Revenue is recognized when promised goods or services (referred to as performance obligations) are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. A five-step model is used for recognizing and measuring revenue from contracts with customers, which includes identifying the contract with the customer, identifying the performance obligations promised within the contract, determining the transaction price (the amount of consideration to which the company expects to be entitled), allocating the transaction price to the performance obligations and recognizing revenue when (or as) the performance obligation is satisfied.


	For the Year Ended December 31, 2020
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	3,951.5	$	644.9	$	—	$	145.1	$	—	$	—	$	4,741.5
Commercial	2,353.4		361.9		—		62.4		—		(4.8)		2,772.9
Industrial	327.1		107.4		—		4.8		—		(13.7)		425.6
Total Retail Tariff Sales Revenues	6,632.0		1,114.2		—		212.3		—		(18.5)		7,940.0
Wholesale Transmission Revenues	—		—		1,557.3		—		74.2		(1,290.6)		340.9
Wholesale Market Sales Revenues	327.3		43.0		—		3.8		—		—		374.1
Other Revenues from Contracts with Customers	74.7		3.6		13.3		7.3		1,161.7		(1,152.0)		108.6
Amortization of/(Reserve for) Revenues Subject to Refund	4.6		2.1		—		(3.8)		—		—		2.9
Total Revenues from Contracts with Customers	7,038.6		1,162.9		1,570.6		219.6		1,235.9		(2,461.1)		8,766.5
Alternative Revenue Programs	88.1		44.7		(35.2)		(4.7)		—		37.1		130.0
Other Revenues	5.6		1.1		0.7		0.5		—		—		7.9
Total Operating Revenues	$	7,132.3	$	1,208.7	$	1,536.1	$	215.4	$	1,235.9	$	(2,424.0)	$	8,904.4


	For the Year Ended December 31, 2019
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	3,723.7	$	555.1	$	—	$	132.3	$	—	$	—	$	4,411.1
Commercial	2,584.8		347.6		—		63.9		—		(4.3)		2,992.0
Industrial	331.8		96.9		—		4.5		—		(11.6)		421.6
Total Retail Tariff Sales Revenues	6,640.3		999.6		—		200.7		—		(15.9)		7,824.7
Wholesale Transmission Revenues	—		—		1,293.3		—		61.3		(1,085.2)		269.4
Wholesale Market Sales Revenues	215.7		55.4		—		4.1		—		—		275.2
Other Revenues from Contracts with Customers	54.8		2.8		13.2		7.0		967.2		(969.0)		76.0
Amortization of/(Reserve for) Revenues Subject to Refund	1.3		6.2		—		(2.8)		—		—		4.7
Total Revenues from Contracts with Customers	6,912.1		1,064.0		1,306.5		209.0		1,028.5		(2,070.1)		8,450.0
Alternative Revenue Programs	45.9		(4.9)		81.8		4.6		—		(74.2)		53.2
Other Revenues	18.5		3.1		0.7		1.0		—		—		23.3
Total Operating Revenues	$	6,976.5	$	1,062.2	$	1,389.0	$	214.6	$	1,028.5	$	(2,144.3)	$	8,526.5


	For the Year Ended December 31, 2018
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	3,766.6	$	542.5	$	—	$	130.7	$	—	$	—	$	4,439.8
Commercial	2,634.7		334.8		—		63.3		—		(4.5)		3,028.3
Industrial	351.9		96.0		—		4.4		—		(10.0)		442.3
Total Retail Tariff Sales Revenues	6,753.2		973.3		—		198.4		—		(14.5)		7,910.4
Wholesale Transmission Revenues	—		—		1,308.9		—		47.3		(1,092.2)		264.0
Wholesale Market Sales Revenues	179.5		57.5		—		4.1		—		—		241.1
Other Revenues from Contracts with Customers	65.9		(2.2)		12.6		7.2		889.0		(891.0)		81.5
Reserve for Revenues Subject to Refund	(12.3)		(8.3)		—		(3.7)		—		—		(24.3)
Total Revenues from Contracts with Customers	6,986.3		1,020.3		1,321.5		206.0		936.3		(1,997.7)		8,472.7
Alternative Revenue Programs	(47.0)		(1.2)		(35.2)		5.4		—		31.9		(46.1)
Other Revenues	17.9		3.1		—		0.6		—		—		21.6
Total Operating Revenues	$	6,957.2	$	1,022.2	$	1,286.3	$	212.0	$	936.3	$	(1,965.8)	$	8,448.2


