-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MCpAq6QbwYkHSWQ6gVYpUIpV7Mv9ueertl+QMUekzTHZMPWj0Y6/YGjXPLP24IrN qtS3VB1jQVTJvCWmQh9UdQ== 0000023426-95-000026.txt : 19951119 0000023426-95-000026.hdr.sgml : 19951119 ACCESSION NUMBER: 0000023426-95-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT LIGHT & POWER CO CENTRAL INDEX KEY: 0000023426 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 060303850 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11419 FILM NUMBER: 95591746 BUSINESS ADDRESS: STREET 1: 707 SELDEN ST CITY: BERLIN STATE: CT ZIP: 06037-1616 BUSINESS PHONE: 2036655000 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 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 0-404 THE CONNECTICUT LIGHT AND POWER COMPANY (Exact name of registrant as specified in its charter) CONNECTICUT 06-0303850 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) SELDEN STREET, BERLIN, CONNECTICUT 06037-1616 (Address of principal executive offices) (Zip Code) (860) 665-5000 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at October 31, 1995 Common Shares, $10.00 par value 12,222,930 shares THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES TABLE OF CONTENTS Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 2 Consolidated Statements of Income - Three and Nine Months Ended September 30, 1995 and 1994 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. Other Information Item 1. Legal Proceedings 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 PART I. FINANCIAL INFORMATION THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 1995 1994 ------------- ------------- (Thousands of Dollars) ASSETS - ------ Utility Plant, at original cost: Electric................................................ $ 6,126,729 $ 6,063,179 Less: Accumulated provision for depreciation......... 2,359,172 2,194,314 ------------- ------------- 3,767,557 3,868,865 Construction work in progress........................... 98,379 99,993 Nuclear fuel, net....................................... 147,066 164,795 ------------- ------------- Total net utility plant............................. 4,013,002 4,133,653 ------------- ------------- Other Property and Investments: Nuclear decommissioning trusts, at market............... 222,100 171,950 Investments in regional nuclear generating companies, at equity................................... 54,843 54,952 Other, at cost.......................................... 14,862 14,742 ------------- ------------- 291,805 241,644 ------------- ------------- Current Assets: Cash and special deposits............................... 3,255 2,017 Receivables, net........................................ 201,496 192,926 Accounts receivable from affiliated companies........... 2,787 9,367 Accrued utility revenues................................ 80,226 90,475 Fuel, materials, and supplies, at average cost.......... 68,944 64,003 Recoverable energy costs, net--current portion.......... 94,151 10,561 Prepayments and other................................... 53,228 43,654 ------------- ------------- 504,087 413,003 ------------- ------------- Deferred Charges: Regulatory assets: Income taxes,net...................................... 926,671 949,134 Deferred costs--nuclear plants........................ 24,410 101,632 Unrecovered contract obligation--Yankee Atomic Electric Company..................................... 92,371 100,003 Deferred demand-side-management costs................. 108,253 116,133 Recoverable energy costs, net......................... 24,388 61,040 Cogeneration costs.................................... 85,889 36,821 Other................................................. 52,521 45,571 Unamortized debt expense................................ 15,241 8,396 Other................................................... 8,729 10,427 ------------- ------------- 1,338,473 1,429,157 ------------- ------------- Total Assets........................................ $ 6,147,367 $ 6,217,457 ============= =============
