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2015
Annual Report

Table of contents

  • Page 1
    2015 Annual Report

  • Page 2
    ... $36.07 $39.08 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Total Shareholder Return (Assumes $100 invested on December 31, 2010 with all dividends reinvested) $200 $150 $100 2010 2011 2012 2013 2014 2015 Eversource Energy EEI Index S&P 500 $100 $100 $100 $117 $120 $102 $131...

  • Page 3
    ... of Financial Condition and Results of Operations," in the accompanying Form 10-K for a reconciliation to GAAP. Company Profile Eversource Energy (NYSE:ES), a Fortune 500 and Standard & Poor's 500 energy company based in Connecticut, Massachusetts and New Hampshire, operates New England's largest...

  • Page 4
    ... same time effectively managing our financial and operating risks. In April, Standard and Poor's Ratings Services raised its corporate credit rating for the Eversource family of companies to "A" with a stable outlook, the top rating among our electric utility peers. Also in 2015, Moody's Investor...

  • Page 5
    ... volatile energy markets and the potential for skyrocketing prices like we have experienced in many recent winters. Eversource understands the region's dilemma and has taken the lead in addressing it. Two of our projects, Access Northeast and Northern Pass, will provide New England customers with...

  • Page 6
    ... 11,415 Eversource customers in Connecticut and Massachusetts installed natural gas space heating in their homes and businesses, and we expect that figure to climb to 12,500 in 2016. Energy efficiency investments and customer programs continue to be critical to our company's long-term success. We...

  • Page 7
    ...Street Berlin, Connecticut 06037-1616 Telephone: (860) 665-5000 NSTAR ELECTRIC COMPANY (a Massachusetts corporation) 800 Boylston Street Boston, Massachusetts 02199 Telephone: (617) 424-2000 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE (a New Hampshire corporation) Energy Park 780 North Commercial Street...

  • Page 8
    ... which the following series are outstanding: 4.25% 4.78% Series Series NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company each meet the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and each is therefore filing this...

  • Page 9
    ... filer" in Rule 12b-2 of the Exchunge Act. (Check one): Large Accelerated Filer Eversource Energy The Connecticut Light und Power Compuny NSTAR Electric Compuny Public Service Compuny of New Humpshire Western Mussuchusetts Electric Compuny Accelerated Filer Non-accelerated Filer Indicute by...

  • Page 10
    ... NSTAR Electric Cmmpany PSNH Public Service Cmmpany mf New Hampshire WMECO Western Massachusetts Electric Cmmpany NSTAR Gas NSTAR Gas Cmmpany Yankee Gas Yankee Gas Services Cmmpany NPT Nmrthern Pass Transmissimn LLC Eversmurce Service Eversmurce Energy Service Cmmpany (effective January 1, 2014...

  • Page 11
    ...Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour) Lost Base Revenue Liquefied natural gas Supplier of last resort service Manufactured Gas Plant One million British thermal units Moody's Investors Services, Inc. Megawatt Megawatt-Hours New England East...

  • Page 12
    EVERSOURCE ENERGY 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 2015 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Page PART I Item 1. Item 1A. Item 1B. Item 2. ...

  • Page 13
    ... Annual Report on Form 10-" to "Eversource," "the Company," "we," "our," and "us" refer to Eversource and its consolidated subsidiaries. On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy. CL&P, NSTAR Electric, PSNH and WMECO are each doing business...

  • Page 14
    ...Massachusetts; and Yankee Gas Services Company (Yankee Gas), a regulated natural gas utility that serves residential, commercial and industrial customers in parts of Connecticut. • • • • • CL&P, NSTAR Electric, PSNH and WMECO also serve New England customers through Eversource Energy...

  • Page 15
    ... their energy suppliers, while CL&P remains their electric distribution company. For those customers who do not choose a competitive energy supplier, under SS rates for customers with less than 500 kilowatts of demand, and LRS rates for customers with 500 kilowatts or more of demand, CL&P purchases...

  • Page 16
    ... pund expenses associated with: various hardship and low income programs; a program to compensate municipalities por losses in property tax revenue due to decreases in the value op electric generating pacilities resulting directly prom electric industry restructuring. The SBC is reconciled annually...

  • Page 17
    .... Both NSTAR Electric and WMECO purchase power from competitive suppliers on behalf of, and pass the related cost through to, their respective customers who do not choose a competitive energh supplier (basic service). Most of the residential customers of NSTAR Electric and WMECO have continued...

  • Page 18
    ... charge to collect costs for energy efficiency programs. Reconciling adjustment charges that recover certain DPU-approved costs as follows: pension and PBOP benefits, low income customer discounts, lost revenue and credits associated with net-metering facilities installed by customers, storms...

