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eversourcelogo.jpges-20210630_g1.jpg

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
June 30, 20202021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Registrant; State of Incorporation; Address; Telephone Number;
Commission File Number; and I.R.S. Employer Identification No.



EVERSOURCE ENERGY
(a Massachusetts voluntary association)
300 Cadwell Drive, Springfield, Massachusetts 01104
Telephone: (800) 286-5000
Commission File Number: 1-5324001-05324
I.R.S. Employer Identification No. 04-2147929



THE CONNECTICUT LIGHT AND POWER COMPANY
(a Connecticut corporation)
107 Selden Street, Berlin, Connecticut 06037-1616
Telephone: (800) 286-5000
Commission File Number: 0-00404000-00404
I.R.S. Employer Identification No. 06-0303850



NSTAR ELECTRIC COMPANY
(a Massachusetts corporation)
800 Boylston Street, Boston, Massachusetts 02199
Telephone: (800) 286-5000
Commission File Number: 1-02301001-02301
I.R.S. Employer Identification No. 04-1278810



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
(a New Hampshire corporation)
Energy Park
780 North Commercial Street, Manchester, New Hampshire 03101-1134
Telephone: (800) 286-5000
Commission File Number: 1-6392001-06392
I.R.S. Employer Identification No. 02-0181050

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, $5.00 par value per shareESNew York Stock Exchange

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
YesNo

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files).
YesNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Eversource EnergyLarge accelerated filer
Accelerated

filer
Non-accelerated

filer
Smaller reporting companyEmerging growth company
The Connecticut Light and Power CompanyLarge accelerated filer
Accelerated

filer
Non-accelerated filerSmaller reporting companyEmerging growth company
NSTAR Electric CompanyLarge accelerated filer
Accelerated

filer
Non-accelerated filerSmaller reporting companyEmerging growth company
Public Service Company of New HampshireLarge accelerated filer
Accelerated

filer
Non-accelerated filerSmaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):
YesNo
Eversource EnergyYesNo
Eversource Energy
The Connecticut Light and Power Company
NSTAR Electric Company
Public Service Company of New Hampshire

Indicate the number of shares outstanding of each of the registrant'sissuer's classes of common stock, as of the latest practicable date:
date.
Company - Class of StockOutstanding as of July 31, 20202021
Eversource Energy Common Shares, $5.00 par value342,667,836343,643,255 
shares
The Connecticut Light and Power Company Common Stock, $10.00 par value6,035,205
shares
NSTAR Electric Company Common Stock, $1.00 par value200
shares
Public Service Company of New Hampshire Common Stock, $1.00 par value301
shares

Eversource Energy holds all of the 6,035,205 shares, 200 shares, and 301 shares of the outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire, respectively.

NSTAR Electric Company and Public Service Company of New Hampshire each meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q, and each is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) of Form 10‑Q.

Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire each separately file this combined Form 10-Q.  Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.  Each registrant makes no representation as to information relating to the other registrants.




GLOSSARY OF TERMS

The following is a glossary of abbreviations and acronyms that are found in this report:

Current or former Eversource Energy companies, segments or investments:
Eversource, ES or the CompanyEversource Energy and subsidiaries
Eversource parent or ES parentEversource Energy, a public utility holding company
ES parent and other companiesES parent and other companies are comprised of Eversource parent, Eversource Service, Eversource Water Ventures, Inc. (parent company of Aquarion), and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), the consolidated operations of CYAPC and YAEC, and Eversource parent's equity ownership interests that are not consolidated
CL&PThe Connecticut Light and Power Company
NSTAR ElectricNSTAR Electric Company
PSNHPublic Service Company of New Hampshire
PSNH FundingPSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR GasNSTAR Gas Company
EGMAEversource Gas Company of Massachusetts
Yankee GasYankee Gas Services Company
AquarionEversource Aquarion Holdings, Inc.Company and its subsidiaries
NPTNorthern Pass Transmission LLC
Northern PassThe HVDChigh-voltage direct current (HVDC) and associated alternating-current transmission line project from Canada into New Hampshire
HEECHarbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric
Eversource ServiceEversource Energy Service Company
Bay State WindBay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted which holds the Sunrise Wind project
North East OffshoreNorth East Offshore, LLC, an offshore wind business holding company being developed jointly by Eversource and Denmark-based Ørsted which holds the Revolution Wind and South Fork Wind projects
CYAPCConnecticut Yankee Atomic Power Company
MYAPCMaine Yankee Atomic Power Company
YAECYankee Atomic Electric Company
Yankee CompaniesCYAPC, YAEC and MYAPC
Regulated companiesThe Eversource regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric and PSNH, the natural gas distribution businesses of Yankee Gas, and NSTAR Gas and EGMA, NPT, Aquarion, and the solar power facilities of NSTAR Electric
Regulators:Regulators and Government Agencies:
DEEPBOEMU.S. Bureau of Ocean Energy Management
DEEPConnecticut Department of Energy and Environmental Protection
DOEU.S. Department of Energy
DOERMassachusetts Department of Energy Resources
DPUMassachusetts Department of Public Utilities
EPAU.S. Environmental Protection Agency
FERCFederal Energy Regulatory Commission
ISO-NEISO New England, Inc., the New England Independent System Operator
MA DEPMassachusetts Department of Environmental Protection
NHPUCNew Hampshire Public Utilities Commission
PURAConnecticut Public Utilities Regulatory Authority
SECU.S. Securities and Exchange Commission
SJCSupreme Judicial Court of Massachusetts
Other Terms and Abbreviations:
ADITAccumulated Deferred Income Taxes
AFUDCAllowance For Funds Used During Construction
AOCIAccumulated Other Comprehensive Income
AROAsset Retirement Obligation
BcfBillion cubic feet
C&LMCfDConservation and Load Management
CfDContract for Differences
CTACompetitive Transition Assessment
CWIPConstruction Work in Progress
EDCElectric distribution company
i


