Eversource 2012 Annual Report Download - page 87

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L. Operating Expenses
Costs related to fuel (and natural gas costs as it related to Yankee Gas and NSTAR Gas) included in Purchased Power, Fuel and
Transmission on the accompanying consolidated statements of income were as follows:
For the Years Ended December 31,
(Millions of Dollars)
2012 (1)
2011
2010
NU
$
346.8
$
307.9
$
391.6
PSNH
103.4
115.9
184.3
Yankee Gas
145.9
191.3
206.4
NSTAR Gas
97.2
N/A
N/A
(1) Includes the NSTAR Gas costs from the date of the merger, April 10, 2012, through December 31, 2012.
M. Allowance for Funds Used During Construction
AFUDC represents the cost of borrowed and equity funds used to finance construction and is included in the cost of the Regulated
companies' utility plant. The portion of AFUDC attributable to borrowed funds is recorded as a reduction of Other Interest Expense, and
the AFUDC related to equity funds is recorded as Other Income, Net on the accompanying consolidated statements of income. AFUDC
costs are recovered from customers over the service life of the related plant in the form of increased revenue collected as a result of
higher depreciation expense.
NU
For the Years Ended December 31,
(Millions of Dollars, except percentages)
2012
2011
2010
AFUDC:
Borrowed Funds $ 5.3 $ 11.8 $ 10.2
Equity Funds
6.8
22.5
16.7
Total
$
12.1
$
34.3
$
26.9
Average AFUDC Rate 3.7% 7.3% 7.1%
For the Years Ended December 31,
2012
2011
2010
(Millions of Dollars, NSTAR
NSTAR
NSTAR
except percentages)
CL&P
Electric(1)
PSNH
WMECO
CL&P
Electric(1)
PSNH
WMECO
CL&P
Electric(1)
PSNH
WMECO
AFUDC:
Borrowed Funds
$
2.5
$
0.3
$
1.6
$
0.5
$
3.3
$
0.2
$
7.1
$
0.5
$
2.7
$
0.1
$
6.6
$
0.3
Equity Funds
1.9
-
1.9
1.0
6.0
-
13.2
1.0
4.9
-
10.4
0.6
Total
$
4.4
$
0.3
$
3.5
$
1.5
$
9.3
$
0.2
$
20.3
$
1.5
$
7.6
$
0.1
$
17.0
$
0.9
Average AFUDC Rate
3.6%
0.4%
5.9%
6.8%
8.3%
0.3%
7.1%
7.4%
8.3%
0.3%
6.8%
6.4%
(1) NSTAR Electric amounts are included in NU consolidated from the date of the merger, April 10, 2012, through December 31, 2012.
NSTAR Electric amounts are not included in NU consolidated for the years ended December 31, 2011 and 2010.
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.
N. Other Income, Net
Items included within Other Income, Net on the accompanying consolidated statements of income primarily consist of investment
income/(loss), interest income, AFUDC related to equity funds and equity in earnings. For CL&P, NSTAR Electric, PSNH and WMECO,
equity in earnings relate to investments in CYAPC, YAEC and MYAPC and also NSTAR Electric's investment in two regional
transmission companies, which are all accounted for on the equity method. On an NU consolidated basis, equity in earnings relate to
the investment in MYAPC and NU's investment in two regional transmission companies.
O. Other Taxes
Gross receipts taxes levied by the state of Connecticut are collected by CL&P and Yankee Gas from their respective customers. These
gross receipts taxes are shown on a gross basis with collections in Operating Revenues and payments in Taxes Other Than Income
Taxes on the accompanying consolidated statements of income as follows:
For the Years Ended December 31,
(Millions of Dollars)
2012
2011
2010
NU
$ 135.0 $ 137.8 $ 143.7
CL&P
120.7
121.6
128.0
Certain sales taxes are also collected by CL&P, NSTAR Electric, WMECO, Yankee Gas and NSTAR Gas from their respective
customers as agents for state and local governments and are recorded on a net basis with no impact on the accompanying
consolidated statements of income.