Eversource 2012 Annual Report Download - page 19

6
ELECTRIC DISTRIBUTION – MASSACHUSETTS
NSTAR ELECTRIC COMPANY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
The electric distribution businesses of NSTAR Electric and WMECO consist primarily of the purchase, delivery and sale of electricity to
residential, commercial and industrial customers within their respective franchise service territories. As of December 31, 2012, NSTAR
Electric furnished retail franchise electric service to approximately 1.1 million customers in Boston and 80 surrounding cities and towns
in Massachusetts, including Cape Cod and Martha’s Vineyard, covering an area of 1,702 square miles. WMECO provides retail
franchise electric service to approximately 207,000 retail customers in 59 cities and towns in the western region of Massachusetts,
covering an area of 1,500 square miles. Neither NSTAR Electric nor WMECO owns any fossil or hydro-electric generating facilities,
and each purchases its respective energy requirements from competitive suppliers.
In 2009, WMECO was authorized by the DPU to install 6 MW of solar energy generation in its service territory. In October 2010,
WMECO completed development of a 1.8 MW solar generation facility on a site in Pittsfield, Massachusetts, and in December 2011
completed development of a 2.3 MW solar generation facility in Springfield, Massachusetts. In connection with the Attorney General
settlement agreement (as defined below) that approved the Merger in Massachusetts, WMECO committed to increase its solar
generation capacity to 8 MW. WMECO is continuing to evaluate sites suitable for development of the remaining 3.9 MW of capacity.
WMECO will sell all energy and other products from its solar generation facilities into the ISO-NE market. NSTAR Electric does not
own any solar generating facilities, but agreed to issue a request for proposals to enter into long-term contracts for 10 megawatts of
solar power in connection with the Attorney General settlement agreement that approved the Merger in Massachusetts. NSTAR
Electric has entered in two contracts for 5 MW of capacity, which contracts are still pending approval at the DPU.
The following table shows the sources of the 2012 electric franchise retail revenues of NSTAR Electric and WMECO based on
categories of customers:
NSTAR Electric
WMECO
(Thousands of Dollars, except percentages)
2012
% of Total
2012
% of Total
Residential
$
1,000,038
44
$
213,494
55
Commercial
1,101,575
48
123,651
32
Industrial
94,130
4
40,207
10
Streetlighting and Railroads
13,047
1
3,780
1
Miscellaneous
85,885
3
5,973
2
Total Retail Electric Revenues
$
2,294,675
100%
$
387,105
100%
A summary of NSTAR Electric’s and WMECO’s retail electric GWh sales and percentage changes for 2012, as compared to 2011, is as
follows:
NSTAR Electric
WMECO
2012
2011
Percentage
Change
2012
2011
Percentage
Change
Residential
6,741
6,727
0.2 %
1,517
1,533
(1.0)%
Commercial
12,987
13,211
(1.7)%
1,485
1,474
0.7 %
Industrial
1,353
1,418
(4.6)%
663
669
(0.9)%
Other
128
146
(12.2)%
18
19
(5.7)%
Total
21,209
21,502
(1.4)%
3,683
3,695
(0.3)%
Rates
NSTAR Electric and WMECO are each subject to regulation by the DPU, which has jurisdiction over, among other things, rates,
accounting procedures, certain dispositions of property and plant, mergers and consolidations, issuances of long-term securities,
acquisition of securities, standards of service, management efficiency and construction and operation of distribution, production and
storage facilities. The present general rate structure for both NSTAR Electric and WMECO consists of various rate and service
classifications covering residential, commercial and industrial services. Massachusetts utilities are entitled under state law to charge
rates that are sufficient to allow them an opportunity to recover their reasonable operation and capital costs, to attract needed capital
and maintain their financial integrity, while also protecting relevant public interests.
Under Massachusetts law, all customers of each of NSTAR Electric and WMECO are entitled to choose their energy suppliers, while
NSTAR Electric or WMECO, as the case may be, remains their distribution company. Both NSTAR Electric and WMECO purchase
power from competitive suppliers for, and pass through the cost to, their respective customers who do not choose a competitive energy
supplier (basic service). Basic service charges are adjusted and reconciled on an annual basis. Most of the residential and small
commercial and industrial customers of NSTAR Electric and WMECO have continued to buy their power from NSTAR Electric or
WMECO, as the case may be, at basic service rates. Most large commercial and industrial customers have switched to a competitive
energy supplier.