EDITExcess Deferred Income Taxes
EPSEarnings Per Share
ERISAEmployee Retirement Income Security Act of 1974

i



ESOP
ESOPEmployee Stock Ownership Plan
Eversource 20192020 Form 10-KThe Eversource Energy and Subsidiaries 20192020 combined Annual Report on Form 10-K as filed with the SEC
FitchFitch Ratings
FMCCFederally Mandated Congestion Charge
FTRGAAPFinancial Transmission Rights
GAAPAccounting principles generally accepted in the United States of America
GSCGeneration Service Charge
GSRPGWhGreater Springfield Reliability ProjectGigawatt-Hours
GWhIPPGigawatt-Hours
HQHydro-Québec, a corporation wholly-owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDCHigh-voltage direct current
Hydro Renewable EnergyHydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec
IPPIndependent Power Producers
ISO-NE TariffISO-NE FERC Transmission, Markets and Services Tariff
kVKilovolt
kVaKilovolt-ampere
kWKilowatt (equal to one thousand watts)
LBRLNGLost Base Revenue
LNGLiquefied natural gas
LRSSupplier of last resort service
MGMillion gallons
MGPManufactured Gas Plant
MMBtuOne million British thermal units
MMcfMillion cubic feet
Moody'sMoody's Investors Services, Inc.
MWMegawatt
MWhMegawatt-Hours
NEEWSNETOsNew England East-West Solution
NETOsNew England Transmission Owners (including Eversource, National Grid and Avangrid)
OCIOther Comprehensive Income/(Loss)
PAMPension and PBOP Rate Adjustment Mechanism
PBOPPostretirement Benefits Other Than Pension
PBOP PlanPostretirement Benefits Other Than Pension Plan
Pension PlanSingle uniform noncontributory defined benefit retirement plan
PPAPower purchase agreement
RECsRenewable Energy Certificates
Regulatory ROEThe average cost of capital method for calculating the return on equity related to the distribution business segment excluding the wholesale transmission segment
ROEReturn on Equity
RRBsRate Reduction Bonds or Rate Reduction Certificates
RSUsRestricted share units
S&PStandard & Poor's Financial Services LLC
SBCSystems Benefits Charge
SCRCStranded Cost Recovery Charge
SERPSupplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
SSStandard service
TCAMUITransmission Cost Adjustment Mechanism
TSATransmission Service Agreement
UIThe United Illuminating Company
VIEVariable Interest Entity


ii




EVERSOURCE ENERGY AND SUBSIDIARIES   
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
Condensed Consolidated Statements of Common Shareholders' Equity
Condensed Statements of Common Stockholder's Equity
Condensed Consolidated Statements of Common Stockholder's Equity
Public Service Company of New Hampshire and Subsidiaries (Unaudited)
Condensed Consolidated Statements of Common Stockholder's Equity
PART II – OTHER INFORMATION
Risk Factors

iii




EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)As of June 30, 2021As of December 31, 2020
ASSETS  
Current Assets:  
Cash$217,397 $106,599 
Receivables, Net (net of allowance for uncollectible accounts of $425,769
   and $358,851 as of June 30, 2021 and December 31, 2020, respectively)
1,224,092 1,195,925 
Unbilled Revenues188,356 233,025 
Fuel, Materials, Supplies and REC Inventory187,692 265,599 
Regulatory Assets1,186,851 1,076,556 
Prepayments and Other Current Assets264,451 252,439 
Total Current Assets3,268,839 3,130,143 
Property, Plant and Equipment, Net31,878,551 30,882,523 
Deferred Debits and Other Assets:  
Regulatory Assets5,246,381 5,493,330 
Goodwill4,453,618 4,445,988 
Investments in Unconsolidated Affiliates1,205,303 1,107,143 
Marketable Securities462,953 456,617 
Other Long-Term Assets718,995 583,854 
Total Deferred Debits and Other Assets12,087,250 12,086,932 
Total Assets$47,234,640 $46,099,598 
LIABILITIES AND CAPITALIZATION  
Current Liabilities:  
Notes Payable$2,002,500 $1,249,325 
Long-Term Debt – Current Portion799,858 1,053,186 
Rate Reduction Bonds – Current Portion43,210 43,210 
Accounts Payable1,061,111 1,370,647 
Regulatory Liabilities532,467 389,430 
Other Current Liabilities665,424 809,214 
Total Current Liabilities5,104,570 4,915,012 
Deferred Credits and Other Liabilities:  
Accumulated Deferred Income Taxes4,258,986 4,095,339 
Regulatory Liabilities3,880,131 3,850,781 
Derivative Liabilities275,775 294,535 
Asset Retirement Obligations503,405 499,713 
Accrued Pension, SERP and PBOP1,455,479 1,653,788 
Other Long-Term Liabilities962,166 948,506 
Total Deferred Credits and Other Liabilities11,335,942 11,342,662 
Long-Term Debt15,851,362 15,125,876 
Rate Reduction Bonds475,307 496,912 
Noncontrolling Interest – Preferred Stock of Subsidiaries155,570 155,570 
Common Shareholders' Equity: 
Common Shares1,789,092 1,789,092 
Capital Surplus, Paid In8,032,959 8,015,663 
Retained Earnings4,830,058 4,613,201 
Accumulated Other Comprehensive Loss(74,342)(76,411)
Treasury Stock(265,878)(277,979)
Common Shareholders' Equity14,311,889 14,063,566 
Commitments and Contingencies (Note 9)00
Total Liabilities and Capitalization$47,234,640 $46,099,598 
(Thousands of Dollars)As of June 30, 2020
As of December 31, 2019





ASSETS 

 
Current Assets: 

 
Cash$64,890

$15,432
Receivables, Net (net of allowance for uncollectible accounts of $270,047 and $224,821 as of June 30, 2020 and December 31, 2019, respectively)996,290

989,383
Unbilled Revenues171,475

181,006
Fuel, Materials, Supplies and REC Inventory176,138
 235,471
Regulatory Assets805,050

651,112
Prepayments and Other Current Assets191,570

342,135
Total Current Assets2,405,413

2,414,539
Property, Plant and Equipment, Net28,610,776

27,585,470
Deferred Debits and Other Assets: 

 
Regulatory Assets4,729,531

4,863,639
Goodwill4,427,266

4,427,266
Investments in Unconsolidated Affiliates884,273
 871,633
Marketable Securities427,001

449,130
Other Long-Term Assets554,458

512,238
Total Deferred Debits and Other Assets11,022,529

11,123,906
Total Assets$42,038,718

$41,123,915




LIABILITIES AND CAPITALIZATION 
 
Current Liabilities: 
 
Notes Payable$493,500

$889,084
Long-Term Debt – Current Portion700,960

327,411
Rate Reduction Bonds – Current Portion43,210
 43,210
Accounts Payable952,132

1,147,872
Regulatory Liabilities442,004

361,152
Other Current Liabilities694,252

836,834
Total Current Liabilities3,326,058

3,605,563
Deferred Credits and Other Liabilities: 
 
Accumulated Deferred Income Taxes3,882,293

3,755,777
Regulatory Liabilities3,679,927

3,658,042
Derivative Liabilities328,313

338,710
Asset Retirement Obligations497,262
 488,511
Accrued Pension, SERP and PBOP1,307,967

1,370,245
Other Long-Term Liabilities839,791

810,553
Total Deferred Credits and Other Liabilities10,535,553

10,421,838
Long-Term Debt13,697,762

13,770,828
Rate Reduction Bonds518,517
 540,122
Noncontrolling Interest – Preferred Stock of Subsidiaries155,570

155,570
Common Shareholders' Equity:

 
Common Shares1,789,092

1,729,292
Capital Surplus, Paid In7,979,146

7,087,768
Retained Earnings4,384,093

4,177,048
Accumulated Other Comprehensive Loss(62,558)
(65,059)
Treasury Stock(284,515)
(299,055)
Common Shareholders' Equity13,805,258

