Text

Annual Rept 1989,Connecticut Light & Power Co
	ML20043A495
Person / Time
Site:	Haddam Neck, Millstone File:Connecticut Yankee Atomic Power Co icon.png
Issue date:	12/31/1989
From:	Ellis W, Fox B; CONNECTICUT LIGHT & POWER CO. (SUBS. OF NORTHEAST
To:	;
Shared Package
ML20042E591	List: ML20042E590; ML20043A492; ML20043A495;
References
	NUDOCS 9005220141
	Download: ML20043A495 (43)
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{{#Wiki_filter:- i ~. ANNUAL REPORT 1 l i 1989 o 8

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+ 3 s' l \\ N l J l l CL&P o The Connecticut Light and Power Company 1 a subsidiary of Northeast Utilities 4 9005220141 900405 l PDR ADOCK 05000213 .I 1 PDR .} .. 2. _.... _ _ _ _ _..__ _.. _. _.._~ _._.____;

K v Directors - i ROBERT G. ABAIR-FRANK R. LOCKE Vice President and Chief Administrative Officer - Senior Vice President Western Massachusetts Electne Company EDWARD J. thROCZKA' ROBERT E. BUSCH ,. Senior Vice President - Senior Vice President and Chef s p pg nan alOker Executive Vice President JOHN P, CAGNETTA LAWRENCE H. SHAY j Senior Vice President. Senior Vice President WILLIAM B. ELLIS - WALTER F. TORRANCE, JR' Chairman and Chief Executive Officer I Senior Vice President. Secretary and . BERNARD M. FOX GeneralCounsel President and Chief Operat!ng Officer \\ Officers - q WILLIAM B. ELLIS RAYMOND E. DONOVAN' RICHARD P. WERNER' Chairman and Chief Vice President Vice President - xe uwe Oker ' BERNARD M. FOX Vice President ^ RICHARD R. CARELLA. ALBERT J. HAJEK Regional Vice President-Eastern P sident and Chief Operating RM WW C EWQ Vice President Regional Vice President-Southern JOHN F. OPEKA FRANCIS L KINNEY ROY C. J. NORMEN Executive Vice President l l Vice President Regional Vice President-Northern ROBERT E. BUSCH HUGH C.'MACKENZIE ALFRED R. ROGERS Senior Vice President and Chief FinancialOfficer Vice President Regional Vice President-Central JOHN P, CAGNETTA KEITH R. MARVIN ROBERT W. ZONGHETTI - Senior Vice President Vice President RegionalVice President-Western ^ I FRANK R. LOCKE -JOHN W. NOYES = THERESA H, ALLSOP Senior Vice President .Vice President Assistant Secretary EDWARD J. MROCZKA RICHARD A. RECKERT DOUGLAS R.TEECE Senior Vice President Vice President Assistant Secretary LAWRENCE H. SHAY WAYNE D. ROMBERG KAREN G. VALENTI Senior Vice President. Vice President - Assistant Secretary WALTER F. TORRANCE JR. WALTER T. SCHULTHEIS ROBERT C. ARONSON. Vice President Assistant Treasurer. Senior Vice President. Secretary and GeneralCounsel C. FREDERICK SEARS ARTHOR H. HIERL C.THAYER BROWNE Vice President Assistant Treasurer ' l Vice President and Treasurer GEORGE D. UHL. EUGENE G. VERTEFEUILLE L ' TOD O. DIXON Vice President and Controller Assistant Treasurer Vice President i FEBRUARY 28,1990 t i i a

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1989' Annual: Report a d '.I ,) s. L The_ Connecticut Light and Power Company; ~ .a L. T a 'Indexc p + ,Y w en e k *. ' L [ h. r contentsI f g s g _,... n3 i [' 9/ i

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w s.- K l Report of Independent Public Account ants..................:....'. b + .35 Selected Financial Data............'........'.......>.....,.........I ~36 t Statements of. Quarterly Financial Data........i..-............... 36- ' Statistics.'............;.-...........c...................[.......... 37L Preferred' Stockholder and Bondholder'Informition........'........., c38 T i "_t-4 k-l (, v'. f .tr bf f t ,.4, t;. - i 1 1 ^- L'- i. + i "#.~ . [ 1., 4p -a. L lj p i' 1 4 4 4 N ' f.[. [p 2 c. r C w f.; t ,_2; r a g' [ _ m u i 5. '-*. y, 'u g r + 4 s,. -,

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i e-s r 7 THE CONNECTICUT LIGHT AND POWER COMPANY 5 March, 1990 TO OUR PREFERRED STOCKHOLDERSt r The financial statements and statistical data contained in. this report reflect the results of operations of;The Connecticut Light and Power-Company (CL&P) for 1989. The 1989 annual report j of Northeast Utilities,-which provides information regarding the entire Northeast Utilities system, including CL&P,.has also been 1 mailed to all CL&P preferred stockholders. This report is brief for that reason. In 1989, operating revenues (excluding. discontinued gas- -i operations) increased to $1'.8 billion from $1.7 billion in 1988. Corresponding net income decreased from $221.5 million in 1988 to i $207.9 million in 1989. During 1989, CL&P' filed a proposal with the Connecticut -[ ~ Department of Public. Utility Control (DPUC) aimed at avoiding a need to request increased rates for 1990. The DPUC issued a decision affecting the treatment of CL&P capacity sales and approved the equal sharing by ratepayers and. shareholders of any return on equity (ROE) earned by CL&P-in 1989 and 1990 in excess of the 12.9 percent ROE allowed in 1988. As'a result, CL&P does not anticipate requesting increased rates that would be in effect earlier than 1991. CL&P also continued selling, capacity to other'New England utilities under-terms of contracts negotiated in'1988 and 1989. Those contracts provide for sales of more than 3,800 megawatt-years of capacity over a ten-year span that will net CL&P J more than $600 million in direct-cash flow to apply to.the l Company's revenue requirements. L In July, the Company completed the divestiture of its gas-business by spinning off the business into Yankee Energy System, Inc., and its operating subsidiary, Yankee Gas Services Company. A more comprehensive discussion-for each of these items is I contained within this report. Sincerely, Eernard M. rx William B. Ellis President and Chie Chairman and Chief 4 Operating Of.ficer Executive Officer h y ;t:

[1 o The Connecticut. Light and power Company MANAGEMENT'S DISCUSSION AND ANALYSIS OF-FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section containimanagement's assessment of The Connecticut Light and Power-Company's (the company) financial condition and the principal' factors with 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 financial statements and footnotes. FINANCIAL CONDITION Overview The Company's net income decreased to $214.5 million in 1989 from $232.5 million in'1988. The decrease in net income is 'the result of. higher refuelingi and maintenance outage costs at electric production facilities, the loss of earnings from divested gas assets, unusually moderate weather throughout most of 1989,'and the' general impact of inflation on most expenses in 1989. This, decrease was. partially offset by cost-containment measures instituted by; management.and higher . sales. Unusually moderate weather throughout most of 1989 limited 1the sales increase to 1.8 percent over 1988. Despite the decline in net income, the Company continues to improve th'e quality. of its earnings now that 80 percent of the allowed cost of Millstone 3 has been phased into retail rate base. The Company is allowed to earn a noncash return on the 20 percent portion of Millstone 3. not yet included in. rate, base - As noncash earnings on Millstone 3 are replaced with cashL earnings, management believes that the company's key financial ratios will improve. The' percent of noncash earnings has dropped from 42.8 percent of net earnings. (before preferred dividends) for the year ending December 31,1988:to 25.9 percent of net earnings for the year ending December 31, 1989. The $119 million af ter-tax Millstone 3 urite-off in 1986 continues to-adversely affect the company's financial condition, because it ' reduced the equity base for ratemaking purposes on which the Company is. allowed to earn its return'on equity (ROE). Previously enacted Connecticut Department of public Utility Control (DPUC) regulations and Connecticut legislation that established a $4.7 billion " cap" on the construction costs of Seabrook 1 also adversely affects the Company because of the inability to. record allowance ~ for funds used during construction (AFUDC) and the continued write-off of capital expenditures since 1987. Notwithstanding managemen't's concern with the Company's earnings and equity base, certain management actions and other events are aimed at improving the Company's financial condition. For example, in l'988 and 1989, the. Company' initiated and entered into arrangements to sell over 3,800 megawatt-years of capacity.over a ten-year period. The capacity and transmission revenues from these-sales:are estimated to be over $600 million. However, under-Connecticut rate-setting i ~~ g,1 l w

g W 4 + principles in offect throughout:1989, these'1989 revenues,Rnot included'in base ^ rates,,were deferred'in' order' to reduce revenues ' required 'frcm customers in the. for1 nvestors.- Nevertheless,: > future 2 and were.not available acfearnings i rmanagement believes that investors benefit indirectly from this situation because-these capacity sales help the company's electric rates to remain competitive at ' l a. time'when customers may.otherwise seek out alternative, lower cost sources;of. energy. The revenues from the' capacity ~ sales will also help limit the Company's : need to' apply for future: rate-increases. Other encouraging signs, include the suspension, for 1990, of the capacity sales :

deferraEsince the Company did not' file for a rate increase in 1989., This stems 7

from aLJune 30,"1989 DPUC Supplemental. Decision-(Supplemental-Decision))and an. ~ Augu'stl10, 1989 clarifying order' which provided L for ' this n suspension.;.' < The ' capacity: sales _will provide the company with an increase in net

revenues although ;

the amount is dependent.on the company's success in selling capacity lin'1990..

In.. addition, - the Supplemental Decision ' also" authorized. the : Companyito begin 1

amortizing into revenues, in the second half of 1990,- the capacity sales deferred - in L1989, should' the Company not, file ~ for a rate increase in' the firstT half of - j .1990. This could provide the Company with an; increase in revenues of 'about' [ $10.million during the second-half' of "1990 when the L copany anticipates.its. C earnings will be below its currently allowed ROE. Management believes-that 'these - revenues will-permit.the Company to postpone'a rate' increase application until ' I the second half of 1990. For.information regarding-nuclear decommissioning, environmentalimatters,=andE other contingencies, see "NotesLto Financial Statements." ' ) Public Service Company of New Hampshire (PSNH). In December 1989, ' Northeast Utilities Service Company' (NUSCO) filed with the United States Bankruptcy Court for the District of New Hampshire (the Bankruptcy Court) an-amended Joint Plan of Reorganization.(the Plan),.under which NUSCO's parent, NU, would acquire PSNH. The Plan wasi negotiated.with, and proposed jointly by, ' the of ficial committees of. PSNH's, equity ' security holders 1 and unsecured creditors and the holders of a majority of pSNH's third-mortgage bonds. The present PSNH management agreed to cosponsor.the'Planishortly before it was t filed. The Plan is the only plan of reorganization that has gained the consensus-of the many negotiating parties in the PSNH bankruptcy, which has been going.on 3 for almost two years. Solicitation of votes for the Plan from'PSNH's creditors and shareholders began in January 1990. Hearings in the. Bankruptcy Court to - confirm the Plan are= scheduled for April 1990. ( ? The ' Plan calls for L distribution of approximately $2.3 billion of cash and, J securities to pSNH creditors-and security holders, with anLoptional "two-step" j approach under which a-stand-alone PSNH ; could be reorganized by mid-1990', if - 1 regulatory approvals for a complete acquisition of PSNH by..NU are not in place s by then. If that occurs, the Bankruptcy Court's confirmation or6r would have ( ' the stand-alo' e PSNH enter into an agreement, to merge with L a newly formed.NU l n subsidiary when all merger conditions are satisfied. LWhen.the acquisition)is-l completed, reorganized PSNH's 35.6 percent interest-in Seabrook1 would l be ' transferred to a separate NU subsidiary, North Atlantic Energy Corporation-(North Atlantic), which would sell Seabrook's output to the reorganized PSNH.. a -g: y e ... y [ .b, 4

