EVERSOURCE ENERGY, 10-Q filed on 5/7/2019
Quarterly Report
v3.19.1
DOCUMENT AND ENTITY INFORMATION - shares
3 Months Ended
Mar. 31, 2019
Apr. 30, 2019
Document And Entity [Line Items]    
Entity Registrant Name Eversource Energy  
Entity Central Index Key 0000072741  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Entity Emerging Growth Company false  
Entity Smaller Reporting Company false  
Trading Symbol ES  
Entity Common Stock, Shares Outstanding (in shares)   317,461,097
The Connecticut Light and Power Company    
Document And Entity [Line Items]    
Entity Registrant Name The Connecticut Light and Power Company  
Entity Central Index Key 0000023426  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Common Stock, Shares Outstanding (in shares)   6,035,205
Public Service Company of New Hampshire    
Document And Entity [Line Items]    
Entity Registrant Name Public Service Company of New Hampshire  
Entity Central Index Key 0000315256  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Common Stock, Shares Outstanding (in shares)   301
NSTAR Electric Company    
Document And Entity [Line Items]    
Entity Registrant Name NSTAR Electric Company  
Entity Central Index Key 0000013372  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Common Stock, Shares Outstanding (in shares)   200
v3.19.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current Assets:    
Cash $ 35,145 $ 108,068
Receivables, Net 1,140,348 994,055
Unbilled Revenues 159,288 176,285
Fuel, Materials, Supplies and Inventory 277,104 238,042
Regulatory Assets 507,255 514,779
Prepayments and Other Current Assets 181,724 260,995
Total Current Assets 2,300,864 2,292,224
Property, Plant and Equipment, Net 26,032,781 25,610,428
Deferred Debits and Other Assets:    
Regulatory Assets 4,589,427 4,631,137
Goodwill 4,427,266 4,427,266
Investments in Unconsolidated Affiliates 711,476 464,286
Marketable Securities 415,405 417,508
Other Long-Term Assets 463,788 398,407
Total Deferred Debits and Other Assets 10,607,362 10,338,604
Total Assets 38,941,007 38,241,256
Current Liabilities:    
Notes Payable 1,477,830 910,000
Long-Term Debt – Current Portion 805,519 837,319
Rate Reduction Bonds – Current Portion 43,210 52,332
Accounts Payable 1,006,774 1,119,995
Regulatory Liabilities 385,442 370,230
Other Current Liabilities 840,587 823,006
Total Current Liabilities 4,559,362 4,112,882
Deferred Credits and Other Liabilities:    
Accumulated Deferred Income Taxes 3,543,052 3,506,030
Regulatory Liabilities 3,627,389 3,609,475
Derivative Liabilities 372,957 379,562
Accrued Pension, SERP and PBOP 939,786 962,510
Other Long-Term Liabilities 1,259,400 1,196,336
Total Deferred Credits and Other Liabilities 9,742,584 9,653,913
Long-Term Debt 12,284,330 12,248,743
Rate Reduction Bonds 561,727 583,331
Noncontrolling Interest – Preferred Stock of Subsidiaries 155,570 155,570
Common Shareholders' Equity:    
Common Shares 1,669,392 1,669,392
Capital Surplus, Paid In 6,242,089 6,241,222
Retained Earnings 4,092,895 3,953,974
Accumulated Other Comprehensive Loss (57,804) (60,000)
Treasury Stock (309,138) (317,771)
Common Stockholder's Equity 11,637,434 11,486,817
Commitments and Contingencies
Total Liabilities and Capitalization 38,941,007 38,241,256
The Connecticut Light and Power Company    
Current Assets:    
Cash 7,496 87,721
Receivables, Net 443,684 397,026
Accounts Receivable from Affiliated Companies 30,363 23,082
Unbilled Revenues 51,300 56,971
Fuel, Materials, Supplies and Inventory 52,109 44,529
Regulatory Assets 147,712 125,155
Prepaid Property Taxes 41,341 19,555
Prepayments and Other Current Assets 20,384 40,724
Total Current Assets 794,389 794,763
Property, Plant and Equipment, Net 9,065,880 8,909,701
Deferred Debits and Other Assets:    
Regulatory Assets 1,496,679 1,505,488
Other Long-Term Assets 197,571 199,767
Total Deferred Debits and Other Assets 1,694,250 1,705,255
Total Assets 11,554,519 11,409,719
Current Liabilities:    
Long-Term Debt – Current Portion 0 250,000
Accounts Payable 347,928 324,983
Accounts Payable to Affiliated Companies 94,738 26,452
Obligations to Third Party Suppliers 56,065 56,248
Accrued Taxes 55,693 38,205
Accrued Interest 42,424 38,395
Regulatory Liabilities 106,489 109,614
Derivative Liabilities 59,651 55,058
Other Current Liabilities 71,461 84,488
Total Current Liabilities 834,449 983,443
Deferred Credits and Other Liabilities:    
Accumulated Deferred Income Taxes 1,184,425 1,166,784
Regulatory Liabilities 1,126,279 1,122,157
Derivative Liabilities 372,774 379,536
Accrued Pension, SERP and PBOP 279,914 282,771
Other Long-Term Liabilities 165,307 155,495
Total Deferred Credits and Other Liabilities 3,128,699 3,106,743
Long-Term Debt 3,265,756 3,004,016
Noncontrolling Interest – Preferred Stock of Subsidiaries 116,200 116,200
Common Shareholders' Equity:    
Common Shares 60,352 60,352
Capital Surplus, Paid In 2,410,765 2,410,765
Retained Earnings 1,737,980 1,727,899
Accumulated Other Comprehensive Loss 318 301
Common Stockholder's Equity 4,209,415 4,199,317
Commitments and Contingencies
Total Liabilities and Capitalization 11,554,519 11,409,719
NSTAR Electric    
Current Assets:    
Cash 1,769 1,606
Receivables, Net 400,082 361,296
Accounts Receivable from Affiliated Companies 20,097 31,344
Unbilled Revenues 31,698 34,518
Fuel, Materials, Supplies and Inventory 160,221 114,202
Regulatory Assets 234,662 241,747
Prepayments and Other Current Assets 24,643 51,960
Total Current Assets 873,172 836,673
Property, Plant and Equipment, Net 8,915,608 8,794,700
Deferred Debits and Other Assets:    
Regulatory Assets 1,173,851 1,196,512
Prepaid PBOP 139,132 132,810
Other Long-Term Assets 134,536 109,764
Total Deferred Debits and Other Assets 1,447,519 1,439,086
Total Assets 11,236,299 11,070,459
Current Liabilities:    
Notes Payable 368,430 278,500
Notes Payable to Eversource Parent 22,300 0
Long-Term Debt – Current Portion 95,000 0
Accounts Payable 306,888 384,398
Accounts Payable to Affiliated Companies 115,676 89,636
Obligations to Third Party Suppliers 110,742 109,547