12,629,994
Commitments and Contingencies (Note 9)


 


Total Liabilities and Capitalization$42,038,718

$41,123,915

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)2021202020212020
Operating Revenues$2,122,538 $1,953,128 $4,948,378 $4,326,854 
 
Operating Expenses:    
Purchased Power, Fuel and Transmission650,087 630,132 1,648,578 1,506,703 
Operations and Maintenance411,147 332,055 876,689 674,117 
Depreciation274,647 240,516 545,352 476,727 
Amortization5,611 23,397 113,624 73,172 
Energy Efficiency Programs128,955 115,354 317,018 263,747 
Taxes Other Than Income Taxes200,486 178,019 409,944 359,613 
Total Operating Expenses1,670,933 1,519,473 3,911,205 3,354,079 
Operating Income451,605 433,655 1,037,173 972,775 
Interest Expense145,435 134,285 283,201 269,000 
Other Income, Net46,619 30,243 80,820 54,347 
Income Before Income Tax Expense352,789 329,613 834,792 758,122 
Income Tax Expense86,389 75,501 200,370 167,379 
Net Income266,400 254,112 634,422 590,743 
Net Income Attributable to Noncontrolling Interests1,880 1,880 3,759 3,759 
Net Income Attributable to Common Shareholders$264,520 $252,232 $630,663 $586,984 
Basic and Diluted Earnings Per Common Share$0.77 $0.75 $1.83 $1.75 
Weighted Average Common Shares Outstanding:   
Basic343,844,626 337,946,663 343,761,435 334,524,452 
Diluted344,435,696 338,561,649 344,385,193 335,749,404 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)2020 2019 2020 2019
        
Operating Revenues$1,953,128
 $1,884,495
 $4,326,854
 $4,300,287
        
Operating Expenses:       
Purchased Power, Fuel and Transmission630,132
 620,904
 1,506,703
 1,595,786
Operations and Maintenance332,055
 328,010
 674,117
 663,606
Depreciation240,516
 219,084
 476,727
 434,032
Amortization23,397
 38,945
 73,172
 109,906
Energy Efficiency Programs115,354
 105,837
 263,747
 245,953
Taxes Other Than Income Taxes178,019
 181,083
 359,613
 365,672
Impairment of Northern Pass Transmission
 239,644
 
 239,644
Total Operating Expenses1,519,473
 1,733,507
 3,354,079
 3,654,599
Operating Income433,655
 150,988
 972,775
 645,688
Interest Expense134,285
 132,705
 269,000
 264,438
Other Income, Net30,243
 45,866
 54,347
 76,850
Income Before Income Tax Expense329,613
 64,149
 758,122
 458,100
Income Tax Expense75,501
 30,815
 167,379
 114,209
Net Income254,112
 33,334
 590,743
 343,891
Net Income Attributable to Noncontrolling Interests1,880
 1,880
 3,759
 3,759
Net Income Attributable to Common Shareholders$252,232
 $31,454
 $586,984
 $340,132
        
Basic and Diluted Earnings Per Common Share$0.75
 $0.10
 $1.75
 $1.07
        
Weighted Average Common Shares Outstanding:       
Basic337,946,663
 319,664,998
 334,524,452
 318,644,796
Diluted338,561,649
 320,388,490
 335,749,404
 319,352,287

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Net Income$266,400 $254,112 $634,422 $590,743 
Other Comprehensive Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments445 387 852 616 
Changes in Unrealized Gains/(Losses) on
   Marketable Securities
273 269 (463)429 
Changes in Funded Status of Pension, SERP and
   PBOP Benefit Plans
163 (103)1,680 1,456 
Other Comprehensive Income, Net of Tax881 553 2,069 2,501 
Comprehensive Income Attributable to
   Noncontrolling Interests
(1,880)(1,880)(3,759)(3,759)
Comprehensive Income Attributable to Common
   Shareholders
$265,401 $252,785 $632,732 $589,485 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Net Income$254,112
 $33,334
 $590,743
 $343,891
Other Comprehensive Income, Net of Tax:       
Qualified Cash Flow Hedging Instruments387
 262
 616
 578
Changes in Unrealized Gains on Marketable Securities269
 444
 429
 1,099
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans(103) 3,457
 1,456
 4,682
Other Comprehensive Income, Net of Tax553
 4,163
 2,501
 6,359
Comprehensive Income Attributable to Noncontrolling Interests(1,880) (1,880) (3,759) (3,759)
Comprehensive Income Attributable to Common Shareholders$252,785
 $35,617
 $589,485
 $346,491

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(Unaudited)
For the Six Months Ended June 30, 2021
 Common SharesCapital
Surplus,
Paid In
Retained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)SharesAmount
Balance as of January 1, 2021342,954,023 $1,789,092 $8,015,663 $4,613,201 $(76,411)$(277,979)$14,063,566 
Net Income   368,023   368,023 
Dividends on Common Shares - $0.6025 Per Share   (206,913)  (206,913)
Dividends on Preferred Stock   (1,880)  (1,880)
Long-Term Incentive Plan Activity  (15,727)   (15,727)
Issuance of Treasury Shares480,275 16,182 8,981 25,163 
Other Comprehensive Income  1,188  1,188 
Balance as of March 31, 2021343,434,298 1,789,092 8,016,118 4,772,431 (75,223)(268,998)14,233,420 
Net Income   266,400   266,400 
Dividends on Common Shares - $0.6025 Per Share   (206,893)  (206,893)
Dividends on Preferred Stock   (1,880)  (1,880)
Long-Term Incentive Plan Activity  6,162    6,162 
Issuance of Treasury Shares166,805  10,679   3,120 13,799 
Other Comprehensive Income   881  881 
Balance as of June 30, 2021343,601,103 $1,789,092 $8,032,959 $4,830,058 $(74,342)$(265,878)$14,311,889 
 For the Six Months Ended June 30, 2020
 Common Shares
Capital
Surplus,
Paid In
Retained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)SharesAmount
Balance as of January 1, 2020329,880,645
$1,729,292
$7,087,768
$4,177,048
$(65,059)$(299,055)$12,629,994
Net Income 
 
 336,633
  336,633
Dividends on Common Shares - $0.5675 Per Share 
 
 (187,462)  (187,462)
Dividends on Preferred Stock 
 
 (1,880)  (1,880)
Issuance of Common Shares - $5 par value5,960,000
29,800
402,300
   432,100
Long-Term Incentive Plan Activity 
 
(15,295) 
  (15,295)
Issuance of Treasury Shares570,542
 17,230
  10,516
27,746
Capital Stock Expense  (12,314)   (12,314)
Adoption of New Accounting Standard (See Note 1B)   (1,514)  (1,514)
Other Comprehensive Income 
 
  1,948
 1,948
Balance as of March 31, 2020336,411,187
1,759,092
7,479,689
4,322,825
(63,111)(288,539)13,209,956
Net Income 
 
