XML 51 R8.htm IDEA: XBRL DOCUMENT v2.4.0.6
REGULATORY ACCOUNTING
 3 Months Ended
Mar. 31, 2012
Notes To Consolidated Financial Statements [Abstract]  
Public Utilities Disclosure [Text Block]

3.       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. If management determined that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to the Regulated companies' operations, or that management could not conclude it is probable that costs would be recovered or reflected in future rates, the costs would be charged to net income in the period in which the determination is made.

 

Regulatory Assets: The components of regulatory assets are as follows:

 As of March 31, 2012 As of December 31, 2011
(Millions of Dollars)NU NU
Deferred Benefit Costs$ 1,322.2 $ 1,360.5
Regulatory Assets Offsetting Derivative Liabilities  912.2   939.6
Securitized Assets  83.5   101.8
Income Taxes, Net  446.1   425.4
Unrecovered Contractual Obligations  95.4   100.9
Regulatory Tracker Deferrals  43.7   45.9
Storm Cost Deferrals  365.5   356.0
Asset Retirement Obligations   48.4   47.5
Losses on Reacquired Debt  24.2   24.5
Deferred Environmental Remediation Costs  37.6   38.5
Other Regulatory Assets  77.3   82.2
Total Regulatory Assets$ 3,456.1 $ 3,522.8
Less: Current Portion$ 241.9 $ 255.1
Total Long-Term Regulatory Assets$ 3,214.2 $ 3,267.7

    
 As of March 31, 2012 As of December 31, 2011
(Millions of Dollars)CL&P PSNH WMECO CL&P PSNH WMECO
Deferred Benefit Costs$ 556.5 $ 194.1 $ 115.5 $ 572.8 $ 200.0 $ 118.9
Regulatory Assets Offsetting Derivative Liabilities  899.9   -   12.3   932.0   -   7.3
Securitized Assets  -   62.5   21.0   -   76.4   25.4
Income Taxes, Net  348.0   37.7   29.3   339.6   38.0   17.8
Unrecovered Contractual Obligations  76.7   -   18.7   80.9   -   20.0
Regulatory Tracker Deferrals  4.7   14.5   22.7   5.5   11.9   22.1
Storm Cost Deferrals  280.9   41.7   42.9   268.3   44.0   43.7
Asset Retirement Obligations   28.5   13.7   3.3   27.9   13.5   3.2
Losses on Reacquired Debt  13.9   8.8   0.3   13.9   9.0   0.3
Deferred Environmental Remediation Costs  -   9.8   -   -   9.7   -
Other Regulatory Assets  33.3   25.7   9.7   33.1   25.6   10.0
Total Regulatory Assets$ 2,242.4 $ 408.5 $ 275.7 $ 2,274.0 $ 428.1 $ 268.7
Less: Current Portion$ 172.3 $ 33.4 $ 33.5 $ 170.2 $ 34.2 $ 35.5
Total Long-Term Regulatory Assets$ 2,070.1 $ 375.1 $ 242.2 $ 2,103.8 $ 393.9 $ 233.2

Additionally, the Regulated companies had $32.6 million ($4.2 million for CL&P, $23.5 million for PSNH, and $1.6 million for WMECO) and $32.4 million ($5 million for CL&P, $22.4 million for PSNH, and $1.6 million for WMECO) of regulatory costs as of March 31, 2012 and December 31, 2011, 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.

 

As part of the settlement agreement NU and NSTAR reached with both the Connecticut Attorney General and the Connecticut Office of Consumer Counsel on March 13, 2012, in the second quarter of 2012, CL&P will record a reserve of $40 million associated with the deferred storm costs related to Tropical Storm Irene and the October 2011 snowstorm. CL&P will file with PURA for recovery of the total deferred storm costs. The total approved costs, which will reflect the $40 million reserve, will be collected over a six year period beginning December 1, 2014. Management believes CL&P's, PSNH's and WMECO's response to the 2011 storms was prudent and therefore believes it is probable that they will be allowed to recover these remaining deferred storm costs. See Note 2, “Merger of NU and NSTAR,” to the unaudited condensed consolidated financial statements for further information.

 

Regulatory Liabilities: The components of regulatory liabilities are as follows:

 As of March 31, 2012 As of December 31, 2011
(Millions of Dollars)NU NU
Cost of Removal$ 164.3 $ 172.2
Regulatory Tracker Deferrals  112.9   139.1
AFUDC Transmission Incentive  66.7   67.0
Pension Liability - Yankee Gas Acquisition  9.4   10.0
Overrecovered Spent Nuclear Fuel Costs and Contractual Obligations  15.4   15.4
Wholesale Transmission Overcollections  9.0   9.6
Other Regulatory Liabilities  20.4   20.6
Total Regulatory Liabilities$ 398.1 $ 433.9
Less: Current Portion$ 149.8 $ 167.8
Total Long-Term Regulatory Liabilities$ 248.3 $ 266.1

  As of March 31, 2012 As of December 31, 2011
(Millions of Dollars)CL&P PSNH WMECO CL&P PSNH WMECO
Cost of Removal$ 57.1 $ 52.8 $ 6.2 $ 63.8 $ 53.2 $ 7.2
Regulatory Tracker Deferrals  69.7   14.0   17.7   94.4   17.3   21.3
AFUDC Transmission Incentive   57.4   -   9.3   57.7   -   9.3
Overrecovered Spent Nuclear Fuel Costs and                  
 Contractual Obligations  15.4   -   -   15.4   -   -
Wholesale Transmission Overcollections  5.1   4.4   10.8   4.5   2.6   9.5
Other Regulatory Liabilities  11.5   6.1   2.1   11.8   5.8   2.4
Total Regulatory Liabilities$ 216.2 $ 77.3 $ 46.1 $ 247.6 $ 78.9 $ 49.7
Less: Current Portion$ 82.4 $ 23.1 $ 30.4 $ 108.3 $ 24.5 $ 33.1
Total Long-Term Regulatory Liabilities$ 133.8 $ 54.2 $ 15.7 $ 139.3 $ 54.4 $ 16.6