Eversource 2013 Annual Report Download - page 48

36
For the Year Ended
December 31, 2013 Compared to 2012
Sales (million cubic feet)
Yankee Gas
NSTAR Gas (3)
Percentage
Percentage
Firm Natural Gas
Increase/(Decrease)
Increase
Residential
19.0 %
19.2%
Commercial
13.9 %
11.8%
Industrial
(1.9)%
10.9%
Total
9.8 %
14.9%
Total, Net of Special Contracts (2)
15.3 %
(1) Results include firm natural gas sales of NSTAR Gas from January 1, 2012 through December 31, 2012 for comparative purposes only.
(2) Special contracts are unique to the customers who take service under such an arrangement and generally specify the amount of distribution revenue
to be paid to Yankee Gas regardless of the customers’ usage.
(3) NSTAR Gas’ sales data for the year ended December 31, 2013 compared to 2012 has been provided for comparative purposes only.
Weather, fluctuations in energy supply costs, conservation measures (including company-sponsored energy efficiency programs), and
economic conditions affect customer energy usage. Industrial sales are less sensitive to temperature variations than residential and
commercial sales. In our service territories, weather impacts electric sales during the summer and electric and natural gas sales during
the winter (natural gas sales are more sensitive to temperature variations than electric sales). Customer heating or cooling usage may
not directly correlate with historical levels or with the level of degree-days that occur. In addition, our electric and natural gas
businesses are susceptible to damage from major storms and other natural events and disasters that could adversely affect our ability
to provide energy.
Our 2013 consolidated retail electric sales were higher, as compared to 2012, due primarily to colder weather in the first and fourth
quarters of 2013. The 2013 retail electric sales for CL&P, NSTAR Electric and PSNH increased while they remained unchanged for
WMECO, as compared to 2012, due primarily to colder weather in the first and fourth quarters of 2013. In 2013, heating degree days
were 17 percent higher in Connecticut and western Massachusetts, 16 percent higher in the Boston metropolitan area, and 15 percent
higher in New Hampshire, and cooling degree days were 7 percent lower in Connecticut and western Massachusetts, 2 percent higher
in the Boston metropolitan area, and 9 percent lower in New Hampshire, as compared to 2012. On a weather-normalized basis (based
on 30-year average temperatures), 2013 retail electric sales for CL&P and PSNH increased, while they decreased for NSTAR Electric
and WMECO, as compared to 2012. The 2013 weather-normalized NU consolidated total retail electric sales remained relatively
unchanged, as compared to 2012.
For WMECO, fluctuations in retail electric sales do not impact earnings due to the DPU-approved revenue decoupling mechanism.
Under this decoupling mechanism, WMECO has an overall fixed annual level of distribution delivery service revenues of $132.4 million,
comprised of customer base rate revenues of $125.4 million and a baseline low income discount recovery of $7 million. These two
mechanisms effectively break the relationship between sales volume and revenues recognized.
Our 2013 consolidated firm natural gas sales are subject to many of the same influences as our retail electric sales, but have benefitted
from favorable natural gas prices and customer growth across all three customer classes. Our 2013 consolidated firm natural gas sales
were higher, as compared to 2012, due primarily to colder weather in the first and fourth quarters of 2013. The 2013 weather-
normalized NU consolidated total firm natural gas sales increased 0.9 percent, as compared to 2012, due primarily to residential
customer growth, an increase in natural gas conversions, the migration of interruptible customers switching to firm service rates, and
the addition of gas-fired distributed generation, all of which was primarily in the Yankee Gas service territory.
NU Parent and Other Companies: NU parent and other companies (which includes certain subsidiaries of NSTAR beginning April 10,
2012, and our competitive businesses held by NU Enterprises) earned $11.1 million in 2013, compared with net losses of $46.9 million
in 2012. Excluding the impact of integration and merger-related costs of $13.8 million in 2013 and $54.4 million in 2012, NU parent and
other companies earned $24.9 million in 2013, compared with $7.5 million in 2012. Improved 2013 results were due primarily to a lower
effective tax rate, a decrease in interest expense at NU parent, and an increase in earnings at the unregulated businesses.
Future Outlook
2014 EPS Guidance: We currently project 2014 earnings of between $2.60 and $2.75 per share.
Liquidity
Consolidated: Cash and cash equivalents totaled $43.4 million as of December 31, 2013, compared with $45.7 million as of
December 31, 2012.
CL&P issued $400 million of 2.5 percent 2013 Series A First and Refunding Mortgage Bonds on January 15, 2013, due to mature in
2023. The proceeds, net of issuance costs, were used to pay short-term borrowings outstanding under the CL&P credit agreement of
$89 million and intercompany loans related to our commercial paper program of $305.8 million. On September 3, 2013, CL&P