Eversource 2012 Annual Report Download - page 71

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58
Purchased Power, Fuel and Transmission decreased in 2011, as compared to 2010, due primarily to the following:
2011 Increase/(Decrease)
(Millions of Dollars)
Compared to 2010
Lower GSC supply costs and purchased power costs,
partially offset by higher CfD and other costs at CL&P
$
(310.2)
Lower energy prices, a slight increase in ES customer
migration to third party suppliers and lower retail sales for PSNH's
remaining ES customers
(61.6)
Lower Basic Service costs at WMECO
(14.1)
Lower natural gas costs at Yankee Gas
(15.1)
Other and eliminations
24.4
$
(376.6)
Operations and Maintenance increased in 2011, as compared to 2010, due primarily to:
Higher electric distribution expenses ($50.4 million) and higher natural gas expenses ($3.8 million), primarily related to CL&P’s
establishment of a $30 million storm fund reserve to provide bill credits to its residential customers who remained without power
after noon on Saturday, November 5, 2011, as a result of the October 2011 snowstorm and to provide contributions to certain
Connecticut charitable organizations. There were also higher boiler equipment and maintenance costs at PSNH’s generation
business related to the absence in 2011 of insurance proceeds received in 2010 related to turbine damage, which reduced 2010
costs ($7.4 million). In addition, there were higher pension costs and higher general and administrative expenses. Partially
offsetting these increases were lower costs that are recovered through distribution tracking mechanisms that have no earnings
impact ($17.7 million), such as uncollectible expenses and customer Energy Independence Act incentives. In addition, there were
lower transmission segment expenses ($8.1 million).
The partial amortization in 2011 of the allowed regulatory deferral, which was recorded in maintenance expense in 2010, as a
result of the June 30, 2010 CL&P rate case decision ($54.9 million).
Higher NU parent and other companies expenses ($27.3 million) due primarily to higher costs at NU’s unregulated electrical
contracting business related to an increased level of work in 2011 ($19.6 million), partially offset by a decrease in costs related to
NU's then pending merger with NSTAR ($2.1 million).
Depreciation increased in 2011, as compared to 2010, due primarily to higher depreciation rates being used at PSNH and WMECO in
2011 as a result of distribution rate case decisions that were effective during 2011 and higher utility plant balances resulting from
completed construction projects placed into service. Partially offsetting these increases was a lower depreciation rate being used at
CL&P as a result of the distribution rate case decision that was effective July 1, 2010.
Amortization of Regulatory Assets, Net increased in 2011, as compared to 2010, due primarily to lower CTA transition costs ($197.7
million) partially offset by lower retail CTA revenue ($154.6 million) at CL&P, the absence in 2011 of the impact from the 2010
Healthcare Act related to income taxes ($26 million) and increases in ES amortization ($11.4 million) and TCAM amortization ($5.9
million) at PSNH. Partially offsetting these increases was lower amortization related to the previously deferred unrecovered stranded
generation costs at CL&P ($38.2 million) and lower amortization of the SBC balance at CL&P ($29.7 million).
Amortization of Rate Reduction Bonds decreased in 2011, as compared to 2010, due to the maturity of CL&P’s RRBs in December
2010 and lower principal balances on the remaining PSNH and WMECO RRBs outstanding.
Energy Efficiency Programs increased in 2011, as compared to 2010, due primarily to an increase in expenses attributable to an
increase in spending in accordance with DPU approved energy efficiency programs at WMECO.
Taxes Other Than Income Taxes increased in 2011, as compared to 2010, due primarily to an increase in property taxes as a result of
an increase in Property, Plant and Equipment related to our capital program and an increase in the tax rate, offset by a decrease in the
Connecticut Gross Earnings Tax due primarily to lower transmission segment revenues and lower CTA revenues in 2011, as compared
to 2010.
Interest Expense
For the Years Ended December 31,
Increase/
(Millions of Dollars)
2011
2010
(Decrease)
Percent
Interest on Long-Term Debt
$
231.6
$
231.1
$
0.5
0.2
%
Interest on RRBs
8.6
20.6
(12.0)
(58.3)
Other Interest
10.2
(14.4)
24.6
(a)
$
250.4
$
237.3
$
13.1
5.5
%
(a) Percent greater than 100 percent not shown since it is not meaningful.