	For the Years Ended December 31,
	2020						2019						2018
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	2,011.1	$	1,365.8	$	574.6	$	1,837.1	$	1,322.1	$	564.5	$	1,828.2	$	1,380.9	$	557.5
Commercial	878.3		1,176.8		299.9		922.9		1,349.4		314.6		928.1		1,391.5		316.9
Industrial	137.5		106.4		83.2		138.3		115.8		77.7		147.7		124.9		79.3
Total Retail Tariff Sales Revenues	3,026.9		2,649.0		957.7		2,898.3		2,787.3		956.8		2,904.0		2,897.3		953.7
Wholesale Transmission Revenues	754.8		576.5		226.0		587.1		517.3		188.9		620.6		488.8		199.5
Wholesale Market Sales Revenues	230.1		58.4		38.8		105.1		73.1		37.5		48.3		76.1		56.6
Other Revenues from Contracts with Customers	32.9		43.6		14.2		36.4		18.7		15.6		35.0		28.9		15.5
Amortization of/(Reserve for) Revenues Subject to Refund	—		—		4.6		—		—		1.3		—		—		(12.3)
Total Revenues from Contracts with Customers	4,044.7		3,327.5		1,241.3		3,626.9		3,396.4		1,200.1		3,607.9		3,491.1		1,213.0
Alternative Revenue Programs	(4.2)		54.5		2.6		77.5		41.6		8.6		(65.9)		0.9		(17.3)
Other Revenues	2.2		3.5		0.6		10.3		7.0		1.9		8.5		8.3		1.1
Eliminations	(495.2)		(444.4)		(165.4)		(482.1)		(400.4)		(144.7)		(454.3)		(387.4)		(149.2)
Total Operating Revenues	$	3,547.5	$	2,941.1	$	1,079.1	$	3,232.6	$	3,044.6	$	1,065.9	$	3,096.2	$	3,112.9	$	1,047.6

Retail Tariff Sales: Regulated utilities provide products and services to their regulated customers under rates, pricing, payment terms and conditions of service, regulated by each state regulatory agency. The arrangement whereby a utility provides commodity service to a customer for a price approved by the respective state regulatory commission is referred to as a tariff sale contract, and the tariff governs all aspects of the provision of regulated services by utilities. The majority of revenue for Eversource, CL&P, NSTAR Electric and PSNH is derived from regulated retail tariff sales for the sale and distribution of electricity, natural gas and water to residential, commercial and industrial retail customers.

The utility's performance obligation for the regulated tariff sales is to provide electricity, natural gas or water to the customer as demanded. The promise to provide the commodity represents a single performance obligation, as it is a promise to transfer a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. Revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided by the utility, and the utility satisfies its performance obligation. Revenue is recognized based on the output method as there is a directly observable output to the customer (electricity, natural gas or water units delivered to the customer and immediately consumed). Each Eversource utility is entitled to be compensated for performance completed to date (service taken by the customer) until service is terminated.

In regulated tariff sales, the transaction prices are the rates approved by the respective state regulatory commissions. In general, rates can only be changed through formal proceedings with the state regulatory commissions. These rates are designed to recover the costs to provide service to customers and include a return on investment. Regulatory commission-approved tracking mechanisms are included in these rates and are also used to recover, on a fully-reconciling basis, certain costs, such as the procurement of energy supply, retail transmission charges, energy efficiency program costs, net metering for distributed generation, and restructuring and stranded costs. These tracking mechanisms result in rates being changed periodically to ensure recovery of actual costs incurred.

