Eversource 2015 Annual Report Download - page 70

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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
COMBINED NOTES TO FINANCIAL STATEMENTS
Refer to the Glossary of Terms included in this combined Annual Report on Form 10-K for abbreviations and acronyms used throughout the
combined notes to the financial statements.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. About Eversource, CL&P, NSTAR Electric, PSNH and WMECO
Eversource Energy: Eversource Energy is a public utility holding company primarily engaged, through its wholly owned regulated utility
subsidiaries, in the energy delivery business. Eversource Energy’s wholly owned regulated utility subsidiaries consist of CL&P, NSTAR Electric,
PSNH, WMECO, Yankee Gas and NSTAR Gas. Eversource provides energy delivery service to approximately 3.6 million electric and natural gas
customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.
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.
Eversource, CL&P, NSTAR Electric, PSNH and WMECO are reporting companies under the Securities Exchange Act of 1934. Eversource Energy
is a public utility holding company under the Public Utility Holding Company Act of 2005. Arrangements among the regulated electric companies
and other Eversource companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility
property are subject to regulation by the FERC. The Regulated companies are subject to regulation of rates, accounting and other matters by the
FERC and/or applicable state regulatory commissions (the PURA for CL&P and Yankee Gas, the DPU for NSTAR Electric, WMECO and NSTAR
Gas, and the NHPUC for PSNH).
Regulated Companies: CL&P, NSTAR Electric, PSNH and WMECO furnish franchised retail electric service in Connecticut, Massachusetts and
New Hampshire. Yankee Gas and NSTAR Gas are engaged in the distribution and sale of natural gas to customers within Connecticut and
Massachusetts, respectively. CL&P, NSTAR Electric, PSNH and WMECO’s results include the operations of their respective distribution and
transmission businesses. PSNH and WMECO’s distribution results include the operations of their respective generation businesses. Eversource also
has a regulated subsidiary, NPT, which was formed to construct, own and operate the Northern Pass line, a HVDC transmission line from Québec to
New Hampshire under development that will interconnect with a new HVDC transmission line being developed by a transmission subsidiary of HQ.
Other: Eversource Service, Eversource’s service company, Rocky River Realty Company, a wholly-owned real estate subsidiary of Eversource,
Renewable Properties, Inc., an indirect, wholly-owned subsidiary of Eversource, and Properties, Inc., a wholly-owned subsidiary of PSNH, provide
support services to Eversource, including its Regulated companies. Eversource Gas Transmission LLC, an indirect, wholly-owned subsidiary of
Eversource, holds an equity interest in the Access Northeast project.
B. Basis of Presentation
The consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries.
Intercompany transactions have been eliminated in consolidation. The accompanying consolidated financial statements of Eversource, NSTAR
Electric and PSNH and the financial statements of CL&P and WMECO are herein collectively referred to as the “financial statements.”
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Eversource consolidates CYAPC and YAEC because CL&P’s, NSTAR Electric’s, PSNH’s and WMECO’s combined ownership interest in each of
these entities is greater than 50 percent. 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.
Eversource’s utility subsidiaries’ distribution (including generation) and transmission businesses are subject to rate-regulation that is based on cost
recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of
regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See
Note 2, “Regulatory Accounting,” for further information.
Certain reclassifications of prior year data were made in the accompanying financial statements to conform to the current year presentation and as a
result of the adoption of new accounting guidance. See Note 1C, “Summary of Significant Accounting Policies – Accounting Standards,” for further
information.
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 Eversource or its consolidated subsidiaries and are not subject to mandatory