March 31, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Attention: Filing Desk
Stop 1-4
Washington, DC 20549-1004
RE: The Connecticut Light and Power Company
Western Massachusetts Electric Company
Northeast Nuclear Energy Company
File No. 70-6907
Gentlemen:
Enclosed for filing on behalf of The Connecticut Light and Power
Company (CL&P), Western Massachusetts Electric Company (WMECO),
and Northeast Nuclear Energy Company (NNECO) is a Certificate As
To Partial Consummation Of Transaction under Rule 24 of the
Public Utility Holding Company Act of 1935 with respect to the
calculation of the composite return on equity NNECO will use in
1997 for purposes of billing CL&P and WMECO under the Amended and
Restated Millstone Plant Agreement.
Very truly yours,
/s/ John J. Roman
John J. Roman
Vice President and Controller
Enclosures
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
- - ----------------------------------------------
)
In the Matter of )
)
THE CONNECTICUT LIGHT AND POWER COMPANY )
NORTHEAST NUCLEAR ENERGY COMPANY )
Berlin, Connecticut )
) CERTIFICATE AS TO
WESTERN MASSACHUSETTS ELECTRIC COMPANY ) PARTIAL CONSUMMATION
West Springfield, Massachusetts ) OF TRANSACTION
)
)
File No. 70-6907 )
)
(Public Utility Holding Company Act )
of 1935) )
)
- - ----------------------------------------------
Pursuant to the Public Utility Holding Company Act of 1935 and
Rule 24(a) thereunder, The Connecticut Light and Power Company (CL&P),
Western Massachusetts Electric Company (WMECO) and Northeast Nuclear
Energy Company (NNECO), referred to collectively herein as the
Companies, hereby submit this certification in accordance with the
terms and conditions of and for the purposes represented by the
Application-Declaration (the Application) filed by the Companies in this
proceeding, and of the order dated December 6, 1983 of the Commission
with respect thereto (the Order).
In accordance with the terms of the Application and Order, the
Companies hereby submit Exhibit 1, Computation of NNECO's 1996 Equity
Return.
Dated: March 31, 1997
THE CONNECTICUT LIGHT AND POWER COMPANY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTHEAST NUCLEAR ENERGY COMPANY
By /s/ John J. Roman
John J. Roman
Their Vice President and Controller
Exhibit 1
COMPUTATION OF NNECO'S 1997 EQUITY RETURN
Effective January 1, 1997 the composite return on equity (ROE) that NNECO
will use in its billing to CL&P and WMECO for the calendar year 1997
is as follows:
Composite
ROE* Ownership ROE
CL&P 11.7% x 81% = 9.48%
WMECO 12.0% x 19% = 2.28%
-----
TOTAL 11.76%
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*These ROE rates are the ROEs authorized by the respective retail
rate regulators in the rate decisions most recently decided before
December 31, 1997. Abstracts from those decisions are attached
hereto as Exhibit 1-a (CL&P) and Exhibit 1-b (WMECO).
Exhibit 1-a
Docket No. 92-11-11
reduction to bills commencing April 1 of the succeeding year in a
manner to be approved by the DPUC. To the extent that CL&P's actual
ROE for any such 12 month period falls below 10.7 percent, CL&P will
decelerate the mitigation of such regulatory and strandable assets
provided for in paragraph 7 as it may choose in amounts sufficient to
produce a 10.7 percent ROE, provided however, that CL&P shall not
decelerate the minimum annual amortizations in paragraph 7. In the
event that after utilizing the maximum permitted deceleration of
regulatory and strandable assets, CL&P projects that its ROE for the
calendar year 1997 will fall below 8.7 percent, CL&P shall be
permitted to file for a rate increase under the provisions of
C.G.S. paragraphs 16-19 with an effective date for new rates commencing
in that year notwithstanding the rate freeze in paragraph 1. CL&P's
right to file for a rate increase to become effective after calendar
year 1997 shall not be affected by this Agreement. CL&P's "allowed"
ROE shall remain at the currently approved level of 11.7 percent during
the period of the rate freeze in paragraph 1.
(b) For the purpose of calculating CL&P's ROE under the provisions
of this paragraph, all such calculations shall be made on a cost of capital
basis consistent with the DPUC's uniform system of accounts and the
definitions of operating income and rate base in Docket No. 92-11-11,
and shall be after the target mitigation of regulatory and strandable
assets in paragraph 7. For the purpose of such calculations the
following amounts shall be excluded: (i) any incremental NRC billings
as a result of the Millstone Station being placed on the "watch list";
(ii) to the extent presently excluded by CL&P, and as commented upon
favorably in the DPUC's investigation of utility company executive
compensation (Docket No. 96-02-03), executive incentive expense;
(iii) the impact of any incentive mechanisms such as a "deadband" that the
Exhibit 1-b
D.P.U. 91-290 Page 3
or rate design (id., p. 1).
The Company and the Attorney General agree that for purposes of
calculating the Allowance for Funds Used During Construction and
inter- and intra-class cost allocations in this case, a rate of return
on common equity of 12.00 percent shall be used (id., para. 2.3).
The Attorney General and WMECO stipulate that if the merger with
Public Service of New Hampshire is completed, the Company will serve
on the Department and the Attorney General all reports of direct and
allocated administrative and general, operations and maintenance, and
Northeast Utility Service Company charges billed to each of the
Northeast Utility subsidiaries, when those reports are filed with the
Connecticut Department of Public Utility Control. Pursuant to the
stipulation, the Company will also serve on the Attorney General and
the Department all orders by the Connecticut Department of Public
Utility Control regarding the ratemaking adjustments to reflect the
system-wide apportionment of off-system capacity sales. In addition,
the Attorney General and WMECO agree to notify the Department and
Attorney General in advance of any proposed changes to the sharing
agreement or the capacity transfer agreements that govern certain
power transactions among the Northeast Utility system companies (i.d.,
para. 2.6).
