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PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

12 Months Ended

Dec. 31, 2012

Notes To Consolidated Financial Statements [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

10. EMPLOYEE BENEFITS

A. Pension Benefits and Postretirement Benefits Other Than Pensions

NUSCO sponsors a defined benefit retirement plan that covers most employees, including CL&P, PSNH, and WMECO employees, hired before 2006 (or as negotiated, for bargaining unit employees), referred to as the NUSCO Pension Plan. NSTAR Electric serves as plan sponsor for a defined benefit retirement plan that covers most employees of NSTAR Electric & Gas, hired before October 1, 2012, or as negotiated by bargaining unit employees, referred to as the NSTAR Pension Plan. Both plans are subject to the provisions of ERISA, as amended by the PPA of 2006. NUSCO and NSTAR Electric & Gas each maintain SERPs and other non-qualified defined benefit retirement plans (herein collectively referred to as the SERP Plans), which provide benefits in excess of Internal Revenue Code limitations to eligible current and retired participants that would have otherwise been provided under the Pension Plans.

NUSCO and NSTAR Electric & Gas also sponsor defined benefit postretirement plans that provide certain retiree health care benefits, primarily medical and dental, and life insurance benefits to retiring employees that meet certain age and service eligibility requirements (NUSCO PBOP Plans and NSTAR PBOP Plan, respectively). Under certain circumstances, eligible retirees are required to contribute to the costs of postretirement benefits. The benefits provided under the NUSCO and NSTAR PBOP Plans are not vested and the Company has the right to modify any benefit provision subject to applicable laws at that time.

The funded status of the Pension, SERP and PBOP Plans is calculated based on the difference between the benefit obligation and the fair value of plan assets. The funded status of the Pension, SERP and PBOP Plans is recorded on the consolidated balance sheets as a liability with an offset to Accumulated Other Comprehensive Income/(Loss). Pension, SERP and PBOP costs for the Regulated companies are recorded as Regulatory Assets as these amounts are recovered from customers. Regulatory accounting was also applied to the portions of the NUSCO and NSTAR Electric & Gas costs that support the Regulated companies, as these costs are also recovered from customers. Pension and PBOP costs for the unregulated companies are recorded on an after-tax basis to Accumulated Other Comprehensive Income/(Loss). For further information, see Note 3, "Regulatory Accounting," and Note 15, "Accumulated Other Comprehensive Income/(Loss)," to the consolidated financial statements. The SERP Plans do not have plan assets.

For the NUSCO Pension and PBOP Plans, the expected return on plan assets is calculated by applying the assumed rate of return to a four-year rolling average of plan asset fair values, which reduces year-to-year volatility. Investment gains or losses for this purpose are the difference between the calculated expected return and the actual return. As investment gains and losses are reflected in the average plan asset fair values, they are subject to amortization with other unrecognized actuarial gains or losses. For the NSTAR Pension and PBOP Plans, the entire difference between the actual return and calculated expected return on plan assets is reflected as a component of unrecognized actuarial gain or loss. Unrecognized actuarial gains or losses are amortized as a component of Pension and PBOP expense over the estimated average future employee service period.

Pension and SERP Plans: The funded status of each of the plans is recorded on the respective sponsor's balance sheet: NUSCO (NUSCO Pension and NUSCO SERP), NSTAR Electric (NSTAR Pension) and NSTAR Electric & Gas (NSTAR SERP). The NUSCO plans are accounted for under the multiple-employer approach while the NSTAR plans are accounted for under the multi-employer approach. Accordingly, the balance sheet of NSTAR Electric reflects the full funded status of the NSTAR Pension Plan.

The following tables provide information on the Pension and SERP Plan benefit obligations, fair values of Pension Plan assets, and funded status:

	Pension and SERP
NU	As of December 31,
(Millions of Dollars)	2012		2011
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(3,098.9)	$	(2,820.9)
Liabilities Assumed from Merger with NSTAR		(1,409.7)		-
Service Cost		(84.3)		(55.4)
Interest Cost		(198.3)		(153.3)
Actuarial Loss		(429.7)		(206.1)
Benefits Paid - Excluding Lump Sum Payments		187.7		134.4
Benefits Paid - SERP		4.2		2.4
SERP curtailment		6.2		-
Benefit Obligation as of End of Year	$	(5,022.8)	$	(3,098.9)
Change in Pension Plan Assets
Fair Value of Plan Assets as of Beginning of Year	$	2,005.9	$	1,977.6
Assets Assumed from Merger with NSTAR		984.7		-
Employer Contributions		222.4		143.6
Actual Return on Plan Assets		386.0		19.1
Benefits Paid - Excluding Lump Sum Payments		(187.7)		(134.4)
Fair Value of Plan Assets as of End of Year	$	3,411.3	$	2,005.9
Funded Status as of December 31^st	$	(1,611.5)	$	(1,093.0)

