8-KRegulation FD

EVERSOURCE ENERGY 8-K Report, Regulation FD Disclosure (Jul 23, 2008)

Filed July 23, 2008For Securities:ES

Summary

This Form 8-K filing by Eversource Energy (formerly Northeast Utilities) announces a significant regulatory decision by the Federal Energy Regulatory Commission (FERC) regarding The Connecticut Light and Power Company's (CL&P) Middletown to Norwalk (M-N) transmission project. The FERC voted to approve incentives for CL&P, including a waiver for the project's completion date to qualify for a 100 basis point return on equity (ROE) adder, and an additional 50 basis point adder for the advanced technology used in the underground portion of the line. While the M-N Project is largely complete, it is expected to be operational after the original incentive deadline. The FERC's approval of the waiver is a positive development, as it allows CL&P to potentially benefit from these higher ROE incentives. The additional ROE for advanced technology is expected to boost annual earnings by approximately $1 million once fully implemented. This decision addresses CL&P's application to ensure it receives appropriate returns for undertaking a large-scale, complex, and technologically advanced transmission infrastructure project vital for regional reliability and congestion reduction.

Key Highlights

  • 1FERC approved CL&P's application for return on equity (ROE) incentives for the Middletown to Norwalk (M-N) transmission project.
  • 2FERC granted a waiver for the M-N Project's completion date, allowing it to qualify for a 100 basis point ROE incentive adder.
  • 3An additional 50 basis point ROE adder was approved for the advanced technology used in the 24-mile underground portion of the M-N Project.
  • 4The 50 basis point technology adder will be capped at 46 basis points due to existing ROE limits, resulting in a 13.1% total ROE for the underground segment.
  • 5The advanced technology incentives are projected to increase NU's annual earnings by approximately $1 million once all equipment is in service.
  • 6FERC found that the M-N Project meets incentive criteria by enhancing reliability, reducing congestion, and presenting significant scope, risks, and challenges.
  • 7Parties have 30 days to seek rehearing from FERC regarding this decision.

Frequently Asked Questions

This 8-K filing announces a favorable decision by the Federal Energy Regulatory Commission (FERC) regarding return on equity (ROE) incentives for The Connecticut Light and Power Company's (CL&P) Middletown to Norwalk (M-N) transmission project.

The M-N Project was not projected to be fully operational by the FERC's original December 31, 2008 deadline for incentive ROE. The waiver allows CL&P to still qualify for the 100 basis point ROE incentive adder, even though the project will be completed later.

The FERC is recognizing the advanced technology used in the 24-mile underground portion of the M-N Project, citing its uniquely long length of 345-kV cross-link polyethylene cable, and the use of 345-kv variable shunt reactors, optical fiber for monitoring, and innovative substation automation packages.

The technology adder, once all advanced equipment is in service, is estimated to increase NU's annual earnings by approximately $1 million. The total ROE for the underground portion of the M-N Project, considering the capped adder, will be 13.1%.