Renewable Portfolio Standards Compliance Obligations 175,391 139,898
Regulatory Liabilities 193,959 190,620
Other Current Liabilities 52,156 74,872
Total Current Liabilities 1,440,542 1,267,471
Deferred Credits and Other Liabilities:    
Accumulated Deferred Income Taxes 1,305,518 1,294,467
Regulatory Liabilities 1,514,557 1,513,279
Accrued Pension, SERP and PBOP 5,496 14,145
Other Long-Term Liabilities 293,794 263,096
Total Deferred Credits and Other Liabilities 3,119,365 3,084,987
Long-Term Debt 2,850,196 2,944,846
Noncontrolling Interest – Preferred Stock of Subsidiaries 43,000 43,000
Common Shareholders' Equity:    
Common Shares 0 0
Capital Surplus, Paid In 1,653,442 1,633,442
Retained Earnings 2,131,015 2,098,091
Accumulated Other Comprehensive Loss (1,261) (1,378)
Common Stockholder's Equity 3,783,196 3,730,155
Commitments and Contingencies
Total Liabilities and Capitalization 11,236,299 11,070,459
Public Service Company of New Hampshire    
Current Assets:    
Cash 3,961 1,439
Receivables, Net 102,806 104,854
Accounts Receivable from Affiliated Companies 11,520 8,444
Unbilled Revenues 43,289 47,145
Taxes Receivable 7,441 25,913
Fuel, Materials, Supplies and Inventory 37,361 37,504
Regulatory Assets 76,599 67,228
Special Deposits 21,059 47,498
Prepayments and Other Current Assets 2,940 17,564
Total Current Assets 306,976 357,589
Property, Plant and Equipment, Net 2,920,560 2,880,073
Deferred Debits and Other Assets:    
Regulatory Assets 855,369 862,288
Other Long-Term Assets 29,884 27,406
Total Deferred Debits and Other Assets 885,253 889,694
Total Assets 4,112,789 4,127,356
Current Liabilities:    
Notes Payable to Eversource Parent 61,000 57,000
Long-Term Debt – Current Portion 150,000 150,000
Rate Reduction Bonds – Current Portion 43,210 52,332
Accounts Payable 106,398 111,292
Accounts Payable to Affiliated Companies 37,976 26,029
Regulatory Liabilities 45,655 55,526
Other Current Liabilities 55,088 64,046
Total Current Liabilities 499,327 516,225
Deferred Credits and Other Liabilities:    
Accumulated Deferred Income Taxes 489,434 481,221
Regulatory Liabilities 429,932 428,069
Accrued Pension, SERP and PBOP 122,490 124,457
Other Long-Term Liabilities 37,956 36,339
Total Deferred Credits and Other Liabilities 1,079,812 1,070,086
Long-Term Debt 655,294 655,173
Rate Reduction Bonds 561,727 583,331
Common Shareholders' Equity:    
Common Shares 0 0
Capital Surplus, Paid In 678,134 678,134
Retained Earnings 641,039 627,258
Accumulated Other Comprehensive Loss (2,544) (2,851)
Common Stockholder's Equity 1,316,629 1,302,541
Commitments and Contingencies
Total Liabilities and Capitalization $ 4,112,789 $ 4,127,356
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Operating Revenues $ 2,415,792 $ 2,287,962
Operating Expenses:    
Purchased Power, Fuel and Transmission 974,882 946,747
Operations and Maintenance 335,597 332,549
Depreciation 214,948 204,266
Amortization 70,961 45,194
Energy Efficiency Programs 140,116 134,241
Taxes Other Than Income Taxes 184,588 182,433
Total Operating Expenses 1,921,092 1,845,430
Operating Income 494,700 442,532
Interest Expense 131,734 121,129
Other Income, Net 30,985 33,789
Income Before Income Tax Expense 393,951 355,192
Income Tax Expense 83,393 83,766
Net Income 310,558 271,426
Net Income Attributable to Noncontrolling Interests 1,880 1,880
Net Income Attributable to Common Shareholders $ 308,678 $ 269,546
Basic and Diluted Earnings Per Common Share (in dollars per share) $ 0.97 $ 0.85
Weighted Average Common Shares Outstanding:    
Basic (in shares) 317,624,593 317,397,052
Diluted (in shares) 318,316,082 317,992,999
The Connecticut Light and Power Company    
Operating Revenues $ 849,246 $ 784,983
Operating Expenses:    
Purchased Power, Fuel and Transmission 319,833 301,889
Operations and Maintenance 130,637 117,292
Depreciation 73,289 67,498
Amortization of Regulatory Assets, Net 35,671 28,006
Energy Efficiency Programs 25,988 22,760
Taxes Other Than Income Taxes 92,000 90,300
Total Operating Expenses 677,418 627,745
Operating Income 171,828 157,238
Interest Expense 35,781 36,823
Other Income, Net 3,880 6,560
Income Before Income Tax Expense 139,927 126,975
Income Tax Expense 29,456 28,407
Net Income 110,471 98,568
NSTAR Electric Company    
Operating Revenues 797,612 770,127
Operating Expenses:    
Purchased Power, Fuel and Transmission 330,104 332,579
Operations and Maintenance 112,963 118,682
Depreciation 72,584 70,542
Amortization of Regulatory Assets, Net 22,584 6,364
Energy Efficiency Programs 76,729 74,793
Taxes Other Than Income Taxes 44,822 48,186
Total Operating Expenses 659,786 651,146
Operating Income 137,826 118,981
Interest Expense 27,881 26,464
Other Income, Net 11,086 12,601
Income Before Income Tax Expense 121,031 105,118
Income Tax Expense 27,017 27,969
Net Income 94,014 77,149
Public Service Company of New Hampshire    
Operating Revenues 276,435 267,350
Operating Expenses:    
Purchased Power, Fuel and Transmission 113,531 109,717
Operations and Maintenance 52,630 51,380
Depreciation 22,919 23,493
Amortization 13,667 5,035
Energy Efficiency Programs 6,714 5,157
Taxes Other Than Income Taxes 17,311 16,801
Total Operating Expenses 226,772 211,583
Operating Income 49,663 55,767
Interest Expense 14,367 12,772
Other Income, Net 7,022 4,749
Income Before Income Tax Expense 42,318 47,744
Income Tax Expense 9,537 12,651
Net Income $ 32,781 $ 35,093
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Net Income $ 310,558 $ 271,426
Other Comprehensive (Loss)/Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments 316  
Qualified Cash Flow Hedging Instruments   724
Changes in Unrealized Gains/(Losses) on Marketable Securities 655 (444)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans 1,225 2,993
Other Comprehensive Income, Net of Tax 2,196 3,273
Comprehensive Income Attributable to Noncontrolling Interests (1,880) (1,880)
Comprehensive Income Attributable to Common Shareholders 310,874 272,819
The Connecticut Light and Power Company    
Net Income 110,471 98,568