The plan requires approvals from the Bankruptcy Court,-the New Hampshire public Utilities Commission, the Securities and Exchange Commission, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission (NRC) and other government agencies. Although NU has sought accelerated regulatory review of the ~ - proposed acquisition, and has presented extensive information about the benefits of the acquisition, regulatory approvals are not' assured. Other utilities have indicated that they intend to oppose NU's proposal-by challenging NU's transmission ' access policies in L these ' regulatory proceedings; and raising, antitrust objections to the proposed acquisition. If the proposed PSNH acquisition occurs, NU would initially finance the purchase with a combination of common stock and term loans totaling about $460 million. It is contemplated that the NU term loans ($230-$310;million) would be, repaid from the proceeds of issuing NU common shares over no more than three years. The i remaining financings will be done by the two new NU subsidiaries: Reorganized PSNH and North Atlantic. Reorganized PSNH will issue and sell up to $612 million of its first mortgage bonds, borrow approximately $320 million through a term loan facility, assume or refund at a more favorable' rate about $212 million~of ~ pollution control revenue bonds issued by pSNH,-and issue and sell $125 million of proterred stock. North Atlantic will issue $355 million of first mortgage-bonds and up to $205 million of contingent notes, under which it will have no obligations until Seabrook, North Atlantic's principal ' asset, has ~ reached specific milestones in'its, licensing by the NRC and.-its operation. As a result of acquiring PSNH, NU's consolidated capitalization would initially have a higher percentage of debt than if<the acquisition ~did not occur. The additional debt would be at the NU level and at the acquired PSNH level and would not affect the capital ; structure of NU's. existing operating companies. The consolidated debt as a percentage of total consolidated capitalize. tion would, on a pro forma basis, increase from approximately 56 percent prior to acquisition to approximately 65 percent following the acquisition. The percentage of NU's common equity in its total capitalization is projected to be. approximately - 27 percent after the acquisition is completed, but it is anticipated to rise I above 30 per ent within about two years. I The temporary increase in leverage on a consolidated basis 'is attributable primarily to debt incurred by the reorganized PSNH, which would have the benefit of a favorable rate agreement to support the debt service, and to debt incurred by North Atlantic, which would have the benefit of a firm power contract with the reorganized PSNH. In light of the temporary nature of the increase in leverage, the contractual arrangements that will be in place to support the debt, and the increased diversity of regulatory risk that consolidated NU will experience, NU -l s l" management is confident that the initial leverage is an acceptable'and prudent l trade-off for the acquisition benefits. NU management believes the acquisition of PSNH provides an opportunity to achieve an overall reduction in costs for the current and future ratepayers of the NU l system, while providing real benefits for its shareholders. Specific areas'for l expected cost savings include a reduction in costs for the operation and maintenance of Seabrook, savings from improving the availability of PSNH's fossil-steam generating facilities, energy. savings achieved by the joint operation of the combined NU and pSNH systems, savings from a reduction in the combined b w-

q W ~ g.. system's New England power pool'(NEPOOL) capability responsibility resulting from the diversity of peak loads between pSNH;and.the rest of the,NU system, and_a reduction in PSNH's purchasing, administrative =and general costs..By reducing. costs, HU can better maintain affordable' electric service and can also reduce the threat that the -largest electric customers will leave the system and turn to ~ _self-generation." The consolidation'of the.two service territories also offersi an opportunity for diversification that reduces risks for both areas. 'For additional information regarding pSNH, see the _" Notes to Financial Statements." .Seabrook project On March 1, 1990, the NRC issued a full-power operating license for Seabrook 1 'l and provided for a brief stay to permit opponents to appeal the issuance.,The stay enables opponents to file.'lege.1 appeals to the operating license. - Assuming the appeals do not result in a prolonged' delay,' Seabrook project management would beg'in the power ascension testing program.. Commercial operation of Seabrook l' could occur as early as three months af ter power ascension begins s Unless'there are further licensing delays or unless delays during power ascension-testing are substantial, management expects that Seabrook_1 will be operational for most:if not all of the summer of 1990.- l At December 31, 1989, the Company's' construction. work in progress (CWIp) balance ~ included an investment of $190.5 million in Seabrook 1. In accordance with. management judgements, for-financial planning purposes the Company' continues to write off cash costs in excess of its recorded investment end does not accrue AFUDC on the balance to date.' These cash cost write-offs in 19891 amounted to' ~ $9.0 million. [ On August 23, 1989, The United Illuminating Company. (UI)', a nonaffiliated; Connecticut utility, entered into an agreement with the DpVC and various state. officials, providing for the amount of UI's investment in Seabrook 1 that will-be recognized in UI's rates. Under; the agreement, ~among other things, approximately 54 percent or $640 million of UI's total investment in Seabrook 1. through December 31,1989 w111 be phased into _ UI's' rate base over al five-year. period. The Company has been negotiating with state. officials in an effort to. .l achieve an agreement that is comparable with respect to the Company's investment _~ in Seabrook 1. Although no final agreement has been reached, such an agreement l with state officials must be reviewed - by the DPUC, and, ' if l approved, couldi require a further write-down of the Company's' investment in Seabrook 1. e In assessing the - potential impact of any additional 1 write-of f,. management estimates that for every $10 million write-off of the Company's Seabrook 1 j investment, NU's earnings per share in the year of the write-off would decrease q approximately $0.06 per share. The Company's future financialicondition would ,i also be adversely affected because a lowered equity base would decrease earnings, j For additional-information regarding the Seabrook project, see the " Notes.to_ Financial Statements." j l., ? t .~

n: i Competitlon/ Cost Containment T i-Management continues to focus; on ' the Company's J core business = activities, lparticularly~in the area of its cost-management program _and improved customer service activities. ;Significant progress has been made in a number of key areas in' the past two years which has, helped the company to become' more efficient end more competitive. First, the Company continues to look aggressively for ways to manage its;uosts. Second, management continues to develop ' and enhance its ~ marketing plan to Limprove customer servico. ~ This includes contacts withikey customers to better understand what their specific energy needs,are and to ensure .that-the Company responds quickly and offactively.to those needs.-l Third, the-i company ~ has - increased capital. expenditures and; operation and c maintenance! spending, including' tree trimming, to enhance reliability; ' Last,' the company and Western Massachusetts Electric Company- (WMECO) committed'=approximately $33 million in ~1989 - on Lenergy ' conservation ' and : load-management _ programs - principally to helpflarger commercial'and industrial customers pay lower electric. bills by cutting their energy waste, and to help them explore other_ alternatives -.to generating their own electricity.' l . Cost management ' and- ; improved customer service - continue to ' strengthen the ' company's core business and will help achieve the goal of remaining the. quality provider of energy services in Connecticut. ] i Discontinued Gas operationc_ a Effectivo July 1,1989, the Company divested its gas business. The gas, business i divestiture was effected in order to comply with the requirements of the Public Utility. Holding Company Act of 1935.. For additional:information-regarding the _ gas divestiture, see the " Notes to Financial-Statements." i The divestiture of the Company's gas business reduced income-generating, assets-by approximately 5.7 percent. The business. contributed 3.4. percent of. the L Company's earnings for the 12 months endedLJune 30, 1989._ -Construction Program The Company's 1989 electric construction expenditures of_ $194.5 million were the lowest since.1979. Following the completion of ~ Millstone' 3. in 1986, the j construction program's focus changed to expenditures for. improvements to existing L< transmission, distribution, and generating facilities;- In a continuing effort E to compliment an already strong base of generation reliability, the.NU system has budgeted more than $100 million. over the next sixD years to' improve _ the. reliability of its transmission ~and distribution system. The Company ldoes not L foresee the need to construct'a' major new generating facility until after the [ l year 2000, j i The Company anticipates that it will be necessary to replace the M111 stone' 2 I steam generators early in thel 1990s.1 This could involve a five to;six-month i outage at a total NU system cost, including the cost of equipment being procured, of approximately $200 million,= which includes AFUDC but does not include the cost

j of replacement power Management is attempting to minimize the length' of this d

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t. ~ i s f L possible-outage by-currently arranging for the-procurement of items with long, lead times, projected' construction expenditures for a the j puriod 1990 through 1994 are-presented in the following table. -production Distribution-Transmission Facilities Facilities Facilities Other Total" (Thousands of. Dollars) s . 1990 $ 81,742 $107,187 $35,704 $17,354 $241,987 1991 '81,698; 112,025 28,360 6,566 '228,649 1992 137,025 113,969 26,543 3,351 '280,888 1993 55,627 116,514 24,214 4,642 200,997 '1994 S1,070' 128,479~ 25,639' 4,361 -209,-549-Financing The Company's bonds arei currently rated Baal Ley Moody's, BBB+.by Standard and Poor's and A-by Duff and Phelps. =However, management has a goal of seeing' - that its ' senior securities ~ progress,: over time, to a strong " A rating. 2 Management continues to believe that this is an achievable goal because of expected improvements in financial-condition due in part to higher cash earnings available to cover interest charges and preferred dividends as Millstone'3 is phased into rates. For example,- the percentage of cash in the Company's earnings averaged 45 percent in the period 1985 through 1989, and for-1990 that. percentage is projected to be approximately 69 percent. Cash requirements in excess of internally generated funds are generally financed through short, intermediate, and long-term borrowings, nuclear fuel trust financing, leasing agreements, and.the sale of preferred stock. In addition'to construction and nuclear fuel requirements, the Company is. obligated' to: tneet maturities and cash sinking-fund requirements for long-term debt and preferred. stock totaling $472.0 million for the years 1990. through 1994 External financing will continue to be necessary to meet total cash requirements, although not at the levels of past years, since projected construction expenditures have been substantially reduced. The Company issued,-during 1989, 'approximately $295 million of first mortgage bonds and preferred stock.3 In June 1989, the Company received approximately $208 million as' a result of the' divestiture of its gas business. These funds were subsequently used to redeem- $85 million of Series II, 12.25 percent First an'd Refunding. Mortgage - Bonds, $73.6 million of Series JJ, 12.375 percent First and Refunding Mortgage Bonds, ~ and $49.5 million of Series KK,12 percent First and Refunding Mortgage Bonds;in- -August 1989. Also, in conjunction with the divestiture of;its gas business, the' Company extinguished $50 million of its first and refunding mortgage bonds through a- ~ ,? defeasance using United States Treasury ~ issues that were purchased from funds deposited into' irrevocable trusts. The interest income and principal from the United States Treasury issues will be used to meet both the interest and: 'r

a p: principal payments of first and refunding mortgage bond obligations as.they como du e... . The Company and WMECO continue to utilize a nuclear fuel trust' to finance their ' ii nuclear fuel requirements for Millstone 1,-2, and 3. As_of December 31, 1989, the company's' portion 1of the. trust's ; investment in nuclear, fuel, ' net of the - fourth quarter 1989 lease payment made on. January 31,1990, was $214.7 million. + The company's nuclear fuel. requirements; forL Millstone:1, s2,, and 3 ;of $271.0 million for the years -1990 to! 1994 are expected to be_ financed by the ; trust.>

In 1989,'_tha: system companies had credit facilities of $400 million available.

Available credit f acilities and _ lines } include l$350 millionl through a revolving [d credit agreement with a'numberiof2 banks. The maximum borrowing ~ limit of : theE ? Company under this agreement is $350 million,. However,_since'this borrowing: facility is also available'to WMECO, the" amount oi borrowing available!could be-a lower depending on WMECO's utilization. At December-31, 1989, the company.hadL $23 millionlof external.short-term borrowings; I. ' Accounting Standard The Financial Accounting Standards Board has ' amended.a~ previously. issued income' tax, accounting standard. The accounting standard requires, among other things, 'that regulated utilities reflect, on their balance sheets,'the taxes related to the cumulative amount of income' taxL timing _ differences ~ for which deferred taxes- ' have not been provided. The? compar.y expects that when the new1 standard is - adopted in 1992, it ~ will ' increase assets ~ and-l liabilities? by '.approximately' $1.0 billion but will not have a material effect on net income. a1 4 I ( k A b g

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1 . [h I 4 7 y m s s, t Y REstil,TS,0F; bDEPATIONS - .&r y d -J [: I Q. " foperating_ Revenues:. u ~ g-Operating revenues; eased : $94.6-million fromi 1988f to - 19891and-- incroned. 4 i $193'9 million from to 1988_.z The components ofl the change: in ' operatinal " revenues,for,the?past two years are provided in the, table'below.a ~ Changelin Operating l Revenues c Increase /(Decraase) 7 1989 vs. 1988

1988,vs. 198U d

m n w& (Millions of Dollars): - b-j ', W i s i ^ U 1 Fuel! cost recoveries .$75.1; 4 ,5 S3;9 i yj - 9 .Regulatoryidecisions-31.7; (40 0)- Rate moderationifund -(58.6)- 10616 ' Sales and:other 46.4