 254,112
  254,112
Dividends on Common Shares - $0.5675 Per Share 
 
 (190,964)  (190,964)
Dividends on Preferred Stock 
 
 (1,880)  (1,880)
Issuance of Common Shares - $5 par value6,000,000
30,000
487,560
   517,560
Long-Term Incentive Plan Activity 
 
7,694
   7,694
Issuance of Treasury Shares216,675
 
12,524
  4,024
16,548
Capital Stock Expense  (8,321)   (8,321)
Other Comprehensive Income 
 
  553
 553
Balance as of June 30, 2020342,627,862
$1,789,092
$7,979,146
$4,384,093
$(62,558)$(284,515)$13,805,258

For the Six Months Ended June 30, 2020
 Common SharesCapital
Surplus,
Paid In
Retained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)SharesAmount
Balance as of January 1, 2020329,880,645 $1,729,292 $7,087,768 $4,177,048 $(65,059)$(299,055)$12,629,994 
Net Income336,633 336,633 
Dividends on Common Shares - $0.5675 Per Share(187,462)(187,462)
Dividends on Preferred Stock(1,880)(1,880)
Issuance of Common Shares - $5 par value5,960,000 29,800 402,300 432,100 
Long-Term Incentive Plan Activity(15,295)(15,295)
Issuance of Treasury Shares570,542 17,230 10,516 27,746 
Capital Stock Expense(12,314)(12,314)
Adoption of Accounting Standards Update 2016-13(1,514)(1,514)
Other Comprehensive Income1,948 1,948 
Balance as of March 31, 2020336,411,187 1,759,092 7,479,689 4,322,825 (63,111)(288,539)13,209,956 
Net Income254,112 254,112 
Dividends on Common Shares - $0.5675 Per Share(190,964)(190,964)
Dividends on Preferred Stock(1,880)(1,880)
Issuance of Common Shares - $5 par value6,000,000 30,000 487,560 517,560 
Long-Term Incentive Plan Activity7,694 7,694 
Issuance of Treasury Shares216,675 12,524 4,024 16,548 
Capital Stock Expense(8,321)(8,321)
Other Comprehensive Income553 553 
Balance as of June 30, 2020342,627,862 $1,789,092 $7,979,146 $4,384,093 $(62,558)$(284,515)$13,805,258 
 For the Six Months Ended June 30, 2019
 Common Shares
Capital
Surplus,
Paid In
Retained EarningsAccumulated Other Comprehensive LossTreasury StockTotal Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)SharesAmount
Balance as of January 1, 2019316,885,808
$1,669,392
$6,241,222
$3,953,974
$(60,000)$(317,771)$11,486,817
Net Income  
 310,558
  310,558
Dividends on Common Shares - $0.535 Per Share  
 (169,757)  (169,757)
Dividends on Preferred Stock  
 (1,880)  (1,880)
Long-Term Incentive Plan Activity  
(16,609) 
  (16,609)
Issuance of Treasury Shares461,662
 17,476
  8,633
26,109
Other Comprehensive Income  
  
2,196
 2,196
Balance as of March 31, 2019317,347,470
1,669,392
6,242,089
4,092,895
(57,804)(309,138)11,637,434
Net Income 
 
 33,334
  33,334
Dividends on Common Shares - $0.535 Per Share 
 
 (169,857)  (169,857)
Dividends on Preferred Stock 
 
 (1,880)  (1,880)
Issuance of Common Shares - $5 par value5,980,000
29,900
403,650
   433,550
Long-Term Incentive Plan Activity 
 
6,470
   6,470
Issuance of Treasury Shares246,969
 13,448
  4,579
18,027
Capital Stock Expense  (6,648)   (6,648)
Other Comprehensive Income 
 
  4,163
 4,163
Balance as of June 30, 2019323,574,439
$1,699,292
$6,659,009
$3,954,492
$(53,641)$(304,559)$11,954,593

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,
(Thousands of Dollars)20212020
Operating Activities:  
Net Income$634,422 $590,743 
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:  
Depreciation545,352 476,727 
Deferred Income Taxes120,390 86,550 
Uncollectible Expense27,683 20,579 
Pension, SERP and PBOP (Income)/Expense, Net(6,391)5,441 
Pension and PBOP Contributions(72,400)(1,323)
Regulatory Over/(Under) Recoveries, Net46,835 (58,501)
Amortization113,624 73,172 
Other(154,065)(40,764)
Changes in Current Assets and Liabilities:  
Receivables and Unbilled Revenues, Net(85,261)(66,460)
Fuel, Materials, Supplies and REC Inventory77,907 59,332 
Taxes Receivable/Accrued, Net(9,113)120,717 
Accounts Payable(285,670)(169,251)
Other Current Assets and Liabilities, Net(145,868)(91,587)
Net Cash Flows Provided by Operating Activities807,445 1,005,375 
Investing Activities:  
Investments in Property, Plant and Equipment(1,423,223)(1,400,198)
Proceeds from Sales of Marketable Securities253,842 250,589 
Purchases of Marketable Securities(240,729)(239,698)
Investments in Unconsolidated Affiliates, Net(100,527)(12,324)
Other Investing Activities12,661 11,129 
Net Cash Flows Used in Investing Activities(1,497,976)(1,390,502)
Financing Activities:  
Issuance of Common Shares, Net of Issuance Costs929,025 
Cash Dividends on Common Shares(402,211)(366,817)
Cash Dividends on Preferred Stock(3,759)(3,759)
Increase/(Decrease) in Notes Payable753,175 (741,870)
Repayment of Rate Reduction Bonds(21,605)(21,605)
Issuance of Long-Term Debt1,525,000 940,000 
Retirement of Long-Term Debt(1,022,000)(270,456)
Other Financing Activities(35,008)(19,534)
Net Cash Flows Provided by Financing Activities793,592 444,984 
Net Increase in Cash and Restricted Cash103,061 59,857 
Cash and Restricted Cash - Beginning of Period264,950 117,063 
Cash and Restricted Cash - End of Period$368,011 $176,920 
 For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019




Operating Activities: 
 
Net Income$590,743

$343,891
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: 
 
Depreciation476,727

434,032
Deferred Income Taxes86,550

36,535
Uncollectible Expense20,579
 31,546
Pension, SERP and PBOP Expense, Net5,441

13,227
Pension and PBOP Contributions(1,323)
(6,648)
Regulatory (Under)/Over Recoveries, Net(58,501)
23,830
Amortization73,172

109,906
Proceeds from DOE Spent Nuclear Fuel Litigation
 68,840
Impairment of Northern Pass Transmission
 239,644
Other(40,764)
(137,428)
Changes in Current Assets and Liabilities: 
 
Receivables and Unbilled Revenues, Net(66,460)
6,357
Fuel, Materials, Supplies and REC Inventory59,332

