Eversource 2010 Annual Report Download - page 47

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recovered retroactive to August 1, 2009. These favorable items were partially offset by higher expenses, including employee benefit
costs, storm restoration costs, depreciation, interest expense and income taxes as a result of a higher effective tax rate in 2010.
PSNH’s distribution segment regulatory ROE was 10.2 percent (including generation) in 2010, compared to 7.2 percent in 2009. We
expect PSNH’s distribution segment regulatory ROE will be approximately 9 percent in 2011.
WMECO’s 2010 distribution segment earnings were $6.6 million lower than 2009 due primarily to higher operating costs including storm
restoration costs, employee benefit costs, depreciation and property taxes as well as a net $2.1 million after-tax charge primarily related
to uncollectibles expense as a result of the outcome of the distribution rate case decision from the DPU on January 31, 2011. These
unfavorable items were partially offset by stronger retail distribution revenues. WMECO’s 2010 retail electric sales were 2.4 percent
higher than 2009 due primarily to warmer than normal weather during the summer of 2010. WMECO’s distribution segment regulatory
ROE was 4.6 percent in 2010 compared to 8.4 percent in 2009. On January 31, 2011, the DPU authorized a distribution segment
regulatory ROE of 9.6 percent as part of its distribution rate case decision. We expect WMECO’s distribution segment regulatory ROE
will be approximately 9 percent in 2011.
Yankee Gas’ 2010 earnings were $11.7 million higher than 2009 due primarily to lower uncollectibles expenses, higher revenues
attributable to a 1.9 percent increase in firm sales as compared to 2009, and lower depreciation expense. Partially offsetting these
favorable items were higher employee benefit costs. Yankee Gas’ regulatory ROE was 8.6 percent in 2010 compared to 6.6 percent in
2009. In June 2011 we anticipate the DPUC will issue a decision on Yankee Gas’ request to raise its distribution rates effective July 1,
2011. Yankee Gas’ request includes a recommendation to maintain its authorized regulatory ROE of 10.1 percent.
For the distribution segment of our Regulated companies, a summary of changes in CL&P, PSNH and WMECO retail electric GWh
sales and Yankee Gas firm natural gas sales for 2010 as compared to 2009 on an actual and weather normalized basis (using a 30-
year average) is as follows:
Electric Firm Natural Gas
CL&P PSNH WMECO Total Yankee Gas
Percentage
Increase
Weather
Normalized
Percentage
Decrease
Percentage
Increase/
(Decrease)
Weathe
r
Normalized
Percentage
Increase/
(Decrease)
Percentage
Increase/
(Decrease)
Weathe
r
Normalized
Percentage
Increase/
(Decrease)
Percentage
Increase/
(Decrease)
Weather
Normalized
Percentage
Decrease
Percentage
Increase/
(Decrease)
Weather
Normalized
Percentage
Increase
Residential 3.5% (1.0)% 2.5% (0.5)% 5.1% 1.4% 3.5% (0.7)% (1.2)% 4.9%
Commercial 0.1% (3.0)% (0.1)% (3.0)% 1.5% (1.4)% 0.2% (2.8)% 6.6% 12.1%
Industrial 1.7% (1.0)% 1.6% (1.9)% (0.6)% (2.4)% 1.3% (1.5)% 0.3% 1.7%
Other - - 0.4% 0.4% (19.9)% (19.9)% (1.4)% (1.4)% - -
Total 1.8% (1.8)% 1.3% (1.8)% 2.4% (0.6)% 1.7% (1.7)% 1.9% 6.2%
A summary of our retail electric sales in GWh for CL&P, PSNH and WMECO and firm natural gas sales in million cubic feet for Yankee
Gas for 2010 and 2009 is as follows:
Electric Firm Natural Gas
2010 2009
Percentage
Increase/
(Decrease) 2010 2009
Percentage
Increase/
(Decrease)
Residential 14,913 14,412 3.5% 13,403 13,562 (1.2)%
Commercial 14,506 14,474 0.2% 14,982 14,063 6.6 %
Industrial 4,481 4,423 1.3% 14,866 14,825 0.3 %
Other 330 336 (1.4)% - - -
Total 34,230 33,645 1.7% 43,251 42,450 1.9 %
Actual retail electric sales for all three electric companies were higher in 2010 compared to 2009 due primarily to warmer than normal
summer weather and colder than normal weather in December 2010. Residential sales benefitted the most from the favorable impacts
of the weather in 2010 and were higher for all three electric companies in 2010 compared to 2009. Cooling degree days in 2010 for
Connecticut and Western Massachusetts were 77 percent higher than 2009 and 41 percent above normal. In New Hampshire, cooling
degree days in 2010 were 107 percent higher than 2009 and 42 percent above normal.
On a weather normalized basis, retail electric sales for all three electric companies were lower in 2010 compared to 2009. We believe
the decrease in weather normalized residential sales was due in part to increased conservation efforts by our customers and continuing
effects of the weak economy on our customers. The decline in commercial sales in 2010 compared to 2009 can be attributed in part to
relatively weak employment growth, higher vacancy rates and uncertainty in consumer confidence. Industrial sales were also lower in
2010 compared to 2009 due to a lack of manufacturing sector hiring although industrial sales benefitted from increased manufacturing
hours worked. Our commercial and industrial sales continue to be negatively impacted by additional installation of gas-fired distributed
generation and utilization of C&LM programs.
Our firm natural gas sales are subject to many of the same influences as our retail electric sales, but have benefitted from a favorable
price for natural gas and the addition of gas-fired distributed generation in Yankee Gas’ service territory. Actual firm natural gas sales
in 2010 were higher than 2009 despite the milder weather during the first quarter 2010 heating season. Heating degree days in 2010
for Connecticut were 11 percent below 2009 levels and 11 percent below normal levels. Firm natural gas sales benefitted from
commercial and industrial customers switching from interruptible service to firm service, additional gas-fired distributed generation, and