REGULATORY ACCOUNTING

6 Months Ended

Jun. 30, 2011

Notes To Consolidated Financial Statements [Abstract]

Public Utilities Disclosure [Text Block]

2.       REGULATORY ACCOUNTING

The Regulated companies continue to be rate-regulated on a cost-of-service basis, therefore, the accounting policies of the Regulated companies conform to GAAP applicable to rate-regulated enterprises and historically reflect the effects of the rate-making process.

Management believes it is probable that the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets. All material net regulatory assets are earning a return, except for the majority of deferred benefit cost assets, regulatory assets offsetting derivative liabilities, securitized regulatory assets and income tax regulatory assets, all of which are not in rate base.

Regulatory Assets: The components of regulatory assets are as follows:
	As of June 30, 2011		As of December 31, 2010
(Millions of Dollars)	NU		NU
Deferred Benefit Costs	$	1,036.1	$	1,094.2
Regulatory Assets Offsetting Derivative Liabilities		866.9		859.7
Securitized Assets		137.3		171.7
Income Taxes, Net		419.0		401.5
Unrecovered Contractual Obligations		112.4		123.2
Regulatory Tracker Deferrals		48.3		70.3
Storm Cost Deferrals		77.3		60.1
Asset Retirement Obligations		46.9		45.3
Losses on Reacquired Debt		22.3		21.5
Deferred Environmental Remediation Costs		39.8		36.8
Deferred Operation and Maintenance Costs		7.8		29.5
Other Regulatory Assets		84.1		81.5
Total Regulatory Assets	$	2,898.2	$	2,995.3
Less: Current Portion	$	242.1	$	238.7
Total Long-Term Regulatory Assets	$	2,656.1	$	2,756.6

	As of June 30, 2011						As of December 31, 2010
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Deferred Benefit Costs	$	445.6	$	145.9	$	91.2	$	471.8	$	152.6	$	96.0
Regulatory Assets Offsetting Derivative Liabilities		859.8		6.7		-		846.2		12.8		-
Securitized Assets		-		103.6		33.7		-		129.8		41.9
Income Taxes, Net		340.4		35.2		16.6		328.9		31.4		16.8
Unrecovered Contractual Obligations		89.6		-		22.8		97.9		-		25.3
Regulatory Tracker Deferrals		13.9		13.9		16.0		35.5		14.7		15.2
Storm Cost Deferrals		10.4		48.5		18.4		4.0		40.7		15.4
Asset Retirement Obligations		26.0		14.9		3.1		24.9		14.7		3.0
Losses on Reacquired Debt		11.1		9.5		0.3		11.2		8.4		0.4
Deferred Environmental Remediation Costs		-		9.7		-		-		9.7		-
Deferred Operation and Maintenance Costs		7.8		-		-		29.5		-		-
Other Regulatory Assets		27.5		26.4		9.3		29.0		19.6		13.1
Total Regulatory Assets	$	1,832.1	$	414.3	$	211.4	$	1,878.9	$	434.4	$	227.1
Less: Current Portion	$	163.9	$	38.7	$	19.5	$	157.5	$	39.2	$	19.5
Total Long-Term Regulatory Assets	$	1,668.2	$	375.6	$	191.9	$	1,721.4	$	395.2	$	207.6

Additionally, the Regulated companies had $4.4million ($0.8million for CL&P and $0.1million for WMECO) and $37.5million ($0.6million for CL&P, $26.5million for PSNH and $1.9million for WMECO) of regulatory costs as of June 30,2011 and December 31, 2010, respectively, which were included in Other Long-Term Assets on the accompanying unaudited condensed consolidated balance sheets. These amounts represent incurred costs that have not yet been approved for recovery by the applicable regulatory agency. Management believes these costs are probable of recovery in future cost-of-service regulated rates.

During June 2011, the NHPUC approved for recovery costs incurred for the February 2010 winter storm restorations and certain costs related to previously recognized tax benefits lost as a result of a provision in the 2010 Healthcare Act that eliminated the tax deductibility of actuarially equivalent Medicare Part D benefits for retirees. Both deferrals were previously recorded in Other Long-Term Assets. As of June 30, 2011, $10.9 million for the February 2010 wind storm costs and $7.2 million for the recovery of the future tax benefits lost as a result of the 2010 Healthcare Act were recorded as Regulatory Assets.

Major Storms: On June 1, 2011, a series of severe thunderstorms with high winds, including a tornado, struck portions of WMECO's service territory. The cost of restoring power, including rebuilding certain overhead electric distribution equipment and services, that was deferred for future recovery and recorded as a regulatory asset as of June 30, 2011 totaled $3.2 million. On June 9, 2011, another series of severe thunderstorms with high winds struck CL&P, PSNH and WMECO's service territories. The cost of restoration that was deferred for future recovery from customers and recorded as regulatory assets as of June 30, 2011 for CL&P and WMECO totaled $7.9 million and $1.2 million, respectively.

Regulatory Liabilities: The components of regulatory liabilities are as follows:
	As of June 30, 2011		As of December 31, 2010
(Millions of Dollars)	NU		NU
Cost of Removal	$	186.7	$	194.8
Regulatory Liabilities Offsetting Derivative Assets		-		38.1
Regulatory Tracker Deferrals		124.4		95.1
AFUDC Transmission Incentive		67.5		62.1
Pension Liability - Yankee Gas Acquisition		11.3		12.5
Overrecovered Spent Nuclear Fuel Costs and Contractual Obligations		14.6		14.6
Wholesale Transmission Overcollections		8.7		13.7
Other Regulatory Liabilities		13.7		8.2
Total Regulatory Liabilities	$	426.9	$	439.1
Less: Current Portion	$	153.0	$	99.4
Total Long-Term Regulatory Liabilities	$	273.9	$	339.7

		As of June 30, 2011								As of December 31, 2010
(Millions of Dollars)		CL&P		PSNH		WMECO		CL&P			PSNH		WMECO
Cost of Removal		$	72.8	$	55.8	$	9.3	$	78.6		$	57.3	$	9.5
Regulatory Liabilities Offsetting
	Derivative Assets		-		-		-		38.1			-		-
Regulatory Tracker Deferrals			84.8		19.4		11.6		79.4			6.6		4.8
AFUDC Transmission Incentive			58.2		-		9.3		56.5			-		5.6
Overrecovered Spent Nuclear Fuel Costs and
	Contractual Obligations		14.6		-		-		14.6			-		-
Wholesale Transmission Overcollections			7.6		-		1.1		13.7			-		-
WMECO Provision For Rate Refunds			-		-		1.8		-			-		2.0
Other Regulatory Liabilities			6.5		4.3		0.4		1.2			3.1		1.1
Total Regulatory Liabilities		$	244.5	$	79.5	$	33.5	$	282.1		$	67.0	$	23.0
Less: Current Portion		$	102.9	$	22.4	$	16.6	$	75.7		$	8.4	$	8.0
Total Long-Term Regulatory Liabilities		$	141.6	$	57.1	$	16.9	$	206.4		$	58.6	$	15.0