Eversource 2014 Annual Report Download - page 69

57
NORTHEAST UTILITIES AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
COMBINED NOTES TO FINANCIAL STATEMENTS
Refer to the Glossary of Terms included in this combined Annual Report on Form 10-K for abbreviations and acronyms used throughout the
combined notes to the financial statements.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. About NU, CL&P, NSTAR Electric, PSNH and WMECO
 NU is a public utility holding company primarily engaged through its wholly owned regulated utility subsidiaries in the energy
delivery business. On April 10, 2012, NU acquired NSTAR and its subsidiaries. See Note 21, "Merger of NU and NSTAR," for further information
regarding the merger. NU's wholly owned regulated utility subsidiaries consist of CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gas and
NSTAR Gas. NU provides energy delivery service to approximately 3.6 million electric and natural gas customers through these six regulated
utilities in Connecticut, Massachusetts and New Hampshire. On February 2, 2015, NU, CL&P, NSTAR Electric, PSNH and WMECO commenced
doing business as Eversource Energy.
NU, CL&P, NSTAR Electric, PSNH and WMECO are reporting companies under the Securities Exchange Act of 1934. NU is a public utility
holding company under the Public Utility Holding Company Act of 2005. Arrangements among the regulated electric companies and other NU
companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility property are subject to
regulation by the FERC. The Regulated companies are subject to regulation of rates, accounting and other matters by the FERC and/or applicable
state regulatory commissions (the PURA for CL&P and Yankee Gas, the DPU for NSTAR Electric, WMECO and NSTAR Gas, and the NHPUC for
PSNH).
 CL&P, NSTAR Electric, PSNH and WMECO furnish franchised retail electric service in Connecticut, Massachusetts and
New Hampshire. Yankee Gas and NSTAR Gas are engaged in the distribution and sale of natural gas to customers within Connecticut and central
and eastern Massachusetts, respectively. CL&P, NSTAR Electric, PSNH and WMECO's results include the operations of their respective
distribution and transmission businesses. PSNH and WMECO's distribution results include the operations of their respective generation businesses.
NU also has a regulated subsidiary, NPT, which was formed to construct, own and operate the Northern Pass line, a HVDC transmission line from
Québec to New Hampshire under development that will interconnect with a new HVDC transmission line being developed by a transmission
subsidiary of HQ.
 NUSCO, NU's service company, Rocky River Realty Company, a wholly-owned real estate subsidiary of NU, Renewable Properties, Inc., a
wholly-owned subsidiary of EETV, and Properties, Inc., a wholly-owned subsidiary of PSNH, provide support services to NU, including its regulated
companies. Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric, provides distribution service and ongoing support to
the Massachusetts Water Resources Authority. Hopkinton LNG Corp, an indirect, wholly-owned subsidiary of NU, provides natural gas
liquefaction, vaporization, and storage services for NSTAR Gas.
B. Basis of Presentation
The consolidated financial statements of NU, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries. Intercompany
transactions have been eliminated in consolidation. The accompanying consolidated financial statements of NU, NSTAR Electric and PSNH and the
financial statements of CL&P and WMECO are herein collectively referred to as the "financial statements."
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.
NU's consolidated financial information includes NSTAR and its subsidiaries'results of operations beginning April 10, 2012. The information
disclosed for the year ended December 31, 2012 for NSTAR Electric is presented on a comparable basis.
NU consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's, PSNH's and WMECO's combined ownership interest in each of these
entities is greater than 50 percent. Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC
companies have been eliminated in consolidation of the NU financial statements.
NU's utility subsidiaries are subject to the application of accounting guidance for entities with rate-regulated operations that considers the effect of
regulation resulting from differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries.
NU's utility subsidiaries'distribution, generation and transmission businesses and NPT are subject to rate-regulation that is based on cost recovery
and meets the criteria for application of rate-regulated accounting. See Note 2, "Regulatory Accounting," for further information.
Certain reclassifications of prior year data were made in the accompanying balance sheets for NU, CL&P, NSTAR Electric and PSNH. These
reclassifications were made to conform to the current year presentation.