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 rate-regulated operations, which consider the effect of regulation on the timing of the recognition of certain revenues and expenses. The Regulated companies' financial statements 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 June 30, 2015		As of December 31, 2014
(Millions of Dollars)	Eversource		Eversource
Benefit Costs	$	1,980.0	$	2,016.0
Derivative Liabilities		423.7		425.5
Income Taxes, Net		631.5		635.3
Storm Restoration Costs		484.3		502.8
Goodwill-related		495.1		505.4
Regulatory Tracker Mechanisms		430.7		350.5
Contractual Obligations - Yankee Companies		124.8		123.8
Other Regulatory Assets		156.3		167.3
Total Regulatory Assets		4,726.4		4,726.6
Less: Current Portion		709.7		672.5
Total Long-Term Regulatory Assets	$	4,016.7	$	4,054.1

	As of June 30, 2015								As of December 31, 2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Benefit Costs	$	443.3	$	496.1	$	175.1	$	85.9	$	445.4	$	515.9	$	174.3	$	85.0
Derivative Liabilities		420.2		2.2		-		-		410.9		4.5		-		-
Income Taxes, Net		438.9		84.0		34.8		30.7		437.7		83.7		38.0		35.5
Storm Restoration Costs		298.4		117.1		41.1		27.7		319.6		103.7		47.7		31.8
Goodwill-related		-		425.1		-		-		-		433.9		-		-
Regulatory Tracker Mechanisms		44.8		255.0		84.3		36.0		16.1		141.4		103.5		33.0
Other Regulatory Assets		79.6		77.2		35.7		12.7		66.1		94.7		41.3		12.9
Total Regulatory Assets		1,725.2		1,456.7		371.0		193.0		1,695.8		1,377.8		404.8		198.2
Less: Current Portion		263.7		258.5		88.8		54.9		220.3		198.7		111.7		51.9
Total Long-Term Regulatory Assets	$	1,461.5	$	1,198.2	$	282.2	$	138.1	$	1,475.5	$	1,179.1	$	293.1	$	146.3

Regulatory Costs in Other Long-Term Assets: The Regulated companies had $60.8 million ($1.9 million for CL&P, $21.9 million for NSTAR Electric, $2 million for PSNH and $15.4 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 June 30, 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 June 30, 2015 and December 31, 2014 primarily related to costs deferred in connection with the basic service bad debt adder. See Note 8D, "Commitments and Contingencies – Basic Service Bad Debt Adder," for further information.

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

	As of June 30, 2015		As of December 31, 2014
(Millions of Dollars)	Eversource		Eversource
Cost of Removal	$	434.9	$	439.9
Regulatory Tracker Mechanisms		198.0		192.3
AFUDC - Transmission		66.2		67.1
Other Regulatory Liabilities		20.2		50.8
Total Regulatory Liabilities		719.3		750.1
Less: Current Portion		208.5		235.0
Total Long-Term Regulatory Liabilities	$	510.8	$	515.1

	As of June 30, 2015								As of December 31, 2014
			NSTAR								NSTAR
(Millions of Dollars)	CL&P		Electric		PSNH		WMECO		CL&P		Electric		PSNH		WMECO
Cost of Removal	$	13.5	$	261.5	$	49.1	$	2.8	$	19.7	$	258.3	$	50.3	$	1.1
Regulatory Tracker Mechanisms		115.6		2.9		4.8		17.0		122.6		20.7		14.2		22.3
AFUDC - Transmission		52.2		5.0		-		9.0		53.6		4.4		-		9.1
Other Regulatory Liabilities		12.5		2.2		2.0		0.9		10.1		28.9		2.9		0.8
Total Regulatory Liabilities		193.8		271.6		55.9		29.7		206.0		312.3		67.4		33.3
Less: Current Portion		122.6		5.0		5.6		16.8		124.7		49.6		16.0		22.5
Total Long-Term Regulatory Liabilities	$	71.2	$	266.6	$	50.3	$	12.9	$	81.3	$	262.7	$	51.4	$	10.8

FERC ROE Complaints: 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 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 to Operating Revenues.

NSTAR Electric and NSTAR Gas 2014 Comprehensive Settlement Agreement: 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 2009 through 2011 (11 dockets in total). In 2015, as a result of the DPU order, NSTAR Electric and NSTAR Gas commenced refunding a combined $44.7 million to customers, which was recorded as a regulatory liability. NSTAR Electric recognized a $21.7 million pre-tax benefit in the first half of 2015 as a result of the approval of the Settlement.

NSTAR Electric Basic Service Bad Debt Adder: On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-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 reconciliations of energy-related bad debt costs through 2014. As a result of the DPU order, NSTAR Electric increased its regulatory assets and reduced operations and maintenance expense by $24.2 million in the first quarter, resulting in after-tax earnings of $14.5 million. On May 5, 2015, NSTAR Electric filed for recovery of the energy-related bad debt costs regulatory asset from customers beginning July 1, 2015. On June 24, 2015, the DPU delayed the effective date of NSTAR Electric's proposed rate increase from July 1, 2015 to November 1, 2015 to allow for the DPU staff to review the reconciliations. The established procedural schedule is expected to result in an approval of the proposed rate increase in the fourth quarter of 2015.

CL&P Distribution Rates: On December 17, 2014, PURA granted a re-opener request to CL&P's base distribution rate application for further review of the appropriate balance of ADIT utilized in the calculation of rate base. On July 2, 2015, PURA issued a final order that approved a settlement agreement filed on May 19, 2015 between CL&P and the PURA Prosecutorial Staff. The order allows for an increase to rate base of approximately $166 million associated with ADIT, including a regulatory asset to recover the incremental revenue requirement for the period December 1, 2014 through November 30, 2015 over a subsequent two-year period. The rate base increase provided an increase to total allowed annual revenue requirements of $18.4 million beginning December 1, 2014. Of that amount, $10.7 million has been recorded as a regulatory asset in June 2015, with a corresponding increase in Operating Revenues. The remaining $7.7 million will be recorded from July 2015 through November 2015. The aggregate amount will be collected from customers in rates over a 24-month period commencing on December 1, 2015.