Other Comprehensive (Loss)/Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments (6)  
Qualified Cash Flow Hedging Instruments   52
Changes in Unrealized Gains/(Losses) on Marketable Securities 23 (12)
Other Comprehensive Income, Net of Tax 17 40
Comprehensive Income Attributable to Common Shareholders 110,488 98,608
NSTAR Electric Company    
Net Income 94,014 77,149
Other Comprehensive (Loss)/Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments 110  
Qualified Cash Flow Hedging Instruments   109
Changes in Unrealized Gains/(Losses) on Marketable Securities 6 (4)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans 1 1
Other Comprehensive Income, Net of Tax 117 106
Comprehensive Income Attributable to Common Shareholders 94,131 77,255
Public Service Company of New Hampshire    
Net Income 32,781 35,093
Other Comprehensive (Loss)/Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments 269  
Qualified Cash Flow Hedging Instruments   290
Changes in Unrealized Gains/(Losses) on Marketable Securities 38 (21)
Other Comprehensive Income, Net of Tax 307 269
Comprehensive Income Attributable to Common Shareholders $ 33,088 $ 35,362
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Common Shares
Capital Surplus, Paid In
Retained Earnings
Accumulated Other Comprehensive Loss
Treasury Stock
The Connecticut Light and Power Company
The Connecticut Light and Power Company
Common Shares
The Connecticut Light and Power Company
Capital Surplus, Paid In
The Connecticut Light and Power Company
Retained Earnings
The Connecticut Light and Power Company
Accumulated Other Comprehensive Loss
NSTAR Electric Company
NSTAR Electric Company
Common Shares
NSTAR Electric Company
Capital Surplus, Paid In
NSTAR Electric Company
Retained Earnings
NSTAR Electric Company
Accumulated Other Comprehensive Loss
Public Service Company of New Hampshire
Public Service Company of New Hampshire
Common Shares
Public Service Company of New Hampshire
Capital Surplus, Paid In
Public Service Company of New Hampshire
Retained Earnings
Public Service Company of New Hampshire
Accumulated Other Comprehensive Loss
Balance (in shares) at Dec. 31, 2017   316,885,808           6,035,205         200         301      
Balance at Dec. 31, 2017 $ 11,086,242 $ 1,669,392 $ 6,239,940 $ 3,561,084 $ (66,403) $ (317,771) $ 3,587,127 $ 60,352 $ 2,110,765 $ 1,415,741 $ 269 $ 3,446,080 $ 0 $ 1,502,942 $ 1,944,961 $ (1,823) $ 1,350,594 $ 0 $ 843,134 $ 511,382 $ (3,922)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                          
Net Income 271,426     271,426     98,568     98,568   77,149     77,149   35,093     35,093  
Dividends on Common Shares (160,027)     (160,027)     (60,000)     (60,000)   (161,000)     (161,000)            
Dividends on Preferred Stock (1,880)     (1,880)     (1,390)     (1,390)   (490)     (490)            
Other                       1     1            
Long-Term Incentive Plan Activity (15,320)   (15,320)                                    
Capital Contributions from Eversource Parent             9,000   9,000     92,500   92,500              
Other Comprehensive Income 3,273       3,273   40       40 106       106 269       269
Balance (in shares) at Mar. 31, 2018   316,885,808           6,035,205         200         301      
Balance at Mar. 31, 2018 $ 11,183,714 $ 1,669,392 6,224,620 3,670,603 (63,130) (317,771) 3,633,345 $ 60,352 2,119,765 1,452,919 309 3,454,346 $ 0 1,595,442 1,860,621 (1,717) 1,385,956 $ 0 843,134 546,475 (3,653)
Balance (in shares) at Dec. 31, 2018 316,885,808 316,885,808           6,035,205         200         301      
Balance at Dec. 31, 2018 $ 11,486,817 $ 1,669,392 6,241,222 3,953,974 (60,000) (317,771) 4,199,317 $ 60,352 2,410,765 1,727,899 301 3,730,155 $ 0 1,633,442 2,098,091 (1,378) 1,302,541 $ 0 678,134 627,258 (2,851)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                          
Net Income 310,558     310,558     110,471     110,471   94,014     94,014   32,781     32,781  
Dividends on Common Shares (169,757)     (169,757)     (99,000)     (99,000)   (60,600)     (60,600)   (19,000)     (19,000)  
Dividends on Preferred Stock (1,880)     (1,880)     (1,390)     (1,390)   (490)     (490)            
Long-Term Incentive Plan Activity (16,609)   (16,609)                                    
Issuance of Treasury Shares (in shares)   461,662                                      
Issuance of Treasury Shares 26,109   17,476     8,633                              
Capital Contributions from Eversource Parent                       20,000   20,000              
Other Comprehensive Income $ 2,196       2,196   17       17 117       117 307       307
Balance (in shares) at Mar. 31, 2019 317,347,470 317,347,470           6,035,205         200         301      
Balance at Mar. 31, 2019 $ 11,637,434 $ 1,669,392 $ 6,242,089 $ 4,092,895 $ (57,804) $ (309,138) $ 4,209,415 $ 60,352 $ 2,410,765 $ 1,737,980 $ 318 $ 3,783,196 $ 0 $ 1,653,442 $ 2,131,015 $ (1,261) $ 1,316,629 $ 0 $ 678,134 $ 641,039 $ (2,544)
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]    
Dividends on Common Shares (in dollars per share) $ 0.535 $ 0.505
v3.19.1
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Operating Activities:    
Net Income $ 310,558 $ 271,426
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:    
Depreciation 214,948 204,266
Deferred Income Taxes 18,085 88,481
Uncollectible Expense 18,565 19,613
Pension, SERP and PBOP Expense/(Income), Net 8,428 (1,965)
Pension and PBOP Contributions (4,700) (171,244)
Regulatory (Under)/Over Recoveries, Net (19,232) 70,457
Amortization 70,961 45,194
Other (37,310) (74,582)
Changes in Current Assets and Liabilities:    
Receivables and Unbilled Revenues, Net (155,823) (156,888)
Fuel, Materials, Supplies and Inventory (39,063) (26,956)
Taxes Receivable/Accrued, Net 126,381 (5,061)
Accounts Payable (13,556) (61,571)
Other Current Assets and Liabilities, Net (70,242) (23,456)
Net Cash Flows Provided by Operating Activities 428,000 177,714
Investing Activities:    
Investments in Property, Plant and Equipment (674,694) (607,334)