See accompanying notes to consolidated financial statements. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 1995 1994 ------------- ------------- (Thousands of Dollars) CAPITALIZATION AND LIABILITIES - ------------------------------ Capitalization: Common stock--$10 par value. Authorized 24,500,000 shares; outstanding 12,222,930 shares................................................. $ 122,229 $ 122,229 Capital surplus, paid in................................ 637,437 632,117 Retained earnings....................................... 793,477 765,724 ------------- ------------- Total common stockholder's equity.............. 1,553,143 1,520,070 Preferred stock not subject to mandatory redemption............................................. 116,200 166,200 Preferred stock subject to mandatory redemption......... 155,000 226,250 Long-term debt.......................................... 1,815,232 1,815,579 ------------- ------------- Total capitalization........................... 3,639,575 3,728,099 ------------- ------------- Minority Interest in Consolidated Subsidiary.............. 100,000 - ------------- ------------- Obligations Under Capital Leases.......................... 108,655 120,268 ------------- ------------- Current Liabilities: Notes payable to banks.................................. - 76,000 Notes payable to affiliated company..................... 81,650 92,750 Commercial paper........................................ - 10,000 Long-term debt and preferred stock--current portion................................................ 16,219 11,861 Obligations under capital leases--current portion................................................ 65,776 55,701 Accounts payable........................................ 71,949 102,837 Accounts payable to affiliated companies................ 20,382 43,033 Accrued taxes........................................... 83,643 26,413 Accrued interest........................................ 31,313 30,682 Other................................................... 22,549 22,828 ------------- ------------- 393,481 472,105 ------------- ------------- Deferred Credits: Accumulated deferred income taxes....................... 1,521,130 1,544,021 Accumulated deferred investment tax credits............. 144,353 150,087 Deferred contract obligation--Yankee Atomic Electric Company....................................... 92,371 100,003 Other................................................... 147,802 102,874 ------------- ------------- 1,905,656 1,896,985 ------------- ------------- Commitments and Contingencies (Note 4) Total Capitalization and Liabilities........... $ 6,147,367 $ 6,217,457 ============= =============
See accompanying notes to consolidated financial statement THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------------- 1995 1994 1995 1994 --------- --------- ----------- ----------- (Thousands of Dollars) Operating Revenues................................. $638,392 $598,706 $1,764,733 $1,769,656 --------- --------- ----------- ----------- Operating Expenses: Operation -- Fuel, purchased and net interchange power..... 166,642 148,118 449,565 436,496 Other......................................... 157,158 158,826 448,813 442,261 Maintenance...................................... 45,631 52,013 131,159 143,933 Depreciation..................................... 60,877 58,801 180,214 171,392 Amortization of regulatory assets, net........... 20,770 9,017 39,174 68,839 Federal and state income taxes................... 55,531 53,458 138,682 152,862 Taxes other than income taxes.................... 44,154 44,833 130,169 133,247 --------- --------- ----------- ----------- Total operating expenses................... 550,763 525,066 1,517,776 1,549,030 --------- --------- ----------- ----------- Operating Income................................... 87,629 73,640 246,957 220,626 --------- --------- ----------- ----------- Other Income: Deferred nuclear plants return--other funds...... 1,154 3,338 3,551 10,276 Equity in earnings of regional nuclear generating companies........................... 1,748 1,905 4,809 5,556 Other, net....................................... 1,968 (3,278) (286) 2,173 Income taxes--credit............................. 534 4,128 6,157 7,443 --------- --------- ----------- ----------- Other income, net.......................... 5,404 6,093 14,231 25,448 --------- --------- ----------- ----------- Income before interest charges............. 93,033 79,733 261,188 246,074 --------- --------- ----------- ----------- Interest Charges: Interest on long-term debt....................... 31,062 29,170 93,506 89,586 Other interest................................... 1,925 2,121 4,564 4,377 Deferred nuclear plants return--borrowed funds... (416) (1,749) (1,310) (5,832) --------- --------- ----------- ----------- Interest charges, net...................... 32,571 29,542 96,760 88,131 --------- --------- ----------- ----------- Net Income......................................... $ 60,462 $ 50,191 $ 164,428 $ 157,943 ========= ========= =========== ===========
