FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2012

Notes To Consolidated Financial Statements [Abstract]

Fair Value Disclosures [Text Block]

11.       FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:

Preferred Stock, Long-Term Debt and Rate Reduction Bonds: The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections. The fair value of fixed-rate long-term debt securities and RRBs is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields. Adjustable rate securities are assumed to have a fair value equal to their carrying value. The fair values provided in the tables below are classified as Level 2 within the fair value hierarchy. Carrying amounts and estimated fair values are as follows:

		As of June 30, 2012				As of December 31, 2011
		NU				NU
		Carrying		Fair		Carrying		Fair
(Millions of Dollars)		Amount		Value		Amount		Value
Preferred Stock Not
	Subject to Mandatory
	Redemption	$	155.6	$	153.1	$	116.2	$	105.1
Long-Term Debt			7,619.7		8,302.7		4,950.7		5,517.0
Rate Reduction Bonds			160.1		163.6		112.3		116.8

		As of June 30, 2012
		CL&P				NSTAR Electric				PSNH				WMECO
		Carrying		Fair		Carrying		Fair		Carrying		Fair		Carrying		Fair
(Millions of Dollars)		Amount		Value		Amount		Value		Amount		Value		Amount		Value
Preferred Stock Not
	Subject to Mandatory
	Redemption	$	116.2	$	110.1	$	43.0	$	43.0	$	-	$	-	$	-	$	-
Long-Term Debt			2,584.0		3,029.3		1,603.4		1,842.0		997.8		1,089.0		499.6		550.1
Rate Reduction Bonds			-		-		84.3		85.8		57.7		59.2		18.1		18.6
		As of December 31, 2011
		CL&P				NSTAR Electric(1)				PSNH				WMECO
		Carrying		Fair		Carrying		Fair		Carrying		Fair		Carrying		Fair
(Millions of Dollars)		Amount		Value		Amount		Value		Amount		Value		Amount		Value
Preferred Stock Not
	Subject to Mandatory
	Redemption	$	116.2	$	105.1	$	43.0	$	41.2	$	-	$	-	$	-	$	-
Long-Term Debt			2,587.8		2,987.1		1,605.1		1,816.1		999.5		1,075.2		501.1		539.8
Rate Reduction Bonds			-		-		127.9		131.2		85.4		88.8		26.9		28.1

• NSTAR Electric amounts are not included in NU consolidated as of December 31, 2011.

Derivative Instruments: NU, including CL&P, NSTAR Electric, PSNH and WMECO, holds various derivative instruments that are carried at fair value. For further information, see Note 5, "Derivative Instruments," to the unaudited condensed consolidated financial statements.

Other Financial Instruments: Investments in marketable securities are carried at fair value on the accompanying unaudited condensed consolidated balance sheets. For further information, see Note 1E, "Summary of Significant Accounting Policies - Fair Value Measurements," and Note 6, "Marketable Securities."

The carrying value of other financial instruments included in current assets and current liabilities, including cash and cash equivalents and special deposits, approximates their fair value due to the short-term nature of these instruments.