Eversource 2014 Annual Report Download - page 60

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Our Operating Revenues increased in 2013, as compared to 2012, due primarily to the addition of NSTAR's operations. During the first quarter of
2013, the former operating subsidiaries of NSTAR contributed approximately $800 million of operating revenues. Absent the first quarter 2013
NSTAR operating revenues, our Operating Revenues increased approximately $227 million, as compared to 2012, due primarily to:
A $62.5 million increase in transmission revenues, net of applicable eliminations, as a result of the recovery of higher transmission
expenses and continuing investments in our transmission infrastructure. The increase was partially offset by the establishment of a reserve
related to the FERC ALJ initial decision in the third quarter of 2013.
A $34.3 million increase in base electric distribution revenues, net of applicable eliminations, reflecting an increase of approximately
1 percent in retail electric sales. The increase in sales volumes was driven primarily by the colder winter weather experienced throughout
our service territories in early and late 2013. In addition, the increase in revenues resulted from the NHPUC-approved distribution rate
increases at PSNH effective July 1, 2012 and July 1, 2013 as a result of the 2010 distribution rate case settlement. These positive impacts
on revenue were partially offset by the impact of our utility-sponsored energy efficiency programs.
A $28.8 million increase in firm natural gas distribution revenues. This increase was driven by the colder winter weather in early and late
2013, residential customer growth, an increase in natural gas conversions, the migration of interruptible customers switching to firm service
rates and the addition of gas-fired distributed generation.
The remaining increase was due primarily to higher revenues from increases related to our fully reconciling cost recovery mechanisms
(tracked costs) related to the recovery of energy supply, retail transmission and utility-sponsored energy efficiency programs. Revenues
related to cost recovery mechanisms vary from period to period based on the timing of collections of the costs incurred. These revenues do
not result in an impact on earnings.
Purchased Power, Fuel and Transmission increased in 2013, as compared to 2012, due primarily to the following:
 Increase/(Decrease)
The addition of NSTAR's operations $ 321.4
Transmission segment costs 70.8
Firm natural gas sales related costs 42.0
Partially offset by:
Electric distribution segment fuel and energy supply costs (13.9)
CfDs and capacity contracts (12.0)
All other items (9.7)
$398.6
Operations and Maintenance decreased in 2013, as compared to 2012, due primarily to the following:
 Increase/(Decrease)
The addition of NSTAR's operations $ 123.6
Partially offset by:
Integration, merger and settlement agreement costs (150.3)
NU's unregulated contracting business costs (17.4)
General and administrative costs (12.9)
Transmission segment costs (5.2)
Natural gas segment costs 10.5
Electric distribution segment costs 1.3
All other items (17.7)
$(68.1)
Depreciation increased in 2013, as compared to 2012, due primarily to the addition of NSTAR ($54.2 million) and the consolidation of CYAPC and
YAEC ($13.7 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 increased in 2013, as compared to 2012, due primarily to the following:
 Increase/(Decrease)
The addition of NSTAR's operations $ 45.8
Recovery of transition costs at NSTAR Electric 91.9
Amortization related to CL&P's SBC and CTA (6.8)
Other (4.4)
$126.5
Amortization of Rate Reduction Bonds decreased in 2013, as compared to 2012, due primarily to the maturity of NSTAR Electric's, PSNH's, and
WMECO's RRBs in 2013, partially offset by the addition of NSTAR Electric's amortization ($15.1 million).
Energy Efficiency Programs increased in 2013, as compared to 2012, due primarily to the addition of NSTAR's operations ($68.6 million), as well
as an increase in energy efficiency costs in accordance with the three-year program guidelines established by the DPU at NSTAR Electric and
WMECO. All costs are fully recovered through DPU-approved tracking mechanisms and therefore do not impact earnings.