Proceeds from Sales of Marketable Securities 234,497 145,438
Purchases of Marketable Securities (237,794) (143,264)
Proceeds from the Sale of Generation Assets 0 130,641
Investments in Unconsolidated Affiliates (249,138) (7,340)
Other Investing Activities 4,893 2,140
Net Cash Flows (Used in)/Provided by Investing Activities (922,236) (479,719)
Financing Activities:    
Cash Dividends on Common Stock (169,757) (160,027)
Cash Dividends on Preferred Stock (1,880) (1,880)
Issuance of Treasury Shares 26,109 0
Increase in Notes Payable 829,430 (240,005)
Repayment of Rate Reduction Bonds (30,727) 0
Issuance of Long-Term Debt 0 1,150,000
Retirement of Long-Term Debt (250,215) (150,218)
Other Financing Activities (9,676) (19,140)
Net Cash Flows Provided by Financing Activities 393,284 578,730
Net (Decrease)/Increase in Cash and Restricted Cash (100,952) 276,725
Cash and Restricted Cash - Beginning of Period 209,324 85,890
Cash and Restricted Cash - End of Period 108,372 362,615
The Connecticut Light and Power Company    
Operating Activities:    
Net Income 110,471 98,568
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:    
Depreciation 73,289 67,498
Deferred Income Taxes 15,188 29,109
Uncollectible Expense 4,116 3,912
Pension, SERP and PBOP Expense/(Income), Net 4,063 3,158
Pension Contributions 0 (82,276)
Regulatory (Under)/Over Recoveries, Net (54,671) (8,878)
Amortization of Regulatory Assets, Net 35,671 28,006
Other (5,848) (18,940)
Changes in Current Assets and Liabilities:    
Receivables and Unbilled Revenues, Net (60,506) (46,330)
Taxes Receivable/Accrued, Net 41,399 42,460
Accounts Payable 75,373 (28,408)
Other Current Assets and Liabilities, Net (40,274) (23,160)
Net Cash Flows Provided by Operating Activities 198,271 64,719
Investing Activities:    
Investments in Property, Plant and Equipment (189,423) (202,126)
Other Investing Activities 59 56
Net Cash Flows (Used in)/Provided by Investing Activities (189,364) (202,070)
Financing Activities:    
Cash Dividends on Common Stock (99,000) (60,000)
Cash Dividends on Preferred Stock (1,390) (1,390)
Capital Contributions from Eversource Parent 0 9,000
Increase in Notes Payable to Eversource Parent 261,600 (69,500)
Issuance of Long-Term Debt 0 500,000
Retirement of Long-Term Debt (250,000) 0
Other Financing Activities (326) (6,539)
Net Cash Flows Provided by Financing Activities (89,116) 371,571
Net (Decrease)/Increase in Cash and Restricted Cash (80,209) 234,220
Cash and Restricted Cash - Beginning of Period 91,613 9,619
Cash and Restricted Cash - End of Period 11,404 243,839
NSTAR Electric Company    
Operating Activities:    
Net Income 94,014 77,149
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:    
Depreciation 72,584 70,542
Deferred Income Taxes 3,722 22,542
Uncollectible Expense 5,953 7,526
Pension, SERP and PBOP Income, Net (4,279) (9,295)
Pension and PBOP Contributions (1,503) 0
Regulatory (Under)/Over Recoveries, Net 4,329 17,618
Amortization of Regulatory Assets, Net 22,584 6,364
Other (8,043) (9,730)
Changes in Current Assets and Liabilities:    
Receivables and Unbilled Revenues, Net (29,220) (52,949)
Fuel, Materials, Supplies and Inventory (46,020) (37,427)
Taxes Receivable/Accrued, Net 29,483 (22,698)
Accounts Payable (18,109) 43,170
Other Current Assets and Liabilities, Net 11,466 23,703
Net Cash Flows Provided by Operating Activities 136,961 136,515
Investing Activities:    
Investments in Property, Plant and Equipment (208,540) (192,036)
Other Investing Activities 17 (654)
Net Cash Flows (Used in)/Provided by Investing Activities (208,523) (192,690)
Financing Activities:    
Cash Dividends on Common Stock (60,600) (161,000)
Cash Dividends on Preferred Stock (490) (490)
Capital Contributions from Eversource Parent 20,000 92,500
Increase in Notes Payable to Eversource Parent 22,300 0
Increase in Notes Payable 89,930 133,000
Other Financing Activities 668 (78)
Net Cash Flows Provided by Financing Activities 71,808 63,932
Net (Decrease)/Increase in Cash and Restricted Cash 246 7,757
Cash and Restricted Cash - Beginning of Period 14,659 14,708
Cash and Restricted Cash - End of Period 14,905 22,465
Public Service Company of New Hampshire    
Operating Activities:    
Net Income 32,781 35,093
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:    
Depreciation 22,919 23,493
Deferred Income Taxes 6,541 43,021
Uncollectible Expense 1,700 1,700
Regulatory (Under)/Over Recoveries, Net (26,986) 129
Amortization 13,667 5,035
Other 104 (15,212)
Changes in Current Assets and Liabilities:    
Receivables and Unbilled Revenues, Net 1,103 (80)
Fuel, Materials, Supplies and Inventory 144 4,854
Taxes Receivable/Accrued, Net 17,572 (5,867)
Accounts Payable 58,327 (18,760)
Other Current Assets and Liabilities, Net 6,472 24,543
Net Cash Flows Provided by Operating Activities 132,644 96,249
Investing Activities:    
Investments in Property, Plant and Equipment (110,926) (72,287)
Proceeds from the Sale of Generation Assets 0 130,641
Other Investing Activities 102 97
Net Cash Flows (Used in)/Provided by Investing Activities (110,824) 58,451
Financing Activities:    
Cash Dividends on Common Stock (19,000) (150,000)
Increase in Notes Payable to Eversource Parent 4,000 8,400
Repayment of Rate Reduction Bonds (30,727) 0
Other Financing Activities (20) (38)
Net Cash Flows Provided by Financing Activities (45,747) (141,638)
Net (Decrease)/Increase in Cash and Restricted Cash (23,927) 13,062
Cash and Restricted Cash - Beginning of Period 52,723 2,191
Cash and Restricted Cash - End of Period $ 28,796 $ 15,253
v3.19.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Basis of Presentation
Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business.  Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas and NSTAR Gas (natural gas utilities) and Aquarion (water utilities).  Eversource provides energy delivery and/or water service to approximately four million electric, natural gas and water customers through eight regulated utilities in Connecticut, Massachusetts and New Hampshire.

