Eversource 2014 Annual Report Download - page 77

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WMECO's and CL&P's (effective December 1, 2014) distribution revenue is decoupled from their customer sales volume. CL&P and WMECO
reconcile their annual base distribution rate recovery to a pre-established level of baseline distribution delivery service revenue. 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.
- CL&P, NSTAR Electric, PSNH and WMECO are responsible for their proportionate share of the
remaining costs of the CYAPC, YAEC and MYAPC nuclear facilities, including nuclear fuel storage. A portion of these amounts was recorded as a
regulatory asset. Amounts for CL&P are earning a return and are being recovered through the CTA. Amounts for NSTAR Electric and WMECO are
being recovered without a return through the transition charge. Amounts for PSNH were fully recovered in 2006. As a result of NU's consolidation
of CYAPC and YAEC, NU's regulatory asset balance also includes the regulatory assets of CYAPC and YAEC, which totaled $97.8 million and
$129.8 million as of December 31, 2014 and 2013, respectively. 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.
 NSTAR Electric's balance represents the contract termination liability related to certain purchase power
contract buy out agreements that were executed in 2004. The contracts'termination payments occur through September 2016 and are collected from
customers through NSTAR Electric's transition charge over the same period. NSTAR Electric does not earn a return on this regulatory asset.
PSNH's balance represents payments associated with the termination of various power purchase contracts that were recorded as regulatory assets and
are amortized over the remaining life of the contracts.
Other Regulatory Assets primarily include asset retirement obligations, environmental remediation costs, losses associated
with the reacquisition or redemption of long-term debt and various other items, partially offset by purchase price adjustments recorded as Regulatory
Assets in connection with the merger with NSTAR.
The components of regulatory liabilities are as follows:
NU As of December 31,
 2014 2013
Cost of Removal $439.9 $435.1
Regulatory Tracker Mechanisms 192.3 151.2
AFUDC -Transmission 67.1 68.1
Other Regulatory Liabilities 50.8 52.9
Total Regulatory Liabilities 750.1 707.3
Less: Current Portion 235.0 204.3
Total Long-Term Regulatory Liabilities $515.1 $503.0
As of December 31,
2014 2013
NSTAR NSTAR
 CL&P Electric PSNH WMECO CL&P Electric PSNH WMECO
Cost of Removal $19.7 $258.3 $50.3 $1.1 $29.1 $250.0 $49.7 $-
Regulatory Tracker Mechanisms 122.6 20.7 14.2 22.3 95.6 21.9 21.6 21.1
AFUDC –Transmission 53.6 4.4 -9.1 54.7 4.1 -9.3
Other Regulatory Liabilities 10.1 28.9 2.9 0.8 8.4 31.1 1.0 3.4
Total Regulatory Liabilities 206.0 312.3 67.4 33.3 187.8 307.1 72.3 33.8
Less: Current Portion 124.7 49.6 16.0 22.5 94.0 54.0 20.6 19.9
Total Long-Term Regulatory Liabilities $81.3 $262.7 $51.4 $10.8 $93.8 $253.1 $51.7 $13.9
 NU's Regulated companies currently recover amounts in rates for future costs of removal of plant assets over the lives of the
assets. The estimated cost to remove utility assets from service is recognized as a component of depreciation expense and the cumulative amounts
collected from customers but not yet expended is recognized as a regulatory liability. Expended costs that exceed amounts collected from customers
are recognized as regulatory assets, as they are probable of recovery in future rates.
- AFUDC was recorded by CL&P and WMECO for their NEEWS projects through May 31, 2011, all of which was reserved
as a regulatory liability to reflect rate base recovery for 100 percent of the CWIP as a result of FERC-approved transmission incentives. Effective
June 1, 2011, FERC approved changes to the ISO-NE Tariff in order to include 100 percent of the NEEWS CWIP in regional rate base. As a result,
CL&P and WMECO no longer record AFUDC on NEEWS CWIP. NSTAR Electric recorded AFUDC on reliability-related projects over $5 million
through December 31, 2014, 50 percent of which was recorded as a regulatory liability to reflect rate base recovery for 50 percent of the CWIP as a
result of FERC-approved transmission incentives.
 Other Regulatory Liabilities primarily includes amounts that are subject to various rate reconciling mechanisms that, as
of each period end date, would result in refunds to customers.
As a result of actions taken by the FERC and other developments in the pending base ROE complaint proceedings
described in Note 11E, "Commitments and Contingencies –FERC Base ROE Complaints," in 2014 the Company recorded reserves at its electric
subsidiaries to recognize the potential financial impact of the first and second complaints. As of December 31, 2014, the cumulative pre-tax reserves
(excluding interest), which exclude refunds for the first complaint refund period, totaled $60.7 million at NU, $33.5 million at CL&P, $13.6 million
at NSTAR Electric, $5.1 million at PSNH and $8.5 million at WMECO. As of December 31, 2013, as a result of the 2013 FERC ALJ initial
decision, the Company had an aggregate pre-tax reserve (excluding interest) of $23.7 million at NU, $12.8 million at CL&P, $5.7 million at NSTAR