	Pension and SERP
	As of December 31, 2012								As of December 31, 2011
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric ⁽¹⁾		PSNH		WMECO		CL&P		Electric ^(1),(2)		PSNH		WMECO
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year	$	(1,043.8)	$	(1,346.2)	$	(497.9)	$	(215.8)	$	(964.3)	$	(1,184.6)	$	(448.7)	$	(196.6)
Service Cost		(21.8)		(30.3)		(11.8)		(4.1)		(19.5)		(26.0)		(10.6)		(3.9)
Interest Cost		(51.2)		(58.9)		(24.4)		(10.5)		(51.9)		(61.0)		(24.4)		(10.7)
Actuarial Loss		(117.4)		(63.6)		(61.3)		(24.0)		(64.0)		(138.0)		(33.2)		(15.4)
Benefits Paid - Excluding Lump Sum Payments		55.9		69.0		19.7		11.3		55.6		59.6		18.9		10.8
Benefits Paid - SERP		0.3		-		-		-		0.3		-		0.1		-
Curtailment and Settlement Payments		-		-		(0.3)		-		-		3.8		-		-
Benefit Obligation as of End of Year	$	(1,178.0)	$	(1,430.0)	$	(576.0)	$	(243.1)	$	(1,043.8)	$	(1,346.2)	$	(497.9)	$	(215.8)
Change in Pension Plan Assets
Fair Value of Plan Assets as of Beginning of Year	$	869.6	$	988.5	$	279.7	$	202.0	$	918.4	$	930.6	$	185.4	$	209.8
Employer Contributions		-		25.0		87.7		-		-		125.0		112.6		-
Actual Return/(Loss) on Plan Assets		123.9		124.6		38.9		27.8		6.8		(3.7)		0.6		3.0
Benefits Paid - Excluding Lump Sum Payments		(55.9)		(69.0)		(19.7)		(11.3)		(55.6)		(59.6)		(18.9)		(10.8)
Benefits Paid - Settlement Payments		-		-		-		-		-		(3.8)		-		-
Fair Value of Plan Assets as of End of Year	$	937.6	$	1,069.1	$	386.6	$	218.5	$	869.6	$	988.5	$	279.7	$	202.0
Funded Status as of December 31^st	$	(240.4)	$	(360.9)	$	(189.4)	$	(24.6)	$	(174.2)	$	(357.7)	$	(218.2)	$	(13.8)

Pension and SERP benefits funded status includes the current portion of the SERP liability, which is included in Other Current Liabilities on the accompanying consolidated balance sheets.

Although the Company maintains a trust to support the SERP with marketable securities held in the NU supplemental benefit trust, the plan itself does not contain any assets. For information regarding the investments in the NU supplemental benefit trust that are used to informally support the SERP liability, see Note 6, "Marketable Securities," to the consolidated financial statements.

⁽¹⁾ NSTAR Electric amounts do not include benefit obligations of the NSTAR SERP Plan.
⁽²⁾ NSTAR Electric amounts are not included in NU consolidated as of December 31, 2011.

The accumulated benefit obligation for the Pension and SERP Plans is as follows:

		Pension and SERP
		As of December 31,
(Millions of Dollars)		2012		2011
NU		$	4,622.1	$	2,810.6
CL&P			1,061.8		938.4
NSTAR Electric ⁽¹⁾			1,353.1		1,271.3
PSNH			515.9		444.8
WMECO			221.3		195.5

⁽¹⁾	NSTAR Electric amounts are not included in NU consolidated as of December 31, 2011 and do not include the accumulated benefit obligation for the SERP Plan.

The following actuarial assumptions were used in calculating the Pension and SERP Plans' year end funded status:

	Pension and SERP
	As of December 31,
	2012		2011
NUSCO Pension and SERP Plans
Discount Rate	4.24	%	5.03	%
Compensation/Progression Rate	3.50	%	3.50	%

NSTAR Pension and SERP Plans
Discount Rate	4.13	%	4.52	%
Compensation/Progression Rate	4.00	%	4.00	%

Pension and SERP Expense: For the NUSCO Plans, NU allocates net periodic pension expense to its subsidiaries based on the actual participant demographic data for each subsidiary's participants. Benefit payments to participants and contributions are also tracked for each subsidiary. The actual investment return in the trust each year is allocated to each of the subsidiaries annually in proportion to the investment return expected to be earned during the year. For the NSTAR Pension Plan, the net periodic pension expense recorded at NSTAR Electric represents the full cost of the plan and then a portion of the costs are allocated to affiliated companies based on participant demographic data. The components of net periodic benefit expense, the portion of pension amounts capitalized related to employees working on capital projects, and intercompany allocations not included in the net periodic benefit expense amounts for the Pension and SERP Plans were as follows:

		Pension and SERP
		For the Year Ended December 31, 2012
						NSTAR
(Millions of Dollars)		NU		CL&P		Electric⁽¹⁾		PSNH		WMECO
Service Cost		$	84.3	$	21.8	$	30.3	$	11.8	$	4.1
Interest Cost			198.3		51.2		58.9		24.4		10.5
Expected Return on Plan Assets			(220.9)		(70.6)		(65.6)		(28.2)		(16.4)
Actuarial Loss			172.4		49.6		63.1		16.2		10.7
Prior Service Cost/(Credit)			7.9		3.6		(0.6)		1.5		0.8
Total Net Periodic Benefit Expense		$	242.0	$	55.6	$	86.1	$	25.7	$	9.7
Curtailments and Settlements		$	2.2	$	-	$	-	$	-	$	-
Related Intercompany Allocations			N/A	$	42.8	$	(12.3)	$	10.1	$	8.1
Capitalized Pension Expense		$	70.6	$	26.8	$	30.7	$	7.9	$	5.1

		Pension and SERP
		For the Year Ended December 31, 2011
						NSTAR
(Millions of Dollars)		NU		CL&P		Electric⁽¹⁾		PSNH		WMECO
Service Cost		$	55.4	$	19.5	$	26.0	$	10.6	$	3.9
Interest Cost			153.3		51.9		61.0		24.4		10.7
Expected Return on Plan Assets			(170.8)		(76.6)		(71.4)		(19.8)		(17.7)
Actuarial Loss			84.2		33.4		48.6		10.7		7.1
Prior Service Cost/(Credit)			9.7		4.2		(0.7)		1.8		0.9
Total Net Periodic Benefit Expense		$	131.8	$	32.4	$	63.5	$	27.7	$	4.9
Related Intercompany Allocations			N/A	$	34.1	$	(10.2)	$	7.6	$	6.2
Capitalized Pension Expense		$	29.7	$	16.6	$	19.8	$	7.6	$	2.7

		Pension and SERP
		For the Year Ended December 31, 2010
						NSTAR
(Millions of Dollars)		NU		CL&P		Electric⁽¹⁾		PSNH		WMECO
Service Cost		$	51.0	$	17.6	$	23.6	$	10.0	$	3.5
Interest Cost			152.6		52.2		61.8		24.1		10.7
Expected Return on Plan Assets			(182.6)		(85.8)		(62.8)		(14.7)		(19.5)
Actuarial Loss			53.5		20.7		50.4		7.2		4.3
Prior Service Cost/(Credit)			9.9		4.2		(0.7)		1.8		0.9
Total Net Periodic Benefit Expense/(Income)		$	84.4	$	8.9	$	72.3	$	28.4	$	(0.1)
Related Intercompany Allocations			N/A	$	25.2	$	(11.6)	$	6.0	$	4.5
Capitalized Pension Expense		$	16.9	$	3.8	$	24.5	$	6.9	$	-

⁽¹⁾	NSTAR Electric amounts are included in NU consolidated from the date of the merger, April 10, 2012, through December 31, 2012. NSTAR Electric amounts are not included in NU consolidated for the years ended December 31, 2011 and 2010. NSTAR Electric's allocated expense associated with the NSTAR SERP was $3.6 million, $4.4 million and $3.9 million for the years ended December 31, 2012, 2011 and 2010, respectively, and are not included in the NSTAR Electric amounts in the tables above.

The following actuarial assumptions were used to calculate Pension and SERP expense amounts:

	Pension and SERP
	For the Years Ended December 31,
NUSCO Pension and SERP Plans	2012		2011		2010
Discount Rate	5.03	%	5.57	%	5.98	%
Expected Long-Term Rate of Return	8.25	%	8.25	%	8.75	%
Compensation/Progression Rate	3.50	%	3.50	%	4.00	%

NSTAR Pension and SERP Plans
Discount Rate	4.52	%	5.30	%	5.85	%
Expected Long-Term Rate of Return	7.30	%	8.00	%	8.00	%
Compensation/Progression Rate	4.00	%	4.00	%	4.00	%

The following is a summary of the changes in plan assets and benefit obligations recognized in Regulatory Assets and OCI as well as amounts in Regulatory Assets and OCI reclassified as net periodic benefit expense during the years presented:

	Amounts Reclassified To/From
	Regulatory Assets				OCI
(Millions of Dollars)	For the Years Ended December 31,
NU Pension and SERP Plans⁽¹⁾	2012		2011		2012		2011
Actuarial Losses Arising During the Year	$	245.7	$	334.8	$	19.1	$	23.0
Actuarial Losses Reclassified as Net Periodic Benefit Expense		(164.6)		(79.4)		(7.8)		(4.8)
Prior Service Cost Reclassified as Net Periodic Benefit Expense		(7.7)		(9.4)		(0.2)		(0.3)

The following is a summary of the remaining Regulatory Assets and Accumulated Other Comprehensive Loss amounts that have not been recognized as components of net periodic benefit expense as of December 31, 2012 and 2011, and the amounts that are expected to be recognized as components in 2013:

		Regulatory Assets as of				Expected		AOCI as of			Expected
(Millions of Dollars)	December 31,					2013	December 31,				2013
NU Pension and SERP Plans⁽¹⁾	2012		2011		Expense		2012		2011		Expense
Actuarial Loss	$	1,973.8	$	1,126.1	$	200.8	$	81.5	$	70.2	$	9.3
Prior Service Cost		21.2		29.3		3.9		1.2		1.4		0.2

(1) The NU consolidated amounts reflect the NSTAR Pension and SERP Plans from the date of the merger, April 10, 2012, through December 31, 2012.