7324

' Total' revenue change- $94 '. 6 $193.9-Fuel-cost recoveries tincreased. infl989, ~ primarily Mecause of $ higher [ sales ;andI higher -energy : costs. = Revenues -..relatedL toD regulatoryEdecisions increased . primarily because of-the effect.of a' Docember $1988hDPUCiretall orate ~ declafoni: d i E The rate moderation fund decrease in 1989(reflects:one aspect'ofja-February 0988\\ l' . DPUC adecision: )( the L February ; 1988 Decision)L. which t authosized I the. Compan'y to recognize :Lin revenues, over the.12-month perio'd beginning' January :1, 1988, a r portion of : revenues ~ reserved? prior. to : January li'1988..... The" revenue 1 reserveH l represented a level of revenues in excess of~thatcrequired!to sarnia specifled v E ROE. Electric sales,= including' sales 7 associated'with energy delivered 1but-not billed, increased 2.2 percent primarily because of:the: continued economic growth j hg in the region, partially offset by the_ effect of more moderate weather lin 1989. l i Operating revenues related to the rate moderation fund increrised in'1986 /chmpared d .to 1987 L because, ^ effactive January 1,.1988, the M February '.198SD begidion j -: discontinued-the Company's requirement-to reserve a ~1evelLof revenueofinwoxcess 1 Lof that ' required to earn a specified ROE. In. additionWthe Fabcuary.1988 l Decision ordered:the Company to recognize.in revenues; over" thel 12-month:porlod beginning January 1, 1988, a portion - of those revenues reserved : prior toc q January 1, 1988. LRevenues ' relatedito regulatory decision'a t decreased ir 1%S, L pi provided for a.$10 million refund toJelectric customers nin" January.iuhM;nnd, ] 7 ecision which; among ' otherL ltninge, primarily because Lof the February 1988 D i ' lowered the Company's allowed ROE. Electric sales increased in 1988 mmn el to 1 '1987, primarily because of the continued economic growth in the;regionMnf oinnt r' j heating and cooling requirements in 1988. e '.I g [ i y y e 4 ~ 1,; -9 3 p di C lu)h 1 i e

l 1 [ x - ElectricEnergy[ Expenses Electric energy-expenses, which"includeP fuel' and net purchased and interchange power, increased $58.7 million:in 1989 'as compared to 1988, primarily because of-higher kilowatt-hour ~ (kWh).. requirements -and - higher ; cost purchases) from-cogenerators and other utilities throughout the region, partially offset by. the - - deferral in,1988, of' fuel savings. associated with the generation utilizations -adjastment clause. Electric'. energy expenses increased $60.0, million.~in 1988: as ' compared. to ' 1987. This increase was primarily because of higher kWh requirements'and ' higher cost energy purchases from other utilities Lthroughout the region'.- Other Operation and Maintenance Expenses. Other operation and maintenancef expenses Jincreased l $34'.9 lmillion in 1989 as-compared to 1988 primarily because of higher costs associated with refueling and ~ maintenance ~ activitiesiat fossil' and f nuclear electrict production'- facilities, j . higher transmission and distribution L eosts - associated' with stormsi and the l general impact of inflation on most expenses, partially offset by higher salou . of capacity and -management's-cost-containment efforts 'in 1989. - Other cperation' and maintenance expenses ; decreased 1 $52.4 millionL.in 1988 as compared to 1987, primarily because of: higher sales of capacity in 1988h lower A] nuclear' refueling and maintenance outage expensesein 1988, dand the' effect of-A cost-containment measures implemented by management.- Depreciation Er m j Depreciatio: stuses Fuased $11.3 million-L in 1989; 'as. compared-- to :1988, primarily bel N of rcit b ry decisions. Jhese decisions' required the company : to reflect e eu latercG e axes implicit in net-of-tax allowance for borrowed funds used t mg constre ion as a reduction to depreciation ' expenses. ' The excess deferrc ms ramted from'a decrease in the federal statutory tax rate. ,mially. of fset ' by greater. plantfinvestment; andJ higher This decrease wuw dccommissioning levels in 1989. 1 Depreciation expenses-increased $13.2 million'in 1988 as compared.to 1987, n ~ primarily because of greater plant-investment'and higher decommissioning levels. Amortization of Deferred Millstone 3 Return 9 1l The amortization of deferred Millstone ~3 return decreased $20.3 million-in 1989 1 as compared to 1988, primarily because the February :1988 - Decision allowed the -j Company to accelerate, in 1988 only, the amortization of deferred phase-in costs, ef fective January 1,1988. This decrease was partially offset by the effect.of 3 the Supplemental Decision requiring the Company to increase -its amortizationLof' ] deferred Millstone 3 return balance by an' amount equal to 50 percent;of ~ those earnings in excess of its allowed ROE of'12.9 percent. .-1 d l

( 't P

5 7 ,.S* p 1 + 4 4 'gj .7, 4 e )l 15 &E ,o, i ^i di The amortizathnJof. deferred'M[llstone 3 9 turn ! increased '$d2.8 millioniin 1988 ? as' compared'to'1987,1primarily.because?tho-February.19881 Decision [ allowed the? q Company to begin.amorMog deferred phase in costs,1 effective January 1,11988.$ q a + 1 Taxes e' ,a 0 Federal' an(; state -income taxes decreased f4 L 3 million -in 1969;as compared < to L l ~ 1988,4p@nerily because of-loweritaxable incoms, Taxes other thanLincomeDtaxes;;"s l r, E tincreased=$8;I million,' primarily;because of higher Connecticut gross earnings; i 'taxesc resultingifrom1 a - higher- ~ leveli. of revenues L:inE1989 and additional 3 connecticut sales' taxes.. 3 -f i-e ' Federal'and state ^ income: taxes. increased $29.3 million ini1988'as comparedstor '1987,- primarily because' of higher taxable 'iricome, partially-offset Lby;allower. q

statutory tax rate. LTaxes otherithan~ income. taxes-increased ~$18.2-millionLint f-9 1988las-compared to 1987, primarily:because ofl higher expenses, associated with

~ Connecticut gross earnings:taxesLand. Connecticut sales: taxes.-- N .AFUDC andLDeferred Millstone 3; Return; - [ 1 i J The. deferred return on Millstone?3 decreaseds$44.41millionf n 19'89,.primarily-i because the Company had. an _ additional 9 portion' of =its' rocoverable'M111stonel3: ~ _ investment phased into rate base in 1989 as' compared to the!same period ^1n 1988. ~ n [ Total 1 debt and. equity AFUDC decreased $22.3: million in 1988(as: compared to=1987. 41 LThis decrease was caused primarilygby the Company's._ decision notito; accrue' AFUDC - on Seabrook 1,J' effective l January 1, 1988,'since.recov'ery oflsuch;AFUDCJwas no? c longer iconsidered probable. The.Sdeferred ? returnl orn Millstone ; 3fdecreased: di $13.2:million, iprimarily because<the Company.had an.additionaliportion:of.its-j ' recoverable Millstone' 3' investment phased:into rate l base' in 1988 as compared;to - 'the-same. period'in.1987. } .. Interest Charges 3 Interest charges increased'$11.6 millionsin'1989 asLeompared to 1988, primarily 1 because of higher average interest' rates throughout.1989 and ' interest accrued on - 3' spent nuclear fuels disposal costs'. Interest chargesiincreased,$10.7 'million in 11988:as compared to.- 1987, primarily !becauseJof higher. borrowing 1 levels and7 q n interest accrued ~on spent nuclear fuel disposal costs 'in~ 1988,~ partially offset. j by interest accrued on the rate moderation fund in 1987. ly I q u } } a 'g e n h ni{ g - f, h la .} % y v .a j

zz L-L l Thy Conn:cticut Light 1cnd pow:r. comp:ny BALANCE SHEETS At December 31,- 1989 1988' .(Thousands of Dollars) Assets LUtility Plant,'at original cost: Electric.'....................................... $5,209,929 $5,048,592 Less: Accumulated provision-for-depreciation.- 1,419,02,8

1,298,138 3,790,901^-

x3,750,454 Construction work 11n progress (CWIP).............

295,182-

~288,669' Nuclear' fuel, not..................'............. - 227 ;739 P -287,203. Net' utility. plant, continuing ~ operations........-- 4,313,822 4,326,326;

Discontinued gas-plantf(includesiCWIp of,

$6,641,000' at DecemberL31, 1988) (Note:1)....... 347J,244 ? Lessi Accumulated provision for depreciation.. 92,657- -Net discontinued. gas-plant...................: 254,587 =i Total net utility plant.. 1.................. 4,313,822'_ -4~,580,913 3 J i d Other. Property and Investments. a

Investments in regional nuclear generating!

'l companies and subsidiary, companies,:at-equity.. 52,'169 150,918 Other, at cost...............'.................... 14',174 14',327 d 66,343' 65,245-d

i Current Assetst y

Cash and special deposits......................... 3,226

1,952'

] Receivables,' less' accumulated provision for 6) uncollectible accounts of $6,106,00011n-1989 ^ and $7,043,000 in=1988......................... 211,053 192,611 Receivables from affiliated companies......'..... 12,361

29,245' Accrued-utility revenues.............v..........

89,840 87,292 Fuel,Lmaterials and 3upplies,-at average' cost... 84,'809: 76,470 1 Prepayments and other........................... 28,936'

19,690; i

430,225 '407,-260 j Deferred Charges: Unamortized debt' expense......................... '10,'754 9,911 0 . Energy adjustment clauses, net.................. '25,005 26,232 { Unrecovered spent nuclear fuel disposal costs... 22,777- -20,397 } Canceled nuclear project........................ 16,696

19,205

,j Deferred costs - Millstone 3..................... 223,616 223;285 j 0ther........................................... 38,882 71,414 'l 337,730 370,444 .t I Total Assets................................. $5,148;120 $5,423.862 j i The-accompanying notes are an integral part of these financial statements. I t 1 ! -5 )

d / -o ' cThy Conn:cticut Lightfand Pow;r Comp:ny. BAIANCE ' SHEETS At December 31,- 1989~ 1988-(Thousands of Dollars) Capitalization'and Liabilities I

Capitalization-Common' stock - $10 par value - authorized

.24,500,000 shares; outstanding 12,222,930 shares in 1989 and 1988.........,,;..-............ $ 122,229 $- 122,229 l Capital surplus, paid in......................... 635il51 636,844- . Retained earnings................................ 695,799 '768,802 -Total common' stockholder's equity.............. 1,453,179 1,527,875 -Cumulative preferred. stock'- shares;. t $50 par value - a'thorized 9,000,000 u outstanding 5,661,745 shares'in-1989 and/ 5,760,504 shares in'1988 '$25 par value ' authorized,8,000,000- shares; -outstanding 7,000,000 shares in 1989 andi 2,000,000 shares in:1988 Not subject to mandatory redemption-(Note 5). 306,195 256,195. Subject to mandatory redemption (Note 6)..... 149,392. 79,392-Long - t e rm debt ( Not e 7 ).......................... 2,091,688 2,229,836 Total capitalization...........................- 4,000,454 4,093,298' Obligations Under Capital Leases.................... 160,511 -227,399 Current Liabilities: Notes payable.to banks........................... 64l000; Notes payable to affiliated company............... 1,450 i Commercial paper................................. 23,000 43,000-Long-term debt and preferred stock - current portion.......................................... 58,704 95,878 s ' Obligations under capital leases - current: po r t io n............................................ 92,141 82,738 i i Accounts payable................................. 80,764 71,612-Accounts payable to affiliated companies......... 44,954 41,995 -Accrued taxes.................................... 141',754 '133,545 Ac c ru ed i n t e re s t................................. 43',259 '54,911 Other............................................ 11,797 '18,538 497,823 606,22 d Deferred Credits: y# ' Accumulated deferred. income taxes................ 268,752 252,842 ? Accumulated deferred investment tax credits...... 178,697 '202,479 0ther............................................ -41,883 41,627 489,332 496,948 Commitments and Contingencies (Note 10) Total. Capitalization and Liabilities.......... $5,148,120 $5,423,862 The accompanying notes are an integral part of these financial statements. s4 s

+ . Thi Conn:cticut Light cnd Pow:r Company- .,. 3 STATEMENTS OF INColm - For the Yearn Ended December 31,- 1989-1988-1987-(Thousands of. Dollars) Operations' Excluding' Discontinued' Gas Operations:- Operating Revenues....................... L$1,826,886 $1,732,298 $1',538,41h Operating Expenses:- Operation-Fue1.........................'......... '343,516 349,221 309,7.60 = Purchased and; interchange power, net. . 7 6, 57 2 = - 12,'125-

(8,375):

Other..-.....i........................- .396,831D .404,720-1440,374; Maintenance......~....................'. 197,578 -154,7631 f171.523 ' Depre ciat io n..............'............. >157,557

168,-021;

-155,662. -Amortization of deferred Millstone'3.

return..~...=........................,..

42,487: .62,835; s -Federal ~and. state income. taxes (Note 8).............................. '129,256'. 153,359' '108,527 Taxes other1than income taxes.......... 155,869; 147,791! 129,602 Total operating expenses...:........ 1,499,666' 1,453,635. '1,307,073< ~ Operating. Income.......... 327,220 278,663. 231,337. 1 Other Income: l Allowance for other funds used

= I

.during construction... 2,603 2,262.- 13,409 Deforred Millstone 3 return - other funds................................ 32,800 ,61 824-77,854 -Equity in earnings of regional' nuclear. generating companies......... '7,535-7;939, 3,927 Write-off.of plant coste....... (9,010) ,(9,717). (24,122); j

Other, net............................