63,918
Taxes Receivable/Accrued, Net120,717

(6,883)
Accounts Payable(169,251)
(156,077)
Other Current Assets and Liabilities, Net(91,587)
(140,103)
Net Cash Flows Provided by Operating Activities1,005,375

924,587




Investing Activities: 
 
Investments in Property, Plant and Equipment(1,400,198)
(1,377,753)
Proceeds from Sales of Marketable Securities250,589

348,904
Purchases of Marketable Securities(239,698)
(302,950)
Investments in Unconsolidated Affiliates, Net(12,324) (265,955)
Other Investing Activities11,129

4,055
Net Cash Flows Used in Investing Activities(1,390,502)
(1,593,699)




Financing Activities: 
 
Issuance of Common Shares, Net of Issuance Costs929,025
 426,902
Cash Dividends on Common Shares(366,817)
(323,346)
Cash Dividends on Preferred Stock(3,759)
(3,759)
Decrease in Notes Payable(741,870)
(181,000)
Repayment of Rate Reduction Bonds(21,605) (30,727)
Issuance of Long-Term Debt940,000

1,000,000
Retirement of Long-Term Debt(270,456)
(250,437)
Other Financing Activities(19,534)
(10,682)
Net Cash Flows Provided by Financing Activities444,984

626,951
Net Increase/(Decrease) in Cash and Restricted Cash59,857

(42,161)
Cash and Restricted Cash - Beginning of Period117,063

209,324
Cash and Restricted Cash - End of Period$176,920

$167,163

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



4



THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)As of June 30, 2021As of December 31, 2020
ASSETS  
Current Assets:  
Cash$198,390 $90,801 
Receivables, Net (net of allowance for uncollectible accounts of $188,760 and
   $157,447 as of June 30, 2021 and December 31, 2020, respectively)
496,612 459,214 
Accounts Receivable from Affiliated Companies38,840 17,486 
Unbilled Revenues58,191 57,407 
Materials and Supplies51,947 57,924 
Regulatory Assets458,609 345,622 
Prepayments and Other Current Assets44,357 83,950 
Total Current Assets1,346,946 1,112,404 
Property, Plant and Equipment, Net10,479,192 10,234,556 
Deferred Debits and Other Assets:  
Regulatory Assets1,745,793 1,866,152 
Other Long-Term Assets273,279 242,862 
Total Deferred Debits and Other Assets2,019,072 2,109,014 
Total Assets$13,845,210 $13,455,974 
LIABILITIES AND CAPITALIZATION  
Current Liabilities:
Accounts Payable$290,413 $451,240 
Accounts Payable to Affiliated Companies97,558 51,118 
Obligations to Third Party Suppliers46,898 49,967 
Regulatory Liabilities219,813 137,166 
Derivative Liabilities70,935 68,767 
Other Current Liabilities104,670 102,060 
Total Current Liabilities830,287 860,318 
Deferred Credits and Other Liabilities: 
Accumulated Deferred Income Taxes1,460,962 1,408,343 
Regulatory Liabilities1,207,289 1,204,942 
Derivative Liabilities275,775 294,535 
Accrued Pension, SERP and PBOP364,990 478,325 
Other Long-Term Liabilities138,337 133,690 
Total Deferred Credits and Other Liabilities3,447,353 3,519,835 
Long-Term Debt4,335,639 3,914,835 
Preferred Stock Not Subject to Mandatory Redemption116,200 116,200 
Common Stockholder's Equity:  
Common Stock60,352 60,352 
Capital Surplus, Paid In2,810,765 2,810,765 
Retained Earnings2,244,341 2,173,367 
Accumulated Other Comprehensive Income273 302 
Common Stockholder's Equity5,115,731 5,044,786 
Commitments and Contingencies (Note 9)00
Total Liabilities and Capitalization$13,845,210 $13,455,974 
(Thousands of Dollars)As of June 30, 2020 As of December 31, 2019
    
ASSETS   
Current Assets:   
Cash$6,918
 $
Receivables, Net (net of allowance for uncollectible accounts of $136,665 and $97,348 as of June 30, 2020 and December 31, 2019, respectively)397,235
 400,927
Accounts Receivable from Affiliated Companies33,510
 24,577
Unbilled Revenues56,913
 56,465
Materials and Supplies52,176
 50,700
Regulatory Assets349,177
 178,607
Prepayments and Other Current Assets31,791
 73,184
Total Current Assets927,720
 784,460
Property, Plant and Equipment, Net9,913,257
 9,625,765
Deferred Debits and Other Assets:   
Regulatory Assets1,487,764
 1,557,261
Other Long-Term Assets248,761
 217,705
Total Deferred Debits and Other Assets1,736,525
 1,774,966
Total Assets$12,577,502
 $12,185,191
    
LIABILITIES AND CAPITALIZATION   
Current Liabilities:   
Notes Payable to Eversource Parent$272,000
 $63,800
Accounts Payable310,178
 374,698
Accounts Payable to Affiliated Companies102,289
 97,793
Obligations to Third Party Suppliers46,652
 56,952
Regulatory Liabilities155,239
 82,763
Derivative Liabilities70,145
 67,804
Other Current Liabilities126,724
 132,339
Total Current Liabilities1,083,227
 876,149
Deferred Credits and Other Liabilities:   
Accumulated Deferred Income Taxes1,291,833
 1,244,551
Regulatory Liabilities1,183,643
 1,164,991
Derivative Liabilities328,058
 338,594
Accrued Pension, SERP and PBOP354,520
 391,159
Other Long-Term Liabilities151,244
 147,586
Total Deferred Credits and Other Liabilities3,309,298
 3,286,881
Long-Term Debt3,518,121
 3,518,136
Preferred Stock Not Subject to Mandatory Redemption116,200
 116,200
Common Stockholder's Equity:   
Common Stock60,352
 60,352
Capital Surplus, Paid In2,535,765
 2,535,765
Retained Earnings1,954,221
 1,791,392
Accumulated Other Comprehensive Income318
 316
Common Stockholder's Equity4,550,656
 4,387,825
Commitments and Contingencies (Note 9)


 


Total Liabilities and Capitalization$12,577,502
 $12,185,191

The accompanying notes are an integral part of these unaudited condensed financial statements.

