Eversource 2012 Annual Report Download - page 131

118
Spent Nuclear Fuel Litigation:
DOE Phase I Damages - In 1998, CYAPC, YAEC and MYAPC (Yankee Companies) filed separate complaints against the DOE in the
Court of Federal Claims seeking monetary damages resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal
by January 31, 1998 pursuant to the terms of the 1983 spent fuel and high level waste disposal contracts between the Yankee
Companies and the DOE (DOE Phase I Damages). In a ruling released on October 4, 2006, the Court of Federal Claims held that the
DOE was liable for damages to CYAPC for $34.2 million through 2001, YAEC for $32.9 million through 2001 and MYAPC for $75.8
million through 2002.
In December 2006, the DOE appealed the ruling, and the Yankee Companies filed cross-appeals. The Court of Appeals issued its
decision on August 7, 2008, effectively agreeing with the trial court's findings as to the liability of the DOE but disagreeing with the
method that the trial court used to calculate damages. The Court of Appeals vacated the decision and remanded the case for new
findings consistent with its decision.
On September 7, 2010, the trial court issued its decision following remand, and judgment on the decision was entered on September 9,
2010. The judgment awarded CYAPC $39.7 million, YAEC $21.2 million and MYAPC $81.7 million. The DOE filed an appeal and the
Yankee Companies cross-appealed on November 8, 2010. Briefs were filed and oral arguments in the appeal of the remanded case
occurred on November 7, 2011. On May 18, 2012, the U.S. Court of Appeals for the Federal Circuit issued a unanimous panel decision
in favor of the Yankee Companies upholding the trial court's awards to each company in the remanded cases, and increasing YAEC
damages by approximately $17 million to cover certain wet pool operating expenses. On August 1, 2012, the DOE filed a petition
asking the U.S. Court of Appeals for the Federal Circuit to reconsider its unanimous panel decision in favor of the Yankee Companies
upholding the trial court's awards to each company in the remanded cases. On September 5, 2012, the U.S. Court of Appeals for the
Federal Circuit denied the DOE’s petition. The decisions became final and non-appealable and interest on the judgments began to
accrue on or about December 5, 2012, as the DOE elected not to file a petition for certiorari with the U.S. Supreme Court.
As a result of the April 10, 2012 merger with NSTAR and NU's consolidation of CYAPC and YAEC, the consolidated financial
statements reflect an aggregate receivable from the DOE for CYAPC and YAEC's Phase I damages awards of $77.9 million as of
December 31, 2012.
In January 2013, the proceeds from the DOE Phase I Damages Claim were received by CYAPC in the amount of $39.6 million, YAEC
in the amount of $38.3 million, and MYAPC in the amount of $81.7 million. The funds were transferred to each Yankee Company’s
respective decommissioning trust. The final application of the proceeds for the benefit of customers of CL&P, NSTAR Electric, PSNH
and WMECO will be determined following rate proceedings to be filed by each Yankee Company at FERC in the second quarter of
2013. Final FERC determinations are expected by the end of the third quarter of 2013.
DOE Phase II Damages - In December 2007, the Yankee Companies each filed subsequent lawsuits against the DOE seeking
recovery of actual damages incurred in the years following 2001 and 2002 related to the alleged failure of the DOE to provide for a
permanent facility to store spent nuclear fuel generated in years after 2001 for CYAPC and YAEC and after 2002 for MYAPC (DOE
Phase II Damages). On November 18, 2011, the court ordered the record closed in the YAEC case, and closed the record in the
CYAPC and MYAPC cases subject to a limited opportunity of the government to reopen the records for further limited proceedings.
The record is now closed, all post-trial briefing has been completed, and the case is awaiting the court decision.
The methodology for applying any DOE Phase II Damages that may be recovered from the DOE for the benefit of customers of CL&P,
NSTAR Electric, PSNH and WMECO will be addressed in the same FERC rate proceedings.
D. Guarantees and Indemnifications
NU parent, or NSTAR LLC, as applicable, provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric,
PSNH and WMECO, in the form of guarantees in the normal course of business.
NU provided guarantees and various indemnifications on behalf of external parties as a result of the sales of former subsidiaries of NU
Enterprises, with maximum exposures either not specified or not material.
NU also issued a guaranty for the benefit of Hydro Renewable Energy under which, beginning at the time the Northern Pass
Transmission line goes into commercial operation, NU will guarantee the financial obligations of NPT under the TSA in an amount not
to exceed $25 million. NU's obligations under the guaranty expire upon the full, final and indefeasible payment of the guaranteed
obligations.
Management does not anticipate a material impact to Net Income as a result of these various guarantees and indemnifications.