GENERATION ASSET SALE

12 Months Ended

Dec. 31, 2019

Regulated Operations [Abstract]

GENERATION ASSET SALE

GENERATION ASSET SALE

On January 10, 2018, PSNH completed the sale of its thermal generation assets. The original purchase price of $175 million was adjusted to reflect working capital adjustments, closing date adjustments and proration of taxes and fees prior to closing. As a result of these adjustments, net proceeds from the sale of the thermal assets totaled $116.8 million. On August 26, 2018, PSNH completed the sale of its hydroelectric generation assets. The original purchase price of $83 million was adjusted to reflect contractual adjustments totaling $5.8 million, resulting in net proceeds of $77.2 million. The difference between the carrying value of the hydroelectric generation assets and the sale proceeds resulted in a gain of $17.3 million. An estimated gain from the sale of these assets was included as an offset to the total remaining costs associated with the sale of generation assets that were securitized on May 8, 2018.

On May 8, 2018, PSNH Funding issued $635.7 million of securitized RRBs to finance PSNH's unrecovered remaining costs resulting from the divestiture of its generation assets, which included the deferred costs resulting from the sale of the thermal generation assets. These RRBs are secured by a non-bypassable charge recoverable from PSNH customers. PSNH recorded regulatory assets and other deferred costs in connection with the generation asset divestiture and the securitization of remaining costs, which are probable of recovery through collection of the non-bypassable charge. As of December 31, 2019 and 2018, unamortized securitized stranded costs totaled $565.3 million and $608.4 million, respectively, and are included in Regulatory Assets on the Eversource and PSNH balance sheets. For further information on the securitized RRB issuance, see Note 10, "Rate Reduction Bonds and Variable Interest Entities."

On November 27, 2019, PSNH filed a motion for the commencement of audit of divestiture-related costs. PSNH’s actual balance of costs eligible for recovery as divestiture-related costs is $654.0 million, which is above the $635.7 million amount securitized in May 2018. PSNH proposed to recover this balance through the SCRC tracker mechanism and believes the amount deferred is probable of recovery. These deferred costs are recorded in Other Long-Term Assets on the balance sheet.

For the year ended December 31, 2018, pre-tax income associated with the hydroelectric assets prior to the sale on August 26, 2018 was $9.9 million. For the year ended December 31, 2017, pre-tax income associated with PSNH's generation assets was $60.0 million. As of December 31, 2018, all generation assets had been sold.