Limits: The amount of short-term borrowings that may be incurred by CL&P, NSTAR Electric and WMECO is subject to periodic approval by the FERC. On November 30, 2011, the FERC granted authorization to allow CL&P and WMECO to incur total short-term borrowings up to a maximum of $450 million and $300 million, respectively, effective January 1, 2012 through December 31, 2013. On March 22, 2012, the FERC approved CL&P's application requesting to increase its total short-term borrowing capacity from a maximum of $450 million to a maximum of $600 million for the authorization period through December 31, 2013. On May 16, 2012, the FERC granted authorization to allow NSTAR Electric to issue total short-term debt securities in an aggregate principal amount not to exceed $655 million outstanding at any one time, effective October 23, 2012 through October 23, 2014. As a result of the NHPUC having jurisdiction over PSNH's short-term debt, PSNH is not currently required to obtain FERC approval for its short-term borrowings.

PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional $60 million until further ordered by the NHPUC. As of December 31, 2012, PSNH's short-term debt authorization under the 10 percent of net fixed plant test plus $60 million totaled approximately $280 million.

CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur, including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. In November 2003, CL&P obtained from its preferred stockholders a waiver of such 10 percent limit for a ten-year period expiring in March 2014, provided that all unsecured indebtedness does not exceed 20 percent of total capitalization. As of December 31, 2012, CL&P had $482 million of unsecured debt capacity available under this authorization.

Yankee Gas and NSTAR Gas are not required to obtain approval from any state or federal authority to incur short-term debt.

Credit Agreements and Commercial Paper Programs: On July 25, 2012, NU, CL&P, NSTAR LLC, NSTAR Gas, PSNH, WMECO, and Yankee Gas jointly entered into a five-year $1.15 billion revolving credit facility. The new facility replaced (1) the NSTAR LLC revolving credit facility of $175 million that served to backstop a commercial paper program utilized by NSTAR LLC and was scheduled to expire on December 31, 2012, (2) the NSTAR Gas revolving credit facility of $75 million that expired on June 8, 2012, and (3) the CL&P, PSNH, WMECO, and Yankee Gas joint three-year $400 million and NU parent three-year $500 million unsecured revolving credit facilities that were scheduled to expire on September 24, 2013. The new facility expires on July 25, 2017. Management expects the new facility to be used primarily to backstop the $1.15 billion commercial paper program at NU, which commenced July 25, 2012. The commercial paper program allows NU parent to issue commercial paper as a form of short-term debt. Under the terms of the agreement, NU parent may provide intercompany loans to its subsidiaries, including CL&P, PSNH and WMECO.

On July 25, 2012, NSTAR Electric entered into a five-year $450 million revolving credit facility. This new facility serves to backstop NSTAR Electric's existing $450 million commercial paper program. The new facility expires on July 25, 2017. This new facility replaced a prior $450 million NSTAR Electric revolving credit facility that was scheduled to expire on December 31, 2012.

As of December 31, 2012, NU had $1.15 billion in short-term borrowings outstanding under its commercial paper program. The weighted-average interest rate on these borrowings as of December 31, 2012 was 0.46 percent, which is generally based on money market rates. As of December 31, 2012, there were inter-company loans of $987.5 million from NU to its subsidiaries ($405.1 million for CL&P, $63.3 million for PSNH, and $31.9 million for WMECO). As of December 31, 2012, NSTAR Electric had $276 million in short-term borrowings outstanding under its commercial paper program, leaving $174 million of available borrowing capacity. The weighted-average interest rate on these borrowings as of December 31, 2012 was 0.31 percent, which is generally based on money market rates.

As of December 31, 2011, CL&P and Yankee Gas had $31 million and $30 million, respectively, in short-term borrowings outstanding under the joint $400 million revolving credit facility with weighted average interest rates of 4.03 percent and 2.07 percent, respectively. As of December 31, 2011, NU parent had $256 million in short-term borrowings outstanding under its $500 million revolving credit facility with a weighted average interest rate of 2.20 percent. As of December 31, 2011, there were also $17.9 million, $4 million and $5.4 million in LOCs outstanding under the NU parent credit facility for NU, CL&P and PSNH, respectively. As of December 31, 2011, NSTAR Electric had $141.5 million in short-term borrowings outstanding under its existing commercial paper program with a weighted average interest rate of 0.16 percent.

Under the credit facilities, NU and its subsidiaries must comply with certain financial and non-financial covenants, including a consolidated debt to total capitalization ratio. NU and its subsidiaries were in compliance with these covenants as of December 31, 2012 and 2011. If NU or its subsidiaries were not in compliance with these covenants, an event of default would occur requiring all outstanding borrowings by such borrower to be repaid and additional borrowings by such borrower would not be permitted under the respective credit facility.

