Eversource 2013 Annual Report Download - page 67

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periods. The tracked electric distribution revenues decreased due primarily to lower energy and supply-related costs ($241.8
million), lower CL&P CTA revenues ($46.3 million), lower wholesale revenues ($44.4 million), lower retail transmission
revenues ($17.8 million), partially offset by higher CL&P FMCC delivery-related revenues ($82.4 million), higher SCRC
revenues at PSNH ($34.2 million) and higher CL&P retail SBC revenues ($22.5 million).
• A decrease in natural gas segment revenues due primarily to a 4.3 percent decrease in Yankee Gas' sales volume related to
the warmer than normal weather in the heating season of 2012, as compared to the heating season of 2011. In addition, there
was a decrease in the cost of natural gas, which is fully recovered in revenues from sales to our customers.
Partially offset by:
• Improved transmission segment revenues resulting from a higher level of investment in transmission infrastructure and the
recovery of higher overall expenses, which are tracked and result in a related increase in revenues. The increase in expenses
is directly related to the increase in transmission plant, primarily at WMECO, including costs associated with higher property
taxes, depreciation and operation and maintenance expenses.
• An increase at PSNH related to the sale of oil to a third party ($20.8 million) in the second quarter of 2012, resulting in a
benefit to customers through lower ES rates that does not impact earnings.
• The portion of electric distribution segment revenues that impacts earnings increased $8.8 million due primarily to CL&P
regulatory incentives of $11.5 million and C&LM incentives of $6.2 million at CL&P, partially offset by a decrease in retail
electric sales related to the warmer than normal winter weather in 2012, as compared to the winter of 2011.
Purchased Power, Fuel and Transmission increased in 2012, as compared to 2011, due primarily to the following:
2012 Increase/(Decrease)
(Millions of Dollars)
Compared to 2011
The addition of NSTAR's operations
$
640.0
Lower GSC supply costs, partially offset by higher CfD costs at CL&P
(124.3)
Lower natural gas costs and lower sales at Yankee Gas
(45.4)
Lower purchased transmission costs and lower Basic Service costs at WMECO
(25.4)
Lower purchased power costs, partially offset by higher transmission costs at PSNH
(8.6)
All other items
(9.8)
$
426.5
Operations and Maintenance increased in 2012, as compared to 2011, due primarily to the addition of NSTAR's operations, which
included operating expenses of $320.8 million and maintenance expense of $50.4 million. Excluding the impact of NSTAR's
operations, Operations and Maintenance increased due primarily to:
• Higher NU parent and other companies' expenses ($70.1 million) that were due primarily to the increase in costs related to the
completion of NU’s merger with NSTAR ($55.9 million) and higher costs at NU’s unregulated contracting business related to
an increased level of work in 2012 ($16.3 million).
• The establishment of a reserve related to major storm restoration costs ($40 million) at CL&P and bill credits to customers at
CL&P and WMECO ($25 million and $3 million, respectively) as a result of the Connecticut and Massachusetts settlement
agreements. In addition, there were higher electric distribution business expenses ($31.6 million) mainly as a result of general
and administrative expenses primarily related to higher pension costs.
Partially offsetting these increases was the absence in 2012 of the storm fund reserve established in 2011 to provide bill credits to
residential customers as a result of the October 2011 snowstorm and to provide contributions to certain Connecticut charitable
organizations ($30 million) at CL&P, a decrease in the amortization of the regulatory deferral allowed in the 2010 rate case decision
($21.4 million) at CL&P and lower maintenance costs at PSNH’s generation business due to less planned outage maintenance in 2012
($17.8 million).
Depreciation increased in 2012, as compared to 2011, due primarily to the addition of NSTAR's utility plant balances ($148.4 million)
and an increase as a result of the consolidation of CYAPC and YAEC ($40.3 million). Excluding the impact of NSTAR and the
consolidation of CYAPC and YAEC, Depreciation increased due primarily to higher utility plant balances resulting from completed
construction projects placed into service.
Amortization of Regulatory Assets, Net decreased in 2012, as compared to 2011, due primarily to a decrease in ES and TCAM
amortization at PSNH ($46.9 million and $20.2 million, respectively), and higher CTA transition costs ($21.5 million) and lower CTA
revenues ($46.3 million) at CL&P. Partially offsetting these decreases was an increase related to the addition of NSTAR's operations
($87.5 million), lower SBC costs ($7.6 million) and higher retail SBC revenues ($22.5 million) at CL&P, and an increase in SCRC
amortization at PSNH ($13.5 million).
Amortization of RRBs increased in 2012, as compared to 2011, due primarily to the addition of NSTAR Electric’s amortization ($67.7
million).