Eversource 2009 Annual Report Download - page 62

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53
Other Operation
Other operation expenses increased $60 million in 2008 due primarily to higher NU parent and other companies’ expenses ($54 million),
higher competitive businesses' expenses ($6 million) and higher regulated companies’ distribution and transmission segment expenses
($1 million).
NU parent and other companies' expenses were higher by $54 million in 2008 due primarily to the absence of the $49.5 million payment
resulting from the settlement of litigation. Competitive businesses' expenses were higher by $6 million due primarily to higher operating
costs at the remaining services businesses.
Higher regulated companies' distribution and transmission segment expenses of $1 million were due primarily to higher transmission
segment expenses ($8 million), expenses at Yankee ($6 million) and higher electric distribution segment expenses ($4 million), partially
offset by all other operating costs ($18 million).
Maintenance
Maintenance expenses increased $43 million in 2008 due primarily to higher regulated companies' distribution expenses ($38 million)
and higher transmission line expenses ($4 million). Distribution expenses were $38 million higher due primarily to higher PSNH
generation expenses ($15 million) mainly related to the Merrimack Station maintenance outages, higher vegetation management ($9
million), higher overhead line maintenance expenses ($5 million), substation equipment ($3 million) and line transformers ($2 million).
Depreciation
Depreciation expenses increased $13 million in 2008 due primarily to higher regulated transmission and distribution plant balances
resulting from completed construction programs placed into service.
Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net expenses increased $146 million in 2008 for the distribution segment due primarily to higher
amortization at CL&P ($144 million) resulting from a higher recovery of transition costs ($62 million), higher amortization of the SBC
balance ($50 million) and a credit in 2007 pertaining to the refund of the GSC overrecovery ($29 million).
Amortization of Rate Reduction Bonds
Amortization of RRBs expenses increased $4 million in 2008, which corresponds to the reduction in principal of the RRBs. This
increase was partially offset by a decrease at PSNH resulting from the retirement of $50 million of RRBs in the first quarter of 2008.
Taxes Other than Income Taxes
Taxes other than income taxes expenses increased $15 million in 2008 due primarily to higher Connecticut gross earnings tax ($16
million) mainly as a result of higher CL&P and Yankee Gas revenues that are subject to gross earnings tax and higher property taxes at
CL&P and PSNH ($5 million) as a result of higher plant balances and higher local municipal tax rates, partially offset by lower payroll
taxes charged to expense ($5 million).
Interest Expense, Net
Interest expense, net increased $29 million in 2008 due primarily to higher long-term debt interest ($31 million) resulting from the
issuance of new long-term debt in 2007 and 2008 and higher other interest ($9 million) mostly related to short-term debt, partially offset
by lower RRB interest resulting from lower principal balances outstanding ($11 million).
Other Income, Net
Other income, net decreased $11 million in 2008 due primarily to lower investment income ($16 million) due primarily to the absence of
the higher NU investment income interest earned in 2007 on cash the parent received from the November 2006 sale of NU's
competitive generation, higher investment losses ($14 million) due primarily to NU’s supplemental benefit trust and lower equity in
earnings of regional nuclear generating and transmission companies ($2 million), partially offset by higher AFUDC equity income ($12
million) and interest income related to the federal tax settlement in 2008 ($10 million).
Income Tax Expense
Income tax expense decreased $4 million in 2008 due primarily to the settlement of litigation ($20 million), flow-through items related to
depreciation ($6 million), partially offset by impacts associated with higher pre-tax earnings ($22 million).