NSTAR Electric continues to maintain reporting requirements as an SEC registrant. Included in the amounts above as of December 31, 2012 are $724 million of unrecognized actuarial losses included in Regulatory Assets for NSTAR Electric. For the year ended December 31, 2012, NSTAR Electric reclassified $62.8 million of actuarial losses and $0.6 million of prior service credit as net periodic benefit expense and $4.6 million of actuarial losses arose during the year. As of December 31, 2011, NSTAR Electric had $782.3 million of unrecognized actuarial losses and $0.6 million of prior service credit included in Regulatory Assets. For the year ended December 31, 2011, NSTAR Electric reclassified $48.4 million of actuarial losses and $0.7 million of prior service credit as net periodic benefit expense and $212 million of actuarial losses arose during the year.

PBOP Plans: The NUSCO Plans are accounted for under the multiple-employer basis while the NSTAR Plan is accounted for under the multi-employer basis. Accordingly, the funded status of the NUSCO PBOP Plans is allocated to its subsidiaries, including CL&P, PSNH and WMECO, while the NSTAR PBOP Plan is not reflected on the SEC registrant NSTAR Electric's balance sheet.

NU annually funds postretirement costs through tax deductible contributions to external trusts.

The following tables represent information on PBOP Plan benefit obligations, fair values of plan assets, and funded status:

		PBOP
		As of December 31,
				2012						2011
(Millions of Dollars)		NU ⁽¹⁾		CL&P		PSNH		WMECO		NU		CL&P		PSNH		WMECO
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year		$	(520.9)	$	(198.9)	$	(99.2)	$	(42.9)	$	(489.9)	$	(190.2)	$	(89.9)	$	(41.7)
Liabilities Assumed from Merger with NSTAR			(770.6)		-		-		-		-		-		-		-
Service Cost			(15.7)		(3.0)		(2.0)		(0.6)		(9.2)		(2.9)		(1.9)		(0.6)
Interest Cost			(49.0)		(9.2)		(4.6)		(2.0)		(25.7)		(10.0)		(4.8)		(2.2)
Actuarial Gain/(Loss)			70.9		1.2		0.3		0.1		(30.1)		(8.5)		(8.4)		(1.0)
Federal Subsidy on Benefits Paid			(6.2)		(1.7)		(0.6)		(0.3)		(4.1)		(1.8)		(0.7)		(0.4)
Benefits Paid			58.2		14.8		5.9		3.2		38.1		14.5		6.5		3.0
Benefit Obligation as of End of Year		$	(1,233.3)	$	(196.8)	$	(100.2)	$	(42.5)	$	(520.9)	$	(198.9)	$	(99.2)	$	(42.9)
Change in Plan Assets
Fair Value of Plan Assets as of Beginning of Year		$	285.4	$	112.2	$	58.7	$	27.1	$	278.5	$	108.6	$	56.9	$	26.7
Assets Assumed from Merger with NSTAR			330.4		-		-		-		-		-		-		-
Actual Return on Plan Assets			78.8		15.0		7.5		3.5		(2.5)		(1.2)		(0.4)		(0.1)
Employer Contributions			72.7		19.8		9.2		3.6		47.5		19.3		8.7		3.5
Benefits Paid			(58.2)		(14.8)		(5.9)		(3.2)		(38.1)		(14.5)		(6.5)		(3.0)
Fair Value of Plan Assets as of End of Year		$	709.1	$	132.2	$	69.5	$	31.0	$	285.4	$	112.2	$	58.7	$	27.1
Funded Status as of December 31^st		$	(524.2)	$	(64.6)	$	(30.7)	$	(11.5)	$	(235.5)	$	(86.7)	$	(40.5)	$	(15.8)

⁽¹⁾	The NU consolidated results include NSTAR PBOP Plan activity from the date of the merger, April 10, 2012, through December 31, 2012.

