Eversource 2014 Annual Report Download - page 70

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In accordance with accounting guidance on noncontrolling interests in consolidated financial statements, the Preferred Stock of CL&P and the
Preferred Stock of NSTAR Electric, which are not owned by NU or its consolidated subsidiaries and are not subject to mandatory redemption, have
been presented as noncontrolling interests in the financial statements of NU. The Preferred Stock of CL&P and the Preferred Stock of NSTAR
Electric are considered to be temporary equity and have been classified between liabilities and permanent shareholders'equity on the balance sheets
of NU, CL&P and NSTAR Electric due to a provision in the preferred stock agreements of both CL&P and NSTAR Electric that grant preferred
stockholders the right to elect a majority of the CL&P and NSTAR Electric Board of Directors, respectively, should certain conditions exist, such as
if preferred dividends are in arrears for a specified amount of time. The Net Income reported in the statements of income and cash flows represents
net income prior to apportionment to noncontrolling interests, which is represented by dividends on preferred stock of CL&P and NSTAR Electric.
As of December 31, 2014 and 2013, NU's carrying amount of goodwill was approximately $3.5 billion. NU performs an assessment for possible
impairment of its goodwill at least annually. NU completed its annual goodwill impairment test for each of its reporting units as of October 1, 2014
and determined that no impairment exists. See Note 22, "Goodwill," for further information.
C. Accounting Standards
 On January 1, 2014, as required, NU prospectively adopted the Financial Accounting Standards Board's
(FASB) final Accounting Standards Updates (ASU) that required presentation of certain unrecognized tax benefits as reductions to deferred tax
assets. Implementation of this guidance had an immaterial impact on the balance sheets and no impact on the results of operations or cash flows of
NU, CL&P, NSTAR Electric, PSNH and WMECO.
In May 2014, the FASB issued ASU 2014-09, , effective
January 1, 2017, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period
presented or cumulatively at the date of initial application). Management is reviewing the requirements of the ASU. The ASU's impact is not
expected to have a material impact on the financial statements of NU, CL&P, NSTAR Electric, PSNH and WMECO.
D. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and short-term cash investments that are highly liquid in nature and have original maturities of three
months or less. At the end of each reporting period, any overdraft amounts are reclassified from Cash and Cash Equivalents to Accounts Payable on
the balance sheets.
E. Provision for Uncollectible Accounts
NU, including CL&P, NSTAR Electric, PSNH and WMECO, presents its receivables at estimated net realizable value by maintaining a provision for
uncollectible accounts. This provision is determined based upon a variety of judgments and factors, including the application of an estimated
uncollectible percentage to each receivable aging category. The estimate is based upon historical collection and write-off experience and
management's assessment of collectability from customers. Management continuously assesses the collectability of receivables and adjusts
collectability estimates based on actual experience. Receivable balances are written off against the provision for uncollectible accounts when the
accounts are terminated and these balances are deemed to be uncollectible.
The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under
financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 90 days. The DPU allows WMECO to also
recover in rates amounts associated with certain uncollectible hardship accounts receivable. Uncollectible customer account balances, which are
expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets.
The total provision for uncollectible accounts and for uncollectible hardship accounts, which is included in the total provision, are included in
Receivables, Net on the balance sheets, and were as follows:
Total Provision for Uncollectible Accounts Uncollectible Hardship
As of December 31, As of December 31,
 2014 2013 2014 2013
NU
$175.3 $171.3 $91.5 $81.2
CL&P 84.3 82.0 74.0 67.3
NSTAR Electric
40.7 41.7 - -
PSNH 7.7 7.4 - -
WMECO 9.9 10.0 6.2 5.5
F. Fuel, Materials and Supplies and Allowance Inventory
Fuel, Materials and Supplies include natural gas, coal, biomass and oil inventories as well as materials purchased primarily for construction or
operation and maintenance purposes. Natural gas, coal, biomass and oil inventories are valued at their respective weighted average cost. Materials
and supplies are valued at the lower of average cost or market. As of December 31, 2014, NU and PSNH had $164.3 million and $95.1 million,
respectively, of fuel and $185.4 million and $53 million, respectively, of materials and supplies. As of December 31, 2013, NU and PSNH had
$139.5 million and $74.2 million, respectively, of fuel and $163.7 million and $54.5 million, respectively, of materials and supplies.
Fuel, Materials and Supplies also include Renewable Energy Certificates (RECs), which are purchased from suppliers of renewable sources of
generation. RECs are used to meet state mandated Renewable Portfolio Standards requirements. As of December 31, 2014 and 2013, NSTAR
Electric had $25.1 million and $4.9 million, respectively, of RECs classified as Materials and Supplies on the balance sheets.
PSNH is subject to federal and state laws and regulations that regulate emissions of air pollutants, including SO2, CO2, and NOxrelated to its
regulated generation units, and uses SO2, CO2, and NOxemissions allowances. At the end of each compliance period, PSNH is required to relinquish
SO2, CO2, and NOxemissions allowances corresponding to the actual respective emissions emitted by its generating units over the compliance