The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries.  Intercompany transactions have been eliminated in consolidation.  The accompanying unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC.  Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.  The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource 2018 Form 10-K, which was filed with the SEC on February 26, 2019. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's and PSNH's financial position as of March 31, 2019 and December 31, 2018, and the results of operations, comprehensive income, common shareholders' equity, and cash flows for the three months ended March 31, 2019 and 2018. The results of operations, comprehensive income, and cash flows for the three months ended March 31, 2019 and 2018 are not necessarily indicative of the results expected for a full year.  

Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's and PSNH's combined ownership and voting interests in each of these entities is greater than 50 percent.  Intercompany transactions between CL&P, NSTAR Electric, PSNH and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

Eversource's utility subsidiaries' electric, natural gas and water distribution and transmission businesses are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See Note 2, "Regulatory Accounting," for further information.

Certain reclassifications of prior period data were made in the accompanying financial statements to conform to the current period presentation.

B.    Accounting Standards
Accounting Standards Issued but Not Yet Effective: In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), which provides a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. Under the new guidance, immediate recognition of all credit losses expected over the life of a financial instrument is required. The new standard also revises the other-than-temporary impairment model for available-for-sale debt securities. The standard is effective January 1, 2020, and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings. The Company is assessing the impacts of this standard on the accounting for credit losses on its financial instruments, including accounts receivable.

Accounting Standards Recently Adopted: On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), which amended existing lease accounting guidance. The Company applied the Topic 842 lease criteria to new leases and lease renewals entered into effective on or after January 1, 2019.  The ASU required balance sheet recognition of leases deemed to be operating leases as well as additional disclosure requirements.  The recognition, measurement and presentation of expenses and cash flows were not significantly changed.

The Company also adopted the modified retrospective transition method allowed in ASU 2018-11, Leases (Topic 842) - Targeted Improvements, which allowed the Company to adopt the new leases standard as of January 1, 2019, with prior periods presented in the financial statements continuing to follow existing lease accounting guidance under Topic 840 (Leases) in the accounting literature.  Implementation of ASU 2018-11 had no effect on retained earnings, and the requirements of the new lease standard (Topic 842) are reflected in the 2019 financial statements and footnotes.

The Company elected the practical expedient package whereby it did not need to reassess whether or not an existing contract is or contains a lease or whether a lease is an operating or capital lease, and it did not need to reassess initial direct costs for leases. Election of this practical expedient allowed us to carry forward our historical lease classifications. The Company elected the practical expedient to not reevaluate land easements existing at adoption if they were not previously accounted for as leases. The Company also elected to use the discount rate as of the January 1, 2019 implementation date to discount its operating lease liabilities. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases.

The Company determined the impact the ASUs had on its financial statements by reviewing its lease population and identifying lease data needed for the disclosure requirements. The Company implemented a new lease accounting system in 2019 to ensure ongoing compliance with the ASU’s requirements. Adoption of the new standard resulted in the recording of operating lease liabilities and right-of-use assets on the balance sheet upon transition at January 1, 2019 of $58.0 million at Eversource, $25.3 million at NSTAR Electric, $0.6 million at CL&P, and $0.6 million at PSNH. Implementation of the new guidance did not have an impact on each company’s results of operations or cash flows.

C.    Northern Pass
Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that will interconnect from the Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire.  As of March 31, 2019, our capitalized Northern Pass project costs were approximately $311 million.

On January 25, 2018, Northern Pass was selected as the winning bidder in the Massachusetts Clean Energy Request for Proposals ("RFP"). In March 2018, the New Hampshire Site Evaluation Committee ("NHSEC") issued a written decision denying Northern Pass’ siting application after which the Massachusetts EDCs revoked the selection of, and terminated contract negotiations with, Northern Pass under the Massachusetts Clean Energy RFP. On July 12, 2018, the NHSEC issued a written decision denying Northern Pass’ April 2018 motion for rehearing. On October 12, 2018, the New Hampshire Supreme Court accepted an appeal filed by NPT, which alleged that the NHSEC failed to follow applicable law in its review of the project. Subsequently, the NHSEC transmitted the record of its proceedings to the New Hampshire Supreme Court on December 11, 2018. Briefing of the appeal began on February 4, 2019 and concluded on April 10, 2019. The New Hampshire Supreme Court will hear oral arguments on May 15, 2019 and a decision is expected later this year. NPT intends to continue to pursue NHSEC approval to construct the project.

Consistent with Eversource’s and HQ’s long-term relationship to bring clean energy into New England, Eversource and HQ remain committed to Northern Pass and the many benefits this project will bring to our customers and the region. We continue to believe that our project costs are recoverable based on our expectation that the Northern Pass project remains probable of being placed in service. If, as a result of future events and changes in circumstances, a future recoverability review were to conclude that our project costs are not recoverable, then we would reduce Northern Pass' project costs to the estimated fair value, which could result in most of our $311 million of capitalized project costs being impaired. Such an impairment could have a material adverse effect on our financial position and results of operations.

D.    Provision for Uncollectible Accounts
Eversource, including CL&P, NSTAR Electric and PSNH, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts.  This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category.  The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers.  Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience.  Receivable balances are written off against the provision for uncollectible accounts when the customer accounts are terminated and these balances are deemed to be uncollectible.

The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively.  The DPU allows NSTAR Electric and NSTAR Gas to recover in rates, amounts associated with certain uncollectible hardship accounts receivable. These uncollectible hardship customer account balances are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

The total provision for uncollectible accounts is included in Receivables, Net on the balance sheets. The provision for uncollectible hardship accounts is included in the total uncollectible provision balance. The provision balances are as follows:
 
Total Provision for Uncollectible Accounts
 
Provision for Uncollectible Hardship Accounts
(Millions of Dollars)
As of March 31, 2019
 
As of December 31, 2018
 
As of March 31, 2019
 
As of December 31, 2018
Eversource
$
223.3

 
$
212.7

 
$
134.6

 
$
131.5

CL&P
93.0

 
88.0

 
75.2

 
71.9

NSTAR Electric
74.8

 
74.5

 
40.9

 
42.5

PSNH
11.0

 
11.1

 

 



Uncollectible expense associated with customers' accounts receivable included in Operations and Maintenance expense on the statements of income is as follows:
 
For the Three Months Ended
(Millions of Dollars)
March 31, 2019
 
March 31, 2018
Eversource
$
18.6

 
$
19.6

CL&P
4.1

 
3.9

NSTAR Electric
6.0

 
7.5

PSNH
1.7

 
1.7



E.    Fair Value Measurements
Fair value measurement guidance is applied to derivative contracts that are not elected or designated as "normal purchases" or "normal sales" ("normal") and to the marketable securities held in trusts.  Fair value measurement guidance is also applied to valuations of the investments used to calculate the funded status of pension and PBOP plans, the nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and the estimated fair value of preferred stock, long-term debt and RRBs.

