8-KOther Events

EVERSOURCE ENERGY 8-K Report (Jun 15, 2004)

Filed June 15, 2004For Securities:ES

Summary

This 8-K filing by Northeast Utilities (NU), operating under the name Eversource Energy (ES) today, announces a significant development in its transmission rate case. On June 14, 2004, NU Companies, including The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH), and Western Massachusetts Electric Company (WMECO), filed a settlement agreement with the Federal Energy Regulatory Commission (FERC) to resolve all material issues in their ongoing transmission rate case initiated in August 2003. This settlement, if approved by the FERC, will allow NU to implement a formula rate for transmission services, tracking actual transmission costs over time with annual true-ups. The settlement also authorizes a return on equity (ROE) of 11.0 percent for the NU Companies from October 28, 2003, until a New England Regional Transmission Organization (RTO) becomes operational. This is a slight reduction from the originally requested 11.75 percent ROE. Importantly, NU management does not anticipate that this settlement's ROE, if approved, will negatively impact their current 2004 earnings per share projections of $1.20 to $1.40.

Key Highlights

  • 1Northeast Utilities (NU) filed a settlement agreement with FERC on June 14, 2004, to resolve transmission rate case issues from August 2003.
  • 2The settlement allows for a formula rate to track and recover transmission costs over time, including future upgrades.
  • 3An authorized return on equity (ROE) of 11.0% is permitted from October 28, 2003, until a New England RTO is operational.
  • 4This 11.0% ROE is slightly lower than the 11.75% initially requested by NU.
  • 5NU's management expects no impact on their 2004 EPS guidance of $1.20-$1.40 per share, even if the settlement is approved.
  • 6The settlement parties include state regulatory bodies like the Connecticut Department of Public Utility Control and the New Hampshire Public Utilities Commission.
  • 7Transmission rate recovery for retail customers will be sought through state-approved mechanisms.

Frequently Asked Questions

The main purpose of this 8-K filing is to report that Northeast Utilities (NU) and its subsidiaries have filed a settlement agreement with the Federal Energy Regulatory Commission (FERC) to resolve issues related to a transmission rate case initiated in August 2003.

The settlement allows NU to implement a formula rate for transmission services that will track changing transmission costs over time. It includes projected costs for the following year with true-ups to actual costs. Costs for transmission upgrades will be included in rates when they are placed into service.

The settlement authorizes NU Companies to earn an 11.0 percent return on equity (ROE) starting from October 28, 2003, until a New England Regional Transmission Organization (RTO) becomes operational. This rate is subject to FERC approval.

No, NU's management does not believe that the lower authorized ROE of 11.0 percent, if approved by the FERC, will cause them to change their current 2004 earnings per share projections, which remain between $1.20 and $1.40.