Eversource 2015 Annual Report Download - page 43

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Our 2015 retail electric sales volumes at our electric utilities with a traditional rate structure (NSTAR Electric and PSNH) were slightly higher, as
compared to 2014, due primarily to the impact of colder winter weather experienced in the first quarter of 2015 and warmer weather in the third
quarter of 2015, partially offset by milder winter weather in the fourth quarter of 2015 throughout those service territories. In 2015, heating degree
days were 1 percent lower in the Boston metropolitan area, and 5 percent lower in New Hampshire, as compared to 2014. Cooling degree days in
2015 were 19 percent higher in the Boston metropolitan area and 57 percent higher in New Hampshire, as compared to 2014. Weather-normalized
retail electric sales volumes were relatively unchanged in 2015, as compared to 2014. Improved economic conditions were offset by an increase in
customer conservation efforts resulting from company-sponsored energy efficiency programs.
Our firm natural gas sales volumes are subject to many of the same influences as our retail electric sales volumes. In addition, they have benefited
from customer growth in both of our natural gas distribution companies. In 2015, consolidated firm natural gas sales volumes were lower, as
compared to 2014. The 2015 firm natural gas sales volumes were negatively impacted by record warm weather in the fourth quarter of 2015, when
compared to 2014, partially offset by colder winter weather in the first quarter of 2015, as compared to 2014, throughout our natural gas service
territories. Weather-normalized Eversource consolidated firm natural gas sales volumes increased 2.5 percent in 2015, as compared to 2014, due
primarily to improved economic conditions as well as residential and commercial customer growth, partially offset by customer conservation efforts
resulting from company-sponsored energy efficiency programs. On October 30, 2015, the DPU issued its order in the NSTAR Gas distribution rate
case, which included the establishment of a revenue decoupling mechanism beginning January 1, 2016.
Prior to December 1, 2014, CL&P earned LBR related to reductions in sales volume as a result of successful energy efficiency programs. LBR was
recovered from retail customers through the FMCC. Effective December 1, 2014, CL&P no longer earns LBR due to its revenue decoupling
mechanism. NSTAR Electric recognized LBR of $60.6 million in 2015 and $39.9 million in 2014. On January 28, 2016, NSTAR Electric received
approval of a three-year energy efficiency plan, which includes recovery of LBR until it is operating under a decoupled rate structure.
For further information, see “Regulatory Developments and Rate Matters - Massachusetts - NSTAR Electric, WMECO and NSTAR Gas Energy
Efficiency Plan” and “Regulatory Developments and Rate Matters - Massachusetts - NSTAR Gas Distribution Rates” in this Management’s
Discussion and Analysis of Financial Conditions and Results of Operations.
Future Outlook
2016 EPS Guidance: We currently project 2016 earnings of between $2.90 per diluted share and $3.05 per diluted share.
Liquidity
Consolidated: Cash and cash equivalents totaled $23.9 million as of December 31, 2015, compared with $38.7 million as of December 31, 2014.
Long-Term Debt Issuances and Repayments: On January 15, 2015, Eversource parent issued $150 million of 1.60 percent Series G Senior Notes,
due to mature in 2018, and $300 million of 3.15 percent Series H Senior Notes, due to mature in 2025.
On May 20, 2015 and December 1, 2015, CL&P issued $300 million and $50 million, respectively, of 4.15 percent 2015 Series A First and
Refunding Mortgage Bonds due to mature in 2045.
On September 10, 2015, Yankee Gas issued $75 million of 3.35 percent 2015 Series M First Mortgage Bonds due to mature in 2025.
On November 18, 2015, NSTAR Electric issued $250 million of 3.25 percent debentures, due to mature in 2025.
On December 8, 2015, NSTAR Gas issued $100 million of 4.35 percent Series O First Mortgage Bonds due to mature in 2045.
The proceeds of all debt issuances, net of issuance costs, were used to repay short-term borrowings and fund capital expenditures and working
capital.
On April 1, 2015, CL&P repaid at maturity the $100 million 5.00 percent 2005 Series A First and Refunding Mortgage Bonds and also redeemed the
$62 million 1996A Series 1.55 percent PCRBs that were subject to mandatory tender, using short term borrowings.
On August 3, 2015, WMECO repaid at maturity the $50 million 5.24 percent Series C Senior Notes, using short-term borrowings.
Long-Term Debt Issuance Authorizations: On November 25, 2015, PURA approved Yankee Gas’ request to extend the authorization period for
issuance of up to $125 million in long-term debt from December 31, 2015 to December 31, 2016. On December 4, 2015, the DPU authorized
WMECO to issue up to $100 million in long-term debt for the period through December 31, 2016. On December 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 parties to a
five-year $1.45 billion revolving credit facility. On October 26, 2015, this revolving credit facility was amended and restated and the termination
date was extended to September 4, 2020. Under the revolving credit facility, CL&P has a borrowing sublimit of $600 million, and PSNH and
WMECO each have borrowing sublimits of $300 million. The revolving credit facility serves to backstop Eversource parent’s $1.45 billion
commercial paper program. The commercial paper program allows Eversource parent to issue commercial paper as a form of short-term debt. As of
December 31, 2015 and 2014, Eversource parent had approximately $1.1 billion in short-term borrowings outstanding on each date under the