Eversource's Regulated companies are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations and reflect the effects of the rate-making process. The rates charged to the customers of Eversource's Regulated companies are designed to collect each company's costs to provide service, including a return on investment.

Management believes it is probable that each of the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets. If management were to determine 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 from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

	As of March 31, 2015		As of December 31, 2014
(Millions of Dollars)	ES		ES
Benefit Costs	$	1,976.6	$	2,016.0
Derivative Liabilities		410.2		425.5
Income Taxes, Net		632.1		635.3
Storm Restoration Costs		504.8		502.8
Goodwill-related		500.2		505.4
Regulatory Tracker Mechanisms		434.5		350.5
Contractual Obligations - Yankee Companies		119.0		123.8
Other Regulatory Assets		151.4		167.3
Total Regulatory Assets		4,728.8		4,726.6
Less: Current Portion		747.3		672.5
Total Long-Term Regulatory Assets	$	3,981.5	$	4,054.1

	As of March 31, 2015								As of December 31, 2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs	$	436.7	$	505.6	$	171.2	$	83.3	$	445.4	$	515.9	$	174.3	$	85.0
Derivative Liabilities		403.3		3.5		-		-		410.9		4.5		-		-
Income Taxes, Net		438.7		83.7		36.8		31.2		437.7		83.7		38.0		35.5
Storm Restoration Costs		308.5		119.7		46.9		29.7		319.6		103.7		47.7		31.8
Goodwill-related		-		429.5		-		-		-		433.9		-		-
Regulatory Tracker Mechanisms		10.1		261.2		93.4		47.6		16.1		141.4		103.5		33.0
Other Regulatory Assets		66.5		85.0		38.9		12.8		66.1		94.7		41.3		12.9
Total Regulatory Assets		1,663.8		1,488.2		387.2		204.6		1,695.8		1,377.8		404.8		198.2
Less: Current Portion		209.6		309.5		100.0		66.7		220.3		198.7		111.7		51.9
Total Long-Term Regulatory Assets	$	1,454.2	$	1,178.7	$	287.2	$	137.9	$	1,475.5	$	1,179.1	$	293.1	$	146.3

Regulatory Costs in Other Long-Term Assets: The Regulated companies had $49.3 million ($1.6 million for CL&P, $18.3 million for NSTAR Electric, $0.4 million for PSNH and $11.8 million for WMECO) and $60.5 million ($1.3 million for CL&P, $33.2 million for NSTAR Electric, $0.9 million for PSNH, and $11 million for WMECO) of additional regulatory costs as of March 31, 2015 and December 31, 2014, respectively, that were included in Other Long-Term Assets on the balance sheets. These amounts represent incurred costs for which recovery has not yet been specifically approved by the applicable regulatory agency. However, based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates. The NSTAR Electric balance as of March 31, 2015 and December 31, 2014 primarily related to costs deferred in connection with the basic service bad debt adder. See Note 8E, "Commitments and Contingencies – Basic Service Bad Debt Adder," for further information.

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

	As of March 31, 2015		As of December 31, 2014
(Millions of Dollars)	ES		ES
Cost of Removal	$	452.8	$	439.9
Regulatory Tracker Mechanisms		183.3		192.3
AFUDC - Transmission		67.1		67.1
Other Regulatory Liabilities		22.9		50.8
Total Regulatory Liabilities		726.1		750.1
Less: Current Portion		201.2		235.0
Total Long-Term Regulatory Liabilities	$	524.9	$	515.1

	As of March 31, 2015								As of December 31, 2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cost of Removal	$	23.1	$	263.4	$	51.3	$	2.8	$	19.7	$	258.3	$	50.3	$	1.1
Regulatory Tracker Mechanisms		77.5		22.5		13.9		22.2		122.6		20.7		14.2		22.3
AFUDC - Transmission		53.3		4.7		-		9.1		53.6		4.4		-		9.1
Other Regulatory Liabilities		12.3		2.1		2.8		0.9		10.1		28.9		2.9		0.8
Total Regulatory Liabilities		166.2		292.7		68.0		35.0		206.0		312.3		67.4		33.3
Less: Current Portion		84.1		24.6		16.1		22.3		124.7		49.6		16.0		22.5
Total Long-Term Regulatory Liabilities	$	82.1	$	268.1	$	51.9	$	12.7	$	81.3	$	262.7	$	51.4	$	10.8

2015 Regulatory Developments: As a result of the March 3, 2015 FERC order in the pending ROE complaint proceedings described in Note 8C, "Commitments and Contingencies – FERC ROE Complaints," in the first quarter of 2015, Eversource recognized a pre-tax charge to earnings (excluding interest) of $20 million, of which $12.5 million was recorded at CL&P, $2.4 million at NSTAR Electric, $1 million at PSNH, and $4.1 million at WMECO. The pre-tax charge was recorded as a regulatory liability and as a reduction of Operating Revenues.

On March 2, 2015, the DPU approved the comprehensive settlement agreement between NSTAR Electric, NSTAR Gas and the Massachusetts Attorney General (the "Settlement") as filed with the DPU on December 31, 2014. The Settlement resolved the outstanding NSTAR Electric CPSL program filings for 2006 through 2011, the NSTAR Electric and NSTAR Gas PAM and energy efficiency-related customer billing adjustments reported in 2012, and the recovery of LBR related to NSTAR Electric's energy efficiency programs for 2008 through 2011 (11 dockets in total). As a result, NSTAR Electric and NSTAR Gas will refund a combined $44.7 million to customers. The refund was recorded as a regulatory liability as of March 31, 2015 and NSTAR Electric recognized a $21.7 million pre-tax benefit in the first quarter of 2015. For further information, see Note 8D, "Commitments and Contingencies – 2014 Comprehensive Settlement Agreement."

On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had appropriately accounted for the removal of supply-related bad debt costs from base distribution rates effective January 1, 2006. The DPU ordered NSTAR Electric and the Massachusetts Attorney General to collaborate on the reconciliation of energy-related bad debt costs through 2014. During the second quarter of 2015, NSTAR Electric expects to file with the DPU to recover from customers approximately $43 million of supply-related bad debt costs. In the first quarter of 2015, as a result of the DPU order, NSTAR Electric increased its regulatory assets and reduced Operations and Maintenance expense by $24.2 million, resulting in an increase in after-tax earnings of $14.5 million. For further information, see Note 8E, "Commitments and Contingencies – Basic Service Bad Debt Adder."