Eversource 2015 Annual Report Download - page 105

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Renewable Energy: Renewable energy contracts include non-cancellable commitments under contracts of CL&P, NSTAR Electric, PSNH, and
WMECO for the purchase of energy and capacity from renewable energy facilities. Such contracts extend through 2035 for CL&P, 2031 for NSTAR
Electric, 2033 for PSNH and 2031 for WMECO.
The contractual obligations table above does not include long-term commitments signed by CL&P, NSTAR Electric and WMECO, as required by the
PURA and DPU, for the purchase of renewable energy and related products that are contingent on the future construction of energy facilities.
Peaker CfDs: In 2008, CL&P entered into three CfDs with developers of peaking generation units approved by PURA (Peaker CfDs). These units
have a total of approximately 500 MW of peaking capacity. As directed by PURA, CL&P and UI have entered into a sharing agreement, whereby
CL&P is responsible for 80 percent and UI for 20 percent of the net costs or benefits of these CfDs. The Peaker CfDs pay the generation facility
owner the difference between capacity, forward reserve and energy market revenues and a cost-of-service payment stream for 30 years. The ultimate
cost or benefit to CL&P under these contracts will depend on the costs of plant operation and the prices that the projects receive for capacity and
other products in the ISO-NE markets. CL&P’s portion of the amounts paid or received under the Peaker CfDs will be recoverable from or refunded
to CL&P’s customers.
Natural Gas Procurement: In the normal course of business, Eversource’s natural gas distribution businesses have long-term contracts for the
purchase, transportation and storage of natural gas as part of its portfolio of supplies. These contracts extend through 2029.
Coal, Wood and Other: PSNH has entered into various arrangements for the purchase of coal, wood and the transportation services for fuel supply
for its electric generating assets. Also included in the contractual obligations table above is a contract for capacity on the Portland Natural Gas
Transmission System (PNGTS) pipeline that extends through 2018. The costs of this contract of $4.5 million are not recoverable from customers.
Transmission Support Commitments: Along with other New England utilities, CL&P, NSTAR Electric, PSNH and WMECO entered into
agreements in 1985 to support transmission and terminal facilities that were built to import electricity from the Hydro-Québec system in Canada.
CL&P, NSTAR Electric, PSNH and WMECO are obligated to pay, over a 30-year period ending in 2020, their proportionate shares of the annual
operation and maintenance expenses and capital costs of those facilities.
Yankee Companies Billings: CL&P, NSTAR Electric, PSNH and WMECO have decommissioning and plant closure cost obligations to the Yankee
Companies, which have each completed the physical decommissioning of their respective nuclear facilities and are now engaged in the long-term
storage of their spent fuel. For further information on the Yankee Companies, see Note 11C, “Commitments and Contingencies - Contractual
Obligations - Yankee Companies,” to the financial statements.
The total costs incurred under these agreements were as follows:
Eversource For the Years Ended December 31,
(Millions of Dollars)
2015 2014 2013
Supply and Stranded Cost $ 147.6 $ 99.2 $ 141.0
Renewable Energy 144.3 114.4 91.3
Peaker CfDs 42.7 18.1 51.9
Natural Gas Procurem
ent 428.6 482.5 349.8
Coal, Wood and Other 95.9 120.5 112.6
Transmission Support Commitments 25.3 25.0 24.9
For the Years Ended December 31,
2015 2014 2013
NSTAR NSTAR NSTAR
(Millions of Dollars)
CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO
Supply and Stranded Cost $ 120.3 $ 6.5 $ 20.8 $ - $ 63.0 $ 7.0 $ 26.0 $ 3.2 $ 77.6 $ 32.4 $ 29.0 $ 2.0
Renewable Energy 20.0 86.7 37.2 0.4 0.7 87.4 26.3 - - 84.9 6.4 -
Peaker CfDs 42.7 - - - 18.1 - - - 51.9 - - -
Coal, Wood and Other - - 95.9 - - - 120.5 - - - 112.6 -
Transmission Support
Commitments 10.0 7.8 5.4 2.1 9.9 7.7 5.3 2.1 9.8 7.7 5.3 2.1
C. Contractual Obligations - Yankee Companies
CL&P, NSTAR Electric, PSNH and WMECO have plant closure and fuel storage cost obligations to the Yankee Companies, which have each
completed the physical decommissioning of their respective nuclear facilities and are now engaged in the long-term storage of their spent fuel. The
Yankee Companies collect these costs through wholesale, FERC-approved rates charged under power purchase agreements with several New
England utilities, including CL&P, NSTAR Electric, PSNH and WMECO. These companies in turn recover these costs from their customers through
state regulatory commission-approved retail rates. The Yankee Companies have collected or are currently collecting amounts that management
believes are adequate to recover the remaining plant closure and fuel storage cost estimates for the respective plants. Management believes CL&P,
NSTAR Electric and WMECO will recover their shares of these obligations from their customers. PSNH has recovered its total share of these costs
from its customers.
CL&P, NSTAR Electric, PSNH and WMECO’s percentage share of the obligations to support the Yankee Companies under FERC-approved rate
tariffs is the same as their respective ownership percentages in the Yankee Companies. For further information on the ownership percentages, see
Note 1J, “Summary of Significant Accounting Policies - Equity Method Investments,” to the financial statements.