8-KOther Events

EVERSOURCE ENERGY 8-K Report, Corporate Update (Aug 3, 2009)

Filed August 3, 2009For Securities:ES

Summary

Eversource Energy's subsidiary, Public Service Company of New Hampshire (PSNH), has received approval for a temporary rate increase from the New Hampshire Public Utilities Commission (NHPUC). This approval, stemming from a settlement agreement, allows for an annual increase of $25.6 million in distribution rates, effective August 1, 2009. A significant portion of this increase, $6 million, is allocated to recovering storm costs incurred in December 2008. While this portion will not impact current earnings as it pertains to a deferred balance, it is expected to improve PSNH's cash flow. This temporary rate adjustment is a precursor to PSNH's ongoing application for a permanent distribution rate increase. PSNH had initially sought a permanent increase of approximately $51 million annually, with an additional $17 million to be phased in later. Investors should note that the NHPUC is expected to render a decision on the permanent rate request in mid-2010. Any discrepancies between the temporary and permanent rates will be reconciled retroactively to August 1, 2009, meaning that customers may see adjustments to their bills once the final permanent rates are determined.

Key Highlights

  • 1Public Service Company of New Hampshire (PSNH), a subsidiary of Eversource Energy (Northeast Utilities), received NHPUC approval for a temporary rate increase.
  • 2The temporary rate increase totals $25.6 million on an annualized basis, effective August 1, 2009.
  • 3The settlement agreement resolving the rate increase application was entered into by PSNH and NHPUC staff.
  • 4$6 million of the temporary increase is for recovering December 2008 storm costs, which will improve cash flow but not impact earnings.
  • 5PSNH has a pending application for a permanent distribution rate increase, initially requesting $51 million annually.
  • 6A decision on the permanent rate increase is anticipated in mid-2010.
  • 7Any differences between temporary and permanent rates will be reconciled retroactively to August 1, 2009.

Frequently Asked Questions

This 8-K filing announces that the New Hampshire Public Utilities Commission (NHPUC) approved a settlement agreement for a temporary increase in distribution rates for Public Service Company of New Hampshire (PSNH), a subsidiary of Eversource Energy.

The temporary rate increase is $25.6 million on an annualized basis and became effective on August 1, 2009.

No, while the total increase is $25.6 million, the $6 million allocated to storm cost recovery will not affect earnings because it will be applied to a deferred balance. However, it is expected to improve PSNH's cash flow.

PSNH is seeking a permanent increase in distribution rates, with a decision from the NHPUC expected in mid-2010. Any difference between the temporary and permanent rates will be reconciled back to the effective date of August 1, 2009.