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94
The following actuarial assumptions were used in calculating the PBOP Plans' year end funded status:
PBOP
As of December 31,
2013
2012
NUSCO PBOP Plans
Discount Rate
4.78
%
4.04
%
Health Care Cost Trend Rate
7.00
%
7.00
%
NSTAR PBOP Plan
Discount Rate
5.10
%
4.35
%
Health Care Cost Trend Rate
7.00
%
7.10
%
PBOP Expense: For the NUSCO Plans, NU allocates net periodic postretirement benefits expense to certain subsidiaries based on the
actual participant demographic data for each subsidiary's participants. Benefit payments to participants and contributions are also
tracked for each subsidiary. The actual investment return in the trust is allocated to each of the subsidiaries annually in proportion to
the investment return expected to be earned during the year. For the NSTAR Plan, NU allocates the net periodic postretirement
expenses to certain subsidiaries based on actual participant demographic data for each of its subsidiaries. The net periodic
postretirement expense allocated to NSTAR Electric was $4.6 million, $34.1 million, and $26 million for the years ended December 31,
2013, 2012 and 2011, respectively.
The components of net periodic benefit expense, for which the total expense less capitalized amounts is included in Operations and
Maintenance on the statements of income, the portion of PBOP amounts capitalized related to employees working on capital projects,
which is included in Property, Plant and Equipment, Net on the balance sheets, and intercompany allocations not included in the net
periodic benefit expense amounts for the PBOP Plans are as follows:
PBOP
For the Years Ended December 31,
2013
2012
2011
(Millions of Dollars)
NU
CL&P
PSNH
WMECO
NU (1)
CL&P
PSNH
WMECO
NU
CL&P
PSNH
WMECO
Service Cost
$
16.9
$
3.4
$
2.3
$
0.7
$
15.7
$
3.0
$
2.0
$
0.6
$
9.2
$
2.9
$
1.9
$
0.6
Interest Cost
47.2
7.9
4.0
1.7
49.0
9.2
4.6
2.0
25.7
10.0
4.8
2.2
Expected Return
on Plan Assets
(55.4)
(10.1)
(5.2)
(2.3)
(39.2)
(9.1)
(4.6)
(2.1)
(21.6)
(8.7)
(4.3)
(2.0)
Actuarial Loss
26.0
7.4
3.6
1.1
36.0
7.5
3.6
1.2
19.0
7.2
3.2
1.1
Prior Service
Cost/(Credit)
(2.1)
-
-
-
(1.4)
-
-
-
(0.3)
-
-
-
Net Transition
Obligation Cost (2)
-
-
-
-
12.2
6.1
2.5
1.3
11.6
6.2
2.5
1.3
Total Net Periodic
Benefit Expense
$
32.6
$
8.6
$
4.7
$
1.2
$
72.3
$
16.7
$
8.1
$
3.0
$
43.6
$
17.6
$
8.1
$
3.2
Related Intercompany
Allocations
N/A
$
7.1
$
1.6
$
1.3
N/A
$
7.9
$
2.0
$
1.5
N/A
$
8.2
$
2.0
$
1.5
Capitalized PBOP
Expense
$
8.8
$
3.9
$
1.3
$
0.6
$
26.6
$
8.2
$
2.3
$
1.6
$
12.7
$
8.7
$
2.2
$
1.5
(1)
NU results include NSTAR PBOP Plan activity beginning April 10, 2012.
(2)
The PBOP Plans' transition obligation costs were fully amortized in 2013.
The following actuarial assumptions were used to calculate PBOP expense amounts:
PBOP
For the Years Ended December 31,
2013
2012
2011
NUSCO PBOP Plans
Discount Rate
4.04
%
4.84
%
5.28
%
Expected Long-Term Rate of Return
8.25
%
8.25
%
8.25
%
NSTAR PBOP Plan
Discount Rate
4.35
%
4.58
%
N/A
Expected Long-Term Rate of Return
8.25
%
7.30
%
N/A