.8,603 (4,733

(2,095) j Income taxes - credit.................,

22,203 33;024 '46,202 l Other income, net................'.. 64~,7 34 - 100,0654 120,175% f 1 Income before interest charges..... 391,954 "378,72BL 351,512 Interest Charges: Interest.on long-term debt............ 189,459 1181,375' 164,6'68 l O the r i n t e re s t........................ 14,823 11',289 17,272 y Allowance for borrowed funds used during construction.................. .( 4,549 ) ( 4,490)- .(15,659', ) Deferred Millstone 3 return - borrowed f funds, net'of income taxes........... (15,654) (30,990): (28,112) Interest charges, net.............. 184,079 157,184 138,169L,j i Income from Continuing Operations....... '207,075 221,544 213,343 j 4 i Income from Discontinued Gas Operations (Note 1).... 6,630 10,979 16,450 j q Not Inco.ne..................... $ 214,505 $ 232,523 $ 229,793 i The accompanying notes are an integral part of these financial statements. i r JC 14-4

4 (4 ..Th6 Conn:cticut Light Cnd Pow r Comp;ny - STATDENTS OF CASH FIDMS - 'For the Years Ended December 31,- 1989 1988 -1987-(Thousands of. Dollars) Cash Flows from' Operations $-207,875 $ 221,544? $-213,343 Income f rom : continuing operations................ i. - Adjusted'for the'following: Depreciation and amortization of: leased property. - 226,353 '250,289- _244,704 Deferred income taxes and investment tax credits,- 28,594 37,976 ' ;37,340 net............................................. De ferred return -: Millstone 3.~................... (48,454)- (92,814); -('105,966) Amortization of deferred Millstone 3 return...... 42,487 62,835 (77,694). 25,304 Ra te mode ra tion f und.. :........................... 24,122' Write-off of plant costs.......................... Amortication of deferred charges and other noncash items............................-....... 38,153, 26,108 (49,777) . Changes in working capital: ~ ~ 8,020: Receivables and accrued utility revenues....... (26,165)' . (51,860) ~ Fuel, materials, and supplies.................. (16,877) (2,357) (411) Accounts payable............................... 22,019 -(11,304) (17,889) Accrued taxes....................,............. 5,023. 75,317 (49,031) Other working capital (excludes cash)..........-- (20,441) 3,569' 4,655 ' Net cash flows:from continuing operations.......... ,458,567 441,609~ 334',414 Net cash flows from discontinued gas' operations 23,767: -30,314-(Note 1)...............................-...........- 15,511 Net cash flows from operations..................... -474,078 _ 465,376-364,728 i Cash Flows from Financing Activities: 50,000 Preferred stock.................................. '125,000 Long-term debt................................... 170,121 210,000 328 300-Increase in obligations under capital leases.....- 22,974 ,70,472_ 92,294-Net increase (decrease) in short-term debt....... (82,550) (2,500) E37,500; Reacquisitions =and retirements of long-term debt and preferred stock.............................. (358,562) _(154,255). '(215,444) Premium on reacquisitions and financing expenses. -( 3,360 ) - (5,419) .(23,'222 )' j Repayment of capital lease obligations........... (81,807)- (85,834) (96,137) Cash dividends on preferred stock................ '(30,536) (30,120) (32,'217) Cash dividends on common stock................... (155,972) (160,'364). (159,876) q Special dividend - discontinuance of gas ~ (101,000)- operations........... Net cash flows from financing activities........... (495,692) (158,020) -(18,802)-{ Investment Act sities: Investment in Plant (including capital leases): Electric utility plant........................... (194,542)-

(209,729).

(240,470) Gas utility plant................................ (11,159) (26,379) (24,558) Nuclear fuel..................................... (16,212) '(73,057) (98,799) Less: Allowance for other funds used during _(2,262) (13,409) construction............................. (2,603) Net cash flows used for investments in plant....... (219,310) (306,903) (350,418) Discontinuance of gas' operations (Note 1).......... 242,198 . Net cash flows provided from (used for) investments....................................... 22,888 (306,903)' '(350,418)', Het Increase (Decrease) in Cash for the Period..... 1,274 453 (4,492)'1 Cash'beginning of-period........................... 1,952 1,499~ 5,991 i Cash end of period................................. 3,226 1,952 1,499 Supplemental Cash Flow Information: Cash paid during the year for: Interest, net of amounts capitalized during construction.................................... $ 199,560 $ 186,148 $ '-166,231 LIncome taxes..................................... $ 87,504 $ 31,217 $. 65,151

The accompanying notes are an integral part of these financial statements.

T6 ] ~ l ~ ~ ?Ths. Conn:cticut Light cnd; Pow 0r Comptny^ t STATEMENTS OF. COMMON STOCKHOLDER'8 EQUITYE Capital + CommonL

Surplus, Retained Stock Paid In

-Earnings (a) -Total-d .(Thousands of Dollars)- i h-Balance at January 1,c1987.......c.

$122,229

$643',520 $689,063 $1,454,812-t + Net income' f or i1987.............. '229,793 229,793 t Cash dividendsLon preferred stock.......;................... (32,217)J ( 32,217 ) > Cash dividends on common stock... (159,876)l (159,876); Preferred stock issuance and-retirement. expenses, and premium 'on reacquired preferred. stock.... J(6,306). (6,306) Balance at December 31, 1987'.......- 122,229. ,637,214 726,763' 1,486,206 1, Net income.Ifor 1988.,............. 232,523-232,523: 1 Cash dividends on preferred stock...........................- (30,120) (30,120) Cash dividends on common stock... (160,364). (160,364) LPreferred stock retirement g expenses, net of amortization... ' ( 370). (370) 'l Balance at December 31, 1988....... -122,229L 636,8445 -768,802' 1,527,875 e Het income-for 1989.............. 214,505 214,505 l

t-Cash dividends onfpreferred j

-stock............................ .(30,536) (30,536) ( Cash dividends on common stock...

(155,972)-

'(155,972) j dj. Preferred stock' issuance l expenses, net of' amortization... ( l',693 ) ' L(1,693); ij EZ Special dividend--discontinuance of-gas operations............... (101,000)-

(101,000) j

[ I Balance at December 31, 1989....... $122,~229' $635,151'_ $695,799 $1,453,179-j _. 'l (a) The company has dividend restrictions. imposed by its long-term debt: agreements. i ht December 31, 1989 'these restrictions totaled $517.million.

i

-j A, I 't e 3 The accompanying notes are an integral part of these-financial statements. e- .. ~

~~ ?y 4: t; f: _ I \\ l _ -Thb Conn:cticut Light cna Pow 0r'Compiny-l ~ NOTES TO FINANCIAL STATEMENTS q d 1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES 7 i 4 General: The Connecticut Light: and' Power' Company;-(CL&P or the Company),: . Western. Massachusetts Electric Company L(WMECO); -andt Holyokel Water LPower I Company _ are the operating subsidiaries' - comprising; theN Northeasti Utilities : system (the system) and are wholly-owned by Northeast Utilities-(NU). s . holly owned ? subsidiaries: of NU' provide substantial support l Other w services to'.the'- system.. NortheastLUtilities; Service: Company-supplies centralized accounting;. administrative, data processing,. engineering,- financial', legal,' operational, planning, purchasing, and other::serviensD to the ' system L companies. ' Northeast Nuclear Energy Company acts; as. agent 1 for system companies'in' constructing (and' operating' nuclear generating. facilities N NU;also has:two subsidiary realty companies, The Rocky > River-Realty. Company land The Quinnehtuk Company. ~ All transactions amongLaffiliated companies _ are on -a: recovery o'f t cost basis - which may include' amounts. representing' a - return "on L equity, ; and L are ~

i

' subject to approval by various federal and. state regulatory' agencies; i .{ Public Utility Reaulation:.NU is registered 1withithe Securities'and Exchange =

Commission ' (SEC) as af holding company under the.Public LUtility Holding Company Act of 1935 (1935 Act), and it and its subsidiaries, ~ including : the.

Company,'are subject to'the provisions of'the-1935 Act.; _ Arrangements. among ~ the system companies,. outside agencies, ' and otherf utilities : covering ~ inter-1 connections, interchange:of electric power, and_ sales?of. utility property are ~ subject to regulation ~ by1 the ' Federall' Energy. Regulatory L Commission f(FERC) _ f and/or the SEC. The? Company is subjectLto further regulation:for rates.and other etters by the' FERC and the Connecticut, Deptrtment : of Public: Utility-Control (DPUC), and' follows" the-' accounting;ipolicies -prescribedi byL'the j commissicos. A Discontinued Gas operations: Ef f ective ' July 1, J 1989,: NUldivested) thet. gas business of CL&P. che gas business divestiture' was ef fected' to-comply with j the requirements of the 1935 Act. The divestiture created..a new independent gas holding-company system with Yankee ! Energy System, ' Inc.,o (YES) as its-parent. The divestiture was ' completed' by means of L a specialistock dividend 4 to.NU shareholders. YES is completely independent of NU,.except:for limited i services rendered to YES, at cost, over a three-year transition' period'under l .a service contract and-facility' leases. Investments and Jointly Owned Electric Utility Plant: The Company owns I common = stock of four regional nuclear generating companies. These companies, with the Company's ownership interests, are: Connecticut Yankee Atomic Power Company (CY) 34.5% Yankee Atomic Electric Company '24.5% 2 4 Maine. Yankee Atomic Power Company (MY) '12.0% 4 Vermont Yankee Nuclear Power Corporation (VY) 9.5% j .t The Company's investments in these companies are accounted for on ' the equity basis..The electricity produced from these facilities is committed to ! 1

i e / [ LTh). Conn:cticut Light tnd. Pow;;r Company \\ q w4 ~ ~ NOTES TO FINANCIAL STATEMENTS i the participants based'ontheir ownership' interests'and is billed pursuant to ' contractual agreements.- a. + The Company has a 52.93 percent-joint. ownership; interest in Millstone 3, .s-1,156-megawatt (MW), nuclear? generating unit.'.. As ' ofi December 31, 1989, plant-in-service.- andL accumulated provision s _for depreciation included- . 3:;approximately $1.9 billion - ~ and $182.7.million,: respectively,. for L the- -Company's )roportionate: share 7of; Millstone 3.. The; Company's share Eof Millstone 3 expenses 'is sincluded in-the corresponding; operating expenses: on th accompanying, Statements-of Income.. Revenues 1 Utility, revenues. are based -on: authorized rates. l applied:.to _ each customer's use of electricity. -Rates can be increasedLonly?through.a formal = ~ proceeding before-the appropriate' regulatory commission.- At the'end of:eachL accounting period,' the Company, accrues sn estimate for i thel amountL of energy - ~ delivered.but unbilled'.' Spent Nuclear Fuel' 'DisposalV Costs: . Under the - Nuclear - Waste ' policy Act : ofi 1982, the Company must_ pay the United States Department of Energy : (DOE) for. the ; disposal of ' spent _ nuclear fuel _ and; high-level! radioactive, waste. 'For-nuclear fuel used to generate electricity prior to._ April.7, 1983.-(prior 4 period - fuel), payment may be, made. anytime prior to the first delivery :of spent fuel to the DCE.. At Decemberc31, ~ 1989, ~ fees 7 duelto-the; DOE for the - .. disposal of prior period _ tuel: were.approximately~ $111.1 million, fincluding_ interest costs of $44.6 million. - As a f December 31, '1989,..approximately. o1 $8g.3-millionhadbeencollectedthroughrates.7 Fees for nuclear ' fuel burned after Aprill7, -1983-are paid-to. the DOE: on a quarterly basis. Depreciation: The provision. for-depreciationc is. calculated 1 using; the straight-line method based on estimated remaining useful lives of. depreciable utility plant-in-service, adjusted for.. salvage Lvalue ; and L removal costs as approved ~by the DPUC. Except for major facilities', depreciation factors are applied to:the average plant-in-service during the period.. Major facilities are dapreciated from the time they. are.- placed ?in ' service. When plant is retired from service, the original costiof plant',Eincluding: costs of removal', less salvage, is charged to_the accumulated provision.for depreciation. For nuclear production plants, the costs of' removal, less; salvage, thatihave been = funded through external decommissioning trusts 'will" be charged to those trusts. See Note 2, " Nuclear' Decommissioning," for additional:information. The depreciation. rates -for the several classes of-electric plant-in-service are equivalent to a composite rate of' 3.4 percent inJ1989 and'1988, and 3.3 percent in-1987. Income Taxes: The tax effect of timing differences (differences between'the periods in which transactions affect income in the financial statements and the periods in which they affect the determination of income subject to. tax) is' accounted for in accordance with the ratemaking treatment of /the applicable' regulatory commissions. See Note 8 for the -components of income tax expense. 1..

g _~ v p'1 8 ..s I ' itti.TheConn$ticutLightindPowirComppny \\ y n a NOTES -TO FINANCIAI.' STATEMENTS - t l The Company has ' not provided ' deferred income: taxes' for cerma; timing l differences'during' periods'when the DPUC.did notypermit the recovery of such; a - "( income taxes through rates charged ' to_ customers.1 The cumulative ' net amount { N of 1 income 1 tax ? timing; dif ferences ; for whichTdeferred E taxes have not: been! provided. was. approximately$$700.million at December 31,::1989. As ~ allowed ' are 'being coll' cted in customers'1 rates as'such taxe'inot previously_ providedh under-current regulatory -practices, deferred L taxes J 4 e s become payableB q In ~ DecemberL1987, the Financial Acc~2nting-Standards-Board fissued q Statement" of; Financial: Accounting Standardse No.J96, " Accounting 3 for, Income ' Taxes'! s ( SFAS - 96 ). - lSFAS :96,-- as ~ amended, E supersedes previously issued ' income ~ tax accounting standards;and will be effective;in 1992.. The. Company: expects that : when ; SFAS. 96 --1s' adopted ' it i will fincrease; assetsiand j liabilitiesf by approximately $1-billion but.will not have A material effeet on~not:incomeL M Allowance for Funds Used During ConsEruction (AFUDC): EAFUDCUainoncashicost-calculatedLin accordance with FERC guidelines, Jepresents the-estimate'd ' cost ~~of capital funds-used _ to' finance the: Company's construction program. lThese . costs, which are one component of the total capitalized ~ cost of< construction,. are not recognized 1 as' part of the 1 rate base for ratemaking purposes"untill facilities:areLplaced11n service. 3 The effective AFUDC rates.underxthe gross-of-income tax, method fort 1989 3 and 1988 were 10.'2' percent and 9.1-percent, respectively. LIn,1987,lAFUDC was capitalized at 9.7. percent, :except for fa:< trash-to-energy project; and. 'Seabrook 1, which.were. capitalized on-a net-of-income tax = basis: -ati 6.2. percent and 6.7 percent,'respectively, i In conjunction with the ' establishment 'of:a $4.'7 billion; statutory cap" on the construction 6 costs of Seabrook I', effective January l,. 1988,:the_. ) Company stopped accruing - AFUDC on its Seabrook 1 - investment. ; - For additional-information-regardin'g" the Seabrook project,, see. Note: 10, " Commitments and Contingencies.'" i. Energy: Adjustment Clauses: Retail electric rates" include a; fuel adjustment _ c, clause (FAC) under which fossil-fuel prices. above or below. base-rate -levels -. are charged or credited'.to customers. ' Administrative proceedings l;are

l.