Amounts outstanding under the commercial paper program are included in Notes Payable for NU and NSTAR Electric and classified in current liabilities on the accompanying consolidated balance sheet as management anticipates that all borrowings under these credit facilities will be outstanding for no more than 364 days at one time. Intercompany loans from NU to PSNH and WMECO are included in Notes Payable to Affiliated Companies and classified in current liabilities on the accompanying consolidated balance sheet.

On January 15, 2013, CL&P issued $400 million of Series A First and Refunding Mortgage Bonds with a coupon rate of 2.5 percent and a maturity date of January 15, 2023. The proceeds, net of issuance costs, were used to pay short-term borrowings outstanding under the CL&P credit agreement and the NU commercial paper program. As a result, as of December 31, 2012, CL&P's credit agreement borrowings of $89 million and intercompany loans related to the commercial paper program of $305.8 million have been classified as Long-Term Debt on the accompanying consolidated balance sheet.

CL&P Credit Agreement: On March 26, 2012, CL&P entered into a five-year unsecured revolving credit facility in the amount of $300 million, which expires on March 26, 2017. Under this facility, CL&P can borrow either on a short-term or a long-term basis subject to regulatory approval. As of December 31, 2012, CL&P had $89 million in borrowings outstanding under this credit agreement with a weighted average interest rate of 3.325 percent.

Under this facility, CL&P may borrow at prime rates or LIBOR-based rates, plus an applicable margin based on the higher of S&P's or Moody's credit ratings.

In addition, CL&P must comply with certain financial and non-financial covenants, including a consolidated debt to total capitalization ratio. CL&P was in compliance with these covenants as of December 31, 2012. If CL&P was not in compliance with these covenants, an event of default would occur requiring all outstanding borrowings to be repaid and additional borrowings would not be permitted under this credit facility.

Working Capital: NU, CL&P, NSTAR Electric, PSNH and WMECO use their available capital resources to fund their respective construction expenditures, meet debt requirements, pay costs, including storm-related costs, pay dividends and fund other corporate obligations, such as pension contributions. The current growth in NU's transmission construction expenditures utilizes a significant amount of cash for projects that have a long-term return on investment and recovery period. In addition, NU's Regulated companies operate in an environment where recovery of its electric and natural gas distribution construction expenditures takes place over an extended period of time. This impacts the timing of the revenue stream designed to fully recover the total investment plus a return on the equity portion of the cost and related financing costs. These factors have resulted in NU's current liabilities exceeding current assets by approximately $1.4 billion, $268 million, $198 million and $60 million at NU, CL&P, NSTAR Electric and WMECO, respectively, as of December 31, 2012.

As of December 31, 2012, approximately $730 million of NU's current liabilities relates to long-term debt that will be paid in the next 12 months, consisting of $550 million for NU parent, $55 million for WMECO, and $125 million for CL&P. Approximately $32 million relates to the amortization of the purchase accounting fair value adjustment that will be amortized in the next twelve months. NU, with its strong credit ratings, has several options available in the financial markets to repay or refinance these maturities with the issuance of new long-term debt. NU, CL&P, NSTAR Electric, and WMECO will reduce their short-term borrowings with cash received from operating cash flows or with the issuance of new long-term debt, as deemed appropriate given capital requirements and maintenance of NU's credit rating and profile. Management expects the future operating cash flows of NU, CL&P, NSTAR Electric and WMECO along with the access to financial markets, will be sufficient to meet any future operating requirements and capital investment forecasted opportunities.

Money Pool: As of December 31, 2011, NU parent, CL&P, PSNH, WMECO, Yankee Gas and certain of NU's other subsidiaries were members of the Money Pool. Short-term borrowing needs of the member companies were met with available funds of other member companies, including funds borrowed by NU parent. Investing and borrowing subsidiaries received or paid interest based on the average daily federal funds rate. In NU's consolidated financial statements, Money Pool amounts payable to or receivable from members eliminated in consolidation. As of December 31, 2011, Money Pool amounts were as follows:

	As of and for the Year Ended December 31, 2011
(Millions of Dollars, except percentages)	CL&P			PSNH			WMECO
Borrowings from/(Lendings to)	$	58.5		$	(55.9)		$	(11.0)
Weighted-Average Interest Rates		0.08	%		0.1	%		0.1	%

The net borrowings from/(lendings to) the Money Pool were recorded in Notes Payable to/Notes Receivable from Affiliated Companies on the accompanying consolidated balance sheets, respectively.