Eversource 2015 Annual Report Download - page 106

94
Spent Nuclear Fuel Litigation:
DOE Phase I Damages – In 2013, CYAPC, YAEC and MYAPC received proceeds of $39.6 million, $38.3 million, and $81.7 million, respectively,
based on a final court judgment awarding damages for separate complaints filed by the Yankee Companies in 1998 against the DOE seeking
monetary damages resulting from the DOE’s failure to begin accepting spent nuclear fuel for disposal 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. In 2013, CYAPC, YAEC and MYAPC reduced rates in their wholesale power contracts through the application of the
DOE proceeds for the benefit of customers. CL&P, NSTAR Electric, PSNH and WMECO began receiving the benefit of the Phase I DOE proceeds
in 2013, and the benefits are being passed on to customers.
In accordance with MYAPC’s three-year refund plan of the DOE Phase I Damages proceeds, in September 2014, MYAPC returned the second
portion of the proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $3.2 million, $1.1
million, $1.4 million and $0.8 million, respectively. On September 28, 2015, MYAPC returned the remaining DOE Phase I Damages proceeds to the
member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $2.3 million, $0.8 million, $1 million and $0.6
million, respectively. These amounts reduced receivables at CL&P, NSTAR Electric, PSNH and WMECO.
DOE Phase II Damages - In 2014, CYAPC, YAEC and MYAPC received proceeds of $126.3 million, $73.3 million and $35.8 million, respectively,
based on a final court judgment awarding damages for separate lawsuits filed by the Yankee Companies in 2007 against the DOE seeking recovery of
actual damages incurred related to the alleged failure of the DOE to provide for a permanent facility to store spent nuclear fuel generated in years
2001 through 2008 for CYAPC and YAEC, and from 2002 through 2008 for MYAPC (DOE Phase II Damages). The Yankee Companies returned
the DOE Phase II Damages proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, for the benefit of their
respective customers in June 2014.
As of December 31, 2014, CL&P’s refund obligation to customers of $65.4 million was recorded as an offset to the deferred storm restoration costs
regulatory asset, as directed by PURA. NSTAR Electric’s, PSNH’s and WMECO’s refund obligation to customers of $29.1 million, $13.1 million
and $18.1 million, respectively, was recorded as a regulatory liability in each company’s respective regulatory tracker mechanisms. Refunds to
customers for these Phase II DOE proceeds were completed in 2015.
DOE Phase III Damages – In August 2013, the Yankee Companies each filed subsequent lawsuits against the DOE seeking recovery of actual
damages incurred in the years 2009 through 2012. The DOE Phase III trial concluded on July 1, 2015, with a post-trial briefing that concluded on
October 14, 2015. The parties are awaiting a decision from the court.
D. Guarantees and Indemnifications
In the normal course of business, Eversource parent provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric,
PSNH and WMECO, in the form of guarantees.
Eversource parent issued a declining balance guaranty on behalf of a wholly-owned subsidiary to guarantee the payment of the subsidiary’s capital
contributions for its investment in the Access Northeast project. The guarantee will not exceed $206 million and will decrease as capital contributions
are made. The guaranty will expire upon the earlier of the full performance of the guaranteed obligations or December 31, 2021.
Eversource parent issued a guaranty on behalf of its subsidiary, NPT, under which, beginning at the time the Northern Pass Transmission line goes
into commercial operation, Eversource parent will guarantee the financial obligations of NPT under the TSA with HQ in an amount not to exceed
$25 million. Eversource parent’s obligations under the guaranty expire upon the full, final and indefeasible payment of the guaranteed obligations.
Eversource parent has also guaranteed certain indemnification and other obligations as a result of the sales of former unregulated subsidiaries and the
termination of an unregulated business, with maximum exposures either not specified or not material.
Management does not anticipate a material impact to Net Income as a result of these various guarantees and indemnifications.
The following table summarizes Eversource parent’s exposure to guarantees and indemnifications of its subsidiaries, including CL&P, NSTAR
Electric, PSNH and WMECO, and guarantees to external parties, as of December 31, 2015:
Maximum Exposure
Company Description (in millions) Expiration Dates
On behalf of subsidiaries:
Various Surety Bonds
(1)
$ 32.7 2016 - 2018
Eversource Service and Rocky River Realty Company Lease Payments for Vehicles and Real Estate $ 11.4 2019 and 2024
On behalf of external parties:
Algonquin Gas Transmission, LLC Access Northeast project
(owner of Access Northeast assets) capital contributions guarantee $ 204.8 2021
(1)
Surety bond expiration dates reflect termination dates, the majority of which will be renewed or extended. Certain surety bonds contain credit
ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource are
downgraded.