Eversource 2013 Annual Report Download - page 82

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The total carrying values of CL&P's, NSTAR Electric's, PSNH's and WMECO's ownership interests in CYAPC, YAEC and MYAPC,
which are included in Other Long-Term Assets on their respective balance sheets, were as follows:
As of December 31,
(Millions of Dollars)
2013
2012
CL&P
$
1.2
$
1.4
NSTAR Electric
0.5
0.6
PSNH
0.3
0.3
WMECO
0.3
0.4
For further information on the Yankee Companies, see Note 12C, "Commitments and Contingencies - Contractual Obligations - Yankee
Companies," to the financial statements.
Other Investments: As of December 31, 2013 and 2012, NU had a 37.2 percent (14.5 percent of which related to NSTAR Electric)
equity ownership interest in two companies that transmit electricity imported from the Hydro-Québec system in Canada. These
investments are accounted for under the equity method of accounting. NU’s investment totaled $5.1 million and $6 million as of
December 31, 2013 and 2012, respectively, and NSTAR Electric's investment totaled $2 million and $2.3 million as of December 31,
2013 and 2012, respectively. As of December 31, 2013 and 2012, NU also had an equity ownership interest of $9.8 million and $6.8
million in an energy investment fund, respectively.
Equity investments are included in Other Long-Term Assets on the balance sheets and net earnings related to these equity investments
are included in Other Income, Net on the statements of income.
K. Revenues
Regulated Companies: The Regulated companies' retail revenues are based on rates approved by their respective state regulatory
commissions. In general, rates can only be changed through formal proceedings with the state regulatory commissions. The
Regulated companies' rates are designed to recover the costs to provide service to their customers, including a return on investment.
The Regulated companies also utilize regulatory commission-approved tracking mechanisms to recover certain costs on a fully-
reconciling basis. These tracking mechanisms require rates to be changed periodically, with overcollections refunded to customers or
undercollections collected from customers in future periods. WMECO has a revenue decoupling mechanism to recover a pre-
established level of baseline distribution delivery service revenues per year, independent of actual customer usage. Such decoupling
mechanisms effectively break the relationship between kWhs consumed by customers and revenues recognized.
Energy purchases are recorded in Purchased Power, Fuel, and Transmission, and sales of energy associated with these purchases are
recorded in Operating Revenues.
Regulated Companies' Unbilled Revenues: Because customers are billed throughout the month based on pre-determined cycles rather
than on a calendar month basis, an estimate of electricity or natural gas delivered to customers for which the customers have not yet
been billed is calculated as of the balance sheet date. Unbilled revenues are included in Operating Revenues on the statements of
income and are assets on the balance sheets. Actual amounts billed to customers when meter readings become available may vary
from the estimated amount.
The Regulated companies estimate unbilled sales monthly using the daily load cycle method. The daily load cycle method allocates
billed sales to the current calendar month based on the daily load for each billing cycle. The billed sales are subtracted from total
month load, net of delivery losses, to estimate unbilled sales. Unbilled revenues are estimated by first allocating unbilled sales to the
respective customer classes, then applying an estimated rate by customer class to those sales.
Regulated Companies' Transmission Revenues - Wholesale Rates: Wholesale transmission revenues are recovered through FERC
approved formula rates. Wholesale transmission revenues for CL&P, NSTAR Electric, PSNH, and WMECO are collected under the
ISO New England Inc. Transmission, Markets and Services Tariff (ISO-NE Tariff). The ISO-NE Tariff includes Regional Network
Service (RNS) and Schedule 21 - NU rate schedules that recover the costs of transmission and other transmission-related services for
CL&P, PSNH and WMECO and Schedule 21 - NSTAR rate schedules that recover costs of transmission and other transmission-related
services for NSTAR Electric. The RNS rate, administered by ISO-NE and billed to all New England transmission load, including CL&P,
NSTAR Electric, PSNH and WMECO's distribution businesses, is reset on June 1st of each year and recovers the revenue
requirements associated with transmission facilities that benefit the entire New England region. Schedule 21 - NU and Schedule 21 -
NSTAR rates, administered by NU, recovers the remainder of the transmission revenue requirements. The Schedule 21 - NU rate is
reset on January 1st and June 1st of each year, while the Schedule 21 - NSTAR rate is reset on June 1st of each year. The Schedule 21
- NU and Schedule 21 - NSTAR rate calculations recover total transmission revenue requirements net of revenues received from other
sources (i.e., RNS, rentals, etc.), thereby ensuring that NU recovers all of CL&P's, NSTAR Electric’s, PSNH's and WMECO's regional
and local transmission revenue requirements in accordance with the ISO-NE Tariff. RNS, Schedule 21 - NU and Schedule 21 - NSTAR
rates provide for the annual reconciliation and recovery or refund of estimated costs to actual costs. The financial impacts of
differences between actual and estimated costs are deferred for future recovery from, or refunded to, transmission customers.
Regulated Companies' Transmission Revenues - Retail Rates: A significant portion of the NU transmission segment revenue comes
from ISO-NE charges to the distribution businesses of CL&P, NSTAR Electric, PSNH and WMECO, each of which recovers these costs
through rates charged to their retail customers. CL&P, NSTAR Electric, PSNH and WMECO each have a retail transmission cost