5


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended June 30, For the Six Months Ended June 30, For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019(Thousands of Dollars)2021202020212020
       
Operating Revenues$817,421
 $740,846
 $1,717,124
 $1,590,092
Operating Revenues$829,597 $817,421 $1,816,871 $1,717,124 
       
Operating Expenses:       Operating Expenses:  
Purchased Power and Transmission315,398
 246,540
 690,115
 566,373
Purchased Power and Transmission308,137 315,398 681,411 690,115 
Operations and Maintenance134,633
 133,351
 270,230
 263,989
Operations and Maintenance152,394 134,633 327,814 270,230 
Depreciation79,718
 74,555
 158,152
 147,844
Depreciation84,423 79,718 167,828 158,152 
Amortization of Regulatory (Liabilities)/Assets, Net(5,698) 12,376
 850
 48,047
Amortization of Regulatory (Liabilities)/Assets, Net(15,059)(5,698)47,716 850 
Energy Efficiency Programs32,347
 20,780
 67,826
 46,768
Energy Efficiency Programs29,524 32,347 65,097 67,826 
Taxes Other Than Income Taxes79,867
 86,465
 162,855
 178,463
Taxes Other Than Income Taxes83,886 79,867 175,278 162,855 
Total Operating Expenses636,265
 574,067
 1,350,028
 1,251,484
Total Operating Expenses643,305 636,265 1,465,144 1,350,028 
Operating Income181,156
 166,779
 367,096
 338,608
Operating Income186,292 181,156 351,727 367,096 
Interest Expense38,722
 36,972
 76,605
 72,754
Interest Expense42,614 38,722 81,592 76,605 
Other Income, Net8,459
 2,853
 10,357
 6,733
Other Income, Net9,879 8,459 14,787 10,357 
Income Before Income Tax Expense150,893
 132,660
 300,848
 272,587
Income Before Income Tax Expense153,557 150,893 284,922 300,848 
Income Tax Expense33,622
 27,856
 64,839
 57,312
Income Tax Expense38,001 33,622 70,967 64,839 
Net Income$117,271
 $104,804
 $236,009
 $215,275
Net Income$115,556 $117,271 $213,955 $236,009 

The accompanying notes are an integral part of these unaudited condensed financial statements.


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Net Income$115,556 $117,271 $213,955 $236,009 
Other Comprehensive Income/(Loss), Net of Tax:    
Qualified Cash Flow Hedging Instruments(6)(6)(13)(13)
Changes in Unrealized Gains/(Losses) on
   Marketable Securities
(16)15 
Other Comprehensive Income/(Loss), Net of Tax(29)
Comprehensive Income$115,559 $117,274 $213,926 $236,011 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Net Income$117,271
 $104,804
 $236,009
 $215,275
Other Comprehensive Income, Net of Tax:       
Qualified Cash Flow Hedging Instruments(6) (7) (13) (13)
Changes in Unrealized Gains on Marketable Securities9
 15
 15
 38
Other Comprehensive Income, Net of Tax3
 8
 2
 25
Comprehensive Income$117,274
 $104,812
 $236,011
 $215,300

The accompanying notes are an integral part of these unaudited condensed financial statements.


6


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
(Unaudited)
For the Six Months Ended June 30, 2021
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 20216,035,205 $60,352 $2,810,765 $2,173,367 $302 $5,044,786 
Net Income   98,398  98,398 
Dividends on Preferred Stock   (1,390) (1,390)
Dividends on Common Stock   (70,100) (70,100)
Other Comprehensive Loss    (32)(32)
Balance as of March 31, 20216,035,205 60,352 2,810,765 2,200,275 270 5,071,662 
Net Income   115,556  115,556 
Dividends on Preferred Stock   (1,390) (1,390)
Dividends on Common Stock(70,100)(70,100)
Other Comprehensive Income    
Balance as of June 30, 20216,035,205 $60,352 $2,810,765 $2,244,341 $273 $5,115,731 
 For the Six Months Ended June 30, 2020
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 20206,035,205
 $60,352
 $2,535,765
 $1,791,392
 $316
 $4,387,825
Net Income 
  
   118,738
   118,738
Dividends on Preferred Stock 
  
   (1,390)   (1,390)
Dividends on Common Stock 
  
   (69,500)   (69,500)
Adoption of New Accounting Standard (See Note 1B)      (900)   (900)
Other Comprehensive Loss 
  
    
 (1) (1)
Balance as of March 31, 20206,035,205
 60,352
 2,535,765
 1,838,340
 315
 4,434,772
Net Income 
  
   117,271
   117,271
Dividends on Preferred Stock 
  
   (1,390)   (1,390)
Other Comprehensive Income 
  
     3
 3
Balance as of June 30, 20206,035,205
 $60,352
 $2,535,765
 $1,954,221
 $318
 $4,550,656

For the Six Months Ended June 30, 2020
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 20206,035,205 $60,352 $2,535,765 $1,791,392 $316 $4,387,825 
Net Income   118,738  118,738 
Dividends on Preferred Stock   (1,390) (1,390)
Dividends on Common Stock   (69,500) (69,500)
Adoption of Accounting Standards Update 2016-13(900)(900)
Other Comprehensive Loss    (1)(1)
Balance as of March 31, 20206,035,205 60,352 2,535,765 1,838,340 315 4,434,772 
Net Income   117,271  117,271 
Dividends on Preferred Stock   (1,390) (1,390)
Other Comprehensive Income    
Balance as of June 30, 20206,035,205 $60,352 $2,535,765 $1,954,221 $318 $4,550,656 
 For the Six Months Ended June 30, 2019
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 20196,035,205
 $60,352
 $2,410,765
 $1,727,899
 $301
 $4,199,317
Net Income 
  
   110,471
   110,471
Dividends on Preferred Stock 
  
   (1,390)   (1,390)
Dividends on Common Stock 
  
   (99,000)   (99,000)
Other Comprehensive Income 
  
    
 17
 17
Balance as of March 31, 20196,035,205
 60,352
 2,410,765
 1,737,980
 318
 4,209,415
Net Income 
  
   104,804
   104,804
Dividends on Preferred Stock 
  
   (1,390)   (1,390)
Dividends on Common Stock      (176,400)   (176,400)
Other 
  
 

 1
   1
Other Comprehensive Income 
  
     8
 8
Balance as of June 30, 20196,035,205
 $60,352

$2,410,765

$1,664,995

$326

$4,136,438

The accompanying notes are an integral part of these unaudited condensed financial statements.


7


THE CONNECTICUT LIGHT AND POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,
(Thousands of Dollars)20212020
Operating Activities:  
Net Income$213,955 $236,009 
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:  
Depreciation167,828 158,152 
Deferred Income Taxes41,886 33,275 
Uncollectible Expense6,614 6,187 
Pension, SERP, and PBOP Expense, Net3,803 5,886 
Pension Contributions(37,880)
Regulatory Underrecoveries, Net(22,121)(45,886)
Amortization of Regulatory Assets, Net47,716 850 
Other(62,137)(43,064)
Changes in Current Assets and Liabilities:  
Receivables and Unbilled Revenues, Net(104,262)(49,800)
Taxes Receivable/Accrued, Net33,049 31,139 
Accounts Payable(80,007)(49,574)
Other Current Assets and Liabilities, Net15,513 (244)
Net Cash Flows Provided by Operating Activities223,957 282,930 
Investing Activities:  
Investments in Property, Plant and Equipment(393,323)(407,175)
Other Investing Activities157 146 
Net Cash Flows Used in Investing Activities(393,166)(407,029)
Financing Activities:  
Cash Dividends on Common Stock(140,200)(69,500)
Cash Dividends on Preferred Stock(2,779)(2,779)
Issuance of Long-Term Debt425,000 
Increase in Notes Payable to Eversource Parent208,200 
Other Financing Activities(5,180)(795)
Net Cash Flows Provided by Financing Activities276,841 135,126 
Net Increase in Cash and Restricted Cash107,632 11,027 
Cash and Restricted Cash - Beginning of Period99,809 4,971 
Cash and Restricted Cash - End of Period$207,441 $15,998 
 For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019
    
