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46
Amortization of Regulatory Assets, Net, which are tracked costs, include certain regulatory-approved tracking mechanisms. Fluctuations in these
costs are recovered from customers in rates and have no impact on earnings. Amortization of Regulatory Assets, Net, increased in 2015, as
compared to 2014, due primarily to the following:
(Millions of Dollars) Increase/(Decrease)
CL&P:
Amortization increase (including storm cost recovery) approved and included in
base distribution rates
$
61.0
Energy and energy-related supply costs tracking mechanism
(108.0)
NSTAR Electric (primarily the recognition of the Comprehensive Settlement
Agreement, partially offset by transition costs tracking mechanism) (6.7)
PSNH (primarily default energy service charge tracking mechanism)
45.9
WMECO (primarily the absence of the refund of DOE proceeds to customers in 2014
and energy and energy-related cost tracking mechanisms)
20.7
Other
(1.3)
Total Amortization of Regulatory Assets, Net
$
11.6
The increase in CL&P’s amortization was due primarily to an increase in storm cost recovery, which was approved and included in distribution rates
effective December 1, 2014. In connection with the Comprehensive Settlement Agreement associated with the CPSL program filings, NSTAR
Electric recognized an $11.7 million benefit in the first quarter of 2015, which was recorded as a reduction to amortization expense.
The remaining fluctuations in amortization expense are driven by the deferral of energy supply and energy-related costs, which can fluctuate from
period to period based on the timing of costs incurred and related rate changes to recover these costs. Fluctuations in energy supply and energy-
related costs, which are the primary drivers in amortization, are recovered from customers in rates and have no impact on earnings.
Energy Efficiency Programs, which are tracked costs, increased in 2015, as compared to 2014, due primarily to an increase in energy efficiency
costs in accordance with the three-year program guidelines established by the DPU at NSTAR Electric.
Taxes Other Than Income Taxes increased in 2015, as compared to 2014, due primarily to an increase in property taxes as a result of both an
increase in utility plant balances and property tax rates.
Interest Expense increased in 2015, as compared to 2014, due primarily to an increase in interest on long-term debt ($9.3 million) as a result of new
debt issuances in 2015 and an increase in interest on notes payable ($1.9 million).
Other Income, Net increased in 2015, as compared to 2014, due primarily to higher equity AFUDC amounts ($5.1 million) and an increase in
interest income related to the deferred compensation plans ($4.3 million), partially offset by the absence in 2015 of a gain on the sale of land
recorded in 2014 at CL&P ($4.5 million).
Income Tax Expense increased in 2015, as compared to 2014, due primarily to higher pre-tax earnings ($45.7 million), higher state taxes, the impact
of adjusting our estimated tax expense to what was filed on our tax return (provision to return), the lower tax benefit in 2015 compared to 2014 from
a change in tax reserves ($19.8 million), and higher items that impact our tax rate as a result of regulatory treatment (flow-through items) ($6.2
million).