Eversource 2009 Annual Report Download - page 60

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components decreased $356 million due primarily to lower recovery of generation service and related congestion charges ($331 million)
and lower CL&P wholesale revenues as a result of decreased market revenue related to sales of Independent Power Producers (IPP)
purchased generation output ($163 million), partially offset by higher retail transmission revenues ($104 million) mainly as a result of the
higher 2009 retail rates. The tracking mechanisms allow for rates to be changed periodically with overcollections refunded to customers
or undercollections recovered from customers in future periods.
Transmission segment revenues increased $153 million due primarily to a higher transmission investment base as a result of the
completion of our southwest Connecticut projects in 2008 and higher overall expenses. Competitive businesses' revenues decreased
$33 million due primarily to lower Boulos revenues as a result of less work on transmission projects and a lower level of work in other
areas.
Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expenses decreased $367 million in 2009 due primarily to lower costs at the regulated
companies. Fuel and purchased power expense from the regulated companies decreased at CL&P ($155 million) due to lower GSC
supply costs and other purchased power costs, partially offset by an increase in deferred fuel costs, at Yankee Gas ($133 million) due to
a decrease in gas prices in 2009 as compared to 2008, at WMECO ($45 million) due primarily to lower Basic/Default supply costs, and
at PSNH ($38 million) due to an increased level of migration of ES customers to competitive supply and lower retail sales, partially offset
by higher forward energy market prices.
Other Operation
Other operation expenses decreased $20 million in 2009 due primarily to lower NU parent and other companies' expenses ($49 million)
and lower competitive businesses' expenses ($39 million), partially offset by higher regulated companies' distribution and transmission
segment expenses ($68 million).
NU parent and other companies' expenses were lower by $49 million in 2009 due primarily to the absence of the $49.5 million payment
resulting from the settlement of litigation made in 2008 ($29.8 million after-tax). Competitive businesses' expenses were lower by $39
million due primarily to lower Boulos expenses as a result of a lower level of work.
Higher regulated companies' distribution and transmission segment expenses of $68 million were due primarily to higher electric
distribution segment expenses ($49 million), higher expenses at Yankee ($18 million), and higher transmission segment expenses ($15
million), partially offset by lower costs that are recovered through distribution tracking mechanisms and have no earnings impact ($8
million), and all other operating costs ($6 million). The higher operations expenses impacting earnings include higher uncollectible and
pension expenses.
Maintenance
Maintenance expenses decreased $20 million in 2009 due primarily to lower regulated companies' distribution expenses ($21 million),
partially offset by higher transmission line expenses ($1 million). Distribution expenses were lower due primarily to lower repair and
maintenance of distribution lines ($15 million), including lower storm-related expenses, lower equipment maintenance expenses ($4
million), and lower PSNH generation expenses ($3 million), partially offset by higher vegetation management expenses ($5 million).
Depreciation
Depreciation expenses increased $31 million in 2009 due primarily to higher transmission ($23 million) and distribution ($11 million)
plant balances resulting from completed construction projects placed into service.
Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net expenses decreased $173 million in 2009 for the distribution segment due primarily to lower
amortization at CL&P resulting from a lower recovery of stranded costs ($131 million) as a result of lower retail CTA revenues and
higher transition costs, partially offset by higher amortization of the SBC balance ($15 million). The decreases for PSNH and WMECO
are $39 million and $15 million, respectively.
Amortization of Rate Reduction Bonds
Amortization of RRBs expenses increased $13 million in 2009, which corresponded to the reduction in principal of the RRBs.
Taxes Other than Income Taxes
Taxes other than income taxes expenses increased $15 million in 2009 due primarily to higher property taxes ($18 million) as a result of
higher plant balances and increased municipal tax rates and higher payroll related taxes, partially offset by the resolution of various
routine tax issues primarily surrounding sales and use tax amounts ($8 million).
Interest Expense, Net
Interest expense, net increased $4 million in 2009 due primarily to higher long-term debt interest ($31 million) resulting from the
issuance of new long-term debt in 2008 and 2009, partially offset by lower RRB interest resulting from lower principal balances
outstanding ($14 million), and lower other interest ($13 million) mostly related to the resolution of various routine tax issues.