Connecticut Light & Power Co – ‘8-K’ for 8/19/96

As of:  Friday, 9/27/96   ·   For:  8/19/96   ·   Accession #:  23426-96-26   ·   File #:  1-11419

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Form 8-K for the Connecticut Light & Power Company     4±    20K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION      
WASHINGTON, D.C. 20549-1004     

FORM 8-K        

CURRENT REPORT        

Pursuant to Section 13 or 15(d) of the          
Securities Exchange Act of 1934             

Date of Report (Date of earliest event reported)  August 19, 1996       
                                            ------------------

Commission File Number 0-404        
               -----

THE CONNECTICUT LIGHT AND POWER COMPANY         
----------------------------------------        
(Exact name of registrant as specified in its charter)      

CONNECTICUT                      06-0303850       
-----------                      ----------       

(State or other jurisdiction of          (I.R.S. Employer             
incorporation or organization)         Identification No.)          

SELDEN STREET, BERLIN, CONNECTICUT             06037-1616       
-------------------------------------------------------------         
(Address of principal executive offices)          (Zip Code)          

(203) 665-5000          
--------------          
(Registrant's telephone number, including area code)          

Not Applicable          
--------------          
(Former name or former address, if changed since last report)           

Item 5. Other Events                                                            

1.   Property Tax Litigation                                                    

 On September 5, 1996, a Connecticut Superior Court judge ruled that the
Town of Haddam had over-assessed the Connecticut Yankee nuclear plant (CY) at   
three and a half times its proper assessment.  The decision sets the plant's    
fair market value at $235 million.  A consultant hired by the town had valued   
the plant at $840 million in 1991.  Connecticut Yankee Atomic Power             
Company (CYAPC), which operates CY, estimates that the town owes it             
approximately $12.9 million in refunds, including accrued interest, for taxes   
that were overpaid from July 31, 1992 through July 31, 1996.  Northeast         
Utilities (NU) system companies (collectively, with NU, the System) own a 49    
percent interest in CYAPC (34.5 percent for The Connecticut Light and Power     
Company (CL&P), 9.5 percent for Western Massachusetts Electric Company          
(WMECO) and 5.0 percent for Public Service Company of New Hampshire (PSNH)).    
The Superior Court's decision is subject to appeal.                             

For more information regarding this proceeding, see "Item 3. Legal    
Proceedings" in CL&P's 1995 Form 10-K.                                          

2.   Nuclear Matters                                                            

Nuclear Management Reorganization                                     

On August 15, 1996, NU announced the appointment of Bruce Kenyon as   
President and Chief Executive Officer of Northeast Utilities' nuclear           
operations, effective September 3, 1996.  Mr. Kenyon replaced Robert E.         
Busch, former president of NU's energy resources group, who has left NU.        
Since 1990, Mr. Kenyon had been president and chief operating officer of        
South Carolina Electric & Gas Company, operator of the V. C. Summer nuclear     
plant.  Prior to that position, Mr. Kenyon was senior vice president of the     
nuclear division at Pennsylvania Power & Light Company, which operates the      
two Susquehanna nuclear units.                                                  

On September 18, 1996, Mr. Kenyon unveiled a reorganization of the NU 
senior management that is intended to establish direct accountability for       
performance at each of NU's five nuclear power units.  He also announced that   
three executives loaned from unaffiliated utility companies--all with           
experience at companies with excellent nuclear operations, including some       
which have shown marked improvement during their tenure--would lead the         
recovery of NU's three Millstone Station units.  A recovery officer for CY      
will be named if the plant passes an economic viability review, which is now    
underway.                                                                       

Each of the outside utilities has agreed to lend the recovery officer 
and their respective teams for six months, which can be extended by mutual      
agreement.  The search for executives to lead those units for the longer term   
has already begun.  The recovery officers have full authority to take           
whatever action is necessary to move their units expeditiously toward           
restart.                                                                        

  Mr. Kenyon also announced that retired Admiral David Goebel was selected
to serve as Vice President for Nuclear Oversight.  Mr. Goebel has more than     
25 years of nuclear management experience, including service as Director of     
Plans and Policy of the U.S. Strategic Command and Commander of Submarine       
Group Two in Groton, Connecticut.                                               

Nuclear Operations                                                    

  NU system companies have a 100 percent ownership interest in Millstone 1
and 2 (81 percent for CL&P and 19 percent for WMECO), an approximately 68       
percent interest in Millstone 3 (52.93 percent for CL&P, 12.24 percent for      
WMECO and 2.85 percent for PSNH) and a 49 percent interest in CYAPC (34.5       
percent for CL&P, 9.5 percent for WMECO and 5.0 percent for PSNH). These        
units have been out of service since November 4, 1995, February 22, 1996,       
March 30, 1996 and July 22, 1996, respectively.                                 

