filings.toolsCover and table of contents
20K characters. Original on sec.gov · Markdown
Cover and table of contents
10-K 1 f2015form10k.htm 2015 FORM 10-K
![[f2015form10k001.jpg]](https://www.sec.gov/Archives/edgar/data/72741/000007274116000063/f2015form10k001.jpg)
**UNITED STATES SECURITIES AND EXCHANGE COMMISSION ****WASHINGTON, D.C. 20549
**FORM 10-K
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| **For the Fiscal Year Ended December 31, 2015 ** | |
| or | |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ____________ to ____________ |
| Commission File Number | Registrant; State of Incorporation; Address; and Telephone Number | I.R.S. Employer Identification No. |
| 1-5324 | **EVERSOURCE ENERGY **(a Massachusetts voluntary association) 300 Cadwell Drive Springfield, Massachusetts 01104 Telephone: (413) 785-5871 | 04-2147929 |
| 0-00404 | **THE CONNECTICUT LIGHT AND POWER COMPANY **(a Connecticut corporation) 107 Selden Street Berlin, Connecticut 06037-1616 Telephone: (860) 665-5000 | 06-0303850 |
| 1-02301 | **NSTAR ELECTRIC COMPANY **(a Massachusetts corporation) 800 Boylston Street Boston, Massachusetts 02199 Telephone: (617) 424-2000 | 04-1278810 |
| 1-6392 | PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE (a New Hampshire corporation) Energy Park 780 North Commercial Street Manchester, New Hampshire 03101-1134 Telephone: (603) 669-4000 | 02-0181050 |
| 0-7624 | **WESTERN MASSACHUSETTS ELECTRIC COMPANY **(a Massachusetts corporation) 300 Cadwell Drive Springfield, Massachusetts 01104 Telephone: (413) 785-5871 | 04-1961130 |
Securities registered pursuant to Section 12(b) of the Act:
| Registrant | Title of Each Class | Name of Each Exchange on Which Registered |
| Eversource Energy | Common Shares, $5.00 par value | New York Stock Exchange, Inc. |
Securities registered pursuant to Section 12(g) of the Act:
| Registrant | Title of Each Class |
| The Connecticut Light and Power Company | Preferred Stock, par value $50.00 per share, issuable in series, of which the following series are outstanding: |
| $1.90 | Series | of 1947 | |||
| $2.00 | Series | of 1947 | |||
| $2.04 | Series | of 1949 | |||
| $2.20 | Series | of 1949 | |||
| 3.90% | Series | of 1949 | |||
| $2.06 | Series E | of 1954 | |||
| $2.09 | Series F | of 1955 | |||
| 4.50% | Series | of 1956 | |||
| 4.96% | Series | of 1958 | |||
| 4.50% | Series | of 1963 | |||
| 5.28% | Series | of 1967 | |||
| $3.24 | Series G | of 1968 | |||
| 6.56% | Series | of 1968 | |||
| NSTAR Electric Company | Preferred Stock, par value $100.00 per share, issuable in series, of which the following series are outstanding: |
| 4.25% | Series | ||
| 4.78% | Series |
NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company each meet the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and each is therefore filing this Form 10-K with the reduced disclosure format specified in General Instruction I(2) to Form 10-K.
Indicate by check mark if the registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act.
| Yes | No | |
| x | ¨ |
Indicate by check mark if the registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
| Yes | No | |
| ¨ | x |
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
| Yes | No | |
| x | ¨ |
Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
| Yes | No | |
| x | ¨ |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer | Accelerated Filer | Non-accelerated Filer | |||
| Eversource Energy | x | ¨ | ¨ | ||
| The Connecticut Light and Power Company | ¨ | ¨ | x | ||
| NSTAR Electric Company | ¨ | ¨ | x | ||
| Public Service Company of New Hampshire | ¨ | ¨ | x | ||
| Western Massachusetts Electric Company | ¨ | ¨ | x |
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):
| Yes | No | |
| Eversource Energy | ¨ | x |
| The Connecticut Light and Power Company | ¨ | x |
| NSTAR Electric Company | ¨ | x |
| Public Service Company of New Hampshire | ¨ | x |
| Western Massachusetts Electric Company | ¨ | x |
The aggregate market value of Eversource Energy’s Common Shares, $5.00 par value, held by non-affiliates, computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of Eversource Energy's most recently completed second fiscal quarter (June 30, 2015) was $14,345,789,335 based on a closing market price of $45.41 per share for the 315,916,964 common shares outstanding on June 30, 2015.
Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:
| Company - Class of Stock | Outstanding as of January 31, 2016 |
| Eversource Energy Common shares, $5.00 par value | 317,191,249 shares |
| The Connecticut Light and Power Company Common stock, $10.00 par value NSTAR Electric Company Common Stock, $1.00 par value | 6,035,205 shares 100 shares |
| Public Service Company of New Hampshire Common stock, $1.00 par value | 301 shares |
| Western Massachusetts Electric Company Common stock, $25.00 par value | 434,653 shares |
Eversource Energy holds all of the 6,035,205 shares, 100 shares, 301 shares, and 434,653 shares of the outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company, respectively.
Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire, and Western Massachusetts Electric Company each separately file this combined Form 10-K. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.
GLOSSARY OF TERMS
| The following is a glossary of abbreviations or acronyms that are found in this report: | |
| Current or former Eversource Energy companies, segments or investments: | |
| Eversource, ES or the Company | Eversource Energy and subsidiaries |
| Eversource parent or ES parent | Eversource Energy, a public utility holding company |
| ES parent and other companies | ES parent and other companies are comprised of Eversource parent, Eversource Service and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), and the consolidated operations of CYAPC and YAEC |
| CL&P | The Connecticut Light and Power Company |
| NSTAR Electric | NSTAR Electric Company |
| PSNH | Public Service Company of New Hampshire |
| WMECO | Western Massachusetts Electric Company |
| NSTAR Gas | NSTAR Gas Company |
| Yankee Gas | Yankee Gas Services Company |
| NPT | Northern Pass Transmission LLC |
| Eversource Service | Eversource Energy Service Company (effective January 1, 2014 includes the operations of NSTAR Electric & Gas) |
| NSTAR Electric & Gas | NSTAR Electric & Gas Corporation, a former Eversource Energy service company (effective January 1, 2014 merged into Eversource Energy Service Company) |
| CYAPC | Connecticut Yankee Atomic Power Company |
| MYAPC | Maine Yankee Atomic Power Company |
| YAEC | Yankee Atomic Electric Company |
| Yankee Companies | CYAPC, YAEC and MYAPC |
| Regulated companies | The Eversource Regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric, PSNH, and WMECO, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, the generation activities of PSNH and WMECO, and NPT |
| Regulators: | |
| DEEP | Connecticut Department of Energy and Environmental Protection |
| DOE | U.S. Department of Energy |
| DOER | Massachusetts Department of Energy Resources |
| DPU | Massachusetts Department of Public Utilities |
| EPA | U.S. Environmental Protection Agency |
| FERC | Federal Energy Regulatory Commission |
| ISO-NE | ISO New England, Inc., the New England Independent System Operator |
| MA DEP | Massachusetts Department of Environmental Protection |
| NHPUC | New Hampshire Public Utilities Commission |
| PURA | Connecticut Public Utilities Regulatory Authority |
| SEC | U.S. Securities and Exchange Commission |
| SJC | Supreme Judicial Court of Massachusetts |
| Other Terms and Abbreviations: | |
| AFUDC | Allowance For Funds Used During Construction |
| AOCI | Accumulated Other Comprehensive Income/(Loss) |
| ARO | Asset Retirement Obligation |
| C&LM | Conservation and Load Management |
| CfD | Contract for Differences |
| Clean Air Project | The construction of a wet flue gas desulphurization system, known as "scrubber technology," to reduce mercury emissions of the Merrimack coal-fired generation station in Bow, New Hampshire |
| CO2 | Carbon dioxide |
| CPSL | Capital Projects Scheduling List |
| CTA | Competitive Transition Assessment |
| CWIP | Construction Work in Progress |
| EPS | Earnings Per Share |
| ERISA | Employee Retirement Income Security Act of 1974 |
| ES 2014 Form 10-K | The Eversource Energy and Subsidiaries 2014 combined Annual Report on Form 10-K as filed with the SEC |
| ESOP | Employee Stock Ownership Plan |
| ESPP | Employee Share Purchase Plan |
| FERC ALJ | FERC Administrative Law Judge |
| Fitch | Fitch Ratings |
| FMCC | Federally Mandated Congestion Charge |
| FTR | Financial Transmission Rights |
| GAAP | Accounting principles generally accepted in the United States of America |
| GSC | Generation Service Charge |
| GSRP | Greater Springfield Reliability Project |
i
| GWh | Gigawatt-Hours |
| HQ | Hydro-Québec, a corporation wholly owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada |
| HVDC | High voltage direct current |
| Hydro Renewable Energy | Hydro Renewable Energy, Inc., a wholly owned subsidiary of Hydro-Québec |
| IPP | Independent Power Producers |
| ISO-NE Tariff | ISO-NE FERC Transmission, Markets and Services Tariff |
| kV | Kilovolt |
| kVa | Kilovolt-ampere |
| kW | Kilowatt (equal to one thousand watts) |
| kWh | Kilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour) |
| LBR | Lost Base Revenue |
| LNG | Liquefied natural gas |
| LRS | Supplier of last resort service |
| MGP | Manufactured Gas Plant |
| MMBtu | One million British thermal units |
