Eversource 2001 Annual Report Download - page 26

Operating Revenues
Total revenues increased by $997 million or 17 percent in the year
2001, compared with the year 2000, primarily due to higher rev-
enues from the competitive energy subsidiaries ($1,069 million
which reflects eliminations of sales to other NU affiliates), higher
revenues from Yankee Gas ($127 million) and higher regulated
retail electric revenues ($33 million), partially offset by lower
wholesale regulated revenues ($190 million) and lower transmis-
sion revenues ($26 million). The competitive energy subsidiaries’
increase is primarily due to higher revenues from Select Energy as
a result of new contracts for energy services. The Yankee Gas
increase is primarily due to a full year of revenue in 2001 versus
ten months post merger in 2000. The regulated retail increase is
primarily due to a 1.7 percent increase in sales ($41 million), the
increase in WMECO’s standard offer service rate ($59 million)
and the recovery of previously deferred fuel costs for CL&P ($19
million), partially offset by the 5 and 11 percent rate decreases for
PSNH that were effective October 1, 2000 and May 1, 2001,
respectively ($89 million). Wholesale revenues were lower primar-
ily due to the sale of Millstone at the end of the first quarter of
2001.
Total revenues increased by $1,405 million or 31 percent in
2000, primarily due to higher revenues from the competitive
energy subsidiaries ($1,246 million of which $669 million repre-
sents sales to other NU affiliates which are eliminated in consoli-
dation), the acquisition of Yankee ($262 million) and higher regu-
lated wholesale revenues ($727 million of which $281 million
represents sales to other NU affiliates which are eliminated in con-
solidation), partially offset by lower regulated retail revenues ($26
million). The competitive energy subsidiaries’ increase is primarily
due to higher revenues from Select Energy as a result of new con-
tracts for energy sales and services. The regulated wholesale rev-
enue increase is primarily due to higher PSNH energy sales and
higher CL&P and WMECO revenue from the sale of the output
from Millstone 2 and 3. The regulated retail decrease is primarily
due to retail rate reductions for CL&P and PSNH ($108 and $8
million, respectively), partially offset by the impact of Millstone 2
being returned to CL&P’s rate base ($33 million), higher retail
sales ($18 million), higher fuel revenues for PSNH ($15 million),
and higher retail revenue attributed to lower price discounts in
2000 and changing customer mix ($24 million). Regulated retail
kWh sales increased by 0.8 percent in 2000.
Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased in
2001, primarily due to higher purchased energy and capacity costs
as a result of higher sales for Select Energy ($1,252 million which
reflects eliminations of purchases from other NU affiliates), high-
er expense for Yankee primarily due to a full year in 2001 and
higher gas prices ($83 million), and higher expense for WMECO
primarily due to the increased cost of the standard offer supply
($70 million), partially offset by lower wholesale cost for CL&P
and PSNH ($173 million, net of eliminations).
Fuel, purchased and net interchange power expense increased
in 2000, primarily due to higher purchased energy and capacity
costs as a result of higher sales for Select Energy ($1,036 million
of which $660 million represents purchases from other NU affili-
ates which are eliminated in consolidation), Yankee expenses
($135 million) and higher purchased power for regulated sub-
sidiaries ($235 million).
Other Operation and Maintenance
Other operation and maintenance (O&M) expenses decreased
$90 million in 2001, primarily due to lower nuclear expenses
($133 million) as a result of the sale of the Millstone units at the
end of the first quarter of 2001, partially offset by higher O&M
expenses for the competitive energy subsidiaries, primarily due to
the acquisition of Boulos ($49 million).
Other O&M expenses decreased $74 million in 2000, primar-
ily due to lower spending at the nuclear units due to better perfor-
mance ($75 million), lower expenses due to the sale of certain
CL&P and WMECO fossil and hydroelectric generation assets
($74 million), lower corporate support ($38 million), the decom-
missioning status of Millstone 1 ($17 million), lower environ-
mental-related costs ($12 million) and 1999 expenses associated
with the Con Edison merger ($12 million), partially offset by the
addition of Yankee ($60 million), higher O&M expenses for the
unregulated businesses ($84 million), primarily due to the busi-
ness expansion, and higher distribution expenses ($29 million),
including increased conservation program expenses.
Depreciation
Depreciation expense decreased $39 million in 2001, primarily
due to the elimination of decommissioning expenses as a result of
the sale of the Millstone units at the end of the first quarter of
2001 ($25 million) and the buydown of the Seabrook Power
Contracts ($14 million).
Depreciation decreased $62 million in 2000, primarily due to
the effect of discontinuing SFAS No. 71 for the portion of the
generation business for CL&P and WMECO and the resulting
reclassification of depreciable nuclear plant balances to regulatory
assets ($84 million) and the sale of certain CL&P and WMECO
fossil and hydroelectric generation assets, partially offset by the
addition of Yankee ($23 million).
Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net increased in 2001, primarily
due to the amortization in 2001 related to the gain on sale of the
Millstone units by CL&P and WMECO ($641 million) and
higher amortization related to restructuring.
Amortization of regulatory assets, net decreased in 2000, pri-
marily due to the amortization in 1999 of the gain on sale of fossil
and hydroelectric generation assets for WMECO and CL&P
($309 million), and changes in amortization levels as a result of
industry restructuring ($95 million). These decreases were partial-
ly offset by higher amortization associated with the reclassified
nuclear plant balances ($84 million).
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