Eversource 2009 Annual Report Download - page 64

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months of 2008 net underrecovery of GSC and FMCC expenses as compared to the twelve months of 2009 net overrecovery of these
expenses.
Other Operation
Other operation expenses increased $13 million in 2009 as a result of higher distribution segment expenses ($36 million) due primarily
to pension and expenses related to uncollectible receivable balances, and higher transmission segment expenses, which are tracked
and recorded through FERC rate tariffs ($14 million), partially offset by lower costs that are recovered through distribution tracking
mechanisms and have no earnings impact ($30 million), and lower transmission segment intracompany billing to the distribution
segment that are eliminated in consolidation ($6 million).
Maintenance
Maintenance expenses decreased $12 million in 2009 due primarily to lower repair and maintenance of distribution lines ($6 million),
including lower storm expenses, lower distribution substation equipment expenses ($2 million), lower transmission segment expenses
($1 million), and lower transformer maintenance expenses ($1 million).
Depreciation
Depreciation expenses increased $24 million in 2009 due primarily to higher utility plant balances resulting from completed construction
projects placed into service in the transmission segment ($19 million) and the distribution segment ($5 million).
Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net expenses decreased $118 million in 2009 due primarily to lower amortization related to the
recovery of stranded charges ($131 million) as a result of lower retail CTA revenue and higher transition costs, partially offset by higher
amortization of the SBC balance ($15 million).
Amortization of Rate Reduction Bonds
Amortization of RRBs expenses increased $10 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 $12 million in 2009 due primarily to higher property taxes as a result of higher plant
balances and increased municipal tax rates ($10 million), higher gross earnings taxes ($4 million) recoverable in rates mainly as a result
of higher transmission revenues that are subject to gross earnings tax, and higher payroll taxes ($2 million), partially offset by the
resolution of various routine tax issues primarily surrounding sales and use tax amounts ($4 million).
Interest Expense, Net
Interest expense, net increased $10 million in 2009 due primarily to higher long-term debt interest ($28 million) resulting from the $300
million debt issuance in May 2008 and the $250 million debt issuance in February 2009, partially offset by lower other interest ($9
million) mostly related to the resolution of various routine tax issues, and lower RRB interest resulting from lower principal balances
outstanding ($10 million).
Other Income, Net
Other income, net decreased $16 million in 2009 due primarily to lower AFUDC equity income ($18 million) as a result of lower eligible
CWIP due to large transmission projects being completed and placed in-service in 2008 and lower capital expenditures in 2009, the
absence in 2009 of interest income related to a federal tax settlement in 2008 ($6 million), and lower Energy Independence Act
incentives ($6 million), partially offset by higher investment income due primarily to improved results from NU's supplemental benefit
trust and the absence of other-than-temporary impairments recorded in 2008 ($16 million).
Income Tax Expense
Income tax expense increased $41 million due primarily to higher pre-tax earnings ($23 million), less tax benefits as a result of lower
capital expenditures ($9 million), lower state tax credits ($3 million), and increases in allowance for doubtful accounts reserves ($4
million).
Comparison of the Year 2008 to the Year 2007
Operating Revenues
Operating revenues decreased $123 million in 2008 due to lower distribution segment revenues ($233 million), partially offset by higher
transmission segment revenues ($110 million).
The distribution segment revenues decreased $233 million due primarily to a decrease in the portion of distribution revenues that does
not impact earnings ($296 million). These revenues do not impact earnings, primarily as a result of the inclusion of these distribution
revenues in regulatory tracking mechanisms and intercompany revenues that are eliminated in consolidation. The portion of revenues
that impacts earnings increased $62 million.
The $296 million decrease in distribution segment revenue that does not impact earnings was due primarily to the portions of retail
revenues that are included in DPUC approved tracking mechanisms that track the recovery of certain incurred costs through CL&P
tariffs ($217 million) and transmission segment intracompany billings to the distribution segment that are eliminated in consolidation
($78 million). The distribution revenue included in DPUC approved tracking mechanisms decreased $217 million due primarily to a
decrease in revenues associated with the recovery of GSC and supply-related FMCC ($314 million) and delivery-related FMCC ($75