Eversource 2012 Annual Report Download - page 29

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maintaining or renewing all required NPDES or state discharge permits in effect for our facilities. In each of the last three years, the
costs incurred by PSNH related to compliance with NPDES and state discharge permits have not been material.
On September 29, 2011, the EPA issued for public review and comment a draft renewal NPDES permit under the Clean Water Act for
PSNH’s Merrimack Station. The draft permit would require PSNH to install a closed-cycle cooling system at the station. The EPA
estimated that the net present value cost to install this system and operate it over a 20-year period would be approximately $112
million. On October 27, 2011, the EPA extended the initial 60-day public review and comment period on the draft permit for an
additional 90 days until February 28, 2012. In its filed comments, PSNH stated that the data and studies supplied to the EPA
demonstrates the fact that a closed-cycle cooling system is not warranted. The EPA has no deadline to consider comments and to
issue a final permit. Merrimack Station can continue to operate under its current permit pending issuance of the final permit and
subsequent resolution of appeals by PSNH and other parties. Due to the site specific characteristics of PSNH's other fossil fueled
electric generating stations, we believe it is unlikely that there would be similar permit requirements imposed on them.
Air Quality Requirements
The Clean Air Act Amendments (CAAA), as well as New Hampshire law, impose stringent requirements on emissions of SO2 and NOX
for the purpose of controlling acid rain and ground level ozone. In addition, the CAAA address the control of toxic air pollutants.
Requirements for the installation of continuous emissions monitors and expanded permitting provisions also are included.
In December 2011, the EPA finalized the Mercury and Air Toxic Standards (MATS) that require the reduction of emissions of hazardous
air pollutants from new and existing coal- and oil-fired electric generating units. Previously referred to as the Utility MACT (maximum
achievable control technology) rules, it establishes emission limits for mercury, arsenic and other hazardous air pollutants from coal and
oil-fired units. MATS is the first implementation of a nationwide emissions standard for hazardous air pollutants across all electric
generating units and provides utility companies with up to five years to meet the requirements. PSNH owns and operates
approximately 1,000 MW of fossil fueled electric generating units subject to MATS, including the two units at Merrimack Station,
Newington Station and the two coal units at Schiller Station. We believe the Clean Air Project at our Merrimack Station, together with
existing equipment, will enable the facility to meet the MATS requirements. A review of the potential impact of MATS on our other
PSNH units is not yet complete. Additional incremental controls may be required for the two coal fired units at Schiller Station. To date,
the financial impact of this potential control has not been determined.
NU’s carbon emission inventory accounts for and reports all direct carbon dioxide (CO2) methane (CH4) nitrous oxide (N2O) sulfur
hexafluoride (SF6) emissions for operations of NU and its subsidiaries in carbon dioxide equivalents. Total carbon emissions include
those from sources owned or operated by NU (Scope 1) and those that are a consequence of NU’s activities, but occur from sources
owned or controlled by others, such as emissions from purchased electricity and line loss during the transmission and distribution of
electricity (Scope 2). NU emissions expressed in thousand metric tons of carbon dioxide equivalent (CO2-e) for NU and its system
companies for 2009 through 2011 are shown below.
2011
2010
2009
Total CO
2
-e emissions (excludes CO
2
from biomass and biofuels)
2,984
3,976
3,390
Data was collected and calculated using the World Resource Institute greenhouse gas protocol tools except for stationary combustion
emissions associated with electric generating units where more accurate Continuous Emissions Monitoring System data was available.
EPA reporting protocol was used for generation calculations where applicable.
Each of the states in which we do business also has Renewable Portfolio Standards (RPS) requirements, which generally require fixed
percentages of our energy supply to come from renewable energy sources such as solar, hydropower, landfill gas, fuel cells and other
similar sources.
New Hampshire’s RPS provision requires increasing percentages of the electricity sold to retail customers to have direct ties to
renewable sources. In 2012, the total RPS obligation was 13 percent and it will ultimately reach 26.5 percent in 2025. Energy
suppliers, like PSNH, purchase RECs from producers that generate energy from a qualifying resource and use them to satisfy the RPS
requirements. PSNH also owns renewable sources and uses a portion of internally generated RECs and purchased RECs to meet its
RPS obligations. To the extent that PSNH is unable to purchase sufficient RECs, it makes up the difference between the RECs
purchased and its total obligation by making an alternative compliance payment for each REC requirement for which PSNH is deficient.
The costs of both the RECs and alternative compliance payments are recovered by PSNH through its ES rates charged to customers.
The RECs generated from PSNH’s Northern Wood Power Project, a wood-burning facility, are typically sold to other energy suppliers or
load carrying entities and the net proceeds from the sale of these RECs are credited back to customers.
Similarly, Connecticut's RPS statute requires increasing percentages of the electricity sold to retail customers to have direct ties to
renewable sources. In 2012, the total RPS obligation was 16 percent and will ultimately reach 27 percent in 2020. CL&P is permitted
to recover any costs incurred in complying with RPS from its customers through rates.
Massachusetts’ RPS program also requires electricity suppliers to meet renewable energy standards. For 2012, the requirement was
16.6 percent, and will ultimately reach 27.1 percent in 2020. NSTAR Electric and WMECO are permitted to recover any costs incurred
in complying with RPS from its customers through rates. WMECO also owns renewable solar generation resources. The RECs