  • Page 19
    ... costs, in order to attract needed capital and maintain their financial integrity, while also protecting relevant public interests. Under New Hampshire law, all of PSNH's customers are entitled to choose competitive energy suppliers, with PSNH providing default energy service under its ES rate...

  • Page 20
    ... affecting PSNH's default energy service rate, how PSNH will maintain just and reasonable rates in light of those conditions, and any impact of PSNH's generation ownership on the New Hampshire competitive electric market. In April 2014, the NHPUC staff issued a "Preliminary Status Report Addressing...

  • Page 21
    ... FERC approved formula rates. Transmdssdon revenues are collected from New England customers, the majordty of whdch are ddstrdbutdon customers of CL&P, NSTAR Electrdc, PSNH and WMECO. The transmdssdon rates provdde for the annual reconcdldatdon of estdmated to actual costs. The fdnancdal dmpacts...

  • Page 22
    ... of low demand. NSTAR Gas and Yankee Gas generate revenues primarily through the sale and/or transportation of natural gas. Predominantly all residential customers in the NSTAR Gas service territory buy gas supply and delivery from NSTAR Gas while all customers may choose their natural gas suppliers...

  • Page 23
    ... financial integrity, while also protecting relevant public interests. Retail natural gas delivery and supply rates are established by the DPU and the PURA and are comprised of: • A distribution charge consisting of a fixed customer charge and a demand and/or energy charge that collects the costs...

  • Page 24
    ... and supplies are used to deliver and store natural gas in market area underground storage faiilities loiated in the New York and Pennsylvania regions. Stored natural gas is withdrawn during the winter season to supplement flowing pipeline supplies in order to meet firm heating demand. NSTAR Gas has...

  • Page 25
    ... power purchase agreements with CL&P, NSTAR Electric, PSNH and WMECO and several other New England utilities. The decommissioning rates charged by the Yankee Companies have been reduced to zero. CL&P, NSTAR Electric, PSNH and WMECO can recover these costs from, or refund proceeds to, their customers...

  • Page 26
    ... law. The costs of both the RECs and alternative compliance payments are recovered by PSNH through its default energy service rates charged to customers. Similarly, Connecticut's RPS statute requires increasing percentages of the electricity sold to retail customers to have direct ties to renewable...

  • Page 27
    ...at which site Eversource Energy's, CL&P's, NSTAR Electric's, PSNH's and WMECO's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports may be reviewed. Information contained on the Company's website or that can be accessed through...

  • Page 28
    constitute a part of this Annual Report on Form 10-K. Printed copies of these reports may be obtained free of charge by writing to our Investor Relations Department at Eversource Energy, 107 Selden Street, Berlin, CT 06037. Item 1A. Risk Factors In addition to the matters set forth under "Safe ...

  • Page 29
    ...flows. Increases in electric and gas prices and/or a weak economy can lead to changes in legislative and regulatory policy promoting increased energy efficiency, conservation, and self-generation and/or a reduction in our customers' ability to pay their bills, which may adversely impact our business...

  • Page 30
    ... on thd busindss, rdsults of opdrations, cash flow and financial condition of Evdrsourcd Endrgy and dach of its utility subsidiarids. Limits on our access to and increases in the cost of capital may adversely impact our ability to execute our business plan. Wd usd short-tdrm ddbt and thd long-tdrm...

  • Page 31
    ...'s ability to access its commercial paper program or the long-term debt and equity capital markets. Prior to funding Eversource parent, the subsidiary companies have financial obligations that must be satisfied, including among others, their operating expenses, debt service, preferred dividends...

  • Page 32
    ...Claimed Capability** (kilowatts) Solar Fixed Tilt, Photovoltaic 3 2010-14 8,000 ** Claimed capability represents the direct current nameplate capacity of the plant. CL&P and NSTAR Electric do not own any electric generating plants. Natural Gas Distribution System As of December 31, 2015, Yankee...

  • Page 33
    ... applicable to NSTAR Electric (described above) is also applicable to WMECO. Yankee Gas Yankee Gas holds valid franchises to sell natural gas in the areas in which Yankee Gas supplies natural gas service, which it acquired either directly or from its predecessors in interest. Generally, Yankee Gas...

  • Page 34
    ... table sets forth the executive officers of Eversource Energy as of February 16, 2016. All of the Company's officers serve terms of one year and until their successors are elected and qualified: Name Thomas J. May James J. Judge Leon J. Olivier David R. McHale Werner J. Schweiger Gregory B. Butler...

  • Page 35
    ... President of CL&P since June 2, 2015 and as Chief Executive Officer of CL&P, NSTAR Electric, NSTAR Gas, PSNH, WMECO and Yankee Gas since August 11, 2014, and as a Director of Eversource Service, NSTAR Gas and Yankee Gas since September 29, 2014 and of CL&P, PSNH, NSTAR Electric and WMECO since May...

