March 29, 2000
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 2000 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
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)
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) )
)
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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 2000 Equity Return.
Dated: March 29, 2000
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/ John P. Stack
John P. Stack
Controller
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTHEAST NUCLEAR ENERGY COMPANY
By
/s/ John J. Roman
John J. Roman
Vice President and Controller
EXHIBIT 1
Computation of NNECO's 2000 Equity Return
Effective January 1, 2000, the composite return on equity (ROE) that NNECO will
use in its billing to CL&P and WMECO for the calendar year 2000 is as follows:
Composite
ROE* Ownership ROE
CL&P 10.3% 81% = 8.34%
WMECO 11.0% 19% = 2.09%
Total 10.43%
*These ROE rates are the ROE's authorized by the respective retail rate
regulators in the rate decisions most recently decided. Abstracts from
those decisions are attached hereto as Exhibit 1-a (CL&P) and
Exhibit 1-b (WMECO).
EXHIBIT 1-a
Per Docket 98-01-02, 2/5/99 Decision
g. Conclusion on Cost of Equity
"The Department believes that the 12.0% projected equity earnings of the Value
Line Industrial Composite provides the maximum for the reasonable cost of
equity range. It is not reasonable to assume that the risk of a BBB+ rated
electric utility, not yet transitioned to competition, would exceed that of
the nonregulated market. The higher equity costs of Mr. Wiater's (Department
updated) 12.59% risk premium and 12.77% CAPM models are considered, subject
to this 12.0% ceiling. The midpoint of the reasonable range is 10.36%, and
the Department concludes that 10.3% is a just and reasonable return on equity
that adequately compensates investors for the risks assumed."
EXHIBIT 1-b
Docket No. DTE 97-120
"Based on WMECo's financial condition, asset portfolio, and its proposed level
of transition charge, the Department finds that an allowed return on common
equity of 11.00% satisfies the Act, is within the range of reasonableness, and
meets the standards set forth in Bluefield and Hope. Accordingly, the
Department finds that WMECo is allowed a ROE of eleven percent for purposes of
calculating its carry charge. However, if the Legislature revises the
section of the Act discussed here, the Department may, at that time, require
an adjustment to the Company's ROE."