| Moody's | Moody's Investors Services, Inc. |
| MW | Megawatt |
| MWh | Megawatt-Hours |
| NEEWS | New England East-West Solution |
| Northern Pass | The high voltage direct current transmission line project from Canada into New Hampshire |
| NOx | Nitrogen oxides |
| PAM | Pension and PBOP Rate Adjustment Mechanism |
| PBOP | Postretirement Benefits Other Than Pension |
| PBOP Plan | Postretirement Benefits Other Than Pension Plan that provides certain retiree benefits, primarily medical, dental and life insurance |
| PCRBs | Pollution Control Revenue Bonds |
| Pension Plan | Single uniform noncontributory defined benefit retirement plan |
| PPA | Pension Protection Act |
| RECs | Renewable Energy Certificates |
| Regulatory ROE | The average cost of capital method for calculating the return on equity related to the distribution and generation business segment excluding the wholesale transmission segment |
| ROE | Return on Equity |
| RRB | Rate Reduction Bond or Rate Reduction Certificate |
| RSUs | Restricted share units |
| S&P | Standard & Poor's Financial Services LLC |
| SBC | Systems Benefits Charge |
| SCRC | Stranded Cost Recovery Charge |
| SERP | Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans |
| SIP | Simplified Incentive Plan |
| SO2 | Sulfur dioxide |
| SS | Standard service |
| TCAM | Transmission Cost Adjustment Mechanism |
| TSA | Transmission Service Agreement |
| UI | The United Illuminating Company |
ii
**EVERSOURCE ENERGY AND SUBSIDIARIES THE CONNECTICUT LIGHT AND POWER COMPANY NSTAR ELECTRIC COMPANY AND SUBSIDIARY PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY WESTERN MASSACHUSETTS ELECTRIC COMPANY
2015 FORM 10-K ANNUAL REPORT **
TABLE OF CONTENTS
| Page | ||
| PART I | ||
| Item 1. Business 2 | ||
| Item 1A. Risk Factors 16 | ||
| Item 1B. Unresolved Staff Comments 19 | ||
| Item 2. Properties 19 | ||
| Item 3. Legal Proceedings 21 | ||
| Item 4. Mine Safety Disclosures 22 | ||
| PART II | ||
| Item 5. Market for the Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 | ||
| Item 6. Selected Consolidated Financial Data 26 | ||
| Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 | ||
| Item 7A. Quantitative and Qualitative Disclosures about Market Risk 60 | ||
| Item 8. Financial Statements and Supplementary Data 61 | ||
| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 136 | ||
| Item 9A. Controls and Procedures 136 | ||
| Item 9B. Other Information 136 | ||
| PART III | ||
| Item 10. Directors, Executive Officers and Corporate Governance 137 | ||
| Item 11. Executive Compensation 140 | ||
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 165 | ||
| Item 13. Certain Relationships and Related Transactions, and Director Independence 166 | ||
| Item 14. Principal Accountant Fees and Services 167 | ||
| PART IV | ||
| Item 15. Exhibits and Financial Statement Schedules 169 | ||
| Signatures | 170 |
iii
EVERSOURCE ENERGY AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
References in this Annual Report on Form 10-K to "Eversource," "the Company," "we," "our," and "us" refer to Eversource and its consolidated subsidiaries. On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy. CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy.
From time to time we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify our forward-looking statements through the use of words or phrases such as "estimate," "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other similar expressions. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause our actual results to differ materially from those contained in our forward-looking statements, including, but not limited to:
·
cyber breaches, acts of war or terrorism, or grid disturbances,
·
actions or inaction of local, state and federal regulatory, public policy and taxing bodies,
·
changes in business conditions, which could include disruptive technology related to our current or future business model,
·
changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability,
·
fluctuations in weather patterns,
·
changes in laws, regulations or regulatory policy,
·
changes in levels or timing of capital expenditures,
·
disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly,
·
developments in legal or public policy doctrines,
·
technological developments,
·
changes in accounting standards and financial reporting regulations,
·
actions of rating agencies, and
·
other presently unknown or unforeseen factors.
Other risk factors are detailed in our reports filed with the SEC and updated as necessary, and we encourage you to consult such disclosures.
All such factors are difficult to predict, contain uncertainties that may materially affect our actual results and are beyond our control. You should not place undue reliance on the forward-looking statements, each speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A_, Risk Factors,_ included in this combined Annual Report on Form 10-K. This Annual Report on Form 10-K also describes material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Consolidated Financial Statements. We encourage you to review these items.
EVERSOURCE ENERGY AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
PART I