  • Page 36
    ...of Eversource Energy, CL&P, PSNH, WMECO, Yankee Gas and Eversource Service from June 2009 until April 10, 2012. From June 2006 through January 2009, Mr. Buth served as the Vice President and Controller for New Jersey Resources Corporation, an energy services holding company that provides natural gas...

  • Page 37
    ... consist of open market purchases made by the Company or an independent agent. These share transactions related to shares awarded under the Company's Incentive Plan and Dividend Reinvestment Plan and matching contributions under the Eversource 401k Plan. Total Number of Shares Purchased as Part of...

  • Page 38
    ... Common Shareholders' Equity. The closing market price divided by the book value per share. (c) (d) (e) (f) (g) (h) See the Combined Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for a description of any accounting changes materially affecting the comparability of...

  • Page 39
    ... Financial Data (Unaudited) and CL&P Selected Sales Statistics have been omitted from this report but are set forth in the Annual Report on Form 10-K for 2015 filed with the SEC on a combined basis with Eversource Energy on February 26, 2016. Such report is also available in the Investors section...

  • Page 40
    ... as the "financial statements." On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy. CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy. Refer to the Glossary of Terms included in this combined Annual Report on Form 10...

  • Page 41
    ...result of the DPU order, in the first quarter of 2015 NSTAR Electric increased its regulatory assets and reduced its operations and maintenance expense by $24.2 million for energy-related bad debt costs through 2014, resulting in after-tax earnings of $14.5 million. NSTAR Electric filed for recovery...

  • Page 42
    ... in 2015, as compared to 2014. Our natural gas distribution segment earnings were favorably impacted by a decrease in operations and maintenance costs primarily attributable to lower employee-related expenses, a lower effective tax rate in 2015, and additional natural gas heating customers. These...

  • Page 43
    ... 4, 2015, the DPU approved NSTAR Electric's request to extend the authorization period for issuance of up to $250 million in long-term debt from December 31, 2015 to December 31, 2016. Credit Agreements and Commercial Paper Programs: Eversource parent, CL&P, PSNH, WMECO, NSTAR Gas and Yankee Gas are...

  • Page 44
    ..., respectively. Each of Eversource, CL&P, NSTAR Electric, PSNH and WMECO use its available capital resources to fund its respective construction expenditures, meet debt requirements, pay operating costs, including storm-related costs, pay dividends and fund other corporate obligations, such as...

  • Page 45
    ... in 2015, $58.3 million in 2014, and $44.7 million in 2013 related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company. Natural Gas Transmission Business: Access Northeast: Access Northeast is a natural gas pipeline...

  • Page 46
    ... siting applications are expected to be filed. All GHCC projects are expected to be completed by late 2018. As of December 31, 2015, CL&P had capitalized $50.6 million in costs associated with GHCC. Northern Pass: Northern Pass is Eversource's planned HVDC transmission line from the Québec-New...

  • Page 47
    ... plan (expansion plan) filed by Yankee Gas and other Connecticut natural gas distribution companies. The expansion plan described how Yankee Gas expects to add approximately 82,000 new natural gas heating customers over a 10-year period. Yankee Gas estimated that its portion of the plan would cost...

  • Page 48
    ...subsmdmarmes mn 2015, 2014 and 2013. In 2015, yversource recognmzed an after-tax charge to earnmngs (excludmng mnterest) of $12.4 mmllmon, of whmch $7.9 mmllmon was recorded at CL&P, $1.4 mmllmon at NSTAR ylectrmc, $0.6 mmllmon at PSNH, and $2.5 mmllmon at WMyCO. The net aggregate aftertax charge to...

  • Page 49
    ... program. See New Hampshire - Distribution Rates in this Regulatory Developments and Rate Matters section for further information. Electric and Natural Gas Retail Rates: The Eversource EDCs obtain and resell power to retail customers who choose not to buy energy from a competitive energy supplier...

  • Page 50
    ... increased its operating revenues and decreased its amortization expense in 2015, resulting in the recognition of a $13 million after-tax benefit. NSTAR Electric Basic Service Bad Debt Adder: On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-related...

  • Page 51
    ... and Maintenance expense on the statements of income. Upon completion of the divestiture process, all remaining stranded costs will be recovered via bonds that will be secured by a non-bypassable charge or through other recoveries in rates billed to PSNH's customers. For further information on the...

  • Page 52
    ... month. Billed revenues are based on these meter readings, and the majority of our recorded annual revenues is based on actual billings. Because customers are billed throughout the month based on pre-determined cycles rather than on a calendar month basis, an estimate of electricity or natural gas...

