8-KMaterial AgreementsExhibits & Filings

EVERSOURCE ENERGY 8-K Report, Material Agreement (Jun 11, 2015)

Filed June 11, 2015For Securities:ES

Summary

Eversource Energy (ES) and its subsidiary Public Service Company of New Hampshire (PSNH) have entered into a material definitive agreement, the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement. This agreement, filed on June 10, 2015, aims to resolve multiple pending dockets before the New Hampshire Public Utilities Commission (NHPUC) and affects several other ongoing PSNH matters. It was necessitated by a prior agreement in principle reached by the involved parties on March 11, 2015. The core of the agreement involves the planned divestiture of PSNH's fossil and hydro generating assets, with the recovery of related stranded costs to be financed through long-term, low-cost securitization bonds. This process is subject to NHPUC approval and the enactment of securitization legislation. Implementation is expected to include a sales process for generation facilities beginning in early 2016, resolution of the Merrimack Station Scrubber prudence proceeding, a two-year extension of PSNH's rate case stay-out, continuation of the Reliability Enhancement Program, and the establishment of a $5 million clean energy fund.

Key Highlights

  • 1Eversource Energy and PSNH entered into a comprehensive Settlement Agreement on June 10, 2015, involving multiple stakeholders to resolve pending regulatory dockets.
  • 2The agreement mandates the eventual divestiture of PSNH's fossil and hydro generating assets.
  • 3Stranded costs associated with the generation assets will be financed using long-term, low-cost securitization bonds, pending regulatory approval.
  • 4Key objectives include customer savings, long-term rate stabilization, and reduced customer obligation for the Merrimack Station Scrubber costs.
  • 5The agreement provides for the resolution of the Merrimack Station Scrubber prudence proceeding and the investigation into PSNH's owned generation fleet.
  • 6A sales process for PSNH's generation facilities is anticipated to commence in early 2016.
  • 7The Settlement Agreement establishes a $5 million clean energy fund and includes provisions for employee and municipal protections.

Frequently Asked Questions

The main purpose of the Settlement Agreement is to resolve several pending regulatory dockets before the New Hampshire Public Utilities Commission (NHPUC) concerning Public Service Company of New Hampshire (PSNH). It aims to facilitate the divestiture of PSNH's generation assets, manage associated stranded costs through securitization, and achieve customer rate stabilization and savings.

Operationally, PSNH will divest its fossil and hydro generating assets. Financially, the agreement enables the recovery of stranded costs through securitization bonds, avoids protracted litigation, and includes a commitment to forgo recovery of $25 million in deferred equity return related to the Scrubber. It also extends PSNH's general distribution rate case stay-out by two years.

The implementation of the Settlement Agreement is contingent upon the approval of the New Hampshire Public Utilities Commission (NHPUC) and the enactment of necessary securitization legislation. A sales process for the generation facilities is expected to begin in early 2016, subject to these approvals.

The agreement is designed to protect the economic interests of PSNH's electricity customers through customer savings across all classes and long-term rate stabilization. Specifically, residential and small commercial default service ratepayers will have a reduced obligation to pay the full costs of the Merrimack Station Scrubber.