See accompanying notes to consolidated financial statements. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, ----------------------- 1995 1994 ----------- ----------- (Thousands of Dollars) Operating Activities: Net Income................................................ $ 164,428 $ 157,943 Adjustments to reconcile to net cash from operating activities: Depreciation............................................ 180,214 171,392 Deferred income taxes and investment tax credits, net... 29,241 8,332 Deferred nuclear plants return, net of amortization..... 77,090 61,538 Recoverable energy costs, net of amortization........... (46,938) 10,247 Deferred cogeneration costs............................. (49,068) (18,202) Other sources of cash................................... 94,865 31,339 Other uses of cash...................................... (49,066) (18,570) Changes in working capital: Receivables and accrued utility revenues................ 8,259 49,439 Fuel, materials, and supplies........................... (4,941) (2,394) Accounts payable........................................ (53,539) (67,015) Accrued taxes........................................... 57,230 9,951 Other working capital (excludes cash)................... (9,222) (14,557) ----------- ----------- Net cash flows from operating activities.................... 398,553 379,443 ----------- ----------- Financing Activities: Issuance of long-term debt................................ - 395,000 Issuance of Monthly Income Preferred Securities..................................... 100,000 - Net (decrease) increase in short-term debt................ (97,100) 85,250 Reacquisitions and retirements of long-term debt.......... (6,669) (600,389) Reacquisitions and retirements of preferred stock......... (117,500) - Cash dividends on preferred stock......................... (17,379) (18,075) Cash dividends on common stock............................ (119,296) (119,418) ----------- ----------- Net cash flows used for financing activities................ (257,944) (257,632) ----------- ----------- Investment Activities: Investment in plant: Electric utility plant.................................. (96,843) (101,292) Nuclear fuel............................................ (5,305) 837 ----------- ----------- Net cash flows used for investments in plant.............. (102,148) (100,455) Other investment activities, net.......................... (37,223) (22,830) ----------- ----------- Net cash flows used for investments......................... (139,371) (123,285) ----------- ----------- Net Increase (Decrease) In Cash For The Period.............. 1,238 (1,474) Cash and special deposits - beginning of period............. 2,017 2,283 ----------- ----------- Cash and special deposits - end of period................... $ 3,255 $ 809 =========== ===========
See accompanying notes to consolidated financial statements. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. General The accompanying unaudited consolidated financial statements should be read in conjunction with the Annual Report of The Connecticut Light and Power Company (the company or CL&P), a wholly owned subsidiary of Northeast Utilities (NU) on Form 10-K for the year ended December 31, 1994 (1994 Form 10-K). In the opinion of the company, the accompanying financial statements contain all adjustments necessary to present fairly the financial position as of September 30, 1995, the results of operations for the three and nine months ended September 30, 1995 and 1994, and the statements of cash flows for the nine months ended September 30, 1995 and 1994. The results of operations for the three and nine months ended September 30, 1995 and 1994 are not necessarily indicative of the results expected for a full year. Certain reclassifications of prior period data have been made to conform with the current period presentation. 2. Accounting for Long-Lived Assets The company's accounting policies and the accompanying consolidated financial statements conform to generally accepted accounting principles applicable to rate-regulated enterprises and reflect the effects of the ratemaking process in accordance with Statement of Financial Accounting Standards No. 71, "Accounting for Certain Types of Regulation" (SFAS 71). If any portion of the company's operations was no longer subject to the provisions of SFAS 71, as a result of a change in the cost-of-service based regulatory structure or the effects of competition, the company would be required to write off related regulatory assets and liabilities. The company would also be required to determine any impairment to other assets and write down these assets to their fair value. Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of" (SFAS 121), issued in March 1995 and effective January 1, 1996, establishes accounting standards for the impairment of long-lived assets. SFAS 121 requires that regulatory assets that are no longer probable of recovery through future revenues be charged to earnings. Based upon the current regulatory environment in the company's operating service area, it is not expected that the adoption of SFAS 121 would have a material impact on the company's financial position or results of operations. This conclusion may change in the future as competitive factors influence wholesale and retail pricing in the electric utility industry, or if the cost-of-service based regulatory structure were to change. 3. Derivative Financial Instruments CL&P uses fuel price swaps to hedge against well-defined fuel price risk created by negotiated energy contracts. CL&P does not use these agreements for trading purposes. Those fuel swap agreements minimize exposure associated with rising fuel prices and effectively fix CL&P's cost of fuel for these negotiated energy contracts. Under the swap agreements, CL&P exchanges monthly payments based on the differential between fixed and variable prices for the associated fuel. These swap agreements have been made with various financial institutions, each of which is currently rated "A" or better by Standard & Poors rating group. CL&P is exposed to credit risk on its fuel swaps if the counterparties fail to perform their obligations. However, based on the high credit quality of CL&P's counterparties, management anticipates that all the obligations under the swap contracts will be fully satisfied. As of September 30, 1995, CL&P had outstanding fuel-swap agreements with a total notional value of approximately $252 million. As of October 31, 1995, the fuel swaps outstanding had a negative mark-to-market position of approximately $11 million. For further information on Derivative Financial Instruments, see the Notes to Consolidated Financial Statements in CL&P's March 31, 1995 and June 30, 1995 Form 10-Qs and in its 1994 Form 10-K. 4. Commitments and Contingencies Construction Program: For information regarding CL&P's construction program, see the Notes to Consolidated Financial Statements in CL&P's 1994 Form 10-K. Nuclear Performance: For information regarding the performance of CL&P's nuclear units, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q, and see CL&P's March 31, 1995 and June 30, 1995 Form 10-Qs, and 1994 Form 10-K. Environmental Matters: For information regarding environmental matters, see "Part II. Item 5. Other Information" in this Form 10-Q, and the Notes to Consolidated Financial Statements in CL&P's March 31, 1995 Form 10-Q and 1994 Form 10-K. Nuclear Insurance Contingencies: For information regarding nuclear insurance contingencies, see the Notes to Consolidated Financial Statements in CL&P's 1994 Form 10-K. Purchased Power Arrangements: For information regarding purchased power arrangements, see the Notes to Consolidated Financial Statements in CL&P's 1994 Form 10-K. Hydro-Quebec: For information regarding Hydro-Quebec, see the Notes to Consolidated Financial Statements in CL&P's 1994 Form 10-K. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations This section contains management's assessment of CL&P's (the company) financial condition and the principal factors having an impact on the results of operations. The company is a wholly owned subsidiary of Northeast Utilities (NU). This discussion should be read in conjunction with the company's consolidated financial statements, footnotes and Part II, Other Information, of this report and Management's Discussion and Analysis in the 1994 Form 10-K and the First and Second Quarter 1995 Form 10-Qs. FINANCIAL CONDITION Overview The company's net income increased to approximately $164 million for the nine months ended September 30, 1995, from approximately $158 million for the same period in 1994. The increase in net income is primarily attributable to higher revenues related to regulatory decisions, a favorable tax ruling in the first quarter of 1995 and a reduction in maintenance costs, partially offset by lower retail kilowatt-hour sales as a result of mild weather in the first quarter of 1995, lower wholesale revenues and higher fuel and purchased-power costs. CL&P's retail kilowatt-hour sales through September 1995 were down by 1.5 percent from 1994, which had colder than normal weather in the first quarter. Net income increased to approximately $60 million for the three months ended September 30, 1995, from approximately $50 million for the same period in 1994. The increase in net income is primarily attributable to higher kilowatt-hour sales due to hotter summer weather, higher revenues from regulatory decisions and a lower level of non-recurring