required each month to approve the FAC charges-or credits.: proposed c for. the L following month.. Monthly FAC rates F. also-subject' to retroactive-review - and appropriate adjustment by - the tr UC uch ' quarter after public hearings l e Effective January 1, 1989, the DPUf., adoptet'La better tracking and mort, timely ~ g FAC. This mechanism does not-permit the' ~ recovery -'of allE chadges iin? fossil-fuel costs. 1 The DPUC didinot allow deferred fossil-fuel accounting _ for the period-January 1,.1989 through. December 31, 1989'and continues to1 disallow deferred fossil-fuel accounting. The DPUC-is permitting the Company to recover, prior l __ deferred fossil-fuel balances, which at-: December 31, '1989 amounted' to l $54.4 million. and $10 million, -over a remaining period of six years and one l year, respectively, without earning a return. L The DPUC has approved the use of a generation utilization adjustment l '- clause which levels the effect on fuel costs caused by variations ' from :ai specified composite nuclear generation capacity factor (70 percent effective

l l

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Thi Conn: cticut Lightf.nd Pow 2r Compkny, a

> - NOTES TO FINANCIAL STATE!!ENTS y January 1, 1989) / 1 At. thel end ?off a 12-month period endingLJulyL31' of f each - Vg .( _ year,1these' net variations /from the amounts-included in base-rate cost levels are irefunded to, oricollected from,7 customers over the subsequent ( 11-month - period' beginning i.in - September. Should the(annualfnuclear capacity. factor - fall. below L 55 percent,-ithe Company. would L have J to ; applyf toJ the? DP.UC ifor-permission to, recovery the additional - fuel expense.. Duringithe' period from- . August: 1; c1988 to J, July 31,<1989,1theLcomposite nuclearzgeneration Yactor^for the seven operatin~ New. England nuclear units iini which CL&p' tias an9wnership g 2 interest;was.75.7 percent, resulting. in? aL fuel' cost savings of approximatelv. ] 3 -$29.1 million. t j s s. Phase-in Plan:- lThe Company is phasing :into rates the recoverable' part of = its ~ -Millstone 3 investment'. The* plan,J as ' currentlyi designed,- is? in' compliance? 'with-Statement. ' of : Financihl: ? Accounting 1 Standards; ;No.192, "" Regulated' Enterprises--Accounting-for Phase-in plans."' N a . As - allowed byD the.DpUC, ; the ~' CompanyJis phasing ? int'o ? rate ; base 11ts allowed'investmentsin. Millstone 3. The-DpUC has provided < for full' deferiid

earnings and carrying. charges-.on 'the portion: -of?;the1 Company's1 allowed-investment - in Millstone 3 ' noti' included 0in Erate base., ;Through ' December - 31, 1989, they Company had placed :into, rate base $1'.4' billion, or : 80 percent, Eof.

d its1 allowed investment cin 4 Millatone' 3. ; ; The r remaining 1 $351.3 million,; or 20 percent, -of the J Company's e allowed 1. investment inL Millstone 3 dial to -. bel l phased into ' rate base 11n four 15-percent - steps s beginning in J1992, qThe5 y amortization and recovery of '. deferrals through rates !beganiJanuaryll, 1988 - 4 and willr end no later than December 31,-- 1995.

As lofiDecember 31,: 1989,

j

$108.9 million of the deferr'ed return,Cincluding carrying ' charges,; hasl been - recovered. I 2. NUCLEAR DECOMMISSIONING A <1989 decommissioning study reaffirms L that completelandl 'immediate dismantlement at retirement is the - -most ' viable l'and economic' ' method of decommissioning the.three Millstone units. The Company'sishareLof the total ..}i estimated cost of -decommissioning these unitsils' $550.1; millionj infyear-end 1989 dollars.. Decommissioning studies are'revi'ewed and: updated periodically to reflect changes in.. decommissioning ' requirements,. technology, and inflation. ~ P The Company has ' established independent decommiasioning ; trusts for-its i portion of the costs of decommissioning Millstone.1,,2, Land.3.: 4 As of December 31, 1989, the' Company 1 had, collected through rates $75.0 million for future decommissioning costs,' f of which $49;6 million has ] been transferred to external-decommissioning, trusts. Although a portionfof j the estimated total decommissioning costs chas: been' approved: by, the DPUC l and' is reflected in the depreciation expense of the company, the Company believes revenues in amounts greater than those currently :being collected will be - required to pay the full projected costs of decommissioning. 91 3. LEASES The Company and WMECO have entered into a capital lease agreement. to finance up to $530 million of nuclear fuel for Millstone 1 and 2 and their 1 2 J'.f'I

~ y -[. /f {[ 6;* Y ( Qj ThiConn:cticutiLightjndvpowIrLComptny: 1 ? ' NOTES TO FINANCIAL STATEMENTS -share of - the nuclear : fuel ' for; Millstone 3. - - TheMCompany 'and WMEC01 make ' quarterly'-lease ;; paymonts for the; fcost 4 of E nuclears fuele consumed in the; reactors 'E(based lon a ? units-of-production method.=-atT rates 'which: reflect [", estimatedt kilowatt-hours.ofLenergy'provided) plus; financing costs' associated with;the; fuel in-the reactors. Upon; permanent discharge. from; thel reactors,. ownership of the, nuclear fuel-transfers.to the' Company and.WMECO. The! Company? has alsoientered: into;. lease agreements,- some' of which^ are. + capital ; leases,- t for the use -' of', substation". equipment,: Jdatai processing rand a

of fice ' ' equipment, - vehicles t nuclear:' control room 1 simulators,. ande office :

space.- ' ; The E provisions of these' ~ lease 1 ag'reementsigenerally. provide for; L-renewal' options. 'The: followingjrentalipayments.-haveabeen:. chargedtok operating expense:- . :e JCapitall .operatingi Year. ~ Leases' Leases- -1989............... .$ 98,810,000, $30,912,000 1988.......'........

107,021~,000 "27,372,000'

'1987.......,....... 109;357f,000 - 31,919,000: Interest inclnded ~ inL capital) lease - rentalE payments -.was ' $22,787,0001 inL A 1989, $21,469,000,in - 1988b and.522,733,000; in ^1987. cl Substantially: all.of the capital lease!lrentali payments - were 7made- ~ pursuant to the nuclear. fuel lease agreement. FuturejminimumLlease payments. / 3 'under the. nuclear ~ fuel capital lease-. cartnot; be reasonably 1 estimated on an annual' basis due to' variations in.the: usage of nuclear fuel'. 4 Future minimum ' rental payments,v excluding. annualL nuclear ifuel.~: lease r payment.h and j executory costs, such.' as property L taxes,- ' state use taxes,- 1 insurance, and maintenance, under 'long-term /noncancelable. leases, as - of; t December;31, 1989,- are approximately: j' Capital. . Operating l Year Leases Leases-(Thousands of-Dollars). 1990.-.............................. $' 1,336- !$ 25,717 1991............................... 1,302 22,199 1992............................... '1,302-18,440 I 1993............................... 1,302 .14~216 1994.................. 2 1,302-10,303 After 1994......................... 15,111 50,741 Future minimum lease payments...... 21,655 -5141,616 Less amount representing interest.. 10,178 l.. present value'of future minimum lease payments for other than nuclear fuei...................... 11,477 Present value of future nuclear fuol lease payments............... 241,175 2 Total....... $252,652 '

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iTh) C;nnteticut Light jnd'Powir1 ompanyy q,s 7% ' NOTES TO FINANCIAL STATEMENTS' h> 4 -

4. _.

SHORT-TERM DEBTc 7 , The 'l system :tcompanies -have t various creditillnes itotaIing; $400: million; 10f1 this amount) $350 millionL is L availablesto-_thef CompanyUNUk andiWMECO - l p; d,

through"a' revolving-credit. agreement with 'aigroup : ofill banks. - l Thee maximumi borrowingJlimitf. of f. the-(Company undern the fagreement?is t $350'million ~1ess i q

i ,m amounts; borrowed 'by WMECO.. (nott to > exceed 1$105 million)Jand by NU 51(not!.i to 1 ( f~, exceedi$100-_-million).:. Thel.companyJmay' borrow) funds Lon'. a fahort-term:l revolving) . basis :fusingf eltherL fixed-rate

loans :L or standby 31oans.D LFixed C rates t are c set s 7using' competitive 6 bidding.x (Standby.' loan} rates i are fbased uponL!several E

iv ' < alternative ? variablei rates. Thel Company 0isl obligatedito Lpayc.a f acilityJ f ee y of L s1875 percent-periannumfon;itsi proportionate' share,of_f th'efcommitmentr i At---

=

December /31,:1989, the-CompanyL-had no_borrowingsJundersthis(agreement. m = > iThe remaining y$50[millionfilsf availableilt'odhe9 huh [ system:Jcompanies' 3 ^throughja~ revolving-credit agreement with'a' group of sevenjbbnks. 1Under;this ^ 1 agreement,JtheiNU system 1companiesTcan. borrow in thefaggregate/ n amount n tS i!" ^ f df to i exceedH$50 million. -- Loans-; under ~ this ? agreement ;?are C on na i shorti-tiermi-H revolving basis Tin ~ the. form of eitheri Eurodollar Lo' ans' basedient theJLondonb i InterbankL offered? Rate, plus L 3/8 of 11? percent, s or. :-as ; Alternativel Base f RateI WA

Lo_ans at _ the.greaterf of ; the prime.' rate lorti/21of 71Fp~ercentloverx thei Federal

EFunds ! Ef fective i Rate..- - This sagreement 1will. expire ; on. August ~ 25 fl991runlessi

extended, ;on1 an1 annual. basis, - for;<aimaximum' Lof! [f.our; years;ibeyondSthe

'? _ expiration of ' the. initial-three-year.iterm.' At tDe'cember 31,i1989 ? there cwsre -no.:borrowings:under thisLagreement. ~ ~ p' I [. I I o qi ..I l .. h:, m 'T. $ j 3

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+ I NOTES TO FINANCIAL STATEMENTS-

.,_, 1 I

..J s 35. ' PREFERRED-STOCK NOTTSUBJECT TO; MANDATORY ~ REDEMPTION f ik ~ ? Details;of preferred: stock notisubject<to mandatory: redemption aret n ~' ' 0 -December-331]; ~ 4 e l Shares x j -1989,_ Outstanding-j [ iRedemption-iDecember1317 -December 3Y,- DescriOtion' ~ Prices -1989' '1989-1988< '1987-- 3 t . (Thousands ofi DollarsP

1

.?'.. 1 + .) 1 m, $1.90 Series of?1947.... .$52i50: 1163;912~

$ l f 8 3196 ! J $i.8',196) { $M;871%

J 4 31fq 03: N $2:.00 2 Series of 1947.... L54iOO: 336=,088: 16,804 ' 16",804( ~ $2. 04 Series of 11949. '... -52.00 e100,000;

5,000i 5,000.;

(E 0J $2.06fSeries E'of-1954..

51.003' 200;000i
10',000-l10,10001 710Wh V Q 2

$2.09tSerieslF of'1955.' 51.00

100,000L

> 5;000: 5,0004 15Wu: $2.201 Series.ofL1949;... 52:501; ~ 200,0001, '$3'.24 Series'Giof'1968..

51'. 84

'3000001 ' /10,000,

10,000j 210 ML.

~ -15,0001 13,00M si '15,000- ~ $3.80LSeries;JJof!1971... '52.10 1400;000? 20,000' 220,2000L ^15,000f,f]. 120,009 1 15,0'00-' 115,000; '$4.48 Series ~Hiof 1970.. 52.21 300,000! ~$4.48 Series 11'of-1970.. -52.32 ~ f400,000l '20;000t ! 2 0','000; J20)D0s

$4.56' Series K'of: 1974'.;

52.08*. il,000$000L

50',000i 50',0001

.53j000 P - 3.90% ' Series of 51949...:..- .50.50 160,000; L8,000 '8,000f '810 @ o .;4.50V Series;of 1956....1 250.75c ?104,000; 5;200i '5,200; C 'm ' -4.50( Series of;1963.... 150;.504 L160,000t

8,000

8,000i 3M '. [ 4.96%l Series of11958.... 50.50 ?100,'000 5,0004

5,000.:

.5jp00 + ~

5.28%~ Series 'of ~ 1967.'....