Operating Activities:   
Net Income$236,009
 $215,275
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:   
Depreciation158,152
 147,844
Deferred Income Taxes33,275
 16,513
Uncollectible Expense6,187
 7,627
Pension, SERP, and PBOP Expense, Net5,886
 6,926
Regulatory Underrecoveries, Net(45,886) (40,460)
Amortization of Regulatory Assets, Net850
 48,047
Other(43,064) (40,290)
Changes in Current Assets and Liabilities:   
Receivables and Unbilled Revenues, Net(49,800) (37,101)
Taxes Receivable/Accrued, Net31,139
 19,701
Accounts Payable(49,574) 5,443
Other Current Assets and Liabilities, Net(244) (3,941)
Net Cash Flows Provided by Operating Activities282,930
 345,584
    
Investing Activities:   
Investments in Property, Plant and Equipment(407,175) (466,112)
Other Investing Activities146
 551
Net Cash Flows Used in Investing Activities(407,029) (465,561)
    
Financing Activities:   
Cash Dividends on Common Stock(69,500) (275,400)
Cash Dividends on Preferred Stock(2,779) (2,779)
Issuance of Long-Term Debt
 300,000
Retirement of Long-Term Debt
 (250,000)
Increase in Notes Payable to Eversource Parent208,200
 259,400
Other Financing Activities(795) 4,237
Net Cash Flows Provided by Financing Activities135,126
 35,458
Net Increase/(Decrease) in Cash and Restricted Cash11,027
 (84,519)
Cash and Restricted Cash - Beginning of Period4,971
 91,613
Cash and Restricted Cash - End of Period$15,998
 $7,094

The accompanying notes are an integral part of these unaudited condensed financial statements.




8



NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)As of June 30, 2021As of December 31, 2020
ASSETS  
Current Assets: 
Cash$577 $102 
Receivables, Net (net of allowance for uncollectible accounts of $98,031 and $91,583
   as of June 30, 2021 and December 31, 2020, respectively)
445,853 403,045 
Accounts Receivable from Affiliated Companies21,455 30,095 
Unbilled Revenues47,689 38,342 
Materials, Supplies and REC Inventory74,638 133,894 
Taxes Receivable6,814 65,051 
Regulatory Assets448,030 399,882 
Prepayments and Other Current Assets24,494 21,833 
Total Current Assets1,069,550 1,092,244 
Property, Plant and Equipment, Net10,437,198 10,123,062 
Deferred Debits and Other Assets: 
Regulatory Assets1,236,379 1,304,019 
Prepaid PBOP216,692 204,138 
Other Long-Term Assets173,815 162,836 
Total Deferred Debits and Other Assets1,626,886 1,670,993 
Total Assets$13,133,634 $12,886,299 
LIABILITIES AND CAPITALIZATION  
Current Liabilities:  
Notes Payable$555,500 $195,000 
Notes Payable to Eversource Parent21,500 21,300 
Long-Term Debt – Current Portion250,000 
Accounts Payable308,106 383,558 
Accounts Payable to Affiliated Companies90,385 95,703 
Obligations to Third Party Suppliers122,760 98,572 
Renewable Portfolio Standards Compliance Obligations47,041 127,536 
Regulatory Liabilities172,988 164,761 
Other Current Liabilities49,826 72,118 
Total Current Liabilities1,368,106 1,408,548 
Deferred Credits and Other Liabilities:  
Accumulated Deferred Income Taxes1,504,188 1,459,906 
Regulatory Liabilities1,552,053 1,550,390 
Accrued Pension and SERP127,248 172,571 
Other Long-Term Liabilities348,504 337,245 
Total Deferred Credits and Other Liabilities3,531,993 3,520,112 
Long-Term Debt3,688,259 3,393,221 
Preferred Stock Not Subject to Mandatory Redemption43,000 43,000 
Common Stockholder's Equity:  
Common Stock
Capital Surplus, Paid In2,053,942 1,993,942 
Retained Earnings2,447,823 2,527,167 
Accumulated Other Comprehensive Income511 309 
Common Stockholder's Equity4,502,276 4,521,418 
Commitments and Contingencies (Note 9)00
Total Liabilities and Capitalization$13,133,634 $12,886,299 
(Thousands of Dollars)As of June 30, 2020 As of December 31, 2019
    
ASSETS 
  
Current Assets:   
Cash$1,158
 $52
Receivables, Net (net of allowance for uncollectible accounts of $68,682 and $75,406 as of June 30, 2020 and December 31, 2019, respectively)387,124
 346,785
Accounts Receivable from Affiliated Companies29,010
 29,914
Unbilled Revenues44,927
 37,482
Materials, Supplies and REC Inventory70,461
 124,060
Regulatory Assets296,366
 285,591
Prepayments and Other Current Assets33,912
 31,150
Total Current Assets862,958
 855,034
Property, Plant and Equipment, Net9,773,248
 9,472,770
Deferred Debits and Other Assets:   
Regulatory Assets1,217,978
 1,250,029
Prepaid PBOP186,260
 166,058
Other Long-Term Assets140,294
 144,368
Total Deferred Debits and Other Assets1,544,532
 1,560,455
Total Assets$12,180,738
 $11,888,259
    
LIABILITIES AND CAPITALIZATION   
Current Liabilities:   
Notes Payable$142,000
 $10,500
Notes Payable to Eversource Parent38,100
 30,300
Long-Term Debt – Current Portion
 95,000
Accounts Payable262,249
 363,691
Accounts Payable to Affiliated Companies116,682
 96,307
Obligations to Third Party Suppliers97,289
 108,827
Renewable Portfolio Standards Compliance Obligations66,543
 150,429
Regulatory Liabilities185,262
 209,180
Other Current Liabilities55,472
 71,333
Total Current Liabilities963,597
 1,135,567
Deferred Credits and Other Liabilities:   
Accumulated Deferred Income Taxes1,399,292
 1,357,265
Regulatory Liabilities1,527,194
 1,516,585
Accrued Pension and SERP96,979
 108,243
Other Long-Term Liabilities347,882
 320,629
Total Deferred Credits and Other Liabilities3,371,347
 3,302,722
Long-Term Debt3,642,558
 3,247,086
Preferred Stock Not Subject to Mandatory Redemption43,000
 43,000
Common Stockholder's Equity:   
Common Stock
 
