INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense are as follows:



Eversource (Millions of Dollars)	For the Years Ended December 31,
Eversource (Millions of Dollars)	2016			2015			2014
Current Income Taxes:
Federal	$	38.9		$	6.2		$	4.4
State	53.0			45.7			24.5
Total Current	91.9			51.9			28.9
Deferred Income Taxes, Net:
Federal	427.9			436.1			406.8
State	38.6			55.6			36.5
Total Deferred	466.5			491.7			443.3
Investment Tax Credits, Net	(3.4		)	(3.6		)	(3.9		)
Income Tax Expense	$	555.0		$	540.0		$	468.3



	For the Years Ended December 31,
	2016												2015												2014
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			WMECO			CL&P			NSTAR Electric			PSNH			WMECO			CL&P			NSTAR Electric			PSNH			WMECO
Current Income Taxes:
Federal	$	27.3		$	73.9		$	(13.7	)	$	12.5		$	26.9		$	36.3		$	(16.7	)	$	(3.5	)	$	(0.2	)	$	75.0		$	(22.6	)	$	1.9
State	13.3			35.0			8.8			4.5			15.8			19.8			6.0			1.6			4.3			20.2			(0.1		)	1.8
Total Current	40.6			108.9			(4.9		)	17.0			42.7			56.1			(10.7		)	(1.9		)	4.1			95.2			(22.7		)	3.7
Deferred Income Taxes, Net:
Federal	157.6			78.3			79.5			18.3			135.8			147.5			74.5			33.4			138.0			88.0			79.6			28.1
State	11.3			1.9			7.8			3.2			0.2			25.7			9.3			6.0			(7.1		)	20.1			15.2			6.0
Total Deferred	168.9			80.2			87.3			21.5			136.0			173.2			83.8			39.4			130.9			108.1			94.8			34.1
Investment Tax Credits, Net	(1.2		)	(1.3		)	—			(0.5		)	(1.3		)	(1.3		)	—			(0.5		)	(1.5		)	(1.3		)	—			(0.5		)
Income Tax Expense	$	208.3		$	187.8		$	82.4		$	38.0		$	177.4		$	228.0		$	73.1		$	37.0		$	133.5		$	202.0		$	72.1		$	37.3

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation between income tax expense and the expected tax expense at the statutory rate is as follows:



Eversource (Millions of Dollars, except percentages)	For the Years Ended December 31,
Eversource (Millions of Dollars, except percentages)	2016			2015			2014
Income Before Income Tax Expense	$	1,504.8		$	1,425.9		$	1,295.4

Statutory Federal Income Tax Expense at 35%	526.7			499.1			453.4
Tax Effect of Differences:
Depreciation	(3.4		)	(4.6		)	(5.6		)
Investment Tax Credit Amortization	(3.4		)	(3.6		)	(3.9		)
Other Federal Tax Credits	(3.5		)	(3.8		)	(3.5		)
State Income Taxes, Net of Federal Impact	56.2			61.1			42.5
Dividends on ESOP	(8.4		)	(8.1		)	(8.0		)
Tax Asset Valuation Allowance/Reserve Adjustments	3.3			4.7			(2.9		)
Excess Stock Benefit ⁽¹⁾	(19.1		)	—			—
Other, Net	6.6			(4.8		)	(3.7		)
Income Tax Expense	$	555.0		$	540.0		$	468.3
Effective Tax Rate	36.9		%	37.9		%	36.2		%



	For the Years Ended December 31,
	2016												2015												2014
(Millions of Dollars, except percentages)	CL&P			NSTAR Electric			PSNH			WMECO			CL&P			NSTAR Electric			PSNH			WMECO			CL&P			NSTAR Electric			PSNH			WMECO
Income Before Income Tax Expense	$	542.6		$	480.5		$	214.3		$	96.1		$	476.8		$	572.6		$	187.5		$	93.5		$	421.2		$	505.1		$	186.1		$	95.1