Customers may elect to purchase electricity from each Eversource electric utility or may contract separately with a competitive third party supplier. Revenue is not recorded for the sale of the electricity commodity to customers who have contracted separately with these suppliers, only the delivery to a customer, as the utility is acting as an agent on behalf of the third party supplier.

Wholesale Transmission Revenues: The Eversource electric transmission-owning companies (CL&P, NSTAR Electric and PSNH) each own and maintain transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. CL&P, NSTAR Electric and PSNH, as well as most other New England utilities, are parties to a series of agreements that provide for coordinated planning and operation of the region's transmission facilities and the rules by which they acquire transmission services. The Eversource electric transmission-owning companies have a combination of FERC-approved regional and local formula rates that work in tandem to recover all their transmission costs. These rates are part of the ISO-NE Tariff. Regional rates recover the costs of higher voltage transmission facilities that benefit the region and are collected from all New England transmission customers, including the Eversource distribution businesses. Eversource's local rates recover the companies' total transmission revenue requirements, less revenues received from regional rates and other sources, and are collected from Eversource's distribution businesses and other transmission customers. The distribution businesses of Eversource, in turn, recover the FERC approved charges from retail customers through annual or semiannual tracking mechanisms, which are retail tariff sales.

The utility's performance obligation for regulated wholesale transmission sales is to provide transmission services to the customer as demanded. The promise to provide transmission service represents a single performance obligation. The transaction prices are the transmission rate formulas as defined by the ISO-NE Tariff and are regulated and established by FERC. Wholesale transmission revenue is recognized over time as the performance obligation is completed, which occurs as transmission services are provided to customers. The revenue is recognized based on the output method. Each Eversource utility is entitled to be compensated for performance completed to date (e.g., use of the transmission system by the customer).

Wholesale Market Sales Revenues: Wholesale market sales transactions include sales of energy and energy-related products into the ISO-NE wholesale electricity market, sales of natural gas to third party marketers, and also the sale of RECs to various counterparties. ISO-NE oversees the region's wholesale electricity market and administers the transactions and terms and conditions, including payment terms, which are established in the ISO-NE tariff, between the buyers and sellers in the market. Pricing is set by the wholesale market. The wholesale transactions in the ISO-NE market occur on a day-ahead basis or a real-time basis (daily) and are, therefore, short-term. Transactions are tracked and reported by ISO-NE net by the hour, which is the net hourly position of energy sales and purchases by each market participant. The performance obligation for ISO-NE energy transactions is defined to be the net by hour transaction. Revenue is recognized when the performance obligation for these energy sales transactions is satisfied, when the sale occurs and the energy is transferred to the customer. For sales of natural gas, transportation, and natural gas pipeline capacity to third party marketers, revenue is recognized when the performance obligation is satisfied at the point in time the sale occurs and the natural gas or related product is transferred to the marketer. RECs are sold to various counterparties, and revenue is recognized when the performance obligation is satisfied upon transfer of title to the customer through the New England Power Pool Generation Information System.

Other Revenues from Contracts with Customers: Other revenues from contracts with customers primarily include property rentals that are not deemed leases. These revenues are generally recognized on a straight-line basis over time as the service is provided to the customer. Other revenues also include revenues from Eversource's service company, which is eliminated in consolidation.