The following actuarial assumptions were used in calculating the PBOP Plans' year end funded status:

	PBOP
	As of December 31,
	2012		2011
NUSCO PBOP Plans
Discount Rate	4.04	%	4.84	%
Health Care Cost Trend Rate	7.00	%	7.00	%

NSTAR PBOP Plan
Discount Rate	4.35	%	N/A
Health Care Cost Trend Rate	7.10	%	N/A

PBOP Expense: For the NUSCO Plans, NU allocates net periodic postretirement benefits expense to its subsidiaries based on the actual participant demographic data for each subsidiary's participants. Benefit payments to participants and contributions are also tracked for each subsidiary. The actual investment return in the trust is allocated to each of the subsidiaries annually in proportion to the investment return expected to be earned during the year. For the NSTAR Plan, NSTAR allocates the net periodic postretirement expenses to its subsidiaries based on actual participant demographic data for each of its subsidiaries. The net periodic postretirement expense allocated to NSTAR Electric was $34.1 million, $26 million, and $33 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The components of net periodic postretirement benefit expense and intercompany allocations not included in the net periodic benefit expense amounts for the PBOP Plans were as follows

			PBOP
		For the Years Ended December 31,
		2012								2011								2010
(Millions of Dollars)		NU ⁽¹⁾		CL&P		PSNH		WMECO		NU		CL&P		PSNH		WMECO		NU		CL&P		PSNH		WMECO
Service Cost		$	15.7	$	3.0	$	2.0	$	0.6	$	9.2	$	2.9	$	1.9	$	0.6	$	8.5	$	2.7	$	1.8	$	0.6
Interest Cost			49.0		9.2		4.6		2.0		25.7		10.0		4.8		2.2		26.8		10.5		5.0		2.3
Expected Return
	on Plan Assets		(39.2)		(9.1)		(4.6)		(2.1)		(21.6)		(8.7)		(4.3)		(2.0)		(21.7)		(8.7)		(4.3)		(2.1)
Actuarial Loss			36.0		7.5		3.6		1.2		19.0		7.2		3.2		1.1		16.7		6.3		2.7		0.9
Prior Service
	Cost/(Credit)		(1.4)		-		-		-		(0.3)		-		-		1.3		(0.3)		-		-		-
Net Transition
	Obligation Cost⁽²⁾		12.2		6.1		2.5		1.3		11.6		6.2		2.5		-		11.6		6.1		2.5		1.3
Total Net Periodic Benefit Expense		$	72.3	$	16.7	$	8.1	$	3.0	$	43.6	$	17.6	$	8.1	$	3.2	$	41.6	$	16.9	$	7.7	$	3.0
Related Intercompany Allocations			N/A	$	7.9	$	2.0	$	1.5		N/A	$	8.2	$	2.0	$	1.5		N/A	$	7.9	$	2.0	$	1.4

⁽¹⁾	The NU consolidated results include NSTAR PBOP Plan expense from the date of the merger, April 10, 2012, through December 31, 2012.
⁽²⁾	The NUSCO PBOP Plans and NSTAR PBOP Plan transition obligation costs will be fully amortized in 2013.

The following actuarial assumptions were used to calculate PBOP expense amounts:

	PBOP
	For the Years Ended December 31,
	2012		2011		2010
NUSCO PBOP Plans
Discount Rate	4.84	%	5.28	%	5.73	%
Expected Long-Term Rate of Return	8.25	%	8.25	%	8.75	%

NSTAR PBOP Plan
Discount Rate	4.58	%	N/A		N/A
Expected Long-Term Rate of Return	7.30	%	N/A		N/A

The following is a summary of the changes in plan assets and benefit obligations recognized in Regulatory Assets and OCI as well as amounts in Regulatory Assets and OCI reclassified as net periodic benefit (expense)/income during the years presented:

		Amounts Reclassified To/From
	Regulatory Assets				OCI
(Millions of Dollars)	For the Years Ended December 31,
NU PBOP Plans ⁽¹⁾	2012		2011		2012		2011
Actuarial (Gains)/Losses Arising During the Year	$	(108.6)	$	50.2	$	(1.8)	$	4.0
Actuarial Losses Reclassified as Net Periodic Benefit Expense		(34.9)		(18.1)		(1.1)		(0.9)
Prior Service Credit Reclassified as Net Periodic Benefit Income		1.4		0.3		-		-
Transition Obligation Reclassified as Net Periodic Benefit Expense		(11.9)		(11.3)		(0.2)		(0.2)

The following is a summary of the remaining Regulatory Assets and Accumulated Other Comprehensive Loss amounts that have not been recognized as components of net periodic benefit expense as of December 31, 2012 and 2011, and the amounts that are expected to be recognized as components in 2013:

		Regulatory Assets as of			Expected			AOCI as of			Expected
(Millions of Dollars)	December 31,				2013			December 31,			2013
NU PBOP Plans ⁽¹⁾	2012		2011		Expense		2012		2011		Expense
Actuarial Loss	$	376.1	$	196.3	$	31.4	$	9.2	$	12.1	$	1.0
Prior Service Credit		(6.7)		(2.4)		(2.1)		-		-		-
Transition Obligation		-		11.4		-		-		0.2		-

The NU consolidated amounts include the NSTAR PBOP Plan from the date of the merger, April 10, 2012, through December 31, 2012.