charges. Retail kilowatt-hour sales for the quarter were up 2.2 percent from 1994. Workforce Reductions In July, 1995, NU announced a program aimed at reducing the nuclear organization's total workforce by approximately 250 employees. The NU system- wide estimated pre-tax cost of the early retirement that was charged to expense in the third quarter was approximately $7 million. This estimate was based on 121 eligible employees accepting the early retirement. The balance of the workforce reduction will be achieved through attrition and layoffs. The estimated cost to the NU system of layoffs to could be in the range of $2 to $3 million. Regulatory Matters In September 1995, the Department of Public Utility Control (DPUC) issued a draft decision denying CL&P's request to exclude market based contracts from the fossil fuel adjustment clause, on the ground that such treatment creates cost shifting among customers. The impact of this decision, if finalized, would be a reduction in fuel revenues of about $13 million a year based on contracts currently in place. Nuclear Performance The composite capacity factor of the five nuclear generating units that the NU system operates - including the Connecticut Yankee nuclear unit (CY) - was 68.6 percent for the nine months ended September 30, 1995, as compared with 64.3 percent for the same period in 1994. An extended refueling and maintenance outage for Millstone Unit 2, which ended on August 4, 1995, had an adverse impact on the 1995 nuclear capacity factor. In early November, Seabrook and Millstone 1 began planned 50-day refueling and maintenance outages. Total replacement power costs attributable to the extension of the Millstone Unit 2 outage for CL&P are approximately $68 million. In addition, operation and maintenance (O&M) costs incurred during the outage are approximately $57 million, an increase of $30 million as a result of the outage extension. O&M costs associated with the refueling outage are deferred and amortized through rates. The recovery of the replacement power and O&M costs is subject to prudence reviews in Connecticut. CL&P has a mechanism that has been in operation since 1979 designed to recover or refund certain non-nuclear fuel costs if the nuclear units do not operate at a predetermined capacity factor (the Generation Utilization Adjustment Clause or GUAC). In early August 1995, CL&P filed its annual GUAC filing with the DPUC. As part of that filing, CL&P proposed to recover its 1994-1995 GUAC costs over an 18 month period (instead of the usual 12 months) to mitigate the impact of the GUAC rate increase. On August 31, 1995, the DPUC issued an interim decision that allowed CL&P to begin recovering $80 million of the GUAC costs over an 18 month period beginning in September 1995. The $80 million is net of the certain fuel "overrecoveries" during the GUAC period (approximately $19 million). In its decision, the DPUC also stated that it would examine the GUAC rate in detail in the November quarterly fuel proceeding and issue a final decision at that time. The DPUC's decision is also subject to the results of a prudence review of the Millstone 2 outage. CL&P has reserved $19 million for the "overrecoveries" during the GUAC period. While the company is unable to predict the outcome of possible prudence reviews of its nuclear operations or the GUAC overrecoveries issues, management believes that the ultimate resolution of these matters will not have a material adverse impact on the company's financial position or the results of its operations. LIQUIDITY AND CAPITAL RESOURCES Cash provided from operations increased approximately $19 million for the first nine months of 1995, as compared to 1994, primarily due to payments received under a new wholesale power contract in 1995. Cash used for investments increased approximately $16 million primarily due to higher investments in the nuclear decommissioning trust in 1995. RESULTS OF OPERATIONS Comparison of the Third Quarter of 1995 with the Third Quarter - -------------------------------------------------------------- of 1994 - ------- The components of the change in operating revenues are as follows: Changes in Operating Revenues Increase/(Decrease) - ----------------------------- ------------------- (Millions of Dollars) Regulatory decisions $ 15 Fuel and purchased-power cost recoveries 16 Retail sales volume 11 Wholesale revenues (3) Other 1 ---- Total revenue change $ 40 ==== Revenues related to regulatory decisions increased primarily because of the July 1995 retail rate increase. Fuel and purchased-power cost recoveries increased primarily due to higher sales and the recovery of GUAC costs. Retail