Eversource 2009 Annual Report Download - page 135

FS-50
In 2009, under applicable fair value accounting guidance, the Company elected to record changes in fair value of newly purchased
equity securities in the NU supplemental benefit trust in Net income. Realized and unrealized gains and losses related to these
securities are included in Other income, net, on the accompanying consolidated statement of income for the year ended December 31,
2009.
These trusts are not subject to regulatory oversight by state or federal agencies.
For information regarding marketable securities, see Note 9, "Marketable Securities," to the consolidated financial statements.
V. Provision for Uncollectible Accounts
NU, including CL&P, PSNH and WMECO, maintain a provision for uncollectible accounts to record their receivables at an estimated net
realizable value. This provision is determined based upon a variety of factors, including applying an estimated uncollectible account
percentage to each receivable aging category, historical collection and write-off experience and management's assessment of
collectibility from individual customers. Management reviews at least quarterly the collectibility of the receivables, and if circumstances
change, collectibility estimates are adjusted accordingly. Receivable balances are written-off against the provision for uncollectible
accounts when these balances are deemed to be uncollectible and the accounts are terminated.
The provision for uncollectible accounts as of December 31, 2009 and 2008, which offset Receivables, net on the accompanying
consolidated balance sheets, were as follows:
(Millions of Dollars) 2009 2008
NU $ 55.3 $ 43.3
CL&P 26.1 24.0
PSNH 5.1 4.2
WMECO 7.2 6.6
The DPUC allows CL&P and Yankee Gas to accelerate the recovery of uncollectible hardship accounts receivable outstanding for
greater than 90 days. As of December 31, 2009, CL&P and Yankee Gas had uncollectible hardship accounts receivable reserves in the
amount of $54.5 million and $8.6 million, respectively, with the corresponding bad debt expense recorded as Regulatory assets as
these amounts are probable of recovery. As of December 31, 2008, these amounts totaled $41 million and $10 million, respectively.
In 2009, WMECO established a reserve of $9.1 million for uncollectible hardship accounts receivable with the corresponding bad debt
expense recorded as Deferred debits and other assets - other on the accompanying consolidated balance sheets. These amounts
have not yet been approved for recovery. Management believes these costs are probable of recovery in future cost of service regulated
rates.
W. Self-Insurance Accruals
NU, including CL&P, PSNH and WMECO, are self-insured for employee medical coverage, long-term disability coverage and general
liability coverage and up to certain limits for workers compensation coverage. Liabilities for insurance claims include accruals of
estimated settlements for known claims, as well as accruals of estimates of incurred but not reported claims. These accruals are
included in Deferred credits and other liabilities - other on the accompanying consolidated balance sheets. In estimating these costs,
NU considers historical loss experience and makes judgments about the expected levels of costs per claim. These claims are
accounted for based on estimates of the undiscounted claims, including those claims incurred but not reported.
X. Related Parties
Several wholly-owned subsidiaries of NU provide support services for NU, including CL&P, PSNH and WMECO. NUSCO provides
centralized accounting, administrative, engineering, financial, information technology, legal, operational, planning, purchasing, and other
services to NU's companies. Two other subsidiaries construct, acquire or lease some of the property and facilities used by NU's
companies.
As of both December 31, 2009 and 2008, CL&P, PSNH and WMECO had long-term receivables from NUSCO in the amount of $25
million, $3.8 million and $5.5 million, respectively, which are included in Deferred debits and other assets - other on the accompanying
consolidated balance sheets related to the funding of investments held in trust by NUSCO in connection with certain postretirement
benefits for CL&P, PSNH and WMECO employees. These amounts have been eliminated in consolidation on the NU financial
statements.
Included in the CL&P, PSNH and WMECO consolidated balance sheets as of December 31, 2009 and 2008 are Accounts receivable
from affiliated companies and Accounts payable to affiliated companies relating to transactions between CL&P, PSNH and WMECO
and other subsidiaries that are wholly-owned by NU. As of December 31, 2009, CL&P, PSNH and WMECO had a de minimus amount
of tax payments accrued in Accounts payable to affiliated companies related to the estimated quarterly income tax obligation paid in the
following quarter. As of December 31, 2008, PSNH had $0.1 million related to this accrual. CL&P and WMECO had a de minimus
balance as of December 31, 2008. These amounts have been eliminated in consolidation on the NU financial statements.
On December 31, 2008, NU's wholly-owned subsidiary, HWP Company (HWP), formerly known as Holyoke Water Power Company,
transferred $4 million in transmission related assets to WMECO.