Statutory Federal Income Tax Expense at 35%	189.9			168.2			75.0			33.6			166.9			200.4			65.6			32.7			147.4			176.8			65.1			33.3
Tax Effect of Differences:
Depreciation	1.6			(3.4		)	1.0			0.3			(1.7		)	(1.4		)	0.5			(0.3		)	(3.6		)	(1.3		)	0.3			(0.2		)
Investment Tax Credit Amortization	(1.2		)	(1.3		)	—			(0.5		)	(1.3		)	(1.3		)	—			(0.5		)	(1.5		)	(1.3		)	—			(0.5		)
Other Federal Tax Credits	—			—			(3.5		)	—			—			—			(3.8		)	—			—			—			(3.5		)	—
State Income Taxes, Net of Federal Impact	14.5			24.0			10.8			5.0			9.2			29.6			9.9			4.9			4.4			26.2			9.8			5.0
Tax Asset Valuation Allowance/Reserve Adjustments	1.5			—			—			—			1.2			—			—			—			(6.3		)	—			—			—
Excess Stock Benefit ⁽¹⁾	(0.9		)	(1.0		)	(0.4		)	(0.2		)	—			—			—			—			—			—			—			—
Other, Net	2.9			1.3			(0.5		)	(0.2		)	3.1			0.7			0.9			0.2			(6.9		)	1.6			0.4			(0.3		)
Income Tax Expense	$	208.3		$	187.8		$	82.4		$	38.0		$	177.4		$	228.0		$	73.1		$	37.0		$	133.5		$	202.0		$	72.1		$	37.3
Effective Tax Rate	38.4		%	39.1		%	38.4		%	39.6		%	37.2		%	39.8		%	39.0		%	39.6		%	31.7		%	40.0		%	38.7		%	39.2		%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the net accumulated deferred income tax obligations are as follows:



Eversource (Millions of Dollars)	As of December 31,
Eversource (Millions of Dollars)	2016		2015
Deferred Tax Assets:
Employee Benefits	$	640.6	$	637.5
Derivative Liabilities	192.6		172.7
Regulatory Deferrals - Liabilities	290.9		243.5
Allowance for Uncollectible Accounts	76.6		60.5
Tax Effect - Tax Regulatory Liabilities	11.8		9.7
Federal Net Operating Loss Carryforwards	—		5.4
Purchase Accounting Adjustment	112.2		119.3
Other	170.5		197.1
Total Deferred Tax Assets	1,495.2		1,445.7
Less: Valuation Allowance	5.1		3.7
Net Deferred Tax Assets	$	1,490.1	$	1,442.0
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	5,001.2	$	4,602.6
Property Tax Accruals	81.9		76.7
Regulatory Amounts:
Regulatory Deferrals - Assets	1,321.8		1,289.1
Tax Effect - Tax Regulatory Assets	252.6		249.3
Goodwill Regulatory Asset - 1999 Merger	186.7		194.9
Derivative Assets	29.5		17.7
Other	223.6		159.4
Total Deferred Tax Liabilities	$	7,097.3	$	6,589.7



