SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 25, 1996
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Commission File Number 0-404
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THE CONNECTICUT LIGHT AND POWER COMPANY
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(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0303850
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SELDEN STREET, BERLIN, CONNECTICUT 06037-1616
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(Address of principal executive offices) (Zip Code)
(203) 665-5000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
1. Nuclear Matters
Millstone Units - Readiness for Restart Plans
Millstone 1, a 660-MW boiling water reactor, and Millstone 2, an 870-MW
pressurized water reactor, are each owned 81 percent by The Connecticut Light
and Power Company (CL&P) and 19 percent by Western Massachusetts Electric
Company (WMECO). Millstone 3, a 1154-MW pressurized water reactor, is
jointly owned by CL&P (52.93 percent), WMECO (12.24 percent), Public Service
Company of New Hampshire (PSNH) (2.85 percent) and other New England
utilities. CL&P, WMECO and PSNH are subsidiaries of Northeast Utilities (NU)
and comprise, together with NU's other subsidiaries, the "NU System".
The three Millstone units (collectively, Millstone) are located in
Waterford, Connecticut and are managed by Northeast Nuclear Energy Company
(NNECO), another subsidiary of NU. Millstone 1, 2 and 3 have been out of
service since November 4, 1995, February 21, 1996 and March 30, 1996,
respectively, and are presently on the Nuclear Regulatory Commission's (NRC)
watch list. NNECO is addressing a number of concerns raised by the NRC about
Millstone.
On December 17, 1996, NNECO advised the NRC staff of its comprehensive
plans for restarting each of the Millstone units. Each unit's recovery team
will be working towards restart of its respective unit on a parallel basis
with the other two units. Based upon management's current plans, it is
estimated that one of the units will be ready for restart in the third
quarter of 1997 with the second and third units being ready for restart in
the fourth quarter of 1997 and the first quarter of 1998, respectively.
Millstone 1 presently has the most aggressive schedule, but there are no
assurances it will be the first unit to restart. Prior to and following
notification to the NRC that the units are ready to resume operations,
management expects that the NRC staff will conduct extensive reviews and
inspections, and, prior to such notification, independent corrective action
verification teams will also inspect each unit. The units will not be allowed
to restart without an affirmative vote of the NRC commissioners following
completion of these reviews and inspections. Management cannot estimate when
the NRC will allow any of the units to restart, but hopes to have at least
one unit operating in the second half of 1997.
For additional information regarding nuclear performance matters,
nuclear regulatory requirements and the financial effect on the NU System of
the Millstone outages, see CL&P's Forms 8-K dated January 31, 1996, March 30,
1996, April 15, 1996, June 3, 1996, June 18, 1996, June 28, 1996, July 22,
1996 and August 19, 1996, CL&P's Forms 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996 and "Item 1. Business - Electric
Operations - Nuclear Generation" in NU's 1995 Form 10-K.
Connecticut Yankee
On December 4, 1996, the board of directors of Connecticut Yankee Atomic
Power Company (CYAPC) voted unanimously to retire the Connecticut Yankee
nuclear plant (CY) from commercial operation. CL&P, WMECO and PSNH own
34.5%, 9.5% and 5%, respectively, of CYAPC's common stock. The decision to
shut down CY was based on an economic analysis of the costs of operating it
compared to the costs of closing it and incurring replacement power costs
over the remaining period of the unit's operating license. This analysis did
not consider the costs of addressing concerns about CY's design and licensing
basis raised by the NRC this past summer similar to those raised at
Millstone. If these costs had been considered the economic analysis would
have been even more negative. CYAPC has undertaken a number of regulatory
filings intended to implement the decommissioning.
For additional information regarding the decision to retire CY, see
CL&P's Form 10-Q for the quarter ended September 30, 1996 and "Item 1.
Business - Electric Operations - Nuclear Generation" in NU's 1995 Form 10-K.
NRC Enforcement Conferences
On December 4 and 5, 1996, the NRC conducted enforcement conferences
regarding numerous apparent regulatory violations at Millstone and CY that
were discovered during routine and special inspections at the units during
1996. It is likely that these proceedings will result in the issuance of
Notices of Violations and the imposition of significant civil penalties for
each of the units.