For the NUSCO PBOP Plans, the health care cost trend assumption is 7 percent, subsequently decreasing 50 basis points per year to an ultimate rate of 5 percent in 2017. For the NSTAR PBOP Plan, the health care cost trend assumption is 7.10 percent, subsequently decreasing to an ultimate rate of 4.50 percent in 2024.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect of changing the assumed health care cost trend rate by one percentage point for the year ended December 31, 2012 would have the following effects:

(Millions of Dollars)	One Percentage		One Percentage
NU PBOP Plans	Point Increase		Point Decrease
Effect on Postretirement Benefit Obligation	$	126.5	$	(101.7)
Effect on Total Service and Interest Cost Components		8.9		(6.9)

Estimated Future Benefit Payments: The following benefit payments, which reflect expected future service, are expected to be paid by the Pension, SERP and PBOP Plans:

(Millions of Dollars)	Pension
NU Consolidated	and SERP		PBOP
2013	$	238.0	$	63.5
2014		257.3		65.0
2015		252.4		66.8
2016		261.2		68.2
2017		270.6		69.6
2018-2022		1,510.2		366.3

NSTAR Pension Plan
2013	$	77.7		N/A
2014		79.6		N/A
2015		82.6		N/A
2016		83.2		N/A
2017		85.1		N/A
2018-2022		462.2		N/A

Contributions: NU's policy is to annually fund the NUSCO and NSTAR Pension Plans in an amount at least equal to an amount that will satisfy federal requirements. NU contributed $197.4 million to the NUSCO Pension Plan in 2012, of which $87.7 million was contributed by PSNH. NSTAR Electric contributed $25 million to the NSTAR Pension Plan for the year ended December 31, 2012. Based on the current status of the NUSCO Pension Plan, NU anticipates making a contribution of approximately $203 million in 2013, of which $107 million is required to meet minimum federal funding requirements. NSTAR Electric anticipates making a contribution of approximately $82 million in 2013 to the NSTAR Pension Plan, of which $38 million is required to meet minimum federal funding requirements.

For the PBOP Plans, it is NU's policy to annually fund the NUSCO PBOP Plans in an amount equal to the PBOP Plans' postretirement benefit cost, excluding curtailment and termination benefits. NU contributed $50 million to the NUSCO PBOP Plans in 2012 and expects to make $25.7 million in contributions in 2013. NU contributes an amount that approximates annual benefit payments to the NSTAR PBOP Plan. NU contributed $22.7 million to the NSTAR PBOP Plan for the period April 10, 2012 to December 31, 2012 and expects to make $30 million in contributions in 2013.

Fair Value of Pension and PBOP Plan Assets: Pension and PBOP funds are held in external trusts. Trust assets, including accumulated earnings, must be used exclusively for Pension and PBOP payments. NU's investment strategy for its Pension and PBOP Plans is to maximize the long-term rates of return on these plans' assets within an acceptable level of risk. The investment strategy for each asset category includes a diversification of asset types, fund strategies and fund managers and establishes target asset allocations that are routinely reviewed and periodically rebalanced. In 2012, PBOP assets were comprised of specific assets within the defined benefit pension plan trust (401(h) assets) as well as assets held in the PBOP Plans. The investment policy and strategy of the 401(h) assets is consistent with those of the defined benefit pension plans, which are detailed below. NU's expected long-term rates of return on Pension and PBOP Plan assets are based on these target asset allocation assumptions and related expected long-term rates of return. In developing its expected long-term rate of return assumptions for the Pension and PBOP Plans, NU evaluated input from actuaries and consultants, as well as long-term inflation assumptions and historical returns. For the year ended December 31, 2012, management has assumed long-term rates of return of 8.25 percent on NUSCO Pension and PBOP Plan assets and 7.30 percent on the NSTAR Pension and PBOP Plan assets. These long-term rates of return are based on the assumed rates of return for the target asset allocations as follows:

		As of December 31,
		2012 and 2011		2012		2011		2012
		NUSCO Pension and PBOP		NSTAR Pension Plan		NSTAR Pension Plan		NSTAR PBOP Plan
		Target	Assumed	Target	Assumed	Target	Assumed	Target	Assumed
		Asset	Rate	Asset	Rate	Asset	Rate	Asset	Rate
		Allocation	of Return	Allocation	of Return	Allocation	of Return	Allocation	of Return
Equity Securities:
	United States	24%	9%	25%	8.3%	22%	8.6%	25%	8.3%
	International	13%	9%	13%	8.6%	12%	8.9%	20%	8.6%
	Emerging Markets	3%	10%	5%	8.8%	5%	8.8%	5%	8.8%
	Private Equity	12%	13%	-	-	-	-	-	-
Debt Securities:
	Fixed Income	20%	5%	21%	4.6%	15%	4.4%	30%	4.6%
	High Yield Fixed Income	3.5%	7.5%	9%	6.5%	9%	6.2%	-	-
	Emerging Markets Debt	3.5%	7.5%	4%	6.4%	3%	6.8%	-	-
Real Estate and Other Assets		8%	7.5%	10%	7.9%	11%	7.7%	10%	7.9%
Hedge Funds		13%	7%	13%	8.4%	23%	8.6%	10%	8.4%