51.43? -200',000 ". L 10 ',000, 10,000

iC ~,1

4 7

6.56%: Series =of v l968'.... 51.44 '200,000l

'10,000;

'10,000D .10;0W ,N{ 7.60% Series' of-l1971..... 51.61e 1199i925l '9,996i -9,996i MM 9.36%-Series of 1970.... 52.04, 200,000 310,000; 10,000 17 0;. 4 9.60%= Series of 1974.... 52.26*- .299,9701 114,999: _14',999) 4,. M 1989-Adjustable Rate ~ o Total. preferred stock ~. 9 1 DART S... '...'............ 25.00L 2,000,000~ 50,000; s ?not subject to. } mandatory redemption , $ 306 ; 195. ' _$ 2 56,19 0. _3 2 5 6_. M._ N

Redemption ~ prices. reduce in. future years.-

All' or any Jpart of each outstanding series of preferred stock)atay M y redeemed by. the Company at any time.at, established redemptU '.. pricos -pka j accrued dividbnds to the date of redemption. ~ Li ',l [ a r q' )a Aj 1, a i 4

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e g ~ 4' C,- - Thf.C:nn:cticut Light.End, Pow:r_ Comp ny: - NOTES TO PINANCIAL STATEMENTS 1 '6. ' PREFERRED STOCK SUBJECT TO MANDATORY; REDEMPTION Details of preferred stock subject-to mandatory'rndemption are: . December"31; Shares 1989; Outstanding._ Redemptions l December 31,: ' December 31, Description Prices *,

1989-1989 1988 1987-(Thousands of Dollars);

$5.52' Series L of 1975 -$52.76 0118,524 $';5,926--;$~;7,879' $ 9,979: 10.48%< Series of 1980 53.93 360,000 '18,000 .20,000-. 22,000 1 11.52% Series:of 1975J '52.88; 59,326 2,966: 3,953j 4,953-15.04%' Series M-of 1982 4,000 Adjustable' Rate Series ~N-250,000-of 1983' 9.10%. Series,of 1987 -26.97 2,000,000 50,000. .50,000 50;000. 9.00%-Series.of 1989 27,25- '3,000,000 75,000 151,892; 81,832 140,832' Less preferred stock.to be-redeemed within one year- -2,500; 2,440 6',940 Total: preferred stock subject to mandatory redemption-

$149,392

$479,392- $133,892

Redemption prices reduce.in. future years.

j - The following-table details ' sinking. fund actihitiyLfori preferredH stock. subject to mandatory. redemption: Minimum Maximum Annual Annual Sinking-Fund Sinking-Fund. Shares Reacquired j Series Requirement ' Requirement 1989 1936 1987 ' Li ] -(Thousands of; Dollars) o 2 $5.52 Series L of 1975 $1,000 $2',000 L39,02d. 40,000' L40,000 a 10.48%-Series of 1980 1,000 2,000 . 4 0 ','0 00 ' "40',000 -40,000 11.52% Series of 1975 500 1,000 19,735. 20,000 20,'000 [ ( .15.04% Series M of 1982 ~ 80,000 720'000 Adjustable Rate Series N l .of 1983 1,000,000 9'10% Series of 1987 (1) 2,500. 5,000 p 9.00% Series of 1989 (2)~ 3,750 7,500 ('1 ) ' S' inking fund requirements commence' June 1, 1993. (2) Sinking fund requirements commence October 1, 1995. The minimum sinking-fund provisions of the series subject to mandatory' =: } redemption, for the years 1990 through 1994, aggregate $2,500,000-in each.of j the years 1990 through 1992, and $5,000,000 -in ' both.1993 and 1994. All 'l sinking-fund requirements for the preferred stock subject to mandatory redemption have been met. 8 I,- 3 e a

nt , -a, m J,,j - s Th> Conn:cticut Light Cnd powir Comp:ny ' d e ' NOTES TO FINANCIAL STATEMENTS i i JIn case of default on sinking fund payments,.no. payments may be made on- 'any' junior ' stock by-way of = dividends or. o,therwis'e (other than'in' shares of., I o junior stock) so long as: the default continues.: If ; the Company -is; int arrears. i l .-in the pay nent: of ' dividends on anyl outstanding shares of: preferred stock,- the' Company would'be-prohibited'from redemption.or purchase'of less:.than-.allfofi ~ the ; preferred stock; outstanding.~- 'All or'part of each.Lof the' series ' named ' 1 i 1

above may be redeemed by the1 Company at-any. time at establishe,d redemption ~

a prices. plusEaccrued dividendsL to the-date of redemption =, except that-'during<, ~ redemption ' period : the? 9.10% and i 9.00% < Serie's1: of' the : initial 'five-year -preferred: stock are subject-to certain refunding limitations'.; a -u o- ' I. .I ' t s b . 'y k i l i q l t 1 i I b i ? l I' i 7o l. 4

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wN TholConn7cticutLight"cnld,PoorComp;ny' f y. NOTES TO FINANCIAL STATEMENTS 4 6 g; 17. .LONG-TERM DEBT j M i
Details ofJlong-term debt outstanding are !
i st, b ~ December 31~, >1989 1988 4 s~ =(Thousands of Dollars). i First Mortgage Bonds:' 4 17 / 8% > Se rie s - P, ; du e ' 1990........ s............. t $f .-. V
25,000:
13.35% Series,: 'du e 19 9 0.. ;......... -........ '.. y .l',6201 f1,620f 4 1/4% Series, du e J 199 3...... <.n...... :....... 15,000! 415,000$
12 1/4%: Series JII,: due : 1993; '......f.... L.... 's......
S '85,000 .4 3/8L Series.R,, due 1993.....................: V-1 -25,000l 18l1/2k Series PP,fduel1993;.....................
125,000' 125,000L y'
9 3/4% ; Series l 00,Hduel1994 L....-.. /.'....-... '....... - 195;000;
95,000; 4'.'1/2% Series,' fdue21994......................-

12;000, 12,000i
12 3/8%-Series;JJi'due~1994.................'...'. 74,624!, 1 80/000. .,80,000 10: ~% Series NN, due 1995...... ..-..s......... 0 8.7/8% Series'LL,.due 1996...........v....../..=c h100,0001 1100,000: '5 5/8% Series, duejl997..............s........ 720l000;
20,000-
~ 9 1/8% Series MM,'due_1997L.......v......;.....w.. f75,000 ' 175',000c 6 T: Series S,. du e l 19 9 7.... '........ =........ '. 130,0001 30,000 4 6 7/8% Series.~ U, due'1998............ .r.......- .40,000" L40',000 j -7_1/8% Series;; - du e y 19 9 8... :.......... i. -........
25,000l

25,000 y
6 1/2% Series-T,. due'1998........;...s.....'.... s20,000c,
20,000' 6 1/2% Series, due 1998.....c...........c..., p 10,000

10,0001 8 3/4% Series V',-
due 2000..................... l 40,000 '40,000i 8 7/8% Series W, due 2000........... 6............ 40,000: .40,000: 9 1/4%-Series, due 2000'..................=,, f20,000 ' .20,000-11- % Series CC, due 2000..................... .4,754 7 3/8% Series X,- due 2001...................... J30,0001 30',000. 7.5/8% Series, due-2001..................... '30,000~ 30,000: 7'1/2% Series, due 2002...........s.......:... '35,0001 '35,000-7 5/8% Series Y, due 2002...................... 50,000; f50;000. 7 5/8% Series Z, -due-2003................... 50,0001 50,000: 7 1/2% Series, due12003........... ..c......
40 000'
'40,000" 4 8 3/4% Series AA,'due 2004...................... 65,000-65,000-9 1/44 Series, due 2004..................... 130,000 30,000 '8 7/8% Series DD,'due 2007......................' .45,0002
45;000i 9 1/4% Series EE, due 20084.......s............
40,000.- 140!300 9 3/8% Series, due 2008...................... 340',000 40,000 4 15- .% Series HH,-due 2012......................-
11,217 12
%.-Serbs KK, due 2015..................... 49,500;. a 9'3/4%: Series-QQ, due 2f)18...................... 75,000 L75,000; 1 9 1/2%' Series RR, due 2019..................... 75,000' N 9 3/8%-Series SS, due 2019..................... 75:000: 7 3/8% Series TT, due 2019.........,........'... 20,000 Total First Mortgage Bonds- $1,448,620' $1~,553,715 q m .q s 1 l I: l a o l} i i ,: ;} i. a 9
dy
., j [ A ( + i @ ' Th?l Conn:cticutl Light cnd' pow;r. Comp:ny a . NOTES TO FINANCIAL STATEMENTS December <31. j 4 1989 '1988 e
(Thousands of Dollars)

Term Lcen Agreements:
_ $1 '75,000 75,000 Variable rate, due 1991............'... ' Intermediate Term Notes: 8.925% to 9.23%, due 1989-1992........ 100',000 .175,000L Ml pollution Control.Hotes: 5.90%,rdue 1998i..................... 8;137-L8,256 1 6.50%, due 2007..........'............: e16,000 16,000-- Variable rate, due 2013-2018..........- .340/100 2340,100 FeesLand? interest duelfor spent fuel. disposal; costs..........................- 111,094
102,302:
Other.................................... 55,247 -58,532 Less amounts due within one year....... 'S6,204 ,93,438 r -Unamortized premium and. discount; not.. (6,306): (5,631); Long-term debt',cnet................. $2,091,688 $2,229,836; Long-term ' debt : maturities an'd cash sinking-fun'd requirements. on$ debt. . i outstanding ? at December 31, 1989 for the '. years -1990 through ' 1994 are: 3 .$56,209.000, $80,201,000, $55,908,000;- $147,104,000, ' and' i $115,048,000, i respectively. In addition,' there are annual 1 percent-sinking =and' improve-j ment-fund requirements, currently amounting J to l - $14,216,000 4 'for
1990,
$14,200,000 for the years 1991 'through.1993, and $12,95.0,000 c for.1994=. Such i sinking-and improvement-fund requirements may be' satisfied by the'depositLof-cash or bonds or by certification.of property additions. All or any part of each outstanding series!of;first mortgage bonds may-be redeemed by the Company at any' time:at established redemption grices plus-accrued interest to the date -of redemption,1except ' certain ser'ies which are subject to ' certain refunding limitations. during -their respective 11nitial five-year redemption periods, i Essentially all of the-Company's utility plant is subject to the~ liens' j of its first mortgage bond indentures..As of-December 31, 1989,1the. Company has secured $293.7 millionr of pollution control? notes ?with secondemortgage l liens ' on Millstone 1, junior to ' the'. liens :: of '.its first mortgage, bond indentures. L In connection with the July 1, 1989 divestiture'of its gas business, the. -t Company extinguished its obligations with respect i.to '$25 million principal amount of its Series p First and LRefunding ' Mortgage Bonds.and.$25 -million principal ~ amount of its Series R First and Refunding ' Mortgage; Bonds. -The 4 Company extinguished its obligations with respect sto. these ' two series by depositing funds into irrevocable trusts on' June. 29,,1989. The ' interest t income and principal from the trusts' investments in United States Treasury-issuess will' be aused to meet the interest and principal 1 payments of both the Series P and Series R obligations as they =come due. - At December 31', fl989, $25 million principal amount of the~ Series p Bonds-and $25 million principal . amount of the. Series R-Bonds remain outstanding but are-considered extinguished for financial reporting purposes, s a i + i
i w 1 H y t 6 % Qp q' -- h .bo : _ % :;< p _ + JTht Connicticut Light cnd pow:riComp ny-s 4 NOTES TO FINANCIAL'STATEMENTG '8.= [ INCOME' TAX EXPENSE' s s ~ ~ The components of.the federal and state:incomo tay; provisions charged to - continuing operations,are. s For the-YearstEnded December 31, 1989- -1988 1987- -(Thousands of Dollars)- w Current income taxes: a Federal.......,............c. W...;..... i$'54,748t '$ 59,73+.. 1
$ 223462 S t a t e........'..