kilowatt- hour sales increased 2.2 percent for the quarter from 1994 levels as a result of hotter summer weather. Wholesale revenues decreased primarily due to capacity sales contracts that expired at the end of 1994. Fuel, purchased, and net interchange power expense increased approximately $19 million in the third quarter of 1995 primarily because of higher 1995 GUAC amortization and the impact of a DPUC draft decision on market based contracts. Other operation and maintenance expense decreased approximately $8 million primarily due to a nuclear inventory write-off in 1994 and lower maintenance costs at the fossil units, partially offset by higher amortization of demand- side-management costs and higher outside services employed. Amortization of regulatory assets, net increased approximately $12 million in the third quarter of 1995 primarily because of the reduction in the deferral of CL&P cogeneration expenses from approximately $6 million a month to approximately $3 million a month beginning July 1995. Federal and state income taxes increased approximately $6 million in the third quarter of 1995 primarily because of higher book taxable income. Deferred nuclear plants return decreased approximately $4 million in the third quarter of 1995 primarily because the last 5 percent of CL&P's Millstone 3 investment was phased into rates on January 1, 1995. Other income increased approximately $5 million in the third quarter of 1995 primarily because of an adjustment in September 1994 to the environmental reserve. Comparison of the First Nine Months of 1995 with the First Nine - --------------------------------------------------------------- Months of 1994 - -------------- The components of the change in operating revenues are as follows: Changes in Operating Revenues Increase/(Decrease) - ----------------------------- ------------------- (Millions of Dollars) Regulatory decisions $ 47 Retail Sales volume (17) Wholesale revenues (15) Fuel and purchased power cost recoveries (18) Other (2) ---- Total revenue change $(5) ==== Revenues related to regulatory decisions increased primarily because of the retail rate increases in July 1994 and 1995. Retail sales volume decreased 1.5 percent for the first nine months of 1995 from 1994 sales levels primarily due to mild weather in the first quarter of 1995, partially offset by hotter summer weather. Wholesale revenues decreased primarily due to capacity sales contracts that expired at the end of 1994. Fuel and purchased-power cost recoveries decreased primarily due to lower kilowatt-hour sales and lower fuel prices partially offset by the recovery of GUAC costs. Fuel, purchased, and net interchange power expense increased approximately $13 million in the first nine months of 1995 primarily because of a higher level of energy purchases from other utilities as a result of the extended Millstone 2 outage, a reserve for fuel overrecoveries and the impact of the DPUC draft decision on market based contracts. These increases were partially offset by higher deferred GUAC expenses, net of GUAC amortization. Other operation expense increased approximately $7 million and maintenance expense decreased approximately $13 million. The increase in operation expense is due primarily to higher capacity charges from the regional nuclear units primarily due to Maine Yankee which is in an extended refueling outage and Vermont Yankee which had an outage in March 1995, higher 1995 demand-side- management amortization costs and higher outside services employed, partially offset by a nuclear inventory write-off in 1994. The decrease in maintenance expense is due primarily to lower maintenance costs at the fossil units. Depreciation expense increased approximately $9 million in the first nine months of 1995 primarily because of higher plant balances and higher decommissioning levels in 1995. Amortization of regulatory assets, net decreased approximately $30 million in the first nine months of 1995 primarily because of the deferral of CL&P cogeneration expenses which began in July 1994 and the 1994 amortization of the CL&P cogeneration buyout. Federal and state income taxes decreased approximately $13 million in the first nine months of 1995 primarily because of a first quarter 1995 adjustment to the income tax accrual as a result of a favorable tax ruling and lower book taxable income. Deferred nuclear plants return decreased approximately $11 million in the first nine months of 1995 primarily because the last 5 percent of CL&P's Millstone 3 investment was phased into rates on January 1, 1995. PART II. OTHER INFORMATION Item 1. Legal Proceedings 1. On November 7, 1995, the