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76
The GSC allows CL&P to recover the costs of the procurement of energy for SS and LRS. The FMCC mechanism allows CL&P to
recover the costs of congestion and other costs associated with power market rules approved by the FERC or as approved by the
DPUC. CL&P's GSC and FMCC were recorded as a $0.3 million regulatory liability as of December 31, 2010 and a $2.4 million
regulatory asset as of December 31, 2009. The SBC allows CL&P to recover certain regulatory and energy public policy costs, such as
hardship protection costs and transition period property taxes. As of December 31, 2010, SBC overrcollections totaled $4.8 million and
was recorded as a regulatory liability whereas as of December 31, 2009, SBC undercollections totaled $18 million and was recorded as
a regulatory asset. The C&LM charge allows CL&P to recover the costs of C&LM programs. C&LM overcollections totaled $36.4
million and $32.8 million and were recorded as regulatory liabilities as of December 31, 2010 and 2009, respectively. As of
December 31, 2010, CL&P retail transmission collections were in excess of costs and $13.2 million was recorded as a regulatory
liability whereas as of December 31, 2009, retail transmission costs were in excess of collections and $17.7 million was recorded as a
regulatory asset.
PSNH Tracker Deferrals: The NHPUC permits PSNH to recover the actual and prudent costs of providing generation for ES, subject to
annual review. Accordingly, ES revenues and costs are fully tracked, and the difference between ES revenues and costs are deferred.
ES deferrals are being collected from/refunded to customers through a charge/(credit) in the subsequent ES rate period. As of
December 31, 2010 and 2009, the ES deferral was in an underrecovery position of $14.7 million and $8.4 million, respectively and was
recorded as a regulatory asset. The SCRC allows PSNH to recover restructuring costs as a result of deregulation and the TCAM
covers retail transmission costs incurred by PSNH's distribution business. As of December 31, 2010, SCRC overcollections totaled
$2.4 million and TCAM overcollections totaled $0.8 million whereas as of December 31, 2009, SCRC undercollections totaled $3.9
million and TCAM undercollections totaled $6.7 million. PSNH recovers the cost of C&LM programs and C&LM overcollections totaled
$3.4 million and $4.4 million as of December 31, 2010 and 2009, respectively.
WMECO Tracker Deferrals: The basic service rate allows WMECO to recover the costs of the procurement of energy for basic service.
Basic service undercollections totaled $0.1 million and overcollections totaled $2.1 million as of December 31, 2010 and 2009,
respectively. WMECO recovers its stranded costs through a transition charge. This amount represents the cumulative excess of
transition expenses over transition revenues. Transition charge undercollections totaled $0.6 million and $6.9 million, and were
recorded as a regulatory asset as of December 31, 2010 and 2009, respectively. The C&LM charge allows WMECO to recover the
costs of C&LM programs. C&LM undercollections totaled $4.5 million and $2.5 million and were recorded as a regulatory asset as of
December 31, 2010 and 2009, respectively. As of December 31, 2010, WMECO retail transmission collections were in excess of costs
and $4.8 million was recorded as a regulatory liability whereas, as of December 31, 2009, WMECO retail transmission costs were in
excess of collections and $0.9 million was recorded as a regulatory asset.
WMECO's pension and PBOP plan costs are recovered through a tracking mechanism that allows WMECO to earn a return on its
pension and PBOP assets and liabilities at its weighted average cost of capital, including the deferred future pension and PBOP benefit
obligations. As of December 31, 2010 and 2009, pension/PBOP undercollections totaled $4.6 million and $1 million, respectively, and
were recorded as a regulatory asset as the pension/PBOP expenses exceeded the revenue collected from customers.
Storm Cost Deferrals: The storm cost deferrals relate to costs incurred at CL&P, PSNH and WMECO for restorations that met
regulatory agency specified criteria for deferral to a major storm cost reserve. The PSNH deferral as of December 31, 2010 relates to
remaining costs incurred for a major storm in December 2008. As part of a multi-year rate case settlement agreement effective July 1,
2010, PSNH was allowed recovery of these storm costs. WMECO's 2008 and 2010 storm costs were deferred and in accordance with
WMECO's January 31, 2011 distribution rate case decision will be recovered from customers over five years as part of WMECO's storm
reserve. These assets are included in rate base.
The CL&P deferral as of December 31, 2010 relates to remaining costs incurred for the March 2010 winter storm restorations that met
the DPUC criteria for a major storm. CL&P is allowed to collect from customers $3 million per year for major storm costs. Storm cost
deferrals/reserves are included in rate base.
Asset Retirement Obligations: See Note 6, "Asset Retirement Obligations," to the consolidated financial statements for further
information.
Losses on Reacquired Debt: The regulatory asset relates to the losses associated with the reacquisition or redemption of long-term
debt. These deferred losses are amortized over the life of the respective long-term debt issuance.
Deferred Environmental Remediation Costs: This regulatory asset relates to environmental remediation costs at PSNH of $9.7 million
and Yankee Gas of $27.1 million. Both PSNH and Yankee Gas have regulatory rate recovery mechanisms for environmental costs and
accordingly, offsets to environmental reserves were recorded as regulatory assets. Management continues to believe these costs are
probable of recovery in future cost-of-service regulated rates.
Deferred Operation and Maintenance Costs: This regulatory asset represents the deferral of maintenance expense in connection with
the deferred recovery of revenue requirements for the period July 1, 2010 through December 31, 2010, as allowed by the DPUC.
CL&P is allowed to recover these costs beginning January 1, 2011 through June 2012.