...... -............ '........
23,711. -22,622i' -2,523- . Tot al i cu r r e n t. :...... -.......... '....... =78,459 82,359- '24,985-H 4 Deferred. income taxes,Lnot: g ' F e d e r a l....................... -..... =.. -..-. ; -37,508:. 73;350' l 45,626 E- ~ ' State...'.......4.........................-. -3,782 T,5653 9,884s Total' deferred............;... 41,290; 49,191~' 83,234- --In' vestment tax credits, net............ 111,925) (6)425)' (ih348) Total income tax' expense.........,... $107,824i $125,125 .$-95j87N TheLcomponents of total income tax- + ,,: expense ~are classified,as follows:-
Income taxes' charged to operating

. _ _. _. j ..$10 bis 27 expenses....................:......... i$129,2561 '$153/359; Income: taxes associated with-thec -amortization'of deferred Millstone 3 return - borrowed funds............. -(11,019). (17,209)J 4,.' Income taxes associated with'AFUDC. .and deferred Millstone,3 return borrowed funds...................... 11,790-21,9997 33,546i 'l Other income taxess-c red i t............ (22'203); r(33,024): (46,202) Total-income tax expense.............. $107;824 ' ~$12N125 $ 95,871 t t t .- ( 1 78 -u W. q
.ca. a LTh1 Conn:cticut Light:cnd pow;r Company 1
NOTES TO FINANCIAL STATEMENTS-i Deferred income taxes; are comprisedI ofE the-tax' effects. of' timing.
differences as follows: o For the Years Ended December 31, 1989 1988 1987 (Tho2 sands of Dollars) .Libegalized. depreciation, excluding [ leased nuclear fuel..................... -$'49,362 $ 58,933 $ 73,110 Construction overheads..................... ( 8,665 )- 77 5,683:
Liberalized depreciation'on' leased.
t nuclear' fuel,1 settlement credits, Land dispo s al1 co s t s..'.......... :.. ~............ 5,826 (6,779) .(7,758), 1 L Decommissioning cos ts'.................. -.... 885 (2,468)> .(441)" Energy adjustment clauses................- (5,938) -(22,947) 9,778- 'AFUDC-and deferred Millstone 3-return, net..................................... 770 .4,790 33,546' Rate modoration fund...................... 856 28,826. (12,509)- Canceled = nuclear project................. (716) (808)1 Write-off of plant costs................. (3,871) (4,029) .?(5,854)j
i Alternative minimum tax..............'....
(10,830): -Contributions'in. aid of construction..... (2,384) ( 4 ',724 ) J _(5,243) Loss on bond redemption..................- .(169) 4,998: Pension accrual.......................... !5,408L .(88) (2,697) 0ther.................................... -(790) (1,684)- 2,259- .^ -Deferred income taxes, net........... $ 41,290. $ 49;191 l$'83,234 ! The ~ effective income tax rate is - computed " by. ' ividing total. income'. tax ~ d + expense. by the sum of such. taxesL and income ' from. continu'ing operations.- The-differences between-the effective rate and the~ federal. statutory; income tax rate j are: For-the Years Ended December 31, 1989 1988 1987- 't Federal statutory income tax rate..,...... 34.00% 34.00% 39.95% Tax effect of differences: Depreciation differences................ ,1.41 3.09 2.97 other funds portion of AFUDC'not recognized as income for tax purposes.. (.28) __(.22) (1.73) Deferred Millstone 3 returi - other funds............ L( 3. 53 )l (6.06)' ('10.06 ); Amortization of deferred Hillstone 3 return - other funds.................. 3.37. 4.56 Construction overheads.- portion not t deferred............................... (3.03) "(.70)
(.33)-
d ~ Investment' tax credit amortization...... (2.57) (1.85) -(2.30) State income taxes, net of federal .f benefit................. 5.82 5.10 2.40
Other, net........
(1.04) (1.83) .10, Effective income tax rate............. 34.15% 36.09% 31.00t
s.. c ? Th'i onnteticut Light cnd Pow:r Comp:ny: ~
NOTES TO FINANCIAL STATEMENTS-9.
RETIREMENT PLAN. .The Company's participate in a~ uniform noncontributory defined benefit retirement: plan coveringL all regular NU system employees. - Benefits are based on years of service:andiemployees' compensation =during the.last;five-years. of ' employment.
The Company's l allocated portion - of, the system's
. pension' cost, part. of which;:was] charged to ;.111ty plant,napproximated. .$3,2 million in.1989,:$5 million in 1988,'and $b.4 million-.in 1987. It1is'. the policy of the Company' 4to, fund-annually an; amount at..least equal.. to -that which will 1 satisfy the-requirements of 'theDEmployee. 7 Retirement 'Incomei Security? Act and':. the.~ Internal: Revenue f Code. Pension-costs lare determined 'using'. market-related 1 values -of:-pension assets. Pension; assets are. invested. primarily - in 1 equity 1 s'ecurities,: bonds,, and" ~
insurance contracts.
'The components'of! net-pension ~ cost'for.the NU system are: e For the Years Ended December 31,- 1989 1988: 1987' .(Thousands of-Dollars).. i Service. cost......v............ $- 31,020i i$31~893 '$32,812 f Interest cost.................. 61,415 159,715 . 54,3185 -l ' Return on plan assets.......=... o(160,750) -(84;825);L(36,811) Net amortization............... =82,852 L10f431- ~(31,161) . Ne t pension ~ cost.. :.............. 14,537. :$17,214: ~ $19 ;158 = For calculating pension cost, the'following assumptions'were used; For the Years Ended December 31, 1989 1988 '1987 . Discount rate.................. 9.5%. ' 9. 5%' 8.5% Expected long-term rate of return...................... - 9.' 7 - 9.7' 9.7. Compensation / progression l rate., 8.5-8.'5. ' 7.5: .l v-I. 1 s
~ I" I
w:o-n -
s ' The. Connecticut. Light and Pow:r Comp 1ny ' NOTES TO FINANCIAL STATEMENTS- . The' following tablef represents; the-plan's funded-siatus' reconciled toi j ~ the NU cor.solidated balance sheet:. j ~ ~! t . t Cocetoer 31, 1989 1988-A L (Thousands of Dollars)- . Accumulated benefit) obligation, ~ l' including $439,804,000.of vested 1 -benefits at: December.31,L1989*and' s ? $386,618,000 of vested benefits at-s, December:31, ' 19 8 8...... :.,....,....... $471,387- $419,781; .,o projected benefit 0 obligation........ .720,994. 694/315)~ j .Le s s : ~ MarketLvalue of plan; assets.. 874,792 '768,0011 Market value in excess of projected. ? benefit obligation...........~...... 153,798L, .73,686 ' Unrecognized transition amount...... (30,837) ' l:(34,233)- Unrecognized net gain..'.............- (140,607) (67,259) Accrued pension (liability)......... $(17,646), - $ ( 27,806 ). The follow'ing? actuarial assumptions : were used in calculating Ithe! ~ plan's year-end funded status- 'At December 31,- 1989-1988 f ' Discount rate....................... - 9 20% ;.
9.5%
l Compensation / progression rate....... L7. 5 ~. 8.5 f 4 In addition-to pension benefits; theJCompany providesycertain-health f care and life insurance benefits to. retired; employees. 1The ~' cost c of providing those benefits was approximately $6;205,000..in* 1989 t $4,673,000 :, in 1988, and $4,412,'000 in 1987. Thel Company 2 recognizes health. care benefits primarily as incurred and provides..for, life tinsurance. benefits-through premiums paid to-antinsurance company. l 10. COMMITMENTS AND CONTINGENCIES l Construction Program: The ' construction: programi;isy sub'jec'tito. periodic review and revision. Actual construction expenditurestmay~ vary from such-estimates due to factors such as revised load estimates, inflation, revised q nuclear safety regulations, delays, difficulties in the licensing process, a the availability and; cost of.. capital, and the ' granting of. timely and- -j adequate rate' relief by regulatory commissions,-as'_well:as actions'by other, -j regulatory bodies. j The Company currently forecasts construction-expenditures' (includingL AFUDC) of $1.2-billion for the~ years 1990-1994,. including $242.0 million: [ for 1990. In. addition, the. Company. estimates 'that-nuclear 1. fuel ~ requirements will be $276.0 million for the years - 1990-1994, including $78.6 million for 1990. 1 Seabrook: The Company has a 4.06 percent joint-ownership interest ~ in, the Seabrook project. 'At December 31, 1989, the Company's construction workJin progress balance included an investment of $190.5 million in Seabrook 1. . l. 1 m - ~
7, + \\ -_h k - O 1 Th3. Conn:cticut' Light cnd powar Company ~ ' ' NOTES -TO FINANCIAIJ STATEMENTS ,i In accordance; with" management's ; judgments', Lfor 4 financial _= reporting. purposes,' the 4 Company continues to 1 write l off ; cash costs : in, excess of' its recorded '.Seabrook 1:. investment -and/ no, longer ( accrues :AFUDC1on ~that i investment. I On August 23, 1989, -. the, DPUC ' approved an ; agreement _ which The - United : 1'11uminating Company (UI), an. unaffiliated Connecticut Jutility,s : entered into with various state cofficialse providing : forfthe':amountEof'.UI's' q investment in Seabrook 11that will be recognized in UI's rates. LUnder : the'; agreement, : approximately 54 -percent' of: UI's? total Seabrook111: investment - through December 31, - 1989 ' willi be recognized :in' UI's i rate ' base over' a five-year period. The Company has' bee'n negotiating with st' ate officialsiin. anLeffort,to achieve an agreement with. respect to;the, company's investment'- to. the UI : agreement. : Although?no' final ' L in Seabrook I that is ccmparable 'greement has.been reachod, such an' agreement among state officials must be. a reviewed by the DPUC,.andNif approved, could require a further write-down of the Company's.$190.5lmillion investment in Seabrook 1. ~ Management cannot, predict ' the extent to ? which the. -Company LwilU be permitted'to recover its Seabrook 1Linvestment. Seabrook'2-has been' canceled' by [the _ joint ^! owners, .. Through Decerkber 31', 1989, the company,had. recovered'approximately $8.8(million(of its retail, investment iniSeabrook 2; The ncompany {has; been g granted' $2.5 million _of; annual f revenues to recover sa; portioniof Rlts (remaining ~ retail -investment min Seabrook' 2, which; at. I;ecember 31, L1989 E amounted to-s $16.7-million.. The -DPUC.has not permitted: the Company to: earn 'a; return on this investment. H'/dro-Quebec: Along with various,NewL England utilities,: NU; has. entered into agreements to finance: and construct >additionalitransmission' and terminal' facilities (Phase'II.)'to:importLelectricity-from the Hydro-Quebec system in' Canada. The. Phase II. project His ? currently 1estimatedJto cost approximately $490 million of which !approximately? $410.million Jhas bee'n t expended or committed as of. December 31,-~1989; = These facilities, which,are scheduled to-be placed -in service in late 1990, ;would Lincrease the capability of the' Hydro-Quebec Jinterconnection toil2,000'MW. ' 'Upon completion of ' Phase II, NU ~ is expected '. to..haveTal'22.66_ percent iequity 1 ownership _ approximating $35 million11n'the' Phase II facilities. Under'the terms of the phase II equity agreement, NU guarantees ; the obligations of
i other participants that' have lower. credit ' ratings.-.
.NU' ~ receives. compensation for such guarantees. Under"the terms ofitheiPhase<II contract CL&P is entitled to receive 18.82% of-the ~ energyqtransmitted by the Phase II facilities. Millstone 2: . Corrosion,. pitting, and denting -of tubest within. steam generator assemblies have - been problems found at. numerous ^ nuclear units. These problems ' were first -identified at ' Millstone = 2 in a 1977 outage. Since then, the unit's i steam generator system has been. the' subject ~ of regular inspections and repairs. In light: of the : extensive ' repairs. that have' been
required, it will-probably become-necessary to replac^e Millstone 2's steam generators in the early?l990s.
Commitments L have 'been made to procure spare steam generator. subassemblies, andiplans;are being developed to prepare the site for ' replacement. If a. steam generator' y, 4
~. g -9JThb Conn:cticut Light c.nd Pow;r Companyf 't H NOTES TO FINANCIAL STATEMENTS . replacement becomes' necessary, an outage. of ; five~ ;to ' six months could _ be ~ involved. The total, cost,'to'the NU(system,' of the replacement'(including the cost of equipment.being procured but excluding replacement' power costs)- 'is estimated to be $200'million including AFUDC. Environmental'Mattersi ' The NU system-is. subject,tolregul'ation'by federal, f ~ state,.and local authorities'with respect.to.~airiand water quality'and.the disposal of toxic substances and hazardous landL solid.3 wastes.- The-cumulative. long-term. economic" cost. impacts of. increasingly _. stringent environmental requirements cannot be estimated. ' However, to comply ' withi such l requirements,- the system' may incur - significant' additional costs cin 7 connection - with : the generation - and 1 transmission: of electricity : and J the storage,' transportation, :andi disposal :of f by,-products 9 and. wastes. .The.
system may H also encounter significantly Jincreased costs to q remedy the -
.i environmental effects'.of prior (, disposal practices.
Thesen= changing l
environmental' requirements could.hinderJtheLconstruction of new. fossil-fuel- _ generating - units and could require extensive and costly modifications; to L [ the-system's existing hydro and fossil-fuel generating units. 'The. system. may. also face significantly. increased costs i for ' work " centers.and. other facilities'as:a' result of environmental regulations. The ex' tent of. additional future environmental Jeleanup; costs is.not estimable -due to ' factors. such. as the unknown--magnitude _ of, possible l 4 contamination, the possible > effects of ' future legislation ~ andf regulation',- 4 the possible - effectse of 1 technological changes - related to; future < cleanup, and the difficulty of-_ determining future liability, if any,'for'the cleanup-of sites at' which :the Company i has Jorimay ;be i designated L as a - potential. responsible party by the. United States EnvironmentalT Pro.tection Agency,. the-Connecticut Department of.. ; Environmental 1 protection, and: the Massachusetts Department of Environmental protection. 'In - addition, - the Company cannot. estimate the' potential liability for: future claims that may 4 be brought against the Company by private parties. However,; considering known facts, existing laws, ' and. possible insurance and/ori rate' treatment, management does not believe such. matters - will :have ~ a material adverse f effect on the Company's financial. position. C Nuclear Insurance Contingencies: The price-Anderson Act currently limits-public liability. from a single. incident at a. nuclear; power plant to $7.8 . billion. The first $200 million of liability ' would ' bey provided ~ by - i purchasing the maximum amount of commercially. available= insurance. Additionals coverage of up to a total'of $7.2 billion wouldibe provided;by-an assessment of $63 million per incident, ~ levied on ;each of the 115 nuclear.' units. currently licensed -to. operate in.'the' United States, subject ' to a maximum assessment of $10 million per incident per nuclear! unit-in any year. In ' addition, if the sum of all public liability claims and legal _ .j costs ' arising from any nuclear incident exceeds - the maximum amount-of financial protection, each reactor operator _ can be assessed an additional' 5 percent, up to -$3.2 million. or $362.3 million in total, for. all <115 nuclear units. The maximum assessment is i to be adjusted at least every five years Lto reflect inflationary changes. Based on the company's ownership interest in the three Millstone -units, its maximum -liability would be $142.2 million per incident. In addition, through the Company's power purchase contracts with the four Yankee regional' nuclear generating companies, and the Company's ownership interest'in Seabrook'1, the Company
3 a: a O' 4 g 2Thi Conn:cticut' Light cnd pow:r Comp:ny i NOTES TO FIHANCIAL STATEMENTS l . ould be responsible for up to.an additional. $55.9 million~ per incident. - w ~ + Payments';for thec Company's ownership l interest; in.1 nuclear.- generating-facilities would< be limited. to a maximum ofJ $30 million per Eincidenti per ,j year. j-Insurance has been: purchased fromj Nur aar; Electric Insurance Limited. l (NEIL) to cover: (1) certain extra costs incurredlin obtaining replacementL power during a' prolonged 4ccidentalboutage,with ' respect (to.the Company's 1 i < ownership interest in, Millstone c 1,: 2a andi3', and CY; and: (ii)L thelcostrof- -repair, replacementF or; decontamination offutility, property resulting.fromb j insured ' occurrences ' at.-- Millstone, l',: 2, and. -- 3, CY, MY,; and;VY.1 'All, f c , companies insured s with' NEIL are. subject.to retroactive; assessmentis if losses - exceed the : accumulated funds--=available' to -NEIL.; Thefmaximumi potential assessments" against ' the - Company with respect: to lossesHarisina during current. policy; years ' are ;approximately. $13.7' million1 under L the i
replacement. power, policies.and $10.3 million under-the property damage and-
' decontamination policies. Although-the Company has purchased'the limits ofL coverage l currently'available-from the conventional-nuclearlinsurance pools,= the cost of'a-nuclear incident could exceed;availabletinsurance proceeds.; 'In ' addition, - insurance. - has' :bsen - purchased from American: } Nuclear. 7 Insurers / Mutual-Atomic. Energy
Liability ' 'Juderwriters, aggregating