Fair Value Hierarchy:  In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable inputs.  Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes.  The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement.  Eversource evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period.  The three levels of the fair value hierarchy are described below:

Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.  

Level 2 - Inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable.

Level 3 - Quoted market prices are not available.  Fair value is derived from valuation techniques in which one or more significant inputs or assumptions are unobservable.  Where possible, valuation techniques incorporate observable market inputs that can be validated to external sources such as industry exchanges, including prices of energy and energy-related products.  

Uncategorized - Investments that are measured at net asset value are not categorized within the fair value hierarchy.

Determination of Fair Value:  The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note 11, "Fair Value of Financial Instruments," to the financial statements.

F.    Investments in Unconsolidated Affiliates
Revolution Wind and South Fork Wind: On February 8, 2019, Eversource and Ørsted entered into a 50-50 partnership for key
offshore wind assets in the Northeast. Eversource's initial payment and contribution under the terms of the partnership agreements totaled approximately $225 million for a 50 percent interest in North East Offshore LLC, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257-square-mile tract off the coasts of Massachusetts and Rhode Island. This equity investment is included in long-term assets on the balance sheet and earnings impacts are included in Other Income, Net on the statement of income.

G.    Other Income, Net
The components of Other Income, Net on the statements of income were as follows:
 
For the Three Months Ended
 
March 31, 2019
 
March 31, 2018
(Millions of Dollars)
Eversource
 
CL&P
 
NSTAR Electric
 
PSNH
 
Eversource
 
CL&P
 
NSTAR Electric
 
PSNH
Pension, SERP and PBOP Non-Service
   Income Components
$
7.4

 
$
(0.6
)
 
$
7.0

 
$
0.5

 
$
15.2

 
$
3.0

 
$
8.4

 
$
2.3

AFUDC Equity
10.9

 
2.6

 
4.0

 
0.2

 
9.7

 
2.8

 
3.4

 

Equity in Earnings
5.0

 

 
0.2

 

 
4.6

 

 

 

Investment Income/(Loss)
1.2

 
1.7

 
(0.3
)
 
0.4

 
0.7

 
(0.1
)
 
0.6

 

Interest Income (1)
6.5

 
0.4

 
0.2

 
5.9

 
3.5

 
0.9

 
0.2

 
2.4

Other

 
(0.2
)
 

 

 
0.1

 

 

 

Total Other Income, Net
$
31.0

 
$
3.9

 
$
11.1

 
$
7.0

 
$
33.8

 
$
6.6

 
$
12.6

 
$
4.7


(1) See Note 2, "Regulatory Accounting" for interest income recognized in 2019 for the equity return component of carrying charges on storm costs at PSNH.

H.    Other Taxes
Eversource's companies that serve customers in Connecticut collect gross receipts taxes levied by the state of Connecticut from their customers. These gross receipts taxes are recorded separately with collections in Operating Revenues and with payments in Taxes Other Than Income Taxes on the statements of income as follows:
 
For the Three Months Ended
(Millions of Dollars)
March 31, 2019
 
March 31, 2018
Eversource
$
45.0

 
$
43.4

CL&P
36.2

 
35.6



As agents for state and local governments, Eversource's companies that serve customers in Connecticut and Massachusetts collect certain sales taxes that are recorded on a net basis with no impact on the statements of income.   

Separate from the amounts above are $10.7 million and $12.7 million of amounts recorded as Taxes Other than Income Taxes for the three months ended March 31, 2019 and 2018, respectively, related to the future remittance to the State of Connecticut of energy efficiency funds collected from customers in Operating Revenues. These amounts are recorded separately, with collections in Operating Revenues and with payments in Taxes Other than Income Taxes on the Eversource and CL&P statements of income.  

I.    Supplemental Cash Flow Information
Non-cash investing activities include plant additions included in Accounts Payable as follows:
(Millions of Dollars)
As of March 31, 2019
 
As of March 31, 2018
Eversource
$
336.3

 
$
274.4

CL&P
121.9

 
117.7

NSTAR Electric
83.2

 
59.5

PSNH
30.4

 
36.0



The following table reconciles cash as reported on the balance sheets to the cash and restricted cash balance as reported on the statements of cash flows:
 
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
Eversource
 
CL&P
 
NSTAR Electric
 
PSNH
 
Eversource
 
CL&P
 
NSTAR Electric
 
PSNH
Cash as reported on the Balance Sheets
$
35.1

 
$
7.5

 
$
1.8

 
$
4.0

 
$
108.1

 
$
87.7

 
$
1.6

 
$
1.4

Restricted cash included in:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepayments and Other Current Assets
45.9

 
3.6

 
13.0

 
21.1

 
72.1

 
3.5

 
13.0

 
47.5

Marketable Securities
24.2

 
0.3

 
0.1

 
0.5

 
25.9

 
0.4

 
0.1

 
0.6

Other Long-Term Assets
3.2

 

 

 
3.2

 
3.2

 

 

 
3.2

Cash and Restricted Cash reported on the
   Statements of Cash Flows
$
108.4

 
$
11.4

 
$
14.9

 
$
28.8

 
$
209.3

 
$
91.6

 
$
14.7

 
$
52.7



Restricted cash included in Prepayments and Other Current Assets and Other Long-Term Assets primarily represents cash collections related to the PSNH RRB customer charges that are held in trust, and required ISO-NE cash deposits. Restricted cash included in Marketable Securities represents money market funds held in trusts to fund certain non-qualified executive benefits and restricted trusts to fund CYAPC and YAEC's spent nuclear fuel storage facilities obligations.
v3.19.1
REGULATORY ACCOUNTING
3 Months Ended
Mar. 31, 2019
Regulated Operations [Abstract]  
REGULATORY ACCOUNTING
REGULATORY ACCOUNTING

Eversource's utility companies are subject to rate regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which considers the effect of regulation on the timing of the recognition of certain revenues and expenses. The regulated companies' financial statements reflect the effects of the rate-making process.  The rates charged to the customers of Eversource's regulated companies are designed to collect each company's costs to provide service, including a return on investment.  

