Eversource 2014 Annual Report Download - page 30

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be impaired would result in a non-cash charge that could materially adversely affect our results of operations and total capitalization. The annual
goodwill impairment test in 2014 resulted in a conclusion that goodwill is not impaired.
Severe storms could cause significant damage to any of our facilities requiring extensive expenditures, the recovery for which is subject to
approval by regulators.
Severe weather, such as ice and snow storms, hurricanes and other natural disasters, may cause outages and property damage, which may require us
to incur additional costs that may not be recoverable from customers. The cost of repairing damage to our operating subsidiaries'facilities and the
potential disruption of their operations due to storms, natural disasters or other catastrophic events could be substantial, particularly as customers
demand better and quicker response times to outages. If, upon review, any of our state regulatory authorities finds that our actions were imprudent,
some of those restoration costs may not be recoverable from customers. The inability to recover a significant amount of such costs could have an
adverse effect on our financial position, results of operations and cash flows.
NU and its utility subsidiaries are exposed to significant reputational risks, which make them vulnerable to increased regulatory oversight or
other sanctions.
Because utility companies, including our electric and natural gas utility subsidiaries, have large consumer customer bases, they are subject to adverse
publicity focused on the reliability of their distribution services and the speed with which they are able to respond to electric outages, natural gas
leaks and similar interruptions caused by storm damage or other unanticipated events. Adverse publicity of this nature could harm the reputations of
NU and its subsidiaries, and may make state legislatures, utility commissions and other regulatory authorities less likely to view NU and its
subsidiaries in a favorable light, and may cause NU and its subsidiaries to be subject to less favorable legislative and regulatory outcomes or
increased regulatory oversight. Unfavorable regulatory outcomes can include more stringent laws and regulations governing our operations, such as
reliability and customer service quality standards or vegetation management requirements, as well as fines, penalties or other sanctions or
requirements. The imposition of any of the foregoing could have a material adverse effect on our business, results of operations, cash flow and
financial condition of NU and each of its utility subsidiaries.
Limits on our access to and increases in the cost of capital may adversely impact our ability to execute our business plan.
We use short-term debt and the long-term capital markets as a significant source of liquidity and funding for capital requirements not obtained from
our operating cash flow. If access to these sources of liquidity becomes constrained, our ability to implement our business strategy could be
adversely affected. In addition, higher interest rates would increase our cost of borrowing, which could adversely impact our results of operations. A
downgrade of our credit ratings or events beyond our control, such as a disruption in global capital and credit markets, could increase our cost of
borrowing and cost of capital or restrict our ability to access the capital markets and negatively affect our ability to maintain and to expand our
businesses.
Our counterparties may not meet their obligations to us or may elect to exercise their termination rights, which could adversely affect our
earnings.
We are exposed to the risk that counterparties to various arrangements who owe us money, have contracted to supply us with energy, coal, or other
commodities or services, or who work with us as strategic partners, including on significant capital projects, will not be able to perform their
obligations, will terminate such arrangements or, with respect to our credit facilities, fail to honor their commitments. Should any of these
counterparties fail to perform their obligations or terminate such arrangements, we might be forced to replace the underlying commitment at higher
market prices and/or have to delay the completion of, or cancel a capital project. Should any lenders under our credit facilities fail to perform, the
level of borrowing capacity under those arrangements could decrease. In any such events, our financial position, results of operations, or cash flows
could be adversely affected.
Judicial or regulatory proceedings or changes in regulatory or legislative policy could jeopardize full recovery of costs incurred by PSNH in
constructing the Clean Air Project.
Pursuant to New Hampshire law, PSNH placed the Clean Air Project in service at its Merrimack Station. PSNH's recovery of costs in constructing
the project is subject to prudence review by the NHPUC. A material prudence disallowance could adversely affect PSNH's financial position, results
of operations or cash flows. While we believe we have prudently incurred all expenditures to date, we cannot predict the outcome of any prudence
reviews. Our projected earnings and growth could be adversely affected were the NHPUC to deny recovery of some or all of PSNH's investment in
the project.
The loss of key personnel or the inability to hire and retain qualified employees could have an adverse effect on our business, financial
position and results of operations.
Our operations depend on the continued efforts of our employees. Retaining key employees and maintaining the ability to attract new employees are
important to both our operational and financial performance. We cannot guarantee that any member of our management or any key employee at the
NU parent or subsidiary level will continue to serve in any capacity for any particular period of time. In addition, a significant portion of our
workforce, including many workers with specialized skills maintaining and servicing the electrical infrastructure, will be eligible to retire over the
next five to ten years. Such highly skilled individuals cannot be quickly replaced due to the technically complex work they perform. We have
developed strategic workforce plans to identify key functions and proactively implement plans to assure a ready and qualified workforce, but cannot
predict the impact of these plans on our ability to hire and retain key employees.