Eversource 2014 Annual Report Download - page 49

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On July 31, 2014, a third complaint was filed at FERC (the "third complaint") by most of the Complainants to the first and second
complaints, claiming that the base ROE and incentive adders exceed the range of permissible ROEs, requesting FERC to reduce the NETOs'base
ROE prospectively from the date of a final FERC order, and seeking refunds for the 15-month period of July 31, 2014 to October 31, 2015 (the "third
complaint refund period"). On November 24, 2014, FERC issued an order finding that the third complaint raised issues of material fact and set the
case for trial. In this order, FERC also consolidated the third complaint with the second complaint for purposes of hearing and decision. Due to the
establishment of two refund periods, the FERC also stated that it is appropriate for the parties to litigate a separate ROE for each refund period. On
December 24, 2014, the NETOs filed for rehearing of this order. The trial judge has set a hearing beginning June 23, 2015 for the two complaints.
The trial judge's recommended initial decision is expected by November 30, 2015 with a FERC order issued by September 30, 2016.
Rehearing requests of NETOs that were filed in all three complaint proceedings have not yet been acted upon by FERC. At this time, the Company
cannot determine the outcome of these rehearing requests.
 The following is a summary of the cumulative pre-tax reserves (excluding interest) that the Company established in 2013 and
2014 to recognize the potential financial impacts of the first and second complaints. The Company is unable to determine any amount related to the
third complaint.
NU
For the Years Ended December 31,
 2013 2014 Total
1
st
Complaint -Base ROE $23.7 $1.2 $24.9
2
nd
Complaint -Base ROE -27.4 27.4
Incentive ROE (1
st
and 2
nd
Complaint) -8.4 8.4
Cumulative Reserve $23.7 $37.0 $60.7
CL&P NSTAR Electric
For the Years Ended December 31, For the Years Ended December 31,
 2013 2014 Total 2013 2014 Total
1
st
Complaint -Base ROE $12.8 $0.5 $13.3 $5.7 $0.4 $6.1
2
nd
Complaint -Base ROE -13.5 13.5 -7.5 7.5
Incentive ROE (1
st
and 2
nd
Complaint) -6.7 6.7 - - -
Cumulative Reserve $12.8 $20.7 $33.5 $5.7 $7.9 $13.6
PSNH WMECO
For the Years Ended December 31, For the Years Ended December 31,
 2013 2014 Total 2013 2014 Total
1
st
Complaint -Base ROE $2.3 $0.1 $ 2.4 $2.9 $0.2 $3.1
2
nd
Complaint -Base ROE -2.7 2.7 -3.7 3.7
Incentive ROE (1
st
and 2
nd
Complaint) - - - - 1.7 1.7
Cumulative Reserve $2.3 $2.8 $5.1 $2.9 $5.6 $8.5
As of December 31, 2014, the cumulative reserves above do not reflect refunds totaling $4.8 million at NU, $2.7 million at CL&P, $1 million at
NSTAR Electric, $0.5 million at PSNH and $0.6 million at WMECO for the first complaint refund period.
In the fourth quarter of 2014, we finalized our reserve analysis based on the October FERC order and our subsequent refund filing. As a result, the
net aggregate after-tax charge to 2014 earnings resulting from the June 19, 2014 and October 16, 2014 FERC orders totaled $22.4 million at NU,
$12.4 million at CL&P, $4.9 million at NSTAR Electric, $1.7 million at PSNH and $3.4 million at WMECO. In 2013, the aggregate after-tax charge
to earnings totaled $14.3 million at NU, $7.7 million at CL&P, $3.4 million at NSTAR Electric, $1.4 million at PSNH and $1.8 million at WMECO.
Regulatory Developments and Rate Matters

Each NU utility subsidiary is subject to the regulatory jurisdiction of the state in which it operates: CL&P and Yankee Gas operate in Connecticut
and are subject to PURA regulation; NSTAR Electric, WMECO and NSTAR Gas operate in Massachusetts and are subject to DPU regulation; and
PSNH operates in New Hampshire and is subject to NHPUC regulation.
In Connecticut, CL&P distribution rates were established in a 2014 PURA approved rate case. See – in this
 section for further information. Yankee Gas distribution rates were established in a 2011 PURA
approved rate case.
In Massachusetts, electric utility companies are required to file at least one distribution rate case every five years and natural gas companies to file at
least one distribution rate case every 10 years, and those companies are limited to one settlement agreement in any 10-year period. Pursuant to the
April 2012 DPU-approved Massachusetts comprehensive merger settlement agreements, NSTAR Electric, WMECO and NSTAR Gas are subject to
a base distribution rate freeze through December 31, 2015. On December 17, 2014, NSTAR Gas filed an application with the DPU to amend base
distribution rates, effective January 1, 2016.
In New Hampshire, PSNH is currently operating under the 2010 NHPUC approved distribution rate case settlement, which is effective through
June 30, 2015. Under the settlement, PSNH is permitted to file a request to collect certain exogenous costs and step increases on an annual basis.
See - in this  section for further information.