Eversource 2012 Annual Report Download - page 60

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On June 4, 2012, the SJC vacated the DPU's June 28, 2007 order and remanded the matter to the DPU for a "statement of reasons,
including subsidiary findings, of its conclusion of law and relevant facts." The continued uncertainty of the outcome of the DPU’s
proceeding leaves NU and NSTAR Electric unable to conclude that it is probable that the previously reserved amount will ultimately be
recovered and therefore NSTAR Electric will continue to maintain a reserve on this amount until the ultimate outcome is determined by
the DPU.
Renewable Energy Contract: On November 26, 2012, the DPU approved NSTAR Electric’s renewable energy contract with Cape Wind
Associates, LLC, which has a term of 15 years, to purchase 129 MW of renewable energy from an offshore wind energy facility once it
is constructed and placed in service.
New Hampshire:
Distribution Rates: In 2012, PSNH filed for a step increase and a change in its accrual to its major storm reserve fund. On June 27,
2012, the NHPUC approved an annualized distribution rate increase of $7.1 million, effective July 1, 2012, for the step increase.
Additionally, PSNH was allowed a $3.5 million increase in the annual accrual to its major storm reserve fund effective July 1, 2012.
ES and SCRC Rates: On December 12, 2012, PSNH filed an updated request to its September 28, 2012 preliminary request with the
NHPUC to adjust its ES and SCRC rates effective with services rendered on and after January 1, 2013. PSNH’s updated request
proposed to increase the current ES billing rate to reflect projected costs for 2013 and to decrease the current SCRC billing rate to
reflect the full amortization of RRBs at the end of April 2013. The net impact to customers that purchase energy from PSNH is a net
increase of 1.287 cents per kWh in total rates. On December 28, 2012, the NHPUC approved the request.
ES Temporary Rates: On November 22, 2011, the NHPUC opened a docket to review the Clean Air Project including the
establishment of temporary rates for near-term recovery of Clean Air Project costs, a prudence review of PSNH's overall construction
program, and establishment of permanent rates for recovery of prudently incurred Clean Air Project costs. On April 10, 2012, the
NHPUC issued an order authorizing temporary rates, effective April 16, 2012, which recover a significant portion of the Clean Air
Project costs, including a return on equity. The docket will continue for a comprehensive prudence review of the Clean Air Project and
the establishment of a permanent rate. The temporary rates will remain in effect until a permanent rate allowing full recovery of all
prudently incurred costs is approved. At that time, the NHPUC will reconcile recoveries collected under the temporary rates with final
approved rates.
The NHPUC had suspended the procedural schedule for the prudence review pending issuance of an order on preliminary substantive
and procedural matters. On December 24, 2012, the NHPUC issued an Order ruling on the requirement of PSNH to respond to a
number of discovery requests that PSNH had objected to, and deciding that PSNH had legal authority to seek a variance from the
Clean Air Project Mandate in the event of "economic infeasibility." PSNH has sought rehearing of that December 24th Order. The
NHPUC is considering PSNH’s rehearing request, and has again suspended the procedural schedule. PSNH expects hearings to
commence in this proceeding on or about the third quarter of 2013. We cannot predict the outcome of the Clean Air Project prudence
review, but believe all costs were incurred appropriately and are probable of recovery.
ES Filing: On July 26, 2011, the NHPUC ordered PSNH to file a rate proposal that would mitigate the impact of customer migration
expected to occur when the ES rate is higher than market prices. On January 26, 2012, the NHPUC rejected the PSNH proposal and
ordered PSNH to file a new proposal no later than June 30, 2012, addressing certain issues raised by the NHPUC. On April 27, 2012,
PSNH filed its proposed Alternative Default Energy Rate that addresses customer migration, with an effective date of July 1, 2012. The
proposal, if implemented, would result in no impact to earnings and would allow for an increased contribution to fixed costs for all ES
customers. On May 24, 2012, the NHPUC suspended the effectiveness of the proposed rates pending hearings. Hearings were held
on October and November 2012 and a final decision is expected in the first quarter of 2013.
Default ES Rate: On January 18, 2013, the NHPUC opened a docket to investigate market conditions affecting PSNH’s energy service
rate, how PSNH will maintain just and reasonable rates in light of those conditions, and any impact of PSNH’s generation ownership on
the New Hampshire competitive electric market. The NHPUC noted that this proceeding will not undertake to determine whether
continued ownership and operation of generation is in PSNH’s retail customers’ economic interest. No schedule or procedural process
has been established for this proceeding.
Legislative and Policy Matters
Federal:
Moving Ahead for Progress in the 21st Century Act: On July 6, 2012, President Obama signed the "Moving Ahead for Progress in the
21st Century" Act, which included provisions that impact how minimum required contributions to qualified pension plans are calculated.
The legislation allows NU to use a higher discount rate to calculate the plan's funded target liability, resulting in lower cash contribution
requirements. We have evaluated the impact of the legislation on future cash contributions to the NUSCO and NSTAR Pension Plans
and will continue to follow our policy to fund these plans on an annual basis that is at least equal to the amounts that will satisfy the
federal requirements, as amended by this legislation.
2013 Legislation: On January 2, 2013, President Obama signed into law the "American Taxpayer Relief Act of 2012," which extends
certain tax rules allowing the accelerated deduction of depreciation from the "American Recovery and Reinvestment Act of 2009" to