The following table presents, by asset category, the Pension and PBOP Plan assets recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:

		NU Consolidated Pension Plans
		Fair Value Measurements as of December 31,
(Millions of Dollars)		2012								2011
Asset Category:		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Securities:
	United States ⁽²⁾	$	336.5	$	302.8	$	270.6	$	909.9	$	218.7	$	14.8	$	259.4	$	492.9
	International ⁽²⁾		42.0		362.6		52.1		456.7		20.0		221.9		-		241.9
	Emerging Markets⁽²⁾		-		135.3		-		135.3		-		66.6		-		66.6
	Private Equity		26.7		-		267.9		294.6		11.3		-		255.1		266.4
Fixed Income⁽³⁾			54.9		629.2		315.1		999.2		17.8		268.7		276.2		562.7
Real Estate and
	Other Assets		-		78.9		235.4		314.3		24.8		57.8		71.8		154.4
Hedge Funds			-		-		418.9		418.9		-		-		240.0		240.0
Total Master Trust Assets		$	460.1	$	1,508.8	$	1,560.0	$	3,528.9	$	292.6	$	629.8	$	1,102.5	$	2,024.9
	Less: 401(h) PBOP Assets⁽⁴⁾								(117.6)								(19.0)
Total Pension Assets								$	3,411.3							$	2,005.9

		NSTAR Pension Plan
		Fair Value Measurements as of December 31,
(Millions of Dollars)		2012								2011^{(1) (5)}
Asset Category:		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Securities:
	United States ⁽²⁾	$	96.7	$	246.4	$	-	$	343.1	$	77.0	$	212.3	$	-	$	289.3
	International⁽²⁾		-		98.3		52.1		150.4		4.0		82.8		41.4		128.2
	Emerging Markets⁽²⁾		-		55.9		-		55.9		-		46.9		-		46.9
Fixed Income⁽³⁾			54.9		292.5		-		347.4		124.7		230.3		-		355.0
Real Estate			-		-		127.2		127.2		-		-		111.0		111.0
Hedge Funds			-		-		122.7		122.7		-		-		126.6		126.6
Total Master Trust Assets		$	151.6	$	693.1	$	302.0	$	1,146.7	$	205.7	$	572.3	$	279.0	$	1,057.0
	Less: 401(h) PBOP Assets⁽⁴⁾								(77.6)								(68.5)
Total Pension Assets								$	1,069.1							$	988.5

		NU Consolidated PBOP Plans
		Fair Value Measurements as of December 31,
(Millions of Dollars)		2012								2011
Asset Category:		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and Cash
	Equivalents	$	9.7	$	-	$	-	$	9.7	$	5.9	$	-	$	-	$	5.9
Equity Securities:
	United States⁽²⁾		116.3		57.7		36.3		210.3		116.9		-		10.7		127.6
	International⁽²⁾		68.0		29.7		-		97.7		29.6		-		-		29.6
	Emerging Markets⁽²⁾		7.7		14.0		-		21.7		4.6		-		-		4.6
Fixed Income ⁽³⁾			-		137.7		32.1		169.8		-		44.3		26.0		70.3
Hedge Funds			-		-		39.6		39.6		-		-		16.1		16.1
Private Equity			-		-		11.3		11.3		-		-		5.1		5.1
Real Estate and Other
	Assets		-		4.7		26.7		31.4		-		4.7		2.5		7.2
Total		$	201.7	$	243.8	$	146.0	$	591.5	$	157.0	$	49.0	$	60.4	$	266.4
	Add: 401(h) PBOP Assets⁽⁴⁾								117.6								19.0
Total PBOP Assets								$	709.1							$	285.4

##SR

The NSTAR Pension Plan amounts are not included in NU consolidated as of December 31, 2011.
United States, International and Emerging Markets equity securities classified as Level 2 include investments in commingled funds and unrealized gains/(losses) on holdings in equity index swaps. Level 3 investments include hedge funds that are overlayed with equity index swaps and futures contracts and funds invested in equities that have redemption restrictions.
Fixed Income investments classified as Level 3 investments include fixed income funds that invest in a variety of opportunistic fixed income strategies, and hedge funds that are overlayed with fixed income futures.
The assets of the Pension Plans include a 401(h) account that has been allocated to provide health and welfare postretirement benefits under the PBOP Plans.
For NSTAR Electric, certain pension assets have been reclassified to the current year presentation in order to align the reporting of pension assets subsequent to the closing of the merger.

CL&P, PSNH and WMECO participate in the NUSCO Pension Plan and NUSCO PBOP Plans. Each company participating in the plans is allocated a portion of the total plan assets. As of December 31, 2012 and 2011, the NUSCO Pension Plan has total assets of $2,342.6 million and $2,005.9 million, respectively. CL&P, PSNH and WMECO's portion of these total plan assets were 40 percent, 17 percent and 9 percent, respectively, as of December 31, 2012, and 43 percent, 14 percent and 10 percent, respectively, as of December 31, 2011. The NUSCO PBOP Plans had total plan assets of $334.9 million and $285.4 million as of December 31, 2012 and 2011, respectively. CL&P, PSNH and WMECO's share of these assets were 39 percent, 21 percent and 9 percent, respectively, as of both December 31, 2012 and 2011.

