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
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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)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- -------------
(Thousands of Dollars)
<S> <C> <C>
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
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- -------------
(Thousands of Dollars)
<S> <C> <C>
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
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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)<F4>
Total Capitalization and Liabilities........... $ 6,147,367 $ 6,217,457
============= =============
</TABLE>
See accompanying notes to consolidated financial statement
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------------
1995 1994 1995 1994
--------- --------- ----------- -----------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
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
========= ========= =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------
1995 1994
----------- -----------
(Thousands of Dollars)
<S> <C> <C>
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
=========== ===========
</TABLE>
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
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000023426
<NAME> THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,013,002
<OTHER-PROPERTY-AND-INVEST> 291,805
<TOTAL-CURRENT-ASSETS> 504,087
<TOTAL-DEFERRED-CHARGES> 1,338,473
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 6,147,367
<COMMON> 122,229
<CAPITAL-SURPLUS-PAID-IN> 637,437
<RETAINED-EARNINGS> 793,477
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,553,143
155,000
116,200
<LONG-TERM-DEBT-NET> 1,815,232
<SHORT-TERM-NOTES> 81,650
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 8,719
7,500
<CAPITAL-LEASE-OBLIGATIONS> 108,655
<LEASES-CURRENT> 65,776
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,235,492
<TOT-CAPITALIZATION-AND-LIAB> 6,147,367
<GROSS-OPERATING-REVENUE> 1,764,733
<INCOME-TAX-EXPENSE> 132,525
<OTHER-OPERATING-EXPENSES> 1,379,094
<TOTAL-OPERATING-EXPENSES> 1,517,776
<OPERATING-INCOME-LOSS> 246,957
<OTHER-INCOME-NET> 8,074
<INCOME-BEFORE-INTEREST-EXPEN> 261,188
<TOTAL-INTEREST-EXPENSE> 96,760
<NET-INCOME> 164,428
17,379
<EARNINGS-AVAILABLE-FOR-COMM> 147,049
<COMMON-STOCK-DIVIDENDS> 119,296
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 398,553
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
