The rates charged to the customers of NU's Regulated companies are designed to collect the companies' costs to provide service, including a return on investment. Therefore, the accounting policies of the Regulated companies apply GAAP applicable to rate-regulated enterprises and 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 any of the Regulated companies' operations, or that management could not conclude it is probable that costs would be recovered in future rates, the costs would be charged to net income in the period in which the determination is made.

	As of March 31, 2013		As of December 31, 2012
(Millions of Dollars)	NU		NU
Benefit Costs	$	2,390.4	$	2,452.1
Regulatory Assets Offsetting Derivative Liabilities		835.0		885.6
Goodwill		532.5		537.6
Storm Restoration Costs		656.1		547.7
Income Taxes, Net		521.7		516.2
Securitized Assets		157.6		232.6
Contractual Obligations		124.9		217.6
Power Contracts Buy Out Agreements		87.3		92.9
Regulatory Tracker Deferrals		177.2		190.1
Asset Retirement Obligations		90.2		88.8
Other Regulatory Assets		67.7		76.2
Total Regulatory Assets		5,640.6		5,837.4
Less: Current Portion		625.5		705.0
Total Long-Term Regulatory Assets	$	5,015.1	$	5,132.4

		As of March 31, 2013								As of December 31, 2012
				NSTAR								NSTAR
(Millions of Dollars)		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs		$	546.9	$	769.0	$	217.2	$	112.6	$	563.2	$	781.2	$	223.7	$	116.0
Regulatory Assets Offsetting
	Derivative Liabilities		819.6		13.6		-		1.8		866.2		14.9		-		3.0
Goodwill			-		457.2		-		-		-		461.5		-		-
Storm Restoration Costs			448.7		132.7		32.3		42.4		413.9		55.8		34.5		43.5
Income Taxes, Net			371.7		46.7		37.3		31.1		367.5		47.1		36.2		31.0
Securitized Assets			-		149.5		5.0		3.1		-		205.1		19.7		7.8
Contractual Obligations			59.7		20.9		-		13.7		64.0		22.8		-		14.9
Power Contracts Buy Out Agreements			-		80.7		6.6		-		-		85.9		7.0		-
Regulatory Tracker Deferrals			10.1		84.5		49.7		31.3		12.2		71.4		49.3		31.9
Asset Retirement Obligations			30.0		29.8		14.3		3.6		29.4		29.4		14.2		3.5
Other Regulatory Assets			27.3		14.3		29.1		11.8		27.9		16.9		29.4		12.6
Total Regulatory Assets			2,314.0		1,798.9		391.5		251.4		2,344.3		1,792.0		414.0		264.2
Less: Current Portion			172.9		309.6		62.2		43.5		185.9		347.1		62.9		42.4
Total Long-Term Regulatory Assets		$	2,141.1	$	1,489.3	$	329.3	$	207.9	$	2,158.4	$	1,444.9	$	351.1	$	221.8

Storm Restoration Costs: The storm restoration cost deferrals relate to costs incurred at CL&P, NSTAR Electric, PSNH and WMECO that each company expects to collect from customers. A storm must meet certain criteria specific to each state and utility company to be declared a major storm. Once a storm is declared major, all qualifying expenses incurred during storm restoration efforts, if deemed prudent, are deferred and recovered from customers in future periods. In Connecticut, qualifying storm restoration costs must exceed $5 million for a storm to be declared a major storm. In Massachusetts, qualifying storm restoration costs must exceed $1 million for NSTAR Electric and $300,000 for WMECO and an emergency response plan must be initiated for a storm to be declared a major storm. In New Hampshire, (1) at least 10 percent of customers must be without power with at least 200 concurrent locations requiring repairs (trouble spots), or (2) at least 300 concurrent trouble spots must be reported for a storm to be declared a major storm. In addition, PSNH is permitted to defer pre-staging costs for storms that may not ultimately qualify as a major storm.

On February 8, 2013, a blizzard caused damage to the electric delivery systems of CL&P and NSTAR Electric. This blizzard resulted in estimated deferred storm restoration costs of approximately $13 million at CL&P and approximately $80 million at NSTAR Electric. On January 31, 2013, a major storm caused damage to CL&P's electric delivery system, which resulted in estimated deferred storm restoration costs of approximately $19 million. Management believes these storm restoration costs meet the criteria for specific cost recovery in Connecticut and Massachusetts and, as a result, are probable of recovery. Therefore, management does not expect these storms to have a material impact on CL&P's or NSTAR Electric's results of operations. CL&P and NSTAR Electric will seek recovery of these deferred storm restoration costs through their applicable regulatory recovery process.

Regulatory Costs Not Yet Approved: The Regulated companies had $78.8 million ($3.7 million for CL&P, $26.3 million for NSTAR Electric, $37.2 million for PSNH, and $6 million for WMECO) and $69.9 million ($3.9 million for CL&P, $25.4 million for NSTAR Electric, $35.7 million for PSNH, and $1.4 million for WMECO) of regulatory costs as of March 31, 2013 and December 31, 2012, respectively, which were included in Other Long-Term Assets on the consolidated balance sheets. These amounts represent incurred costs that have not yet been approved for recovery by the applicable regulatory agency. Management believes it is probable that these costs will ultimately be approved and recovered from customers.

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

	As of March 31, 2013		As of December 31, 2012
(Millions of Dollars)	NU		NU
Cost of Removal	$	441.3	$	440.8
Regulatory Tracker Deferrals		147.0		95.1
AFUDC Transmission Incentive		68.9		70.0
Spent Nuclear Fuel Costs and Contractual Obligations		15.4		15.4
Other Regulatory Liabilities		50.6		53.0
Total Regulatory Liabilities		723.2		674.3
Less: Current Portion		191.7		134.1
Total Long-Term Regulatory Liabilities	$	531.5	$	540.2


		As of March 31, 2013								As of December 31, 2012
				NSTAR								NSTAR
(Millions of Dollars)		CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cost of Removal		$	39.3	$	244.5	$	51.3	$	-	$	44.2	$	240.3	$	51.2	$	-
Regulatory Tracker Deferrals			39.1		37.3		13.8		12.5		39.1		14.4		20.4		13.7
AFUDC Transmission Incentive			55.5		4.1		-		9.3		56.6		4.1		-		9.3
Spent Nuclear Fuel Costs and
	Contractual Obligations		15.4		-		-		-		15.4		-		-		-
Wholesale Transmission Overcollections			2.3		-		1.1		0.9		-		-		-		5.3
Other Regulatory Liabilities			1.4		29.8		4.4		2.6		1.1		32.9		3.8		2.4
Total Regulatory Liabilities			153.0		315.7		70.6		25.3		156.4		291.7		75.4		30.7
Less: Current Portion			42.3		67.3		18.1		15.6		32.1		47.5		23.0		21.0
Total Long-Term Regulatory Liabilities		$	110.7	$	248.4	$	52.5	$	9.7	$	124.3	$	244.2	$	52.4	$	9.7