Eversource 2004 Annual Report Download - page 45

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The Utility Group revenue increase of $165 million 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
locational marginal pricing (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 ($81 million) and higher gas sales
volumes ($26 million), partially offset by an adjustment to unbilled
revenues ($28 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.
Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased
$496 million in 2004, primarily due to higher wholesale costs at NU
Enterprises ($224 million) and higher purchased power costs for the
Utility Group ($272 million). The increase for the Utility Group is
primarily due to an increase in the standard offer supply costs for
CL&P ($152 million) and WMECO ($16 million), higher Yankee Gas
expenses ($33 million) primarily due to increased gas prices, higher
expenses for PSNH ($10 million) primarily due to higher energy and
capacity purchases, partially offset by the 2003 CL&P recovery of
certain fuel costs ($44 million).
Fuel, purchased and net interchange power expense increased
$686 million in 2003, primarily due to higher wholesale energy
purchases at NU Enterprises ($630 million) and higher gas costs
($77 million), partially offset by lower nuclear fuel ($20 million).
Other Operation
Other operation expenses increased $131 million in 2004, primarily
due to higher expenses for NU Enterprises resulting from the
increased volume in the contracting business ($71 million), higher
CL&P RMR costs and other power pool related expenses ($71 million),
higher PSNH fossil production expense ($6 million), and higher
distribution expenses ($4 million), partially offset by lower C&LM
expense ($20 million).
Other operation expense increased $138 million in 2003, primarily due
to higher expenses for NU Enterprises resulting from service business
growth ($59 million), higher regulated business administrative and
general expenses primarily due to higher health care costs ($16 million),
lower pension income ($31 million), higher RMR related transmission
expense ($30 million), higher conservation and load management
expenditures ($16 million), higher distribution expense ($6 million),
and higher load and dispatch expenses ($6 million), partially offset
by lower nuclear expense due to the sale of Seabrook ($29 million).
Maintenance
Maintenance expense increased $13 million in 2004, primarily due to
higher expenses for NU Enterprises at its generating plants ($5 million),
the absence of the 2003 positive resolution of the Millstone use of
proceeds docket ($5 million) and higher electric distribution expenses
($5 million).
Maintenance expense decreased $24 million in 2003, primarily due to
lower nuclear expense resulting from the sale of Seabrook ($26 million),
partially offset by higher gas distribution expenses ($2 million).
Depreciation
Depreciation increased $20 million in 2004 due to higher Utility Group
plant balances and higher depreciation rates at CL&P resulting from
the distribution rate case decision effective in January 2004.
Depreciation decreased $1 million in 2003 primarily due to lower
decommissioning and depreciation expenses resulting from 2002
depreciation of Seabrook as compared to no 2003 Seabrook-related
depreciation ($7 million) and lower NU Enterprises depreciation due
to a study which resulted in lengthening the useful lives of certain
generation assets ($3 million), partially offset by higher Utility Group
depreciation resulting from higher plant balances ($9 million).
Amortization
Amortization decreased $53 million in 2004 primarily due to lower
Utility Group recovery of stranded costs and a decrease in amortization
expense resulting from the amortization of GSC over-recoveries
allowed in the CL&P distribution rate case effective in January 2004
($29 million).
Amortization decreased $129 million in 2003 primarily due to the
2002 amortization of stranded costs upon the sale of Seabrook
($183 million), partially offset by higher amortization in 2003 related
to the Utility Group’s recovery of stranded costs ($62 million), in
part resulting from higher wholesale revenue from the sale of IPP
related energy.
Amortization of Rate Reduction Bonds
Amortization of rate reduction bonds increased $12 million in 2004
due to the repayment of a higher principal amount as compared to 2003.
Amortization of rate reduction bonds increased $5 million in 2003 due
to the repayment of principal.
Taxes Other Than Income Taxes
Taxes other than income taxes increased $10 million in 2004 primarily
due to higher payroll taxes ($4 million), higher sales tax ($3 million)
and higher local property taxes ($2 million).
Taxes other than income taxes increased $5 million in 2003, primarily
due to a credit recorded in 2002 recognizing a Connecticut sales and
use tax audit settlement ($8 million), partially offset by a lower 2003
payment to compensate the Town of Waterford for lost property tax
revenue as a result of the sale of Millstone ($3 million) and lower
New Hampshire property taxes due to the sale of Seabrook ($2 million).