Eversource 2003 Annual Report Download - page 43

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Operating Revenues
Total revenues increased $832 million in 2003, compared with 2002, due
to higher revenues from NU Enterprises ($775 million or $588 million
after intercompany eliminations), higher Utility Group electric revenues
($160 million or $165 million after intercompany eliminations) and higher
Utility Group gas revenues ($79 million).
The NU Enterprises’ revenue increase is primarily due to higher wholesale
and retail requirements sales volumes ($386 million) and higher prices
($339 million).
The Utility Group revenue increase is primarily due to higher retail electric
revenue ($217 million), partially offset by lower wholesale revenue ($57
million). The regulated retail electric revenue increase is primarily due to
higher CL&P recovery of incremental LMP costs net of amounts to be
returned to customers ($72 million), higher sales volumes ($73 million),
an adjustment to unbilled revenues ($46 million) and a higher average
price resulting from the mix among customer classes for the regulated
companies ($25 million). The higher Yankee Gas revenue is primarily due
to higher recovery of gas costs ($77 million), higher gas sales volumes
($8 million) and price variances among customer classes ($7 million),
partially offset by an adjustment to unbilled revenues ($13 million).
Regulated retail electric kWh sales increased by 2.1 percent, and firm
natural gas sales increased by 7.8 percent in 2003, before the adjustments
to unbilled revenues. The regulated wholesale revenue decrease is primarily
due to lower PSNH 2003 sales as a result of the sale of Seabrook.
Total revenues decreased by $524 million in 2002, compared with 2001,
primarily due to lower competitive energy revenues ($245 million after
intercompany eliminations) and lower regulated subsidiaries revenues due
to lower wholesale and transmission revenues ($143 million after inter-
company eliminations), and lower regulated retail revenues ($136 million).
The competitive energy companies’ revenue decrease in 2002 is primarily
due to lower wholesale marketing revenues from Select Energy full
requirements contracts, primarily due to lower energy prices. The
decrease in regulated wholesale revenues is primarily due to lower sales
associated with purchased-power contracts ($91 million) and the 2001
revenue associated with the sale of Millstone output ($42 million). The
regulated retail revenue decrease is primarily due to the May 2001 rate
decrease for PSNH ($23 million), and the 2002 decrease in the WMECO
standard offer energy rate ($77 million), lower Yankee Gas revenue due
to lower purchased gas adjustment clause revenue ($59 million) and a
combination of the April 2002 rate decrease and lower gas sales ($27
million), partially offset by an increase resulting from the collection of
CL&P deferred fuel costs ($25 million) and higher retail electric sales ($25
million). Regulated retail electric kWh sales increased by 1.3 percent, and
firm natural gas volume sales decreased by 4.3 percent in 2002.
Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased $683
million in 2003, primarily due to higher wholesale energy purchases at
NU Enterprises ($629 million), and higher gas costs ($77 million), partially
offset by lower nuclear fuel ($20 million).
Fuel, purchased and net interchange power expense decreased by $382
million in 2002, primarily due to lower wholesale sales from the merchant
energy business line ($168 million after intercompany eliminations),
lower Yankee Gas expense primarily due to lower gas prices ($80 million),
and lower purchased-power costs for the regulated subsidiaries ($131
million after intercompany eliminations).
Results of Operations
The following table provides the variances in income statement line items for the consolidated statements of income included in this annual report for
the past two years:
Income Statement Variances 2003 over / (under) 2002 2002 over / (under) 2001
(Millions of Dollars) Amount Percent Amount Percent
Operating Revenues $ 832 16% $(524) (9)%
Operating Expenses:
Fuel, purchased and net interchange power 683 22 (382) (11)
Other operation 148 20 (21) (3)
Maintenance (31) (12) 5 2
Depreciation (1) (1) 5 2
Amortization (130) (42) (572) (65)
Amortization of rate reduction bonds 43 50 51
Taxes other than income taxes 5284
Gain on sale of utility plant 187 100 455 71
Total operating expenses 865 18 (452) (9)
Operating Income (33) (7) (72) (13)
Interest expense, net (24) (9) (9) (3)
Other (loss) / income, net (44) (a) (144) (77)
Income before tax expense (53) (22) (207) (46)
Income tax expense (22) (27) (92) (53)
Preferred dividends of subsidiaries —— (2) (23)
Income before cumulative effect of accounting changes, net of tax benefits (31) (20) (113) (43)
Cumulative effect of accounting changes, net of tax benefits (5) (100) 22 100
Net income $ (36) (23)% $ (91) (38)%
(a) Percent greater than 100.