Eversource 2012 Annual Report Download - page 50

37
For the Year Ended
December 31, 2012 Compared to 2011
Sales
(million cubic feet)
Percentage
NU – Firm Natural Gas
2012 (1)
2011
Increase
Residential
22,535
13,508
66.8%
Commercial
27,906
17,175
62.5%
Industrial
19,453
16,197
20.1%
Total
69,894
46,880
49.1%
Total, Net of Special Contracts (2)
64,140
38,197
67.9%
For the Year Ended
December 31, 2012
Compared to 2011
Yankee Gas
NSTAR Gas (3)
Firm Natural Gas
Percentage
Increase/
(Decrease)
Percentage
Decrease
Residential
(7.6)%
(10.7)%
Commercial
(3.5)%
(2.9)%
Industrial
(2.5)%
(0.4)%
Total
(4.3)%
(6.2)%
Total, Net of Special Contracts (2)
2.3 %
(1) NU firm natural gas sales include the sales of NSTAR Gas from the date of merger, April 10, 2012, through December 31, 2012.
(2) Special contracts are unique to the customers who take service under such an arrangement and generally specify the amount of
distribution revenue to be paid to Yankee Gas regardless of the customers’ usage.
(3) NSTAR Gas’ sales data for the year ended December 31, 2012 compared to 2011 has been provided for comparative purposes
only.
Weather and, to a lesser extent, fluctuations in fuel costs, conservation measures, and economic conditions affect sales to our
customers. Industrial sales are less sensitive to temperature variations than residential and commercial sales. Weather impacts
electric sales primarily during the summer and natural gas sales during the winter in our service territories (natural gas sales are more
sensitive to temperature variations than electric sales). Customer heating or cooling usage may not directly correlate with historical
levels or with the level of degree-days that occur, particularly when weather patterns experienced are consistently colder or warmer. In
addition, our electric and natural gas businesses are sensitive to variations in daily weather, are highly influenced by New England’s
seasonal weather variations, and are susceptible to damage from major storms and other natural events and disasters that could
adversely affect our ability to provide energy.
Our consolidated retail electric and firm natural gas sales were higher in 2012, as compared to 2011, due to the inclusion of NSTAR
Electric and NSTAR Gas sales, respectively, from the date of merger, April 10, 2012, through December 31, 2012.
Actual retail electric sales for CL&P, NSTAR Electric and WMECO decreased in 2012, as compared to 2011, due primarily to the
warmer than normal weather in the first quarter of 2012, as compared to colder than normal weather in the first quarter of 2011, while
actual retail electric sales for PSNH were 0.1 percent higher than last year. In 2012, heating degree days were 11 percent lower in
Connecticut and western Massachusetts, 7 percent lower in the Boston metropolitan area, and 9 percent lower in New Hampshire, as
compared to 2011. On a weather normalized basis (based on 30-year average temperatures), the average NU combined consolidated
total retail electric sales decreased 0.2 percent in 2012, as compared to 2011, assuming NSTAR Electric had been part of the NU
combined electric distribution system for all periods under consideration. We believe these decreases were due primarily to increased
conservation efforts among all our customer classes and the continued installation of distributed generation at our commercial and
industrial customers’ facilities. For WMECO, the fluctuations in retail electric sales no longer impact earnings as the DPU approved a
sales decoupling plan effective February 1, 2011. Under this decoupling plan, WMECO now has an established annual level of
baseline distribution delivery service revenues of $125.4 million that it is able to recover. This effectively breaks the relationship
between sales volume and revenues recognized.
Our firm natural gas sales are subject to many of the same influences as our retail electric sales, but have benefitted from lower natural
gas prices and customer growth across all three customer classes. In 2012, excluding the impact of NSTAR Gas sales, actual sales
decreased, as compared to 2011, due primarily to the warmer than normal weather in the first quarter of 2012, as compared to colder
than normal weather in the first quarter of 2011. On a weather normalized basis, Yankee Gas’ 2012 sales increased due primarily to
customer growth, lower cost of natural gas, the migration of interruptible customers switching to firm service rates, and the addition of
gas-fired distributed generation in Yankee Gas’ service territory.
On a weather-normalized basis, the average NU combined consolidated total firm natural gas sales increased 2.7 percent in 2012, as
compared to 2011, assuming NSTAR Gas had been part of the NU combined natural gas distribution system for all periods under
consideration.