  • Page 53
    ... by 50 basis points: (Milliots of Dollars) Assumption Change Eversource Increase in Pension Plan Cost Increase in PBOP Plan Cost As of December 31, 2015 2014 2015 2014 Lower expected long-term rate of return Lower discount rate Higher compensation rate $ $ $ 20.6 26.3 12.4 $ $ $ 19.3 19.1 10...

  • Page 54
    ... stock and long-term debt. Changes in fair value of the Regulated company derivative contracts are recorded as Regulatory Assets or Liabilities, as we recover the costs of these contracts in rates charged to customers. These valuations are sensitive to the prices of energy and energy-related...

  • Page 55
    ... 1,994.4 11.2 9.6 69.4 1,599.8 6,474.7 Long-term debt maturities exclude the CYAPC pre-1983 spent nuclear fuel obligation, net unamortized premiums, discounts and debt issuance costs, and other fair value adjustments. Estimated interest payments on fixed-rate debt are calculated by multiplying the...

  • Page 56
    ...of Dollars) 2015 2014 Increase/ (Decrease) Percent Operating Revenues Operating Expenses: Purchased Pmwer, Fuel and Transmissimn Operatimns and Maintenance Depreciatimn Ammrtizatimn mf Regulatmry Assets, Net Energy Efficiency Prmgrams Taxes Other Than Incmme Taxes Tmtal Operating Expenses Operating...

  • Page 57
    ... revenues decreased due primarily to the sale of Eversource's unregulated contracting business on April 13, 2015 ($55 million). Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity and natural gas on behalf of our customers. These energy supply costs...

  • Page 58
    ... are recoverep from customers im rates amp have mo impact om earmimgs. Amortizatiom of Regulatory Assets, Net, imcreasep im 2015, as comparep to 2014, pue primarily to the followimg: (Millions of Dollars) Increase/(Decrease) CL&P: Amortizatiom imcrease (imclupimg storm cost recovery) approvep amp...

  • Page 59
    ... service territories in Connecticut and Massachusetts. Weather-normalized total firm natural gas sales volumes (based on 30year average temperatures) increased 2.9 percent in 2014, as compared to 2013, due primarily to residential and commercial customer growth. Base electric distribution revenues...

  • Page 60
    ..., Net, decreased in 2014, as compared to 2013, due primarily to the following: (Millions of Dollars) Increase/(Decrease) NSTAR Electric (primarily recovery of transition costs) PSNH (primarily default energy service charge) CL&P (primarily energy supply and energy-related costs) WMECO (primarily...

  • Page 61
    ... nuclear fuel litigation received by CL&P, NSTAR Electric, PSNH and WMECO from the Yankee Companies, the absence of 2013 cash disbursements for major storm restoration costs, the decrease of approximately $130 million in Pension and PBOP Plan cash contributions and changes in the timing of working...

  • Page 62
    ... companies, natural gas and electric utilities, oil and gas producers, financial institutions, and other energy marketers. Margin accounts exist within this diverse group, and we realize interest receipts and payments related to balances outstanding in these margin accounts. This wide customer...

  • Page 63
    Item 8. Eversource Financial Statements and Supplementary Data Company Report on Internal Controls Over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Financial Statements 51

  • Page 64
    ... the accompanying consolidated financial statements of Eversource Energy and subsidiaries (Eversource or the Company) and of other sections of this annual report. Eversource's internal controls over financial reporting were audited by Deloitte & Touche LLP. Management is responsible for establishing...

  • Page 65
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Trustees and Shareholders of Eversource Energy: We have audited the accompanying consolidated balance sheets of Eversource Energy and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated ...

  • Page 66
    EVERSOURCE ENERGY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, (Thousands of Dollars) ASSETS Current Assets: Cash and Cash Equivalents Receivables, Net Unbilled Revenues Taxes Receivable Fuel, Materials and Supplies Regulatory Assets Prepayments and Other Current Assets Total ...

  • Page 67
    ... Revenues Operating Expenses: Purchased Pswer, Fuel and Transmissisn Operatisns and Maintenance Depreciatisn Amsrtizatisn sf Regulatsry Assets, Net Amsrtizatisn sf Rate Reductisn Bsnds Energy Efficiency Prsgrams Taxes Other Than Incsme Taxes Tstal Operating Expenses Operating Incsme Interest Expense...

  • Page 68
    ... Loss Balance as of December 31, 2014 Net Income Dividends on Common Shares - $1.67 Per Share Dividends on Preferred Stock Issuance of Common Shares, $5 Par Value Long-Term Incentive Plan Activity Increase in Treasury Shares Other Changes in Shareholders' Equity Other Comprehensive Income Balance as...

