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Concerning Energy Independence” to promote distributed
generation and demand side management. These items
were partially oset by a 3.7 percent decline in sales,
higher operating costs, including full-year storm expenses,
maintenance expenses, and interest expense, a $5.8 million
pre-tax charge to refund the 2004 procurement incentive
fee that was recognized in 2005 earnings, and losses on
investments in the Trust Under Supplemental Executive
Retirement Plan (“supplemental benefit trust”). CL&P’s
distribution segment Regulatory ROE was 7.5 percent
in 2008 and 7.9 percent in 2007. We expect CL&P’s
distribution segment Regulatory ROE in 2009 will be
approximately 7 percent.
PSNH’s distribution segment earnings in 2008 were $2.3
million lower than 2007. The decrease in 2008 earnings
was primarily due to higher operating costs including full-
year storm expenses, depreciation, and interest expense,
a 2.5 percent decline in sales, losses on the supplemental
benefit trust and the absence of a $4.5 million pre-tax
benefit from the implementation of the retail transmission
cost tracking mechanism in the second quarter of 2007.
These items were partially oset by an increase in PSNH’s
distribution revenues that resulted from distribution rate
increases on July 1, 2007 and January 1, 2008, a pre-tax
adjustment to its generation cost recovery mechanism
of $1.9 million, and a settlement of federal tax matters.
PSNH’s distribution segment Regulatory ROE was 8.3
percent in 2008 and 9.5 percent in 2007. We expect
PSNH’s distribution segment Regulatory ROE in 2009
will be approximately 8percent, with the earnings of the
generation portion of this segment based on its authorized
ROE of 9.8 percent.
WMECO’s 2008 distribution segment earnings were
$6.2 million lower than 2007 primarily due to higher
operating costs, including full-year storm expenses, and
uncollectibles expense, a 4.2 percent decline in sales, a $1.6
million pre-tax charge related to a DPU ruling on WMECO’s
2005 and 2006 transition cost reconciliations, a $1.3
million pre-tax charge for potential refunds to customers
from an assessment under the DPU’s service quality index
criteria, and losses on the supplemental benefit trust.
These items were partially oset by a $3 million annualized
distribution rate increase that took eect January 1,
2008 and a settlement of federal tax matters. WMECO’s
distribution segment Regulatory ROE was 7.2 percent
in 2008 and 9.7 percent in 2007. We expect WMECO’s
distribution segment Regulatory ROE in 2009 will be
approximately 8 percent.
Yankee Gas’ earnings in 2008 were $4.5 million higher
than 2007 primarily due to a distribution rate increase
that took eect on July 1, 2007 and a 2.1 percent increase
in firm natural gas sales. These increases were partially
oset by higher operating costs, including uncollectibles
expense, maintenance expense, and interest expense, and
a DPUC order requiring Yankee Gas to refund $5.8 million
of previous gas cost recoveries. Yankee Gas’ Regulatory
ROE was 8.3 percent in 2008 and 8.7 percent in 2007.
We expect Yankee Gas’ Regulatory ROE in 2009 will be
approximately 9 percent.
For the distribution segment of our regulated companies,
a summary of changes in CL&P, PSNH and WMECO retail
electric KWH sales and Yankee Gas firm natural gas sales
for 2008 as compared to 2007 on an actual and weather
normalized basis (using a 30-year average)
is as follows:
Weather Weather
Weather Normalized Weather Weather Normalized
Normalized Percentage Percentage Normalized Normalized Percentage Percentage
Percentage Percentage (Decrease)/ (Decrease)/ Percentage Percentage Percentage Percentage (Decrease)/ (Decrease)/
Decrease Decrease Increase Increase Decrease Decrease Decrease Decrease Increase Increase
Residential (4.1)% (2.7)% (2.2)% (1.0)% (3.1)% (2.1)% (3.6)% (2.3)% (2.0)% (0.1)%
Commercial (1.3)% (0.7)% (1.2)% (0.4)% (2.6)% (2.1)% (1.4)% (0.8)% (0.2)% 1.4 %
Industrial (9.8)% (9.3)% (6.1)% (5.4)% (8.7)% (8.5)% (8.6)% (8.1)% 9.2 % 9.6 %
Other (3.2)% (3.2)% 2.2 % 2.2 % (14.6)% (14.6)% (3.7)% (3.7)% - % - %
Total (3.7)% (2.8)% (2.5)% (1.6)% (4.2)% (3.5)% (3.5)% (2.6)% 2.1 % 3.4 %
Electric Firm Natural Gas
CL&P PSNH WMECO Total Yankee Gas
20
Electric Firm Natural Gas
Percentage
Percentage (Decrease)/
2008 2007 Decrease 2008 2007 Increase
Residential 14,509 15,051 (3.6)% 13,467 13,742 (2.0)%
Commercial 14,885 15,103 (1.4)% 12,939 12,965 (0.2)%
Industrial 5,149 5,635 (8.6)% 13,310 12,193 9.2 %
Other 340 353 (3.7)% - - - %
Total* 34,883 36,142 (3.5)% 39,717 38,900 2.1 %
*Amounts may not total due to rounding of GWH.
A summary of our retail electric sales in gigawatt hours (GWH) for CL&P, PSNH and WMECO and firm natural gas sales in
million cubic feet for Yankee Gas for 2008 and 2007 is as follows: