Eversource 2012 Annual Report Download - page 21

8
Sources and Availability of Electric Power Supply
As noted above, neither NSTAR Electric nor WMECO owns any generation assets (other than WMECO’s recently constructed solar
generation), and both companies purchase their respective energy requirements from a variety of competitive sources through requests
for proposals issued periodically, consistent with DPU regulations. NSTAR Electric and WMECO enter into supply contracts for basic
service for 50 percent of their respective residential and small commercial and industrial customers twice a year for twelve month terms.
Both NSTAR Electric and WMECO enter into supply contracts for basic service for 100 percent of large commercial and industrial
customers every three months.
ELECTRIC DISTRIBUTION – NEW HAMPSHIRE
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
PSNH’s distribution business consists primarily of the generation, delivery and sale of electricity to its residential, commercial and
industrial customers. As of December 31, 2012, PSNH furnished retail franchise electric service to approximately 500,000 retail
customers in 211 cities and towns in New Hampshire, covering an area of 5,628 square miles. PSNH also owns and operates
approximately 1,200 MW of primarily fossil fueled electricity generation plants. Included in those electric generating plants is PSNH’s
50 MW wood-burning Northern Wood Power Project at its Schiller Station in Portsmouth, New Hampshire, and approximately 70 MW of
hydroelectric generation. PSNH’s distribution business includes the activities of its generation business.
The Clean Air Project, a wet flue gas desulphurization system (Scrubber), was constructed and placed in service by PSNH at its
Merrimack Station in September 2011. The cost of the Scrubber is expected to be recovered through PSNH's ES rates under New
Hampshire law. By November 2011, both of Merrimack Station’s coal-fired units were integrated with the Scrubber, and the Scrubber is
now reducing emissions from the units. PSNH completed remaining project construction activities in 2012 and the final cost of the
project was approximately $421 million.
The Clean Air Project was placed in service and began operations nearly two years before the statutory deadline of July 1, 2013. Tests
to date indicate that the Scrubber reduces emissions of SO2 and mercury from Merrimack Station by over 90 percent, which is well in
excess of state and federal requirements. Notwithstanding the Clean Air Project's environmental successes well in advance of the
statutory deadline, competitors and environmental groups continue to challenge PSNH's right to recover the costs of this legally-
mandated project. In particular, TransCanada, a Canadian energy company that is pursuing the transcontinental Keystone XL pipeline
across the United States and is a participant in the U.S. competitive electricity market, and the Conservation Law Foundation, an
environmental group which initially supported the law requiring installation of the Scrubber and which formally notified PSNH that it
intended to sue PSNH under the Clean Air Act for not installing such emissions control technology, both now claim PSNH was
imprudent for pursuing the Clean Air Project. PSNH is vigorously defending its constitutionally protected right to recover the costs of
the Clean Air Project, which were invested to comply with the express mandates of state law.
The following table shows the sources of PSNH’s 2012 electric franchise retail revenues based on categories of customers:
PSNH
(Thousands of Dollars, except percentages)
2012
% of Total
Residential
$
511,036
54
Commercial
313,201
33
Industrial
82,141
9
Streetlighting and Railroads
6,061
1
Miscellaneous
33,948
3
Total Retail Electric Revenues
$
946,387
100%
A summary of PSNH’s retail electric GWh sales and percentage changes for 2012, as compared to 2011, is as follows:
2012
2011
Percentage
Change
Residential
3,138
3,141
(0.1)%
Commercial
3,315
3,315
0.0 %
Industrial
1,345
1,336
0.7 %
Other
23
23
(1.0)%
Total
7,821
7,815
0.1 %