  • Page 69
    ... The 2015 financial statements for CL&P, NSTAR Electric, PSNH and WMECO have been omitted from this report but are set forth in the Annual Report on Form 10-K for 2015 filed with the SEC on a combined basis with Eversource Energy on February 26, 2016. Such report is also available in the Investors...

  • Page 70
    ... CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gab and NSTAR Gab. Everbource provideb energy delivery bervice to approximately 3.6 million electric and natural gab cubtomerb through thebe bix regulated utilitieb in Connecticut, Mabbachubettb and New Hampbhire. On April 30, 2015, the Company'b legal name...

  • Page 71
    ...Accounting Stenderds Accounting Standards Issued but not Yet Effective: InsMays2014,sthesFinancialsAccountingsStandardssBoards(FASB)sissuedsansAccountingsStandardss Updates(ASU)s2014-09,sRevenue from Contracts with Customers... and Measurement of Financial Assets and Liabilities,s... Accounts Eversource,...

  • Page 72
    ..., are included in Receivables, Net on the balance sheets, and were as follows: Total Provision for Uncollectible Accounts As of December 31, 2015 2014 Uncollectible Hardship As of December 31, 2015 2014 (Millions of Dollars) Eversource CL&P NSTAR Electric PSNH WMECO $ 190.7 79.5 52.6 8.7 14...

  • Page 73
    ... are included in Other Income, Net on the statements of income. Regional Decommissioned Nuclear Companies: CL&P, NSTAR Electric, PSNH and WMECO own common stock in three regional nuclear generation comhanies (CYAPC, YAEC and MYAPC, collectively referred to as the Yankee Comhanies), each of which...

  • Page 74
    ...CL&P, NSTAR Eldctric, PSNH and WMECO dach havd a rdtail transmission cost tracking mdchanism as part of thdir ratds, which allows thd dldctric distribution companids to chargd thdir rdtail customdrs for transmission costs on a timdly basis. L. Operating Expenses Costs rdlatdd to fudl and natural gas...

  • Page 75
    ... Net of Amounts Capitalized Income Taxes Non-Cash Investing Activities: Plant Additions Included in Accounts Payable (As of) $ 365.9 10.3 216.6 $ 349.6 334.2 181.9 $ 343.3 50.0 193.1 As of and For the Years Ended December 31, 2015 (Millions of Dollars) CL&P NSTAR Electric PSNH WMECO CL&P 2014...

  • Page 76
    ... Eversource financial statements. Included in the CL&P, NSTAR Electric, PSNH and WMECO balance sheets as of December 31, 2015 and 2014 were Accounts Receivable from Affiliated Companies and Accounts Payable to Affiliated Companies relating to transactions between CL&P, NSTAR Electric, PSNH and WMECO...

  • Page 77
    ... regarding income taxes, see Note 10, "Income Taxes," to the financial statements. Storm Restoration Costs: The storm restoration cost deferrals relate to costs incurred for major storm events at CL&P, NSTAR Electric, PSNH and WMECO that each company expects to recover from customers. A storm must...

  • Page 78
    ... 31, 2015 and 2014, respectively. Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements. Other Regulatory Assets: Other Regulatory Assets primarily include asset retirement...

  • Page 79
    ...increased its operating revenues and decreased its amortization expense in 2015, resulting in the recognition of a $21.7 million pre-tax benefit in 2015. NSTAR Electric Basic Service Bad Debt Adder: On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-related...

  • Page 80
    ... 31, 2015 NSTAR Electric (Years) Eversource CL&P PSNH WMECO Distribution Transmission Generation Other 34.8 41.6 30.7 14.1 37.3 38.7 - 31.9 43.8 - 31.3 41.6 30.9 - 30.5 50.0 25.0 - 4. DERIVATIVE INSTRUMENTS The Regulated companies purchase and procure energy and energy-related products...

  • Page 81
    ... MWh of energy per year through 2018 and a capacity-related contract to purchase up to 35 MW per year through 2019. As of December 31. 2015 and 2014. Eversource had NYMEX financial contracts for natural gas futures in order to reduce variability associated with the purchase price of approximately...

  • Page 82
    ... energy and energy-related products, and accounting requirements. The future power and capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full time...

  • Page 83
    ... in current and long-term Marketable Securities on the balance sheets. As of December 31, 2015 Amortized Cost Pre-Tax Unrealized Gains Pre-Tax Unrealized Losses Amortized Cost Pre-Tax Unrealized Gains 2014 Pre-Tax Unrealized Losses (Millions of Dollars) Fair Value Fair Value Eversource Debt...

  • Page 84
    ...trades and benchmark yields. Other fixed income securities are valued using pricing models, quoted prices of securities with similar characteristics, and discounted cash flows. 6. ASSET RETIREMENT OBLIGATIONS Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, recognizes a liability for the...