DPUC Management Audit
On December 6, 1996, one of the two outside consulting firms retained by
the Connecticut Department of Public Utility Control (DPUC) to audit the NU
System's nuclear operations through August 30, 1996 issued its final report.
The report, among other things, was highly critical of NU's senior management
and made a finding that NU should consider eliminating its dividend.
Although the results of this report could bear on any future DPUC review of
the prudence of the System's nuclear-related costs, NU management does not
intend to recommend to the NU Board of Trustees that it reconsider the
dividend level at this time.
For additional information regarding the DPUC audit see CL&P's Form 8-K
dated March 30, 1996. For additional information regarding the present
dividend level, see NU's Form 8-K dated July 22, 1996 in which management
stated that it considered the new dividend level reported in the 8-K to be
sustainable in a range of scenarios.
Section 2.206 Petition
On November 25, 1996, a petition was filed by the Citizens Awareness
Network with the NRC under Section 2.206 of the agency's regulations
requesting, among other things, that the NRC suspend or revoke NNECO's
licenses to operate Millstone due to alleged mismanagement of the units. The
petitioners also request actions by the NRC regarding its regulation and
oversight of Millstone and the decommissioning of CY. Management is
currently evaluating how it will respond to the petition, but does not
believe that the petition will result in the suspension or revocation of any
of the units' operating licenses.
Potential Joint Owner Litigation
The non-NU owners of Millstone 3 have been paying their monthly shares
of the cost of that unit since it went out of service in March 1996, but have
reserved their rights to contest whether the NU System companies have any
responsibility for the additional costs the non-NU owners have borne as a
result of the current outage of that unit. No formal claims have been made,
but management believes that it is possible that some or all of the non-NU
owners will assert liability on the part of the NU System. CL&P and WMECO,
through NNECO as agent, operate Millstone 3 at cost, and without profit,
under a Sharing Agreement that obligates them to utilize good utility
operating practice and requires the joint owners to share the risk of
employee negligence and other risks pro rata in accordance with their
ownership shares. The Sharing Agreement provides that CL&P and WMECO would
only be liable for damages to the non-NU owners for a deliberate breach of
the Agreement pursuant to authorized corporate action. If brought, NU would
vigorously defend against any such action.
CMEEC Notice of Breach
On December 16, 1996, the Connecticut Municipal Electric Energy
Cooperative (CMEEC), which receives from CL&P approximately 3.5% of each of
Millstone 1 and 2's capacity and energy in exchange for payment of a like
amount of the units' costs under a life-of-unit contract, advised CL&P that
it was terminating this contract for cause due to the extended outages and
stopped making payments for such costs thereunder. CL&P intends to contest
this action vigorously if it cannot satisfy CMEEC's concerns through
negotiation. CMEEC's payment obligations under the contract are
approximately $1.6 million per month.
2. NU System Capacity
On December 6, 1996, a fuel barge damaged the Long Island end of the
underwater cables extending from Northport, New York to Norwalk, Connecticut
(Long Island Cable). The Long Island Cable can provide up to 300 MW of
capacity to CL&P from Long Island Lighting Company to enhance system
reliability, but will not return to service until at least next summer.
Notwithstanding problems with the Long Island Cable, the shutdown of CY and
the outages at Millstone, the NU operating companies are effecting
improvements to the System's transmission facilities and expect to have
sufficient capacity, assuming expected system load and expected operations of
system facilities, to meet peak demands in their service areas through the
winter of 1996-1997 and the summer of 1997.
For additional information regarding the NU System's capacity, see
CL&P's Form 8-K dated July 22, 1996 and Forms 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996.
3. Storm Bernice
Storm Bernice, which struck the NU System's service area on December
7-8, 1996, was the fourth most severe in the System's history, causing power
outages at its peak to about 352,000 of its customers (about 20% of all
customers). Restoration efforts were largely completed by December 11 and
are expected to cost NU about $20-30 million. After payment of a $10 million
deductible, up to $15 million of insurance is available to cover the
restoration costs.
SIGNATURE
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
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Registrant
Date December 19, 1996 By /s/ John B. Keane
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John B. Keane
Vice President and Treasurer