Management believes it is probable that each of the regulated companies will recover its respective investments in long-lived assets, including regulatory assets.  If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the regulated companies' operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

Regulatory Assets:  The components of regulatory assets were as follows:
 
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
Eversource
 
CL&P
 
NSTAR
Electric
 
PSNH
 
Eversource
 
CL&P
 
NSTAR
Electric
 
PSNH
Benefit Costs
$
1,878.7

 
$
416.0

 
$
534.9

 
$
165.8

 
$
1,914.8

 
$
424.7

 
$
544.4

 
$
169.6

Income Taxes, Net
730.9

 
454.3

 
106.1

 
8.0

 
728.6

 
454.4

 
105.9

 
8.3

Securitized Stranded Costs
597.7

 

 

 
597.7

 
608.4

 

 

 
608.4

Storm Restoration Costs, Net
579.0

 
307.4

 
204.4

 
67.2

 
576.0

 
302.6

 
212.9

 
60.5

Regulatory Tracker Mechanisms
317.7

 
54.4

 
160.2

 
78.0

 
316.0

 
33.2

 
169.1

 
67.3

Derivative Liabilities
353.5

 
353.1

 

 

 
356.5

 
356.5

 

 

Goodwill-related
344.2

 

 
295.5

 

 
348.4

 

 
299.1

 

Asset Retirement Obligations
92.8

 
32.8

 
44.9

 
3.4

 
89.2

 
32.3

 
42.2

 
3.3

Other Regulatory Assets
202.2

 
26.4

 
62.6

 
11.9

 
208.0

 
27.0

 
64.6

 
12.1

Total Regulatory Assets
5,096.7

 
1,644.4


1,408.6


932.0


5,145.9

 
1,630.7


1,438.2


929.5

Less:  Current Portion
507.3

 
147.7

 
234.7

 
76.6

 
514.8

 
125.2

 
241.7

 
67.2

Total Long-Term Regulatory Assets
$
4,589.4

 
$
1,496.7


$
1,173.9


$
855.4


$
4,631.1

 
$
1,505.5


$
1,196.5


$
862.3



Storm Filings: On November 16, 2018, CL&P filed for recovery of $153 million of storm costs incurred from October 2017 through May 2018, with recovery over six years to begin May 1, 2019.  Through the course of the proceeding, CL&P updated its request to $145.5 million to reflect final invoicing and capitalization amounts. On April 17, 2019, PURA authorized recovery of $141.0 million as part of storm cost recovery and the remainder to be recorded to capital or other balance sheet accounts.

On March 26, 2019, the NHPUC approved the recovery of $38.1 million, plus carrying charges, of storm costs incurred from December 2013 through April 2016 and the transfer of funding from PSNH’s major storm reserve to recover those costs. The costs of these storms (excluding the equity return component of the carrying charges) were deferred as regulatory assets, and the funding reserve collected from customers was accrued as a regulatory liability. As a result of the duration of time between incurring storm costs in December 2013 through April 2016 and final approval from the NHPUC in 2019, PSNH recognized $5.2 million (pre-tax) for the equity return component of the carrying charges within Other Income, Net on the statement of income in the first quarter of 2019, which has been collected from customers. Also included in the March 26, 2019 NHPUC approval is a prospective requirement for PSNH to annually net its storm funding reserve collected from customers against deferred storm costs.

Regulatory Costs in Long-Term Assets:  Eversource's regulated companies had $129.5 million (including $41.9 million for CL&P, $52.8 million for NSTAR Electric and $13.9 million for PSNH) and $122.9 million (including $42.1 million for CL&P, $49.3 million for NSTAR Electric and $12.2 million for PSNH) of additional regulatory costs as of March 31, 2019 and December 31, 2018, respectively, that were included in long-term assets on the balance sheets.  These amounts represent incurred costs for which recovery has not yet been specifically approved by the applicable regulatory agency.  However, based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates.

Regulatory Liabilities:  The components of regulatory liabilities were as follows:
 
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
Eversource
 
CL&P
 
NSTAR
Electric
 
PSNH
 
Eversource
 
CL&P
 
NSTAR
Electric
 
PSNH
EDIT due to Tax Cuts and Jobs Act
$
2,871.4

 
$
1,030.7

 
$
1,096.7

 
$
394.6

 
$
2,883.0

 
$
1,031.0

 
$
1,103.7

 
$
396.4

Cost of Removal
535.0

 
46.2

 
313.4

 
22.1

 
521.0

 
39.9

 
307.1

 
22.1

Benefit Costs
87.2

 

 
73.6

 

 
91.2

 

 
76.9

 

Regulatory Tracker Mechanisms
332.5

 
79.5

 
166.7

 
39.9

 
309.0

 
89.5

 
163.7

 
48.3

AFUDC - Transmission
71.4

 
47.1

 
24.3

 

 
70.7

 
47.4

 
23.3

 

Revenue Subject to Refund due to Tax Cuts
  and Jobs Act
27.0

 

 

 
15.8

 
24.6

 

 

 
12.6

Other Regulatory Liabilities
88.3

 
29.3

 
33.9

 
3.2

 
80.2

 
24.0

 
29.2

 
4.2

Total Regulatory Liabilities
4,012.8

 
1,232.8


1,708.6


475.6


3,979.7

 
1,231.8


1,703.9


483.6

Less:  Current Portion
385.4

 
106.5

 
194.0

 
45.7

 
370.2

 
109.6

 
190.6

 
55.5

Total Long-Term Regulatory Liabilities
$
3,627.4

 
$
1,126.3


$
1,514.6


$
429.9


$
3,609.5

 
$
1,122.2


$
1,513.3


$
428.1

v3.19.1
PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION
3 Months Ended
Mar. 31, 2019
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION
PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

The following tables summarize property, plant and equipment by asset category:
Eversource
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
 
Distribution - Electric
$
15,245.9

 
$
15,071.1

Distribution - Natural Gas
3,635.6

 
3,546.2

Transmission - Electric
10,251.1

 
10,153.9

Distribution - Water
1,649.5

 
1,639.8

Solar
169.9

 
164.1

Utility
30,952.0

 
30,575.1

Other (1)
798.3

 
778.6

Property, Plant and Equipment, Gross
31,750.3

 
31,353.7

Less:  Accumulated Depreciation
 
 
 
Utility   
(7,229.5
)
 
(7,126.2
)
Other
(348.7
)
 
(336.7
)
Total Accumulated Depreciation
(7,578.2
)
 
(7,462.9
)
Property, Plant and Equipment, Net
24,172.1

 
23,890.8

Construction Work in Progress
1,860.7

 
1,719.6

Total Property, Plant and Equipment, Net
$
26,032.8

 
$
25,610.4


 
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
CL&P
 
NSTAR
Electric
 
PSNH
 
CL&P
 
NSTAR
Electric
 
PSNH
Distribution - Electric
$
6,255.8

 
$
6,828.5

 
$
2,201.8

 
$
6,176.4

 
$
6,756.4

 
$
2,178.6

Transmission - Electric
4,746.4

 
4,085.6

 
1,370.2

 
4,700.5

 
4,065.9

 
1,338.7

Solar

 
169.9

 

 

 
164.1

 

Property, Plant and Equipment, Gross
11,002.2

 
11,084.0

 
3,572.0

 
10,876.9

 
10,986.4

 
3,517.3

Less:  Accumulated Depreciation
(2,328.0
)
 
