Eversource 2013 Annual Report Download - page 83

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tracking mechanism as part of their rates, which allows the electric distribution companies to charge their retail customers for
transmission costs on a timely basis.
L. Operating Expenses
Costs related to fuel and natural gas included in Purchased Power, Fuel and Transmission on the statements of income were as
follows:
For the Years Ended December 31,
(Millions of Dollars)
2013
2012
2011
NU - Natural Gas and Fuel (1)
$
466.5
$
346.8
$
307.9
PSNH - Fuel
104.8
103.4
115.9
(1) NSTAR Gas natural gas costs were included in NU beginning April 10, 2012.
M. Allowance for Funds Used During Construction
AFUDC represents the cost of borrowed and equity funds used to finance construction and is included in the cost of the Regulated
companies' utility plant. The portion of AFUDC attributable to borrowed funds is recorded as a reduction of Other Interest Expense, and
the AFUDC related to equity funds is recorded as Other Income, Net on the statements of income. AFUDC costs are recovered from
customers over the service life of the related plant in the form of increased revenue collected as a result of higher depreciation
expense.
NU
For the Years Ended December 31,
(Millions of Dollars, except percentages)
2013
2012 (1)
2011
AFUDC:
Borrowed Funds
$
4.1
$
5.3
$
11.8
Equity Funds
7.1
6.8
22.5
Total
$
11.2
$
12.1
$
34.3
Average AFUDC Rate
2.7%
3.7%
7.3%
(1) NSTAR amounts were included in NU beginning April 10, 2012.
For the Years Ended December 31,
2013
2012
2011
(Millions of Dollars,
NSTAR
NSTAR
NSTAR
except percentages)
CL&P
Electric
PSNH
WMECO
CL&P
Electric
PSNH
WMECO
CL&P
Electric
PSNH
WMECO
AFUDC:
Borrowed Funds
$
2.2
$
0.5
$
0.5
$
0.5
$
2.5
$
0.3
$
1.6
$
0.5
$
3.3
$
0.2
$
7.1
$
0.5
Equity Funds
2.9
-
0.2
1.0
1.9
-
1.9
1.0
6.0
-
13.2
1.0
Total
$
5.1
$
0.5
$
0.7
$
1.5
$
4.4
$
0.3
$
3.5
$
1.5
$
9.3
$
0.2
$
20.3
$
1.5
Average AFUDC Rate
3.7%
0.5%
1.1%
6.1%
3.6%
0.4%
5.9%
6.8%
8.3%
0.3%
7.1%
7.4%
The Regulated companies' average AFUDC rate is based on a FERC-prescribed formula using the cost of a company's short-term
financings as well as a company's capitalization (preferred stock, long-term debt and common equity). The average rate is applied to
average eligible CWIP amounts to calculate AFUDC.
N. Other Income, Net
Items included within Other Income, Net on the statements of income primarily consist of investment income/(loss), interest income,
AFUDC related to equity funds, and equity in earnings. Investment income/(loss) primarily related to the NU supplemental benefit trust.
For further information, see Note 6, "Marketable Securities," to the financial statements. For further information on AFUDC related to
equity funds, see Note 1M, "Summary of Significant Accounting Policies – Allowance for Funds Used During Construction," to the
financial statements. For further information on equity in earnings, see Note 1J, "Summary of Significant Accounting Policies – Equity
Method Investments," to the financial statements.
O. Other Taxes
Gross receipts taxes levied by the state of Connecticut are collected by CL&P and Yankee Gas from their respective customers. These
gross receipts taxes are shown on a gross basis with collections in Operating Revenues and payments in Taxes Other Than Income
Taxes on the statements of income as follows:
For the Years Ended December 31,
(Millions of Dollars)
2013
2012
2011
NU
$
144.1
$
135.0
$
137.8
CL&P
128.2
120.7
121.6
Certain sales taxes are also collected by NU's companies that serve customers in Connecticut and Massachusetts as agents for state
and local governments and are recorded on a net basis with no impact on the statements of income.