Eversource 2010 Annual Report Download - page 89

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The Regulated companies' average AFUDC rate is based on a FERC-prescribed formula that produces an average rate 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. AFUDC is recorded on 100 percent of CL&P's and
WMECO's CWIP for their NEEWS projects, all of which is being reserved as a regulatory liability to reflect current rate base recovery for
100 percent of the CWIP as a result of FERC-approved transmission incentives. For the year ended December 31, 2008, 50 percent of
AFUDC related to other major transmission projects at CL&P were being reserved as a regulatory liability to reflect current rate base
recovery for 50 percent of the CWIP as a result of FERC-approved transmission incentives.
P. Other Income, Net
The pre-tax components of other income/(loss) items are as follows:
NU For the Years Ended December 31,
(Millions of Dollars) 2010 2009 2008
Other Income:
Investment Income $ 6.4 $ 10.1 $ 6.6
Interest Income 4.0 5.6 10.1
AFUDC - Equity Funds 16.7 9.4 29.0
EIA Incentives 8.7 6.1 12.1
C&LM Incentives 7.2 4.3 4.8
Other 2.2 2.7 2.7
Total Other Income 45.2 38.2 65.3
Other Loss:
Investment Loss - - (14.6)
Other (3.3) (0.4) (0.3)
Total Other Loss (3.3) (0.4) (14.9)
Total Other Income, Net $ 41.9 $ 37.8 $ 50.4
For the Years Ended December 31,
2010 2009 2008
(Millions of Dollars) CL&P PSNH WMECO CL&P PSNH WMECO CL&P PSNH WMECO
Other Income:
Investment Income $ 4.3 $ 1.0 $ 0.9 $ 6.8 $ 1.7 $ 1.5 $ 6.0 $ 1.9 $ 1.2
Interest Income 3.4 1.0 0.6 3.5 2.2 (0.3) 6.4 1.9 1.1
AFUDC - Equity Funds 4.9 10.4 0.6 5.7 3.6 - 23.2 4.4 1.2
EIA Incentives 8.7 - - 6.1 - - 12.1 - -
C&LM Incentives 5.0 1.7 0.5 2.3 1.5 0.5 3.0 1.3 0.5
Other 0.5 0.1 - 1.6 0.5 0.2 1.1 0.2 0.1
Total Other Income 26.8 14.2 2.6 26.0 9.5 1.9 51.8 9.7 4.1
Other Loss:
Investment Loss - - - - - - (9.8) (2.4) (2.1)
Other (0.1) (2.5) - (0.1) - (0.1) (0.1) - -
Total Other Loss (0.1) (2.5) - (0.1) - (0.1) (9.9) (2.4) (2.1)
Total Other Income, Net $ 26.7 $ 11.7 $ 2.6 $ 25.9 $ 9.5 $ 1.8 $ 41.9 $ 7.3 $ 2.0
Other Income - Other includes equity in earnings, which relates to the Company's investments, including investments of CL&P, PSNH
and WMECO, in the Yankee Companies and NU's investments in two regional transmission companies. For the years ended
December 31, 2010, 2009, and 2008, equity in earnings was $1.4 million, $1.8 million and $1.6 million, respectively, for NU. For the
year ended December 31, 2010, CL&P, PSNH and WMECO had de minimis amounts for equity in earnings. Equity in earnings was
$0.3 million for CL&P and $0.1 million for PSNH and WMECO for both the years ended December 31, 2009 and 2008. For the years
ended December 31, 2010, 2009 and 2008, income tax expense associated with the equity in earnings was $0.6 million, $0.7 million
and $0.6 million, respectively, for NU (de minimis amounts for CL&P, PSNH and WMECO for all periods presented).
The EIA incentives relate to incentives earned by Connecticut regulated companies from the construction of distributed generation, new
large-scale generation and implementation of C&LM initiatives to reduce FMCC charges.
Included in Other Loss - Other for NU and PSNH for the year ended December 31, 2010 is a $2.5 million write-off of carrying charges
related to storm costs incurred during the December 2008 ice storm. This write-off was part of PSNH's multi-year rate case settlement
agreement that was effective July 1, 2010.
For further information regarding interest income related to federal tax settlements, see Note 11, "Income Taxes," to the consolidated
financial statements.