Eversource 2014 Annual Report Download - page 24

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season, excess pipeline capacity and supplies are used to deliver and store natural gas in market area underground storage facilities located in the
New York and Pennsylvania regions. Stored natural gas is withdrawn during the winter season to supplement flowing pipeline supplies in order to
meet firm heating demand. NSTAR Gas has firm underground storage contracts and total storage capacity entitlements of approximately 6.6 Bcf.
A portion of the storage of natural gas supply for NSTAR Gas during the winter heating season is provided by Hopkinton LNG Corp., which owns an
LNG liquefaction and vaporization plant and three above-ground cryogenic storage tanks having an aggregate capacity of 3.0 Bcf of liquefied natural
gas. NSTAR Gas also has access to facilities that include additional storage capacity of 0.5 Bcf and additional vaporization capacity.
PURA requires that Yankee Gas meet the needs of its firm customers under all weather conditions. Specifically, Yankee Gas must structure its
supply portfolio to meet firm customer needs under a design day scenario (defined as the coldest day in 30 years) and under a design year scenario
(defined as the average of the four coldest years in the last 30 years). Yankee Gas'on-system stored LNG and underground storage supplies help to
meet consumption needs during the coldest days of winter. Yankee Gas obtains its interstate capacity from the three interstate pipelines that directly
serve Connecticut: the Algonquin, Tennessee and Iroquois Pipelines. Yankee Gas has long-term firm contracts for capacity on TransCanada
Pipelines Limited Pipeline, Vector Pipeline, L.P., Tennessee Gas Pipeline, Iroquois Gas Transmission Pipeline, Algonquin Pipeline, Union Gas
Limited, Dominion Transmission, Inc., National Fuel Gas Supply Corporation, Transcontinental Gas Pipeline Company, and Texas Eastern
Transmission, L.P. pipelines.
Based on information currently available regarding projected growth in demand and estimates of availability of future supplies of pipeline natural
gas, NSTAR Gas and Yankee Gas each believes that participation in planned and anticipated pipeline expansion projects will be required in order for
it to meet current and future sales growth opportunities.
NATURAL GAS PIPELINE EXPANSION
On September 16, 2014, NU and Spectra Energy Corp announced Access Northeast, a natural gas pipeline expansion project. Access Northeast will
enhance the Algonquin and Maritimes pipeline systems using existing routes and is expected to be capable of delivering approximately one billion
cubic feet of natural gas per day to New England. NU and Spectra Energy Corp will have equal ownership interest in the project with the option of
additional investors joining in the future. On February 18, 2015, NU, Spectra Energy Corp and National Grid announced the addition of National
Grid as a co-developer in the project for a total ownership interest of 20 percent, with NU and Spectra Energy Corp each owning 40 percent. The
total project cost, subject to FERC approval, is expected to be approximately $3 billion and has an anticipated in-service date of November 2018.
On December 8, 2014, NU and Spectra Energy Corp announced an alliance with Iroquois Gas Transmission for the Access Northeast project. This
alliance will provide New England natural gas distribution companies and generators with additional access to natural gas supplies from multiple,
diverse receipt points along the Algonquin pipeline system, including the Iroquois pipeline system.
PROJECTED CAPITAL EXPENDITURES
We project to make capital expenditures of approximately $8.4 billion from 2015 through 2018. Of the $8.4 billion, we expect to invest
approximately $4.2 billion in our electric and natural gas distribution segments and $3.9 billion in our electric transmission segment. In addition, we
project to invest approximately $360 million in information technology and facilities upgrades and enhancements. These projections do not include
capital expenditures related to Access Northeast.
FINANCING
Our credit facilities and indentures require that NU parent and certain of its subsidiaries, including CL&P, NSTAR Electric, NSTAR Gas, 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 of these companies currently are, and expect to
remain, in compliance with these covenants.
As of December 31, 2014, a total of $216.7 million of NU's long-term debt will be paid in the next 12 months, consisting of $162 million for CL&P,
$4.7 million for NSTAR Electric and $50 million or WMECO.
NUCLEAR FUEL STORAGE
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 has completed its collection of decommissioning and closure costs through the proceeds from the spent nuclear fuel litigation against the
DOE. These proceeds were used by the Yankee Companies to offset the decommissioning and closure cost receivables from their member
companies or to decrease the wholesale FERC-approved rates charged under power purchase agreements with CL&P, NSTAR Electric, PSNH and
WMECO and several other New England utilities. The decommissioning rates charged by the Yankee Companies have been eliminated. CL&P,
NSTAR Electric, PSNH and WMECO can recover these costs from, or refund proceeds to, their customers through state regulatory commission-
approved retail rates.
As a result of the merger with NSTAR, we consolidate the assets and obligations of CYAPC and YAEC on our consolidated balance sheet.
For information on the DOE proceeds received related to the spent nuclear fuel litigation, see Note 11C, “Commitments and Contingencies –
Contractual Obligations –Yankee Companies,” in the accompanying Item 8, .