	As of December 31,
	2016								2015
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		WMECO		CL&P		NSTAR Electric		PSNH		WMECO
Deferred Tax Assets:
Employee Benefits	$	138.8	$	58.4	$	46.5	$	11.1	$	126.1	$	91.3	$	37.1	$	10.0
Derivative Liabilities	191.5		1.1		—		—		165.7		0.6		—		—
Regulatory Deferrals - Liabilities	6.3		186.4		36.7		8.5		36.0		109.4		42.1		6.1
Allowance for Uncollectible Accounts	33.0		20.0		4.1		5.7		30.4		8.5		3.6		4.5
Tax Effect - Tax Regulatory Liabilities	4.9		1.1		2.6		2.2		3.1		1.5		2.3		2.4
Federal Net Operating Loss Carryforwards	—		—		—		—		—		—		2.4		0.4
Other	59.4		2.2		56.4		4.4		55.5		3.4		61.1		5.0
Total Deferred Tax Assets	433.9		269.2		146.3		31.9		416.8		214.7		148.6		28.4
Less: Valuation Allowance	4.5		—		—		—		3.1		—		—		—
Net Deferred Tax Assets	$	429.4	$	269.2	$	146.3	$	31.9	$	413.7	$	214.7	$	148.6	$	28.4
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	1,700.3	$	1,463.5	$	726.3	$	438.4	$	1,545.6	$	1,387.1	$	655.3	$	416.1
Property Tax Accruals	29.7		25.6		8.0		11.2		27.3		22.8		7.3		10.6
Regulatory Amounts:
Regulatory Deferrals - Assets	473.4		322.3		142.1		59.4		456.8		339.7		137.9		60.5
Tax Effect - Tax Regulatory Assets	170.4		36.1		12.2		8.7		168.7		36.0		15.4		9.0
Goodwill Regulatory Asset - 1999 Merger	—		160.3		—		—		—		167.4		—		—
Derivative Assets	27.0		—		—		—		17.7		—		—		—
Other	16.3		97.7		43.1		5.0		18.5		22.0		38.6		2.7
Total Deferred Tax Liabilities	$	2,417.1	$	2,105.5	$	931.7	$	522.7	$	2,234.6	$	1,975.0	$	854.5	$	498.9

Summary of Operating Loss Carryforwards

The following tables provide the amounts and expiration dates of state tax credit and loss carryforwards and federal tax credit and net operating loss carryforwards:



	As of December 31, 2016
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO		Expiration Range
Federal Tax Credit	$	8.6	$	—	$	—	$	—	$	—	—
Federal Charitable Contribution	27.8		—		—		—		—		2016 - 2019
State Tax Credit	111.1		80.5		—		—		—		2016 - 2021
State Charitable Contribution	36.5		—		—		—		—		2016 - 2020



	As of December 31, 2015
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		WMECO		Expiration Range
Federal Net Operating Loss	$	15.5	$	—	$	—	$	7.0	$	1.0	2032
Federal Tax Credit	26.1		0.1		0.2		15.0		—		2031 - 2035
Federal Charitable Contribution	14.9		—		—		—		—		2016 - 2018
State Tax Credit	101.2		73.8		—		—		—		2015 - 2020
State Charitable Contribution	3.0		—		—		—		—		2015 - 2019

Summary of Income Tax Contingencies

A reconciliation of the activity in unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows:



(Millions of Dollars)	Eversource			CL&P
Balance as of January 1, 2014	$	38.2		$	11.4
Gross Increases - Current Year	9.3			2.7
Gross Increases - Prior Year	0.3			0.2
Lapse of Statute of Limitations	(1.6		)	—
Balance as of December 31, 2014	46.2			14.3
Gross Increases - Current Year	9.9			2.6
Gross Increases - Prior Year	0.1			—
Lapse of Statute of Limitations	(8.2		)	(3.4		)
Balance as of December 31, 2015	48.0			13.5
Gross Increases - Current Year	9.9			3.9
Gross Increases - Prior Year	0.2			0.2
Lapse of Statute of Limitations	(9.7		)	(2.3		)
Balance as of December 31, 2016	$	48.4		$	15.3

The amount of interest expense/(income) on uncertain tax positions recognized and the related accrued interest payable/(receivable) are as follows:



	Other Interest Expense/(Income)							Accrued Interest Expense
	For the Years Ended December 31,							As of December 31,
(Millions of Dollars)	2016			2015		2014		2016		2015
Eversource	$	(0.2	)	$	0.1	$	0.4	$	1.8	$	2.0

Summary of Income Tax Examinations

The following table summarizes Eversource, CL&P, NSTAR Electric, PSNH and WMECO's tax years that remain subject to examination by major tax jurisdictions as of December 31, 2016:



Description	Tax Years
Federal	2016
Connecticut	2013 - 2016
Massachusetts	2013 - 2016
New Hampshire	2014 - 2016