Eversource 2015 Annual Report Download - page 72

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The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under
financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively. The DPU
allows WMECO and NSTAR Gas to also recover in rates amounts associated with certain uncollectible hardship accounts receivable. Certain of
NSTAR Electric’s uncollectible hardship accounts receivable are expected to be recovered in future rates, similar to WMECO and NSTAR Gas.
Uncollectible customer account balances, which are expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets
on the balance sheets.
The total provision for uncollectible accounts and for uncollectible hardship accounts, which is included in the total provision, are included in
Receivables, Net on the balance sheets, and were as follows:
Total Provision for Uncollectible Accounts Uncollectible Hardship
As of December 31, As of December 31,
(Millions of Dollars) 2015
2014 2015 2014
Eversource $ 190.7 $ 175.3 $ 118.5 $ 91.5
CL&P 79.5 84.3 68.1 74.0
NSTAR Electric
52.6 40.7 25.3 -
PSNH 8.7 7.7 - -
WMECO 14.0 9.9 7.4 6.2
F. Fuel, Materials and Supplies and Allowance Inventory
Fuel, Materials and Supplies include natural gas, coal, biomass and oil inventories as well as materials purchased primarily for construction or
operation and maintenance purposes. Natural gas, coal, biomass and oil inventories are valued at their respective weighted average cost. Materials
and supplies are valued at the lower of average cost or market.
Fuel, Materials and Supplies also include Renewable Energy Certificates (RECs), which are purchased from suppliers of renewable sources of
generation. RECs are used to meet state mandated Renewable Portfolio Standards requirements.
PSNH is subject to federal and state laws and regulations that regulate emissions of air pollutants, including SO
2
, CO
2
, and NO
x
related to its
regulated generation units, and uses SO
2
, CO
2
, and NO
x
emissions allowances. At the end of each compliance period, PSNH is required to relinquish
SO
2
, CO
2
, and NO
x
emissions allowances corresponding to the actual respective emissions emitted by its generating units over the compliance
period. SO
2
and NO
x
emissions allowances are obtained through an annual allocation from the federal and state regulators that are granted at no cost
and through purchases from third parties. CO
2
emissions allowances are obtained through an annual allocation from the state regulator that are
granted at no cost and are acquired through auctions and through purchases from third parties. SO
2
, CO
2
, and NO
x
emissions allowances are charged
to expense based on their weighted average cost as they are utilized against emissions volumes at PSNH’s generating units. SO
2
, CO
2
, and NO
x
emissions allowances are recorded within Fuel, Materials and Supplies on the balance sheet and are classified as short-term or long-term depending
on the period in which they are expected to be utilized against actual emissions. Current SO
2
and CO
2
emissions allowances were classified as Fuel,
Materials and Supplies on the balance sheets and long-term SO
2
and CO
2
emissions allowances were classified as Other Long-Term Assets on the
balance sheets.
The carrying amount of fuel, materials and supplies, RECs, and emission allowances were as follows:
As of December 31,
2015 2014
NSTAR NSTAR
(Millions of Dollars)
Eversource Electric PSNH Eversource Electric PSNH
Current:
Fuel $ 152.5 $ - $ 103.4 $ 164.3 $ - $ 95.1
Materials and Supplies 131.2 32.2 44.6 159.5 49.1 52.2
RECs 50.9 43.3 7.0 25.8 25.1 0.7
Emission Allowances 1.9 - 1.9 0.1 - 0.1
Long-Term:
Emission Allowances 17.5 - 17.5 20.1 - 20.1
G. Deposits
As of December 31, 2015, Eversource, CL&P, NSTAR Electric and PSNH had $17.1 million, $0.7 million, $8.5 million and $1.5 million,
respectively, of cash collateral posted not subject to master netting agreements, with ISO-NE related to energy purchase transactions, which was
included in Prepayments and Other Current Assets on the balance sheets. As of December 31, 2014, these amounts were $9.9 million, $1.2 million
and $2.5 million for Eversource, CL&P and PSNH, respectively.
H. Fair Value Measurements
Fair value measurement guidance is applied to derivative contracts that are not elected or designated as “normal purchases or normal sales” (normal)
and to the marketable securities held in trusts. Fair value measurement guidance is also applied to valuations of the investments used to calculate the
funded status of pension and PBOP plans, the nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and the
estimated fair value of preferred stock and long-term debt.
Fair Value Hierarchy: In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable
inputs. Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes. The entire fair value
measurement is categorized based on the lowest level of input that is significant to the fair value measurement. Eversource evaluates the