Eversource 2015 Annual Report Download - page 25

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2015, the FERC accepted the Project’s request to initiate the pre-filing review process. Upon completion of the pre-filing review, a certificate
application will be filed with the FERC. In late 2015, the Project bid into the New England Natural Gas Pipeline Capacity RFP conducted by certain
EDCs in Massachusetts and Rhode Island, including NSTAR Electric and WMECO in Massachusetts, and in December 2015 and January 2016,
those Massachusetts EDCs filed with the DPU seeking approval of the contracts for pipeline and storage capacity with the Project. We expect the
Rhode Island EDC to file its selected contracts with the Rhode Island regulatory agencies in the first half of 2016. In February 2016, PSNH filed for
approval with the NHPUC, of its proposed contract for natural gas pipeline capacity and storage with the Project.
PROJECTED CAPITAL EXPENDITURES
We project to make capital expenditures of approximately $9.2 billion from 2016 through 2019. Of the $9.2 billion, we expect to invest
approximately $4.9 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 $0.4 billion in information technology and facilities upgrades and enhancements. These projections do not include
capital expenditures related to Access Northeast or Clean Energy Connect.
FINANCING
Our credit facilities and indentures require that Eversource Energy 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, 2015, a total of $200 million of Eversource’s long-term debt, all at NSTAR Electric, will be paid in the next 12 months.
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. The Yankee
Companies have completed collection of their decommissioning and closure costs through the proceeds from the spent nuclear fuel litigation against
the DOE and has refunded amounts to its member companies. These proceeds were used by the Yankee Companies to offset the decommissioning
and closure cost amounts due 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 reduced to zero. 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.
We consolidate the assets and obligations of CYAPC and YAEC on our consolidated balance sheet because we own more than 50 percent of these
companies.
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, Financial Statements and Supplementary Data.
OTHER REGULATORY AND ENVIRONMENTAL MATTERS
General
We are regulated in virtually all aspects of our business by various federal and state agencies, including FERC, the SEC, and various state and/or
local regulatory authorities with jurisdiction over the industry and the service areas in which each of our companies operates, including the PURA,
which has jurisdiction over CL&P and Yankee Gas, the NHPUC, which has jurisdiction over PSNH, and the DPU, which has jurisdiction over
NSTAR Electric, NSTAR Gas and WMECO.
Environmental Regulation
We are subject to various federal, state and local requirements with respect to water quality, air quality, toxic substances, hazardous waste and other
environmental matters. Additionally, major generation and transmission facilities may not be constructed or significantly modified without a review
of the environmental impact of the proposed construction or modification by the applicable federal or state agencies.
Water Quality Requirements
The Clean Water Act requires every “point source” discharger of pollutants into navigable waters to obtain a National Pollutant Discharge
Elimination System (NPDES) permit from the EPA or state environmental agency specifying the allowable quantity and characteristics of its
effluent. States may also require additional permits for discharges into state waters. We are in the process of maintaining or renewing all required
NPDES or state discharge permits in effect for PSNH’s generation facilities.
In 1997, PSNH filed in a timely manner for a renewal of the NPDES permit for the Merrimack Station. As a result, the existing permit was
administratively continued. In 2011, the EPA issued a draft renewal NPDES permit for PSNH’s Merrimack Station for public review and comment.
The proposed permit contains many significant conditions to future operation. The proposed permit would require PSNH to install a closed-cycle
cooling system (including cooling towers) at the station. The EPA estimated that the net present value cost to install this system and operate it over a