8-KOther Events

EVERSOURCE ENERGY 8-K Report, Corporate Update (Feb 15, 2011)

Filed February 15, 2011For Securities:ES

Summary

Northeast Utilities (now Eversource Energy) announced on February 15, 2011, that the Federal Energy Regulatory Commission (FERC) has accepted the Transmission Service Agreement (TSA) for the Northern Pass Transmission line. This agreement, filed on December 15, 2010, outlines the terms for Northern Pass Transmission LLC (NPT) to provide firm transmission service to H.Q. Hydro Renewable Energy Inc. (HRE), a subsidiary of Hydro-Québec. The acceptance by FERC is a significant step forward for the Northern Pass project, which involves constructing a high-voltage direct current (HVDC) transmission line from the U.S.-Canadian border into New Hampshire. The approved TSA allows NPT to charge cost-based rates, including a specified return on equity (ROE) during the construction phase and a variable ROE upon commercial operation tied to ISO-NE rates. This regulatory approval provides clarity on the project's revenue-generating framework.

Key Highlights

  • 1FERC accepted the Transmission Service Agreement (TSA) for the Northern Pass Transmission line without modification.
  • 2The TSA facilitates firm transmission service from Northern Pass Transmission LLC (NPT) to H.Q. Hydro Renewable Energy Inc. (HRE), a Hydro-Québec subsidiary.
  • 3NPT is indirectly owned by Northeast Utilities (75%) and NSTAR (25%).
  • 4The Northern Pass line includes an HVDC component from the Canadian border to Franklin, NH, and an AC radial line from Franklin to Deerfield, NH.
  • 5The agreement allows NPT to charge cost-based rates, including a 12.56% ROE during construction.
  • 6Post-commercial operation, the ROE will be based on ISO-NE Open-Access Transmission Tariff rates (currently 11.14%), plus an additional margin up to a certain cap.
  • 7This FERC acceptance is a key regulatory milestone for the Northern Pass project.

Frequently Asked Questions

The FERC acceptance is a crucial regulatory approval that validates the terms under which Northern Pass Transmission LLC (NPT) will provide transmission services. It signifies progress for the Northern Pass project and provides a framework for revenue generation through cost-based rates, including a defined return on equity.

The main parties are Northern Pass Transmission LLC (NPT), which is indirectly owned by Northeast Utilities and NSTAR, and H.Q. Hydro Renewable Energy Inc. (HRE), a subsidiary of Hydro-Québec. NPT will provide transmission service to HRE.

The TSA permits NPT to charge cost-based rates. This includes a 12.56% return on equity (ROE) during the construction phase. Upon commercial operation, the ROE will be based on the ISO-NE Open-Access Transmission Tariff rate (currently 11.14%), plus an additional amount (the lesser of 1.42% or a cap to stay within reasonableness) per year.

The Northern Pass Transmission line is a project to build a high-voltage direct current (HVDC) transmission line from the U.S.-Canadian border to Franklin, New Hampshire. It also includes an associated alternating current (AC) radial transmission line built by NPT between Franklin and Deerfield, New Hampshire. This line will interconnect with a planned Hydro-Québec transmission line.