Eversource 2012 Annual Report Download - page 28

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CAPITAL EXPENDITURES
We project capital expenditures of approximately $5 billion from 2013 through 2015. Of the $5 billion, we expect to invest
approximately $2.5 billion in our electric and natural gas distribution segments, including our generation businesses, and $2.3 billion in
our electric transmission segment. In addition, we project capital expenditures of approximately $1.6 billion from 2016 through 2017 in
our electric transmission segment.
FINANCING
Our credit facilities and indentures require that NU parent and certain of its subsidiaries, including CL&P, NSTAR Electric, NSTAR Gas,
NSTAR LLC, PSNH, WMECO and Yankee Gas, comply with certain financial and non-financial covenants as are customarily included
in such agreements, including maintaining a ratio of consolidated debt to total capitalization of no more than 65 percent. All such
companies currently are, and expect to remain in compliance with these covenants.
As of December 31, 2012, approximately $730 million of NU's long-term debt will be paid in the next 12 months, consisting of $550
million for NU parent, $55 million for WMECO, and $125 million for CL&P.
NUCLEAR DECOMMISSIONING
General
CL&P, NSTAR Electric, PSNH, WMECO and several other New England electric utilities are stockholders in three inactive regional
nuclear generation companies, CYAPC, MYAPC and YAEC (collectively, the Yankee Companies). The Yankee Companies have
completed the physical decommissioning of their respective generation facilities and are now engaged in the long-term storage of their
spent nuclear fuel. Each Yankee Company collects decommissioning and closure costs through wholesale FERC-approved rates
charged under power purchase agreements with CL&P, NSTAR Electric, PSNH and WMECO and several other New England utilities.
These companies in turn recover these costs from their customers through state regulatory commission-approved retail rates.
The ownership percentages of CL&P, NSTAR Electric, PSNH and WMECO in the Yankee Companies are set forth below:
CL&P
NSTAR
Electric
PSNH
WMECO
Total
CYAPC
34.5%
14.0%
5.0%
9.5%
63.0%
YAEC
24.5%
14.0%
7.0%
7.0%
52.5%
MYAPC
12.0%
4.0%
5.0%
3.0%
24.0%
Our share of the obligations to support the Yankee Companies under FERC-approved contracts is the same as the ownership
percentages above. As a result of the Merger, we consolidate the assets and obligations of CYAPC and YAEC on our consolidated
balance sheet.
OTHER REGULATORY AND ENVIRONMENTAL MATTERS
General
We are regulated in virtually all aspects of our business by various federal and state agencies, including FERC, the SEC, and various
state and/or local regulatory authorities with jurisdiction over the industry and the service areas in which each of our companies
operates, including the PURA, which has jurisdiction over CL&P and Yankee Gas, the NHPUC, which has jurisdiction over PSNH, and
the DPU, which has jurisdiction over NSTAR Electric, NSTAR Gas and WMECO.
Environmental Regulation
We are subject to various federal, state and local requirements with respect to water quality, air quality, toxic substances, hazardous
waste and other environmental matters. Additionally, major generation and transmission facilities may not be constructed or
significantly modified without a review of the environmental impact of the proposed construction or modification by the applicable
federal or state agencies. PSNH owns approximately 1,200 MW of generation assets. In 2011, PSNH’s Clean Air Project, the
installation of a wet flue gas desulphurization system at its Merrimack coal station to reduce its mercury and sulfur dioxide emissions,
was placed into service. The Clean Air Project was fully operational by mid-2012 and is designed to capture more than 80 percent of
the mercury in the coal from the coal burning stations and to reduce sulfur dioxide emissions by more than 90 percent, making
Merrimack one of the cleanest coal-burning plants in the nation. The final cost of the project was approximately $421 million.
Compliance with additional environmental laws and regulations, particularly air and water pollution control requirements, may cause
changes in operations or require further investments in new equipment at existing facilities.
Water Quality Requirements
The Clean Water Act requires every “point source” discharger of pollutants into navigable waters to obtain a National Pollutant
Discharge Elimination System (NPDES) permit from the EPA or state environmental agency specifying the allowable quantity and
characteristics of its effluent. States may also require additional permits for discharges into state waters. We are in the process of