Eversource 2014 Annual Report Download - page 15

3
A summary of our distribution companies'retail electric GWh sales volumes and percentage changes for 2014, as compared to 2013, is as follows:
2014 2013
Percentage
Change
Residential 21,317 21,896 (2.6)%
Commercial 27,449 27,787 (1.2)%
Industrial 5,676 5,648 0.5 %
Total 54,442 55,331 (1.6)%
Our 2014 consolidated retail electric sales volumes were lower, as compared to 2013, due primarily to cooler summer weather in 2014 as well as an
increase in customer conservation efforts primarily by our residential customers, including the impact of energy efficiency programs sponsored by
CL&P, NSTAR Electric and WMECO.
For WMECO and CL&P (effective December 1, 2014), fluctuations in retail electric sales volumes do not impact earnings due to the regulatory
commission approved revenue decoupling mechanisms. Distribution revenues are decoupled from their customer sales volumes. CL&P and
WMECO reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues. Any
difference between the allowed level of distribution revenue and the actual amount incurred during a 12-month period is adjusted through rates in the
following period. The decoupling mechanism effectively breaks the relationship between sales volumes and revenues recognized. Prior to
December 1, 2014, CL&P recognized LBR related to reductions in sales volume as a result of successful energy efficiency programs. LBR was
recovered from retail customers through the FMCC. Effective December 1, 2014, CL&P no longer recognizes LBR due to its revenue decoupling
mechanism.
ELECTRIC DISTRIBUTION –CONNECTICUT
THE CONNECTICUT LIGHT AND POWER COMPANY
CL&P's distribution business consists primarily of the purchase, delivery and sale of electricity to its residential, commercial and industrial
customers. As of December 31, 2014, CL&P furnished retail franchise electric service to approximately 1.2 million customers in 149 cities and
towns in Connecticut, covering an area of 4,400 square miles. CL&P does not own any electric generation facilities.
The following table shows the sources of CL&P's 2014 electric franchise retail revenues based on categories of customers:
CL&P
 2014 % of Total
Residential $1,474,181 58
Commercial 879,343 35
Industrial 149,220 6
Other 43,050 1
Total Retail Electric Revenues $2,545,794 100%
A summary of CL&P's retail electric GWh sales volumes and percentage changes for 2014, as compared to 2013, is as follows:
2014 2013
Percentage
Change
Residential 10,026 10,314 (2.8)%
Commercial 9,643 9,770 (1.3)%
Industrial 2,377 2,320 2.5 %
Total 22,046 22,404 (1.6)%
Rates
CL&P is subject to regulation by PURA, which, among other things, has jurisdiction over rates, certain dispositions of property and plant, mergers
and consolidations, issuances of long-term securities, standards of service and construction and operation of facilities. CL&P's present general rate
structure consists of various rate and service classifications covering residential, commercial and industrial services. CL&P's retail rates include a
delivery service component, which includes distribution, transmission, conservation, renewables, CTA, SBC and other charges that are assessed on
all customers. Connecticut utilities are entitled under state law to charge rates that are sufficient to allow them an opportunity to recover their
reasonable operating and capital costs, in order to attract needed capital and maintain their financial integrity, while also protecting relevant public
interests.
Under Connecticut law, all of CL&P's customers are entitled to choose their energy suppliers, while CL&P remains their electric distribution
company. For those customers who do not choose a competitive energy supplier, under SS rates for customers with less than 500 kilowatts of
demand, and LRS rates for customers with 500 kilowatts or more of demand, CL&P purchases power under standard offer contracts and passes the
cost of the power to customers through a combined GSC and FMCC charge on customers'bills.
CL&P continues to supply approximately 45 percent of its customer load at SS or LRS rates while the other 55 percent of its customer load has
migrated to competitive energy suppliers. Because this customer migration is only for energy supply service, it has no impact on CL&P's electric
distribution business or its operating income.