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Power Company (“Maine Yankee”) (together, the “Yankees”). These ownership interests are accounted for on the equity
method. The Yankees operated nuclear generating units that have been permanently retired. Physical decommissioning
of the units is complete. Spent nuclear fuel remains on each site, awaiting fulfillment by the US Department of Energy
(“DOE”) of its statutory obligation to remove it. In addition, groundwater monitoring is ongoing at each site. Future
estimated billings, which are included in other deferred liabilities and other current liabilities in the accompanying
balance sheets, are as follows:
Unit % Amount Date Retired Amount
Yankee Atomic 34.5 $ 551 Feb 1992 $ 4,747
Connecticut Yankee
19.5
413
Dec 1996
24,081
Maine Yankee
24.0
517
Aug 1997
-
(in thousands of dollars)
The Company’ s
Investment as of
March 31, 2012
Future Estimated
Billings to the
Company
With respect to each of the units, at March 31, 2012 and March 31, 2011, New England Power has a liability and a
regulatory asset of $29 million and $87 million, respectively, reflecting the estimated future decommissioning billings
from the Yankees. In a 1993 decision, the FERC allowed Yankee Atomic to recover its undepreciated investment in the
plant, including a return on that investment, as well as unfunded nuclear decommissioning costs and other costs. Maine
Yankee and Connecticut Yankee recover their prudently incurred costs, including a return, in accordance with settlement
agreements approved by the FERC in May 1999 and July 2000, respectively. The Yankees collect the approved costs
from their purchasers, including New England Power. New England Power’ s share of the decommissioning costs is
accounted for in contract termination charges and nuclear shutdown charges on the consolidated statements of income.
Under settlement agreements, New England Power is permitted to recover prudently incurred decommissioning costs
through CTCs.
The Yankees are periodically required to file rate cases for FERC approval, which present the Yankees’ estimated future
decommissioning costs. The Yankees are currently collecting decommissioning and other costs under FERC Orders
issued in their respective rate cases.
Future estimated billings from the Yankees are based on cost estimates. These estimates include the projected costs of
groundwater monitoring, security, liability and property insurance and other costs. They also include costs for interim
spent fuel storage facilities, which the Yankees have constructed during litigation they brought to enforce the DOE’ s
obligation to remove the fuel as required by the Nuclear Waste Policy Act of 1982.
Following a trial at the US Court of Claims (“Claims Court”) to determine the level of damages, on October 4, 2006, the
Claims Court awarded the three companies an aggregate of $143 million for spent fuel storage costs that had been
incurred through 2001 and 2002. The Yankees had requested $176.3 million. The DOE appealed to the US Court of
Appeals for the Federal Circuit, which rendered an opinion generally supporting the Claims Court’ s decision and
remanded the matter to it for further proceedings. In September, 2010, the Claims Court again awarded the companies an
aggregate of approximately $143 million. The DOE again appealed and the Yankees cross-appealed. On May 18, 2012,
the Court of Appeals again ruled in favor of the Yankees, awarding them an aggregate of approximately $160 million.
The Yankees cannot predict whether the DOE will seek reconsideration by the Court of Appeals or review by the United
States Supreme Court.
The Company’ s liability in relation to the Yankee nuclear plant costs was $87.4 million as of March 31, 2011. This
liability was decreased by $32.3 million, to $55.1 million, as a result of the Court of Appeals ruling in favor of the
Yankees on May 18, 2012.
On December 14, 2007, the Yankees brought further litigation in the Claims Court to recover damages incurred
subsequent to 2001 and 2002. A Claims Court trial took place in October 2011. The record is closed and briefs have been
submitted.
The US Congress and the DOE have effectively terminated budgetary support for the proposed long-term spent fuel
storage facility at Yucca Mountain in Nevada and the DOE has taken actions designed to prevent its construction. A Blue