Amortization of/(Reserve for) Revenues Subject to Refund: Eversource has recorded a regulatory liability, recorded as a reduction to revenues, to reflect the difference between the 35 percent federal corporate income tax rate included in rates charged to customers and the 21 percent federal corporate income tax rate, effective January 1, 2018 as a result of the Tax Cuts and Jobs Act of 2017, until rates billed to customers reflect the lower federal tax rate. The Connecticut water business has not yet reflected the change in the federal corporate income tax rate in distribution rates and continues to accrue the regulatory liability. CL&P and Yankee Gas each have fully refunded this regulatory liability by the end of 2018 and 2020, respectively, and in 2019, PSNH began to refund this regulatory liability to customers in rates. NSTAR Electric and NSTAR Gas were not required to make refunds to customers for the higher federal corporate income tax rate billed to customers in the period between January 1, 2018 to the effective dates of each company's 2018 rate changes. EGMA will begin refunding this amount in November 2021.

Alternative Revenue Programs: In accordance with accounting guidance for rate-regulated operations, certain of Eversource's utilities' rate making mechanisms qualify as alternative revenue programs (ARPs) if they meet specified criteria, in which case revenues may be recognized prior to billing based on allowed levels of collection in rates. Eversource's utility companies recognize revenue and record a regulatory asset or liability once the condition or event allowing for the automatic adjustment of future rates occurs. ARP revenues include both the recognition of the deferral adjustment to ARP revenues, when the regulator-specified condition or event allowing for additional billing or refund has occurred, and an equal and offsetting reversal of the ARP deferral to revenues as those amounts are reflected in the price of service in subsequent periods.

•Certain Eversource electric, natural gas and water companies, including CL&P and NSTAR Electric, have revenue decoupling mechanisms approved by a regulatory commission (decoupled companies). Decoupled companies’ distribution revenues are not directly based on sales volumes. The decoupled companies reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues, with any difference between the allowed level of distribution revenue and the actual amount realized adjusted through subsequent rates.

•The transmission formula rates provide for the annual reconciliation and recovery or refund of estimated costs to actual costs. The financial impacts of differences between actual and estimated costs are deferred for future recovery from, or refund to, transmission customers. This transmission deferral reconciles billed transmission revenues to the revenue requirement for our transmission businesses.

Other Revenues: Other Revenues include certain fees charged to customers that are not considered revenue from contracts with customers. Other revenues also include lease revenues under lessor accounting guidance of $4.3 million ($0.8 million at CL&P and $2.7 million at NSTAR Electric) and $4.4 million ($1.0 million at CL&P and $2.7 million at NSTAR Electric) for the years ended December 31, 2020 and 2019, respectively.

Intercompany Eliminations: Intercompany eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business, and revenues from Eversource's service company. Intercompany revenues and expenses between the Eversource wholesale transmission businesses and the Eversource distribution businesses and from Eversource's service company are eliminated in consolidation and included in "Eliminations" in the table above.

Receivables: Receivables, Net on the balance sheet include trade receivables from our retail customers and receivables arising from ISO-NE billing related to wholesale transmission contracts and wholesale market transactions, sales of natural gas and capacity to marketers, sales of RECs, and property rentals. In general, retail tariff customers and wholesale transmission customers are billed monthly and the payment terms are generally due and payable upon receipt of the bill.

Unbilled Revenues: Unbilled Revenues on the balance sheet represent estimated amounts due from retail customers for electricity, natural gas or water delivered to customers but not yet billed. The utility company has satisfied its performance obligation and the customer has received and consumed the commodity as of the balance sheet date, and therefore, the utility company records revenue for those services in the period the services were provided. Only the passage of time is required before the company is entitled to payment for the satisfaction of the performance obligation. Payment from customers is due monthly as services are rendered and amounts are billed. Actual amounts billed to customers when meter readings become available may vary from the estimated amount.

Unbilled revenues are recognized by allocating estimated unbilled sales volumes to the respective customer classes, and then applying an estimated rate by customer class to those sales volumes. Unbilled revenue estimates reflect seasonality, weather, customer usage patterns, customer rates in effect for customer classes, and the timing of customer billing. The companies that have a decoupling mechanism record a regulatory deferral to reflect the actual allowed amount of revenue associated with their respective decoupled distribution rate design.