  • Page 85
    ...the commercial paper programs are included in Notes Payable for Eversource and NSTAR Electric and are classified in current liabilities on the balance sheets as all borrowings are outstanding for no more than 364 days at one time. Intercompany loans from Eversource parent to CL&P, PSNH and WMECO are...

  • Page 86
    ...: 4.375% Fixed Rate Tax Exempt due 2028 1.550% Fixed Rate Tax Exempt due 2031 Total Pollution Control Revenue Bonds Pre-1983 Spent Nuclear Fuel Obligation Less Amounts due Within One Year Unamortized Premiums and Discounts, Net Unamortized Debt Issuance Costs(1) CL&P Long-Term Debt(1) NSTAR Electric...

  • Page 87
    ... - Accounting Standards," for further information. The fair value adjustment amount is the purchase price adjustment, net of amortization, required to record the NSTAR long-term debt at fair value on the date of the merger. (2) Long-Term Debt Issuances: On January 15, 2015, Eversource parent...

  • Page 88
    ... exclude the CYAPC pre-1983 spent nuclear fuel obligation, net unamortized premiums, discounts and debt issuance costs, and other fair value adjustments as of December 31, 2015: (Millions of collars) Eversource CL&P NSTAR Electric PSNH WMECO 2016 2017 2018 2019 2020 Thereafter Total $ $ 200...

  • Page 89
    ... of NSTAR Electric & Gas were attributed by participant and transferred to the applicable operating company's balance sheets. This change had no impact on the income statement or net assets of NSTAR Electric or Eversource. The Pension and SERP Plans are accounted for under the multiple-employer...

  • Page 90
    ... in calculating the Pension and SERP Plans' year end funded status: Pension and SERP As of Decembe4 31, 2015 2014 Discount Rate Compensation/Progression Rate 4.21 % - 4.60 % 3.50% 4.20 % 3.50 % Pension and SERP Expense: Eversource charges net periodic pension expense to its subsidiaries based on...

  • Page 91
    ... the Year Ended December 31, 2015 NSTAR CL&P Electric PSNH (1) (Millions of Dollars) Eversource (1) WMECO Service Cost Interest Cost Expected Return on Pension Plan Assets Actuarial Loss Prior Service Cost/(Credit) Total Net Periodic Benefit Expense Intercompany Allocations Capitalized Pension...

  • Page 92
    ... of NSTAR Electric & Gas were attributed by participant and transferred to the applicable operating company's balance sheets. This change had no impact on the income statements or net assets of NSTAR Electric or Eversource. The PBOP Plan is accounted for under the multiple-employer approach...

  • Page 93
    ...Plan's ymar mnd fundmd status: PBOP As of December 31, 2015 2014 Discount Ratm Hmalth Carm Cost Trmnd Ratm 4.62 % 6.25 % 4.22 % 6.50 % PBOP Expense... 31, 2015 NSTAR CL&P Electric PSNH (Millions of Dollars) Eversource WMECO Smrvicm Cost Intmrmst Cost Expmctmd Rmturn on Plan Assmts Actuarial...

  • Page 94
    ... 31, 2015 2014 Expected 2016 Expense AOCI as of December 31, 2015 2014 Expected 2016 Expense (Millions of Dollars) Actuarial Loss Prior Service Credit $ 152.2 (1.3) $ 192.7 $ (1.8) 4.0 $ (0.2) 6.3 - $ 6.0 - $ 0.4 - Estimated Future Benefit Payments: The following benefit payments, which...

  • Page 95
    ... As of December 31, 2014 Pension Plan and Tax-Exempt Assets Within PBOP Plan Target Asset Allocation Assumed Rate of Return Equity Securities: United States International Emerging Markets Private Equity Debt Securities: Fixed Income High Yield Fixed Income Emerging Markets Debt Real Estate and...

  • Page 96
    ... not eligible to actively participate in the Eversource Pension Plan. The total defined Eversource 401k Plan employer matching contributions, including the K-Vantage contributions, were as follows: NSTAR Electric (Millions of Dollars) Eversource CL&P PSNH WMECO 2015 2014 2013 $ 30.4 29.7 37...

  • Page 97
    ..., CL&P, NSTAR Electric, PSNH and WMECO record compensation expense related to these awards, as applicable, for shares issued or sold to their respective employees and officers, as well as for the allocation of costs associated with shares issued or sold to Eversource's service company employees and...

  • Page 98
    ... compensation expense and associated future income tax benefits recognized by Eversource, CL&P, NSTAR Electric, PSNH and WMECO for sfare-based compensation awards were as follows: Eversource (Millions of Dollars) 2015 For the Years Ended Decem4er 31, 2014 2013 Compensation Expense Future Income Tax...

