Eversource 2013 Annual Report Download - page 37

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time and are subject to the action of these authorities and the legislature. Under Massachusetts law, with the exception of municipal-
owned utilities, no other entity may provide electric or gas delivery service to retail customers within NSTAR’s service territory without
the written consent of NSTAR Electric and/or NSTAR Gas. This consent must be filed with the DPU and the municipality so affected.
The Massachusetts restructuring legislation defines service territories as those territories actually served on July 1, 1997 and following
municipal boundaries to the extent possible. The restructuring legislation further provides that until terminated by law or otherwise,
distribution companies shall have the exclusive obligation to serve all retail customers within their service territories and no other person
shall provide distribution service within such service territories without the written consent of such distribution companies. Pursuant to
the Massachusetts restructuring legislation, the DPU (then, the Department of Telecommunications and Energy) was required to define
service territories for each distribution company, including NSTAR Electric. The DPU subsequently determined that there were
advantages to the exclusivity of service territories and issued a report to the Massachusetts Legislature recommending against, in this
regard, any changes to the restructuring legislation.
PSNH The NHPUC, pursuant to statutory requirements, has issued orders granting PSNH exclusive franchises to distribute electricity
in the respective areas in which it is now supplying such service.
In addition to the right to distribute electricity as set forth above, the franchises of PSNH include, among others, rights and powers to
manufacture, generate, purchase, and transmit electricity, to sell electricity at wholesale to other utility companies and municipalities
and to erect and maintain certain facilities on certain public highways and grounds, all subject to such consents and approvals of public
authority and others as may be required by law. PSNH’s status as a public utility gives it the ability to petition the NHPUC for the right
to exercise eminent domain for its transmission and distribution services in appropriate circumstances.
PSNH is also subject to certain regulatory oversight by the Maine Public Utilities Commission and the Vermont Public Service Board.
WMECO WMECO is authorized by its charter to conduct its electric business in the territories served by it, and has locations in the
public highways for transmission and distribution lines. Such locations are granted pursuant to the laws of Massachusetts by the
Department of Public Works of Massachusetts or local municipal authorities and are of unlimited duration, but the rights thereby granted
are not vested. Such locations are for specific lines only and for extensions of lines in public highways. Further similar locations must
be obtained from the Department of Public Works of Massachusetts or the local municipal authorities. In addition, WMECO has been
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
DOE Phase I Damages – 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). Phase I covered damages for the period 1998 through 2002. Following multiple
appeals and cross-appeals in December 2012, the judgment awarding CYAPC $39.6 million, YAEC $38.3 million and MYAPC $81.7
million became final.
In January 2013, the proceeds from the DOE Phase I Damages Claim were received by the Yankee Companies and transferred to
each Yankee Company’s respective decommissioning trust. As a result of NU's consolidation of CYAPC and YAEC, the financial
statements reflected an increase of $77.9 million in marketable securities for CYAPC and YAEC’s Phase I damage awards that were
invested in the nuclear decommissioning trusts in 2013.
On May 1, 2013, CYAPC, YAEC and MYAPC filed applications with the FERC to reduce rates in their wholesale power contracts
through the application of the DOE proceeds for the benefit of customers. In its June 27, 2013 order, the FERC granted the proposed
rate reductions, and changes to the terms of the wholesale power contracts to become effective on July 1, 2013. In accordance with
the FERC order, CL&P, NSTAR Electric, PSNH and WMECO began receiving the benefit of the DOE proceeds, and the benefits have
been or will be passed on to customers.