The Company values assets based on observable inputs when available. Equity securities, exchange traded funds and futures contracts classified as Level 1 in the fair value hierarchy are priced based on the closing price on the primary exchange as of the balance sheet date. Commingled funds included in Level 2 equity securities are recorded at the net asset value provided by the asset manager, which is based on the market prices of the underlying equity securities. Swaps are valued using pricing models that incorporate interest rates and equity and fixed income index closing prices to determine a net present value of the cash flows. Fixed income securities, such as government issued securities, corporate bonds and high yield bond funds, are included in Level 2 and are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The pricing models utilize observable inputs such as recent trades for the same or similar instruments, yield curves, discount margins and bond structures. Hedge funds and investments in opportunistic fixed income funds are recorded at net asset value based on the values of the underlying assets. The assets in the hedge funds and opportunistic fixed income funds are valued using observable inputs and are classified as Level 3 within the fair value hierarchy due to redemption restrictions. Private Equity investments and Real Estate and Other Assets are valued using the net asset value provided by the partnerships, which are based on discounted cash flows of the underlying investments, real estate appraisals or public market comparables of the underlying investments. These investments are classified as Level 3 due to redemption restrictions.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3): The following tables present changes for the Level 3 category of Pension and PBOP Plan assets for the years ended December 31, 2012 and 2011:

		NU Consolidated Pension Plans
		United								Real Estate
		States				Private		Fixed		and Other		Hedge
(Millions of Dollars)		Equity		International		Equity		Income		Assets		Funds		Total
Balance as of January 1, 2011		$	266.0	$	-	$	229.5	$	247.6	$	43.7	$	247.1	$	1,033.9
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		(6.6)		-		20.0		(1.5)		1.6		(7.1)		6.4
	Relating to Assets Distributed During the Year		-		-		19.5		(2.8)		0.3		-		17.0
Purchases, Sales and Settlements			-		-		(13.9)		32.9		26.2		-		45.2
Balance as of December 31, 2011		$	259.4	$	-	$	255.1	$	276.2	$	71.8	$	240.0	$	1,102.5
Assets Assumed from Merger with NSTAR			-		41.4		-		-		111.0		126.6		279.0
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		11.2		10.7		17.0		42.1		5.7		21.8		108.5
	Relating to Assets Distributed During the Year		-		-		15.0		0.7		7.6		(0.3)		23.0
Purchases, Sales and Settlements			-		-		(19.2)		(3.9)		39.3		30.8		47.0
Balance as of December 31, 2012		$	270.6	$	52.1	$	267.9	$	315.1	$	235.4	$	418.9	$	1,560.0

		NU Consolidated PBOP Plans
		United						Real Estate
		States		Private		Fixed		and Other			Hedge
(Millions of Dollars)		Equity		Equity		Income		Assets			Funds		Total
Balance as of January 1, 2011		$	10.1	$	0.3	$	23.4	$	-	$	16.4	$	50.2
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		0.6		0.6		0.2		(0.1)		(0.3)		1.0
Purchases, Sales and Settlements			-		4.2		2.4		2.6		-		9.2
Balance as of December 31, 2011		$	10.7	$	5.1	$	26.0	$	2.5	$	16.1	$	60.4
Assets Assumed from Merger with NSTAR			19.7		-		-		18.4		21.4		59.5
Actual Return on Plan Assets:
	Relating to Assets Still Held as of Year End		5.9		1.6		4.0		3.0		2.1		16.6
Purchases, Sales and Settlements			-		4.6		2.1		2.8		-		9.5
Balance as of December 31, 2012		$	36.3	$	11.3	$	32.1	$	26.7	$	39.6	$	146.0

		NSTAR Pension Plan
				Real Estate
				and Other
(Millions of Dollars)		International		Assets		Hedge Funds		Total
Balance as of January 1, 2011		$	45.1	$	86.8	$	157.9	$	289.8
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		(3.7)		8.7		(4.8)		0.2
	Relating to Assets Distributed During the Year		-		-		0.2		0.2
Purchases, Sales and Settlements			-		15.5		(26.7)		(11.2)
Balance as of December 31, 2011		$	41.4	$	111.0	$	126.6	$	279.0
Actual Return/(Loss) on Plan Assets:
	Relating to Assets Still Held as of Year End		10.7		9.9		5.6		26.2
	Relating to Assets Distributed During the Year		-		-		(0.3)		(0.3)
Purchases, Sales and Settlements			-		6.3		(9.2)		(2.9)
Balance as of December 31, 2012		$	52.1	$	127.2	$	122.7	$	302.0

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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