  • Page 99
    ...&P 2015 NSTAR Electric PSNH WMECO For the Years Ended December 31, 2014 NSTAR CL&P Electric PSNH WMECO CL&P 2013 NSTAR Electric PSNH WMECO Current Income Taxes: Federal State Total Current Deferred Income Taxes, Net: Federal State Total Deferred Investment Tax Credits, Net Income Tax Expense...

  • Page 100
    ... Tax Credits utate Income Taxes, Net of Federal Impact Tax Asset Valuation Allowance/Reserve Adjustments Other, Net Income Tax Expense Effective Tax Rate CL&P $ 476.8 $ 2015 NSTAR Electric PSNH 572.6 $ 187.5 WMECO $ 93.5 $ For the Years Ended December 31, 2014 NSTAR CL&P Electric PSNH WMECO...

  • Page 101
    ... - 2032 2031 - 2035 2016 - 2018 2015 - 2020 2015 - 2019 (Millions of Dollars) Eversource CL&P As of December 31, 2014 NSTAR Electric PSNH WMECO Expiration RangeE E Federal Net Operating Loss Federal TaB Credit Federal Charitable Contribution State TaB Credit State Loss Carryforwards State...

  • Page 102
    ...CL&P, $72 million for NSTAR Electric, $46 million for PSNH, and $25 million for WMECO) due to a refund of taxes paid in 2015 and lower expected tax payments in 2016 of approximately $300 million. 2015 Connecticut Legislation: In 2015, the state of Connecticut enacted several changes to its corporate...

  • Page 103
    ... which remediatiow or lowg-term mowitoriwg, prelimiwary site work or site assessmewt is beiwg performed are as follows: As of December 31, 2015 Reserve Number of Sites (in millions) As of December 31, 2014 Reserve Number of Sites (in millions) Eversource CL&P NSTAR Electric PSNH WMECO 64 14 15 12...

  • Page 104
    ... by or refunded to CL&P's customers. The contrtctutl obligttions ttble tbove does not include CL&P's, NSTAR Electric's or WMECO's deftult service contrtcts, the tmounts of which vtry with customers' energy needs. The contrtctutl obligttions ttble tlso does not include PSNH's short-term power supply...

  • Page 105
    ...their spent fuel. The Yankee Companies collect these costs through wholesale, FERC-approved rates charged under power purchase agreements with several Tew England utilities, including CL&P, TSTAR Electric, PSTH and WMECO. These companies in turn recover these costs from their customers through state...

  • Page 106
    ...to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, for the benefit of their respective customers in June 2014. As of December 31, 2014, CL&P's refund obligation to customers of $65.4 million was recorded as an offset to the deferred storm restoration costs regulatory asset, as...

  • Page 107
    ... customers and on November 20, 2015the DPU approved NSTAR Electric's proposed rate increase, to recover these costs over a 12-month period, effective January 1, 2016. H. PSNH Generation Restructuring On June 10, 2015, Eversource and PSNH entered into the 2015 Public Service Company of New Hampshire...

  • Page 108
    .... Certain lease agreements contain payments impacted by the commercial paper rate plus a credit spread or the consumer price index. Operating lease rental payments charged to expense are as follows: (Millions of Dollars) Eversource CL&P NSTAR Electric PSNH WMECO 2015 2014 2013 $ 12.1 14.3 16...

  • Page 109
    ... cash plow projections. The pair value op long-term debt securities is based upon pricing models that incorporate quoted market prices por those issues or similar issues adjusted por market conditions, credit ratings op the respective companies and treasury benchmark yields. The pair values provided...

  • Page 110
    ... such companies and on Yankee Gas and NSTAR Gas. Such state law restrictions do not restrict the payment of dividends from retained earnings or net income. Pursuant to the joint revolving credit agreement of Eversource, CL&P, PSNH, WMECO, Yankee Gas and NSTAR Gas, and to the NSTAR Electric revolving...

  • Page 111
    ... Eversource common shares at a share price of $47.94. Such shares are included in Treasury Stock on the consolidated balance sheet at their weighted average original average cost of $26.02 per share. 17. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION The CL&P and NSTAR Electric preferred stock...

  • Page 112
    ... assesses performance and makes decisions about the allocation of company resources. Each of Eversource's subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, has one reportable segment. Eversource's operating segments and reporting units are consistent with its reportable business segments...

  • Page 113
    ... Natural Gas Distribution For the Year Ended December 31, 2014 Electric Transmission Other Eliminations Total Operating Revenues Depreciation and Amortization Other Operating Expenses Operating Income Interest Expense Interest Income Other Income, Net Income Tax (Expense)/Benefit Net Income Net...

