Eversource 2015 Annual Report Download - page 85

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7. SHORT-TERM DEBT
Short-Term Borrowing Limits: The amount of short-term borrowings that may be incurred by CL&P, NSTAR Electric and WMECO is subject to
periodic approval by the FERC. As a result of the NHPUC having jurisdiction over PSNH’s short-term debt, PSNH is not currently required to
obtain FERC approval for its short-term borrowings. On June 16, 2015, the FERC granted authorization that allows CL&P and WMECO to incur
total short-term borrowings up to a maximum of $600 million and $300 million, respectively, effective January 1, 2016 through December 31, 2017.
On June 11, 2014, the FERC granted authorization to allow NSTAR Electric to issue total short-term debt securities in an aggregate principal amount
not to exceed $655 million outstanding at any one time, effective October 24, 2014 through October 23, 2016.
PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional $60 million
until further ordered by the NHPUC. As of December 31, 2015, PSNH’s short-term debt authorization under the 10 percent of net fixed plant test
plus $60 million totaled approximately $325 million.
CL&P’s certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur, including
limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. As of December 31, 2015, CL&P had
$327.3 million of unsecured debt capacity available under this authorization.
Yankee Gas and NSTAR Gas are not required to obtain approval from any state or federal authority to incur short-term debt.
Credit Agreements and Commercial Paper Programs: Eversource parent, CL&P, PSNH, WMECO, NSTAR Gas and Yankee Gas are parties to a
five-year $1.45 billion revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated and the termination
date was extended to September 4, 2020. Under the revolving credit facility, CL&P has a borrowing sublimit of $600 million, and PSNH and
WMECO each have borrowing sublimits of $300 million. The revolving credit facility serves to backstop Eversource parent’s $1.45 billion
commercial paper program. The commercial paper program allows Eversource parent to issue commercial paper as a form of short-term debt. As of
December 31, 2015 and 2014, Eversource parent had approximately $1.1 billion in short-term borrowings outstanding on each date under the
Eversource parent commercial paper program, leaving $351.5 million and $348.9 million of available borrowing capacity as of December 31, 2015
and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.72 percent and 0.43
percent, respectively. As of December 31, 2015, there were intercompany loans from Eversource parent of $277.4 million to CL&P, $231.3 million
to PSNH and $143.4 million to WMECO. As of December 31, 2014, there were intercompany loans from Eversource parent of $133.4 million to
CL&P, $90.5 million to PSNH and $21.4 million to WMECO.
NSTAR Electric has a five-year $450 million revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated
and the termination date was extended to September 4, 2020. The facility serves to backstop NSTAR Electric’s $450 million commercial paper
program. As of December 31, 2015 and 2014, NSTAR Electric had $62.5 million and $302 million, respectively, in short-term borrowings
outstanding under its commercial paper program, leaving $387.5 million and $148 million of available borrowing capacity as of December 31, 2015
and 2014, respectively. The weighted-average interest rate on these borrowings as of December 31, 2015 and 2014 was 0.40 percent and 0.27
percent, respectively.
Except as described below, amounts outstanding under the commercial paper programs are included in Notes Payable for Eversource and NSTAR
Electric and are classified in current liabilities on the balance sheets as all borrowings are outstanding for no more than 364 days at one time.
Intercompany loans from Eversource parent to CL&P, PSNH and WMECO are included in Notes Payable to Eversource Parent and are classified in
current liabilities on their respective balance sheets. Intercompany loans from Eversource to CL&P, PSNH and WMECO are eliminated in
consolidation on Eversource’s balance sheets.
On January 15, 2015, Eversource parent issued $150 million of 1.60 percent Series G Senior Notes due to mature in 2018 and $300 million of 3.15
percent Series H Senior Notes, due to mature in 2025. The proceeds, net of issuance costs, were used to repay short-term borrowings outstanding
under the Eversource parent commercial paper program. As the debt proceeds, net of issuance costs, refinanced short-term debt, the short-term debt
was classified as Long-Term Debt as of December 31, 2014. See Note 8, “Long-Term Debt,” for further information on these debt issuances.
Under the credit facilities described above, Eversource and its subsidiaries must comply with certain financial and non-financial covenants, including
a consolidated debt to total capitalization ratio. As of December 31, 2015 and 2014, Eversource and its subsidiaries were in compliance with these
covenants. If Eversource or its subsidiaries were not in compliance with these covenants, an event of default would occur requiring all outstanding
borrowings by such borrower to be repaid and additional borrowings by such borrower would not be permitted under its respective credit facility.