Eversource 2013 Annual Report Download - page 91

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79
As of December 31,
2013
2012
NSTAR
NSTAR
(Millions of Dollars)
CL&P
Electric
PSNH
WMECO
CL&P
Electric
PSNH
WMECO
Distribution
$
4,930.7
$
4,694.7
$
1,608.2
$
756.6
$
4,691.3
$
4,539.9
$
1,520.1
$
724.2
Transmission
3,071.9
1,772.3
695.7
826.4
2,796.1
1,529.7
599.2
583.7
Generation
-
-
1,131.2
21.1
-
-
1,125.5
21.1
Property, Plant and
Equipment, Gross
8,002.6
6,467.0
3,435.1
1,604.1
7,487.4
6,069.6
3,244.8
1,329.0
Less: Accumulated Depreciation
(1,804.1)
(1,631.3)
(1,021.8)
(271.5)
(1,698.1)
(1,540.1)
(954.0)
(252.1)
Property, Plant and Equipment, Net
6,198.5
4,835.7
2,413.3
1,332.6
5,789.3
4,529.5
2,290.8
1,076.9
Construction Work in Progress
252.8
208.2
54.3
48.5
363.7
205.8
61.7
213.6
Total Property, Plant and
Equipment, Net
$
6,451.3
$
5,043.9
$
2,467.6
$
1,381.1
$
6,153.0
$
4,735.3
$
2,352.5
$
1,290.5
Depreciation of utility assets is calculated on a straight-line basis using composite rates based on the estimated remaining useful lives
of the various classes of property (estimated useful life for PSNH distribution). The composite rates are subject to approval by the
appropriate state regulatory agency. The composite rates include a cost of removal component, which is collected from customers over
the lives of the plant assets and is recognized as a regulatory liability. Depreciation rates are applied to property from the time it is
placed in service.
Upon retirement from service, the cost of the utility asset is charged to the accumulated provision for depreciation. The actual incurred
removal costs are applied against the related regulatory liability.
The depreciation rates for the various classes of utility property, plant and equipment aggregate to composite rates as follows:
(Percent)
2013
2012
2011
NU
2.8
2.5
2.6
CL&P
2.5
2.5
2.4
NSTAR Electric
2.9
2.8
3.0
PSNH
3.0
3.0
2.9
WMECO
2.9
3.3
2.9
The following table summarizes average useful lives of depreciable assets:
Average Depreciable Life
(Years)
NU
CL&P
NSTAR Electric
PSNH
WMECO
Distribution
36.1
42.0
32.9
32.7
29.8
Transmission
43.0
39.6
47.2
42.3
49.5
Generation
32.2
-
-
32.4
25.0
Other
14.6
-
-
-
-
5. DERIVATIVE INSTRUMENTS
The Regulated companies purchase and procure energy and energy-related products for their customers, which are subject to price
volatility. The costs associated with supplying energy to customers are recoverable through customer rates. The Regulated companies
manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and
nonderivative contracts.
Many of the derivative contracts meet the definition of, and are designated as, normal and qualify for accrual accounting under the
applicable accounting guidance. The costs and benefits of derivative contracts that meet the definition of normal are recognized in
Operating Expenses or Operating Revenues on the statements of income, as applicable, as electricity or natural gas is delivered.
Derivative contracts that are not designated as normal are recorded at fair value as current or long-term Derivative Assets or Derivative
Liabilities on the balance sheets. For the Regulated companies, regulatory assets or regulatory liabilities are recorded to offset the fair
values of derivatives, as costs are recovered from, or refunded to, customers in their respective energy supply rates. For NU's
unregulated wholesale marketing contracts that expired on December 31, 2013, changes in fair values of derivatives were included in
Net Income.