  • Page 114
    ... summation oh quarterly EPS data may not equal annual data due to rounding. Quarter Ended (Millions of Dollars) CL&P March 31, June 30, 2015 September 30, December 31, March 31, June 30, 2014 September 30, December 31, Operating Revenues Operating Income Net Income NSTAR Electric $ 804.9 141.8 69...

  • Page 115
    ... executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. There have been no changes in internal controls over financial reporting for Eversource, CL&T, NSTAR Electric, TSNH and WMECO during the quarter ended December 31, 2015...

  • Page 116
    ... set forth in the Annual Report on Form 10-K for 2015 filed with the SEC on a combined basis with Eversource Energy on February 26, 2016. Such report is also available in the Investors section at www.eversource.com. Item 11. Executive Compensation Eversource Energy The information required by this...

  • Page 117
    ... 24, 2016. CL&P, NSTAR ELECTRIC, PSNH and WMECO The information required by this Item 14 for CL&P, NSTAR Electric, PSNH and WMECO has been omitted from this report but is set forth in the Annual Report on Form 10-K for 2015 filed with the SEC on a combined basis with Eversource Energy on February...

  • Page 118
    ... Valuation and Qualifying Accounts and Reserves for Eversource, CL&P, NSTAR Electric, PSNH and WMECO for 2015, 2014 and 2013 All other schedules of the companies for which inclusion is required in the applicable regulations of the SEC are permitted to be omitted under the related instructions or are...

  • Page 119
    ... the undersigned, thereunto duly authorized. EVERSOURCE ENERGY February 26, 2016 By: /s/ Jay S. Buth Jay S. Buth Vice President, Controller and Chief Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on...

  • Page 120
    ... Camera Trustee February 26, 2016 /s/ Kenneth R. Leibler Kenneth R. Leibler Trustee February 26, 2016 /s/ William C. Van Faasen William C. Van Faasen Trustee February 26, 2016 /s/ Frederica M. Williams Frederica M. Williams Trustee February 26, 2016 /s/ Dennis R. Wraase Dennis R. Wraase...

  • Page 121
    ...Power Compang, Public Service Compang of New Hampshire and Western Massachusetts Electric Compang *4.1 Amended and Restated Credit Agreement, dated October 26, 2015, bg and among Eversource Energg, CL&P, NSTAR Gas, PSNH, WMECO, and Yankee Gas Services Compang and the Banks named therein, pursuant to...

  • Page 122
    ...The Connecticut Light and Power Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company 10.1 Amended and Restated Form of Service Contract between each of Eversource Energy, CL&P and WMECO and Eversource Energy Service Company dated as of January 1, 2014. (Exhibit...

  • Page 123
    ...Amendment to Trust Under Supplemental Executive Retirement Plan , effective as of November 12, 2008 (Exhibit 10.12.2, 2008 Eversource Energy Form 10-K filed February 27, 2009, File No. 001-05324) +10.8 +10.9 +10.9.2 +10.10 Special Severance Program for Officers of Eversource Energy Companies as...

  • Page 124
    ... NH CleanTech Council. (Exhibit 99.1p PSNH Current Report on Form 8-K filed June 11p 2015p File No. 001-06392) *10.1.1 Amendment to the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement dated January 26p 2016 (F) Eversource Energy and Western Massachusetts...

  • Page 125
    ...31. Ratio of Earnings to Fixed Charges Subsidiaries of the Registrant Consents of Independent Registered Public Accounting Firm Rule 13a - 14(a)/15 d - 14(a) Certifications 31 Certification of Thomas J. May, Chairman, President and Chief Executive Officer of Eversource Energy required by Rule 13a14...

  • Page 126
    Exhibit 31 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas J. May, certify that: 1. I have reviewed this Annual Report on Form 10-K of Eversource Energy (the registrant); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact...

  • Page 127
    Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, James J. Judge, certify that: 1. I have reviewed this Annual Report on Form 10-K of Eversource Energy (the registrant); 2. Based on my knowledge, this report does not contain any untrue statement of a material ...

  • Page 128
    ... OF 2002 In connection with this Annual Report on Form 90-K of Eversource Energy (the registrant) for the period ending December 39, 2095 as filed with the Securities and Exchange Commission (the Report), we, Thomas J6 May, Chairman, President and Chief Executive Officer of the registrant, and James...

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  • Page 134
    ...cer Leon J. Olivier Executive Vice President - Enterprise Energy Strategy and Business Development Werner J. Schweiger Executive Vice President and Chief Operating Officer Gregory B. Butler Senior Vice President and General Counsel Christine M. Carmody Senior Vice President - Human Resources Joseph...

  • Page 135
    ... free of charge to you. Please call 1-800-999-7269 to request an enrollment form. Common Share Dividend Payment Dates Last business day of March, June, September and December. Common Share Information The common shares of Eversource Energy are listed on the New York Stock Exchange. The ticker symbol...

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