The management reorganization of NU's nuclear organization described  
above may impact the actions currently being taken by NU to improve             
operations, regulatory compliance and safety at the Millstone units and CY.     
Mr. Kenyon has made it the first priority of the loaned recovery officers to    
reassess these actions and related scheduling issues for the Millstone units.   
That effort will begin in early October after these officers arrive at          
Millstone and begin to work full-time.  New estimates and plans will be         
developed following this reassessment.                                          

In addition to events previously reported, the actions may also be    
impacted by the currently ongoing analysis of CY's economics, an August 14,     
1996 order of the Nuclear Regulatory Commission (NRC) requiring the creation    
of an independent corrective action verification program for each of the        
Millstone units, and the NRC's ongoing and planned inspection activities at     
each of the units.                                                              

  Management estimates the System's combined cost of replacement power for
the three Millstone units and CY to range from $25 to $33 million per month.    
NU, however, cannot estimate how the events discussed above may otherwise       
affect operation and maintenance expense and other costs associated with the    
outages or the timing for restart of any of the units.                          

For additional information regarding nuclear performance matters, see 
CL&P's Forms 8-K dated January 31, 1996, March 30, 1996, April 15, 1996, June   
6, 1996, June 18, 1996, June 28, 1996, and July 22, 1996, Forms 10-Q for the    
quarters ended March 31, 1996 and June 30, 1996 and "Item 1. Business -         
Electric Operations - Nuclear Generation" in CL&P's 1995 Form 10-K.             

3.   System Companies' Ratings                                                  

On September 5, 1996, Moody's Investors Service Inc. placed all of the
securities of NU, CL&P, WMECO, CYAPC and Niantic Bay Fuel Trust under review    
for possible downgrades as a result of the ongoing outages at Millstone and     
CY.                                                                             

4.   Connecticut Rate Matters                                                   

Proposed Energy Adjustment Clause                                     

On August 19, 1996, the Department of Public Utility Control (DPUC)   
issued a draft decision (Draft) proposing to replace CL&P's two existing        
energy recovery mechanisms with an Energy Adjustment Clause (EAC).  The         
Draft's EAC tracks changes from base rate levels for more costs than CL&P's     
existing recovery mechanisms (the fossil fuel adjustment clause and             
generation utilization adjustment clause).  It contains two proposed            
incentive mechanisms.  The most significant is a proposed 80 percent            
limitation on the amount of charges or credits resulting from incurred costs    
that differ from base rate assumptions (EAC Differential) that can be passed    
on to CL&P's customers under the EAC.  The second is a proposed regulatory      
billing lag of approximately 11 months for each six-month EAC period, with an   
additional six-month billing lag for replacement power costs that are           
incurred during any six-month EAC period as a result of CL&P's composite        
nuclear capacity factor falling below 60 percent.                               

  While CL&P does not expect incentive provisions in any new EAC to affect
recovery of the replacement power costs presently being incurred while the      
Millstone and CY nuclear units are shut down (see discussion below), the        
Draft's proposal to allow recovery of only 80 percent of the EAC Differential   
could, under certain scenarios, result in a material underrecovery of           
prudently incurred expense.  CL&P has objected to certain of the Draft's        
proposals in writing and in oral argument before the DPUC.  CL&P proposed as    
an alternative to the incentive mechanisms in the Draft that the EAC have an    
annual "deadband" of $8.75 million applying to costs above or below levels      
recovered in base rates, within which the EAC would not operate.  CL&P          
expects the DPUC to issue its final EAC decision within the next several        
weeks.                                                                          

Replacement Power Costs                                               

 The DPUC issued a related proposal on September 17, 1996 to exclude all
of CL&P's replacement power costs on and after April 1, 1996 incurred as a      
result of the outages at Millstone and CY from recovery under CL&P's fuel       
adjustment mechanisms, including any EAC that might be adopted.  Under the      
proposal, CL&P will be allowed to defer these costs until such time as the      
four Connecticut nuclear units return to service, nuclear audit reports being   
performed for the DPUC have been filed, and a record pertaining to all of the   
outages has been fully developed that will allow the DPUC to evaluate the       
extent to which, if any, replacement power costs were prudently incurred and    
recovery should be permitted from CL&P's customers.                             

 While it is too early to estimate the total amount of such costs or the
results of any prudence reviews, management believes that there is              
significant exposure to non-recovery of a material amount of such costs.        

  For additional information regarding the DPUC audit, see CL&P's Form 8-K
dated March 30, 1996. For additional information regarding CL&P's existing      
fuel adjustment mechanisms, see "Item 1. Business - Connecticut Retail Rates    
- CL&P Adjustment Clauses" in CL&P's 1995 Form 10-K.                            

SIGNATURE   

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the        
undersigned hereunto duly authorized.                                           

           THE CONNECTICUT LIGHT AND POWER COMPANY
           ---------------------------------------
          Registrant

Date  September 27, 1996             By /s/ John H. Forsgren                    
--------------------            ------------------------------------  
                John H. Forsgren
                            Executive Vice President and
                       Chief Financial Officer

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing		Date		Other Filings
Filed on:		9/27/96
		9/18/96
		9/17/96
		9/5/96
		9/3/96
For Period End:		8/19/96
		8/15/96
		8/14/96		10-Q
		7/31/96
		7/22/96		8-K
		6/30/96		10-Q
		6/28/96		8-K
		6/18/96		8-K
		6/6/96		8-K
		4/15/96		8-K
		4/1/96
		3/31/96		10-Q
		3/30/96		8-K
		2/22/96
		1/31/96		8-K
		11/4/95
		7/31/92
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