(2,749.9
)
 
(789.3
)
 
(2,302.6
)
 
(2,702.0
)
 
(772.9
)
Property, Plant and Equipment, Net
8,674.2

 
8,334.1

 
2,782.7

 
8,574.3

 
8,284.4

 
2,744.4

Construction Work in Progress
391.7

 
581.5

 
137.9

 
335.4

 
510.3

 
135.7

Total Property, Plant and Equipment, Net
$
9,065.9

 
$
8,915.6

 
$
2,920.6

 
$
8,909.7

 
$
8,794.7

 
$
2,880.1



(1) 
These assets are primarily comprised of building improvements, computer software, hardware and equipment at Eversource Service.
v3.19.1
DERIVATIVE INSTRUMENTS
3 Months Ended
Mar. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS

The electric and natural gas companies purchase and procure energy and energy-related products, which are subject to price volatility, for their customers.  The costs associated with supplying energy to customers are recoverable from customers in future rates.  These regulated companies manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and non-derivative contracts.  

Many of the derivative contracts meet the definition of, and are designated as, normal and qualify for accrual accounting under the applicable accounting guidance.  The costs and benefits of derivative contracts that meet the definition of normal are recognized in Operating Expenses on the statements of income, as applicable, as electricity or natural gas is delivered.

Derivative contracts that are not designated as normal are recorded at fair value as current or long-term Derivative Assets or Derivative Liabilities on the balance sheets.  For the electric and natural gas companies, regulatory assets or regulatory liabilities are recorded to offset the fair values of derivatives, as contract settlement amounts are recovered from, or refunded to, customers in their respective energy supply rates.  

The gross fair values of derivative assets and liabilities with the same counterparty are offset and reported as net Derivative Assets or Derivative Liabilities, with current and long-term portions, on the balance sheets.  The following table presents the gross fair values of contracts, categorized by risk type, and the net amounts recorded as current or long-term derivative assets or liabilities:
 
 
 
As of March 31, 2019
 
As of December 31, 2018
(Millions of Dollars)
Fair Value Hierarchy
 
Commodity Supply and Price Risk
Management
 
Netting (1)
 
Net Amount
Recorded as a Derivative
 
Commodity Supply and Price Risk
Management
 
Netting (1)
 
Net Amount
Recorded as
a Derivative
Current Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
CL&P
Level 3
 
$
10.4

 
$
(1.9
)
 
$
8.5

 
$
9.6

 
$
(3.4
)
 
$
6.2

Other
Level 2
 

 

 

 
1.5

 
(0.9
)
 
0.6

Long-Term Derivative Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
CL&P
Level 3
 
73.1

 
(2.2
)
 
70.9

 
74.2

 
(2.3
)
 
71.9

Current Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
CL&P
Level 3
 
(59.7
)
 

 
(59.7
)
 
(55.1
)
 

 
(55.1
)
Other
Level 2
 
(0.4
)
 
0.2

 
(0.2
)
 

 

 

Long-Term Derivative Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
CL&P
Level 3
 
(372.8
)
 

 
(372.8
)
 
(379.5
)
 

 
(379.5
)
Other
Level 2
 
(0.2
)
 

 
(0.2
)
 

 

 


(1) 
Amounts represent derivative assets and liabilities that Eversource elected to record net on the balance sheets.  These amounts are subject to master netting agreements or similar agreements for which the right of offset exists.

For further information on the fair value of derivative contracts, see Note 1E, "Summary of Significant Accounting Policies - Fair Value Measurements," to the financial statements.

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts
Commodity Supply and Price Risk Management:  As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities.  CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI.  The combined capacity of these contracts is 787 MW.  The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets.  In addition, CL&P has a contract to purchase 0.1 million MWh of energy per year through 2020.   

As of March 31, 2019 and December 31, 2018, Eversource had New York Mercantile Exchange ("NYMEX") financial contracts for natural gas futures in order to reduce variability associated with the price of 6.2 million and 12.5 million MMBtu of natural gas, respectively.

For the three months ended March 31, 2019 and 2018, there were losses of $5.2 million and $36.1 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts.

Fair Value Measurements of Derivative Instruments
Derivative contracts classified as Level 2 in the fair value hierarchy relate to the financial contracts for natural gas futures.  Prices are obtained from broker quotes and are based on actual market activity.  The contracts are valued using NYMEX natural gas prices.  Valuations of these contracts also incorporate discount rates using the yield curve approach.
 
The fair value of derivative contracts classified as Level 3 utilizes significant unobservable inputs.  The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions related to exit price.  Significant observable inputs for valuations of these contracts include energy and energy-related product prices in future years for which quoted prices in an active market exist.  Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy and energy-related products, and accounting requirements.  The future power and capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full term of the contract.  

Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty's credit rating for assets and the Company's credit rating for liabilities.  Valuations incorporate estimates of premiums or discounts that would be required by a market participant to arrive at an exit price, using historical market transactions adjusted for the terms of the contract.  

The following is a summary of CL&P's Level 3 derivative contracts and the range of the significant unobservable inputs utilized in the valuations over the duration of the contracts:
 
As of March 31, 2019
 
As of December 31, 2018
CL&P
Range
 
Period Covered
 
Range
 
Period Covered
Capacity Prices
$
4.30

 
 
7.34

 
per kW-Month
 
2023 - 2026
 
$
4.30

 
 
7.44

 
per kW-Month
 
2022 - 2026
Forward Reserve
0.75

 
 
1.78

 
per kW-Month
 
2019 - 2024
 
0.75

 
 
1.78

 
per kW-Month
 
2019 - 2024


Exit price premiums of 3.7 percent through 15.1 percent are also applied to these contracts and reflect the uncertainty and illiquidity premiums that would be required based on the most recent market activity available for similar type contracts.

Significant increases or decreases in future capacity or forward reserve prices in isolation would decrease or increase, respectively, the fair value of the derivative liability.  Any increases in risk premiums would increase the fair value of the derivative liability.  Changes in these fair values are recorded as a regulatory asset or liability and do not impact net income.  

Valuations using significant unobservable inputs:  The following table presents changes in the Level 3 category of derivative assets and derivative liabilities measured at fair value on a recurring basis.  The derivative assets and liabilities are presented on a net basis.
CL&P
For the Three Months Ended March 31,
(Millions of Dollars)
2019
 
2018
Derivatives, Net:
 
 
 
Fair Value as of Beginning of Period
$
(356.5
)
 
$
(362.3
)
Net Realized/Unrealized Losses Included in Regulatory Assets
(5.3
)
 
(36.9
)
Settlements
8.7

 
12.7

Fair Value as of End of Period
$
(353.1