Eversource 2012 Annual Report Download - page 39

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granted easements for its lines in the Massachusetts Turnpike by the Massachusetts Turnpike Authority and pursuant to state laws, has
the power of eminent domain.
The Massachusetts restructuring legislation applicable to NSTAR Electric (described above) is also applicable to WMECO.
Yankee Gas. Yankee Gas holds valid franchises to sell gas in the areas in which Yankee Gas supplies gas service, which it acquired
either directly or from its predecessors in interest. Generally, Yankee Gas holds franchises to serve customers in areas designated by
those franchises as well as in most other areas throughout Connecticut so long as those areas are not occupied and served by another
gas utility under a valid franchise of its own or are not subject to an exclusive franchise of another gas utility. Yankee Gas’ franchises
are perpetual but remain subject to the power of alteration, amendment or repeal by the General Assembly of the State of Connecticut,
the power of revocation by the PURA and certain approvals, permits and consents of public authorities and others prescribed by
statute. Generally, Yankee Gas’ franchises include, among other rights and powers, the right and power to manufacture, generate,
purchase, transmit and distribute gas and to erect and maintain certain facilities on public highways and grounds, and the right of
eminent domain, all subject to such consents and approvals of public authorities and others as may be required by law.
Item 3. Legal Proceedings
1. Yankee Companies v. U.S. Department of Energy
In 1998, the Yankee Companies (CYAPC, YAEC and MYAPC) 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. In late
January 2013, the proceeds from the DOE Phase 1 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 the Yankee Companies at FERC in the second quarter of
2013. Final FERC determinations are expected by the end of the third quarter of 2013.
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.
2. Conservation Law Foundation v. PSNH
On July 21, 2011, the Conservation Law Foundation (CLF) filed a citizens suit under the provisions of the federal Clean Air Act against
PSNH alleging permitting violations at the company’s Merrimack generating station. The suit alleges that PSNH failed to have proper
permits for replacement of the Unit 2 turbine at Merrimack, installation of activated carbon injection equipment for the unit, and violated
a permit condition concerning operation of the electrostatic precipitators at the station. The suit seeks injunctive relief, civil penalties,
and costs. CLF has pursued similar claims before the NHPUC, the N.H. Air Resources Council, and the N.H. Site Evaluation
Committee, all of which have been denied. PSNH believes this suit is without merit and intends to defend it vigorously. On
September 27, 2012, the federal court dismissed portions of CLF’s suit pertaining to the installation of activated carbon injection and the
electrostatic precipitators. An additional motion to dismiss the remaining counts is still pending.