i $200 million on an industry -basis for covere,ge' ofl-worker; claims.'- LAll companies insured under.this coverage are', subject; to( retrospective .l assessments of $3.25 million per.: reactor.L The' maximum potential assessment [ against " the ' Company withs respect ~ to" losses l arising during the. current' policy period'is.approximately $9.7 million. 4 Financing Arrangements'for the Regional Nuclear Generating' Companies: The'-- owners of CY, including the Company, have. guaranteed their. pro rata shares; of $22.0 million '17-percent Series AT Debentures. _ The ~ guarantee ' of : the, L Company is $7.9 million.. [ The Company believes that thel regional" nuclear generating. companies - will require additional external financing c ini ths.. next 1several years for construction expenditures, nuclear' fuel, and other purposes. Although the j ways in which each regional. nuclear generating: company 'williattempt' to finance-these expenditures have not: been ' determined, s the Company expects that it may be asked to provide direct or indirect
financial support for one or more of these companies.
] j l l l j t i ! o
I 2- 'n Th3 CinnecticutiLight cnd power Comp:ny. 7 ? Report of Independent-Public Accountants - e { t-e To the Board of Directors j: of The_ Connecticut _ Light and power companyp We.have D audited; the' balance" sheetsL of : The Connec+.icut Light : and Power 'h Company L (a Connecticut corporation and ' a' wholly ' owned hubsidiary of-Northeast. J Utilities) as ' of December. 31, 1989 and 1988, tand - th s related statements of ,f[ income,. common stockholder's equity and. cash flows for. each of : the _ three1 years 'q ~ . in the: period ended December 31', -1989;
These financial statements fare ; the,.
responsibility of the Company's menagement. Our: responsibility.Is~to express.an opinion'on these financialfatatamtnts based'on our-audits. - We ' conducted' our. audits - in. accordance with generally ' accepted auditing, standards. :Those: standards require that'we plan and: perform the audit-to obtain? reasonable assurance about whether-theLfinancial statements are free.offmaterial misstatement. An audit includes.examiningr on actest' basis,7 evidence supporting the amounts and disclosures in'the financial statements. An: audit'also includes . assessing the < accounting.; principless used..and significant. estimates 1made; by ~ 3 management, as well as evaluating; the - overall_ financial statement'. presentation. ~ We believe that our: audits provide a' reasonable basis for:our ' opinion / C { LIn our' opinion,..therfinancial! statements. referred:toiabove-present: fairly, in all. material: respects, the financial position of The. Connecticut Light ^and-3 I Power: Company as 'of. December 31; 1989 and l1988',_and the 'results LofL its - perations and cash - flows for each of the three years einL the.-period ended ~ j o December 31, 1989, in conformity with generally accepted _ accounting: principles.
V L
As discussed more fully. In Note 10, _ a number ofI. uncertainties currently ~ exist relating to the - Company's - investment'. -in. the; Seabrooks nuclear project. Because management is unableL.-to ' predicthow these uncertainties -will; be ~ resolved, they..cannot now predict what portion of.the investment'in the Seabrook p project (approximately $207;2 million at December 31;.l?'J9) will-ultimately.be recoverable. 1 ARTHUR ANDERSEN & CO. [ Hartford, Connecticut February ~ 16, 1990 a e h s 4 +
h q JTh3 Conn;ctacut Light and: Pow 3r Company 4 7e,,;,. SELECTED FINANCIAL DATA ~ . Years Ended December 31, 1989 1988 1987 1986 1985 9 (Thousands of-Dollars)' y i, Continuing Operations:7 !i . Operating. Revenues.... $1;826,886 $1;732;298 $1,538,410 $1,509,849" $1;536,426L pg f0perating income..... 3273220 278,6631 231,337 229,223 216,276= Net 1 Income...-........ 207'875_ 221,544 213,343 '161,073' x264,744i Discontinued Gas -Operations: Operating Revenues... 124,229- '200,243-202','816 F 203,814 '220i010 Operating - Income'.....-- 12,563 21,790: 125,796 121,080: .21,862-Het Income........... 6,630-10;979-16,450~ 11,4881 12,331^ Total Assets..-......... '5,148,120" 5,423,862 5,344 ',890 L 5,063,313: 4,987,909! Long-Term Debta........ c2,147,892 --Preferred Stock 1
23323,274 2,202,555' 12,044,5741 -2;014,3111 Subject to~ Mandatory Redemption *..........
151,892 ?81,832 140,832-131',833
135;8333 Obligations Under Capital Leaces*......
252,652 310,137 326,189 330,819;
322,318
Includes portions due within'one year.
7 STATEMENTS OF OUARTERLY FINANCIAL DATA (Unaudited) Quarter-Ended 1989 March 31 -June 30 September 30 = December 31 (Thousands of Dollars) Continuing Operations: Operating Revenues... S462,836-M 4 2 2,' 378 - $468,146-S473,526-Operating Income..... S 86,752 S 77,557 $ 89,942 S 72,969 i Net Income........... S 56,915 S 45,712 5-59,127 S 46,121 Discontinued Gas Operations: Operating Revenues... S,8,5 780 S 38,449 S Operating Income..... S 12,635 3 (72)' S S Net Income........... S 9,756' S (3,126): S S 1988 q Continuing Operations: Operating Revenues... S447,771 $390,068 S453,985 S440,474 jj Operating Income..... S 65,295 S 60,981' 'S 81,220 5 71,167 \\' Net Income. S 50,481 S 45,410 S 64,509 S 61,1_44
. ]i Discontinued Gat D'
Operations: 'w - Operating Revenues... $ 78,199 $ 34,999 S ~23,612 S 63,433 { Operating Income..... S 12,953 2,032 S (261) S 7,066 Net Income........... S 10,280 (732) H (2,974) S 4,405 i ! 1 U
4,, w d, + 1 n. 1 s 5, ~. ' W .3 a 'e'go;.._.. u 1 + s p. '. The' Connecticut; Light and ' Power Conpany
g a.
eI, ) It~ ' f .7
STATISTICS' J
l 6 f g, -'tf. 5 'v>, i i ' Gros's Electr'c: e M 0 Utility Plant! Average yi ; December 31), EAnnual f Electric k..
(Thousands.c6,kWh' Sales
'Residentiali -Customers' Employees ' Dollars) (Millions)' kWh-Use' ~(Averace) (Dacember 31,)-fu o -c,
-1989-
$5,732,850~ l20;983; l8,570 1~,054,037j 3,556'. T-1988' L5,624,464 .. 20,611 '8,525' ,- 1,03 6 ; 565 '_. 14,022: 1987: 5,449,339'. 19,639,
8,152V n1,010,3432
'4,135. 11986; 5,248,487 - 18,728:
7,817-
.983,387, ,4,066' q.L '1985
5,155;473-17,816' 7,551
~ 961.,0,707 L4,061 ~ +. 4
t.
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D, [g \\ r,, m Fi The Connecticut Light cnd: Power Comp:ny ~ *' m.
First'and Refunding Mortgage Bonds =
i Trustee end 1nterest Paying Agent-3 L Bankers Trust Company.1 Corporate Trust 'and Agericy Group
P.O. Box 318, Church Street Station,l New york, New York 10015, N
The First National' Bank.of= Boston, Corporate Trust Dopartment" P.O. Box 1897, Boston, MassachusettsL 07105 7
s N
The Connecticut' National Bank, Corporate Trust. Department L:s 777-Main Street, Hr.rtford,' Connecticut :06115
' Preferred Stock m Transfer Agent? Dividend' Disbursing Agent and Registrar' The Connecticut Bank,and Trust Company,3 N.A. Stock Transfer DepartmentJ -One Constitution Plaza, Hartfordi. Connecticut 06115: e 1990 Dividend' Payment-Dates-5.28 % 9.00 % i9.60 %,10.'48 % 11,52 %. $3 24,.$4.40'H and:$4.48'I Series - January:1, Aprilil,LJuly 1 and October.1 4.50% (1956), 4.96%:6.56% 9.36%' $1.90, $2.00, $2.04, $2.06,'$2'.09'and $2.20 Series-- February,1, May?1, August (1 and November IL ' 7 3.90%, 4.50% (1963),. 7.60%, 9.10%, 4i $3.80,'$4.56 and $5.52. Series f March.1, June 1,; September 1-and: December ) ' DARTS ***- January 3, February;21, April 11, May 30,. July IS', September 5, October;24 and December 12 Address'. General Correspondence'in Care:off: Northeast Utilities Service Company. S I Investor Relations Department 'P.O. Box'270 Hartford, Connecticut' 06141-0270; Tel. (203).665-5000. General' office Selden Street, Berlin, Connecticut 06037-1616 ,? l .s M
Trustee and interest paying. agent (except asinoted below) for first mortgage'
,:w bonds issued under the indenture of The. Hartford Electric Light Company.. ij Effective at the close of business on June 30, 1982, The Hartford Electric- ~ 4 y& Light. Company was merged into The Connecticut Light and Power Company. W] . 4-1/4% 1963-Series and 4 1/2% 1964. Series. -** Paying agent.for the ( j
Transfer and Paying Agent:
O :. . Bankers Trust Company, Corporate Trust and' Agency Group P.O., Box 318, Church Stroet Statid h New York, New York 10015 U, 'The data contained in this Report is'submicted for'th'e sole purpose of-( providing information to present. stockholders about the Company. M.,, .- 3 8 ,r .4 ~ L
,..,a..u -a.a.,.a. m -- - - - e .-.maa-s.--,- n--, .u.- .-.no,. . na a. --n... y ) 1 i g 8 & ' en ' 1 i ) l I 1 ? I ) s j i UTIRJTIES THE CONNECTICUT UGHT AND POWER COMPANY wf8 TERN MASSACHUSETTS ELECTRIC COMPANY HOLYOKE WATER POWER COMPANY NORTHEAST UTIUTIES SES/ ICE COMPANY NORTHEAST NUCLEAR ENEROYCOMPANY 1 k - n t a ? 4 4 - ? . 31. , t L' ? i t 1- 't f i i ) I = i l ,y.s. y-r-ya g, e 9 .s .g um.g.. m, o g gvi g w -,-c 9 gw..g,ew-r.w.,.,p,_,.,w......g.-wde-N&- tas -1 prvem
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ML20043A495

Text

SUMMARY

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