DPUC issued a draft decision in the Texas-Ohio Power Company (Texas-Ohio) proceeding that was filed by CL&P in mid-August. The DPUC found that a private power producer (PPP) can sell electricity to retail customers in Connecticut as long as the PPP does not use public rights of way. The draft decision specifically states that the ruling is "narrow in scope" and that a PPP that seeks to utilize public rights of way to sell at retail to end users in Connecticut would require a franchise. A final decision in this DPUC proceeding is expected at the end of November. For additional information on this proceeding, see "Legal Proceedings" in CL&P's 1995 Form 10-Q for the quarter ended June 30, 1995. Item 5. Other Information 1. On October 4, 1995, the U.S. Court of Appeals for the District of Columbia Circuit granted a motion to intervene filed by Northeast Utilities Service Company, Connecticut Yankee Atomic Power Company and North Atlantic Energy Service Company as party petitioners in the lawsuit brought by other nuclear utilities seeking a judicial declaration that the Nuclear Waste Policy Act of 1982, as amended, unconditionally binds the U.S. Department of Energy to begin acceptance of spent nuclear fuel and high-level radioactive waste beginning on January 31, 1998. For additional information on this matter, see "Item 1. Business - Electric Operations - Nuclear Generation - High-Level Radioactive Waste" in CL&P's 1994 Form 10-K. 2. On October 12, 1995, the NRC issued an order halting major dismantling or decommissioning activities at the Yankee Rowe Nuclear Plant (Yankee Rowe) until after completion of an adjudicatory hearing process. The NRC intends to issue a Notice of Opportunity for a hearing on the NRC staff-approved Yankee Rowe decommissioning plan and, if a hearing is requested, order an expedited hearing. The NRC's action was taken in response to a recent federal appeals court decision finding that the NRC should have offered a hearing opportunity prior to authorizing Yankee's Component Removal Program in 1993. For additional information on this matter, see "Other Information" in CL&P's 1995 Form 10-Q for the quarter ended June 30, 1995. 3. On October 13, 1995, the Connecticut Department of Environmental Protection (DEP) issued a consent order to CL&P and NUSCO requiring those companies to address leaks from the Long Island cable, which is jointly owned by CL&P and the Long Island Lighting Company (LILCO). The order will obligate CL&P and NUSCO to study and propose alternatives for prevention, detection and mitigation of oil leaks and to evaluate the ecological effects of leaks on the environment. Alternatives to be studied include removal and replacement of the cable. The System will incur additional costs to complete the requirements of the order and to meet any subsequent DEP requirements resulting from the studies under the consent order, which costs cannot be estimated at this time. 4. The United States Attorney's Office in New Haven, Connecticut has commenced an investigation and has issued subpoenas to CL&P, NU and NUSCO, seeking documents relating to operation and maintenance of and recent leaks from the Long Island cable. Since the investigation is in its preliminary stages and the government has not revealed the scope of its investigation, management cannot evaluate the likelihood of a criminal proceeding being initiated at this time. However, management is aware of nothing that would suggest that any System company, officer or employee has engaged in conduct that would warrant such a proceeding. Item 6. Exhibits and Reports on Form 8-K (a) Listing of Exhibits: Exhibit Number Description ------- ----------- 27 Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K have been filed during this reporting period. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE CONNECTICUT LIGHT AND POWER COMPANY --------------------------------------- Registrant Date November 13, 1995 By /s/ Bernard M. Fox -------------------- ------------------------------ Bernard M. Fox Chairman and Director Date November 13, 1995 By /s/ John W. Noyes -------------------- ----------------------------- John W. Noyes Vice President and Controller EX-27 2
UT 0000023426 THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES 1,000 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK 4,013,002 291,805 504,087 1,338,473 0 6,147,367 122,229 637,437 793,477 1,553,143 155,000 116,200 1,815,232 81,650 0 0 8,719 7,500 108,655 65,776 2,235,492 6,147,367 1,764,733 132,525 1,379,094 1,517,776 246,957 8,074 261,188 96,760 164,428 17,379 147,049 119,296 0 398,553 0.00 0.00
-----END PRIVACY-ENHANCED MESSAGE-----