Eversource 2014 Annual Report Download - page 48

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Projected Capital Expenditures: A summary of the projected capital expenditures for the Regulated companies'electric transmission and for the total
electric distribution, generation, and natural gas distribution businesses for 2015 through 2018, including information technology and facilities
upgrades and enhancements on behalf of the Regulated companies, is as follows:
Years
 2015 2016 2017 2018
2015-2018
Total
CL&P Transmission $214 $241 $258
$
158 $871
NSTAR Electric Transmis
sion 231 262 236 295 1,024
PSNH Transmission 133 76 73 19 301
WMECO Transmission 128 80 34 8 250
NPT
34 309 620 466 1,429
 $740 $968 $1,221
$
946 $3,875
Electric Distribution $755 $778 $758
$
748 $3,039
Generation 38 20 15 15 88
Natural Gas
228 256 275 300 1,059
 $1,021 $1,054 $1,048
$
1,063 $4,186
Information Technology and All Other $90 $92 $94
$
83 $359
Total $1,851 $2,114 $2,363
$
2,092 $8,420
The projections do not include capital expenditures related to Access Northeast. Actual capital expenditures could vary from the projected amounts
for the companies and years above.
FERC Regulatory Issues

On September 30, 2011, a complaint was filed jointly at FERC under Sections 206 and 306 of the Federal Power Act (the "first
complaint") by several New England state attorneys general, state regulatory commissions, consumer advocates and other parties (the
"Complainants"). The Complainants alleged that the base ROE of 11.14 percent that has been utilized since 2006 in the calculation of formula rates
for transmission service under the ISO-NE Open Access Transmission Tariff by NETOs, including CL&P, NSTAR Electric, PSNH and WMECO,
was unjust and unreasonable and asserted that the rate was excessive due to changes in the capital markets. Complainants sought an order to reduce
the base ROE prospectively from the date of a final FERC order, and for the 15-month period October 1, 2011 to December 31, 2012 (the "first
complaint refund period"), and to require refunds. The FERC set the case for trial before a FERC ALJ after settlement negotiations were
unsuccessful in August 2012.
On August 6, 2013, the FERC ALJ issued an initial decision on the first complaint finding that the base ROE in effect during the first complaint
refund period was not reasonable and recommended separate base ROEs for the first complaint refund period of 10.6 percent and for the period
beginning when FERC issues its final decision (the "prospective period") of 9.7 percent, leaving policy considerations and additional adjustments to
the FERC. In 2013, the Company recorded reserves at its electric subsidiaries to recognize the potential financial impact from the FERC ALJ's initial
decision for the first complaint refund period.
On June 19, 2014, FERC issued an order on the first complaint partially affirming and partially reversing the FERC ALJ's initial decision. FERC set
a single tentative base ROE of 10.57 percent for the first complaint refund period and prospective period. FERC also modified its traditional
methodology by adopting a two-step discounted cash flow analysis consistent with the method that it utilizes to determine the ROEs of both natural
gas and oil pipeline projects. Using this methodology, FERC determined a new zone of reasonableness of 7.03 percent to 11.74 percent, and set the
tentative base ROE halfway between the midpoint and the top of the zone of reasonableness. FERC also stated that a utility's "total ROE, inclusive
of transmission incentive ROE adders" should not exceed the top of the new zone of reasonableness produced by this methodology. FERC instituted
a paper hearing on the long-term growth rate portion of the methodology (the "paper hearing"). Rehearing requests on this new methodology were
filed in July 2014, and briefs were filed in August and September 2014 by the parties on the appropriate long-term growth rate.
On October 16, 2014, the FERC issued an order in the paper hearing, which confirmed that the base ROE should be set at 10.57 percent and that a
utility's total or maximum ROE should not exceed the top of the new zone of reasonableness (11.74 percent). The FERC ordered the NETOs to
provide refunds to customers for the first complaint refund period, and set the prospective new base ROE at this time. In November 2014, the
NETOs requested rehearing and clarification from FERC. In late 2014, the NETOs made a compliance filing, and began refunding amounts from the
first complaint period, inclusive of incentive ROE adders that exceeded the 11.74 percent as compared to the total company transmission ROE.
Complainants have challenged the compliance filing.
In 2014, the Company recorded additional reserves at its electric subsidiaries to recognize the potential financial impact from the FERC's orders.
On December 27, 2012, a second complaint was filed jointly at FERC by several additional consumer groups and municipal
parties (the "second complaint"), challenging the NETOs'existing base ROE, requesting FERC to reduce the NETOs'base ROE prospectively from
the date of the final FERC order and seeking refunds for the 15-month period of December 27, 2012 to March 27, 2014 (the "second complaint
refund period").
On June 19, 2014, FERC issued an order finding that the second complaint raised issues of material fact, and setting the complaint for settlement or
hearing. On July 21, 2014, the NETOs filed a rehearing request in this proceeding. On October 24, 2014, the FERC assigned the case for trial before
a FERC ALJ after settlement negotiations were unsuccessful. The FERC ALJ set a trial date beginning June 8, 2015, and indicated he could issue an
initial decision on or before October 26, 2015. This schedule was subsequently modified by a November 24, 2014 order on the third complaint (see
below). In 2014, the Company recorded reserves at its electric subsidiaries to recognize the potential financial impact from the FERC's June 19th
order for the second complaint refund period.