Capital Surplus, Paid In1,813,442
 1,813,442
Retained Earnings2,346,504
 2,346,287
Accumulated Other Comprehensive Income290
 155
Common Stockholder's Equity4,160,236
 4,159,884
Commitments and Contingencies (Note 9)


 


Total Liabilities and Capitalization$12,180,738

$11,888,259

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Operating Revenues$687,375 $660,971 $1,424,418 $1,394,804 
Operating Expenses:    
Purchased Power and Transmission191,137 192,304 417,615 434,742 
Operations and Maintenance136,356 115,831 279,576 238,149 
Depreciation83,917 79,520 166,710 157,865 
Amortization of Regulatory (Liabilities)/Assets, Net(2,528)19,604 15,890 46,612 
Energy Efficiency Programs64,273 56,756 139,373 125,423 
Taxes Other Than Income Taxes54,126 50,583 108,776 99,306 
Total Operating Expenses527,281 514,598 1,127,940 1,102,097 
Operating Income160,094 146,373 296,478 292,707 
Interest Expense37,195 32,955 69,501 63,972 
Other Income, Net21,915 13,112 38,727 25,350 
Income Before Income Tax Expense144,814 126,530 265,704 254,085 
Income Tax Expense33,902 29,062 60,868 56,228 
Net Income$110,912 $97,468 $204,836 $197,857 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Operating Revenues$660,971
 $681,893
 $1,394,804
 $1,479,505
        
Operating Expenses: 
  
  
  
Purchased Power and Transmission192,304
 228,397
 434,742
 558,501
Operations and Maintenance115,831
 108,924
 238,149
 221,887
Depreciation79,520
 73,055
 157,865
 145,639
Amortization of Regulatory Assets, Net19,604
 23,184
 46,612
 45,768
Energy Efficiency Programs56,756
 65,904
 125,423
 142,633
Taxes Other Than Income Taxes50,583
 48,226
 99,306
 93,047
Total Operating Expenses514,598
 547,690
 1,102,097
 1,207,475
Operating Income146,373
 134,203
 292,707
 272,030
Interest Expense32,955
 28,238
 63,972
 56,120
Other Income, Net13,112
 10,657
 25,350
 21,743
Income Before Income Tax Expense126,530
 116,622
 254,085
 237,653
Income Tax Expense29,062
 26,888
 56,228
 53,906
Net Income$97,468
 $89,734
 $197,857
 $183,747

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Net Income$110,912 $97,468 $204,836 $197,857 
Other Comprehensive Income, Net of Tax:  
  Changes in Funded Status of SERP Benefit Plan(40)(43)(81)(86)
  Qualified Cash Flow Hedging Instruments179 109 288 218 
  Changes in Unrealized Gains/(Losses) on
     Marketable Securities
(5)
Other Comprehensive Income, Net of Tax141 68 202 135 
Comprehensive Income$111,053 $97,536 $205,038 $197,992 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Net Income$97,468
 $89,734
 $197,857
 $183,747
Other Comprehensive Income, Net of Tax:       
  Changes in Funded Status of SERP Benefit Plan(43) 1
 (86) 2
  Qualified Cash Flow Hedging Instruments109
 109
 218
 219
  Changes in Unrealized Gains on Marketable
  Securities
2
 4
 3
 10
Other Comprehensive Income, Net of Tax68
 114
 135
 231
Comprehensive Income$97,536
 $89,848
 $197,992
 $183,978

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


10


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
(Unaudited)
For the Six Months Ended June 30, 2021
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 2021200 $$1,993,942 $2,527,167 $309 $4,521,418 
Net Income   93,924  93,924 
Dividends on Preferred Stock   (490) (490)
Dividends on Common Stock   (206,400) (206,400)
Other Comprehensive Income    61 61 
Balance as of March 31, 2021200 1,993,942 2,414,201 370 4,408,513 
Net Income   110,912  110,912 
Dividends on Preferred Stock   (490) (490)
Dividends on Common Stock(76,800)(76,800)
Capital Contributions from Eversource Parent60,000 60,000 
Other Comprehensive Income    141 141 
Balance as of June 30, 2021200 $$2,053,942 $2,447,823 $511 $4,502,276 
 For the Six Months Ended June 30, 2020
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 2020200
 $
 $1,813,442
 $2,346,287
 $155
 $4,159,884
Net Income 
  
   100,390
   100,390
Dividends on Preferred Stock 
  
   (490)   (490)
Dividends on Common Stock 
  
   (196,500)   (196,500)
Adoption of New Accounting Standard (See Note 1B)      (161)   (161)
Other Comprehensive Income 
  
     67
 67
Balance as of March 31, 2020200



1,813,442

2,249,526

222

4,063,190
Net Income 
  
  
 97,468
  
 97,468
Dividends on Preferred Stock 
  
  
 (490)  
 (490)
Other Comprehensive Income 
  
  
  
 68
 68
Balance as of June 30, 2020200
 $
 $1,813,442
 $2,346,504
 $290
 $4,160,236

For the Six Months Ended June 30, 2020
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 2020200 $$1,813,442 $2,346,287 $155 $4,159,884 
Net Income   100,390  100,390 
Dividends on Preferred Stock   (490) (490)
Dividends on Common Stock   (196,500) (196,500)
Adoption of Accounting Standards Update 2016-13(161)(161)
Other Comprehensive Income    67 67 
Balance as of March 31, 2020200 1,813,442 2,249,526 222 4,063,190 
Net Income   97,468  97,468 
Dividends on Preferred Stock   (490) (490)
Other Comprehensive Income    68 68 
Balance as of June 30, 2020200 $$1,813,442 $2,346,504 $290 $4,160,236 
 For the Six Months Ended June 30, 2019
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 2019200
 $
 $1,633,442
 $2,098,091
 $(1,378) $3,730,155
Net Income 
  
   94,014
   94,014
Dividends on Preferred Stock 
  
   (490)   (490)
Dividends on Common Stock 
  
   (60,600)   (60,600)
Capital Contributions from Eversource Parent 
  
 20,000
 
   20,000
Other Comprehensive Income 
  
     117
 117
Balance as of March 31, 2019200
 
 1,653,442
 2,131,015
 (1,261) 3,783,196
Net Income 
  
   89,734
  
 89,734
Dividends on Preferred Stock 
  
   (490)  
 (490)
Dividends on Common Stock 
  
 
 (121,200)  
 (121,200)
Other Comprehensive Income 
  
     114
 114
Balance as of June 30, 2019200
 $

$1,653,442

$2,099,059

$(1,147)
$3,751,354

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


11


NSTAR ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months Ended June 30,
(Thousands of Dollars)20212020
Operating Activities:  
Net Income$204,836 $197,857 
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:  
Depreciation166,710 157,865 
Deferred Income Taxes28,742 26,062 
Uncollectible Expense7,394 6,826 
Pension, SERP and PBOP Income, Net(12,990)(9,296)
Pension Contributions(10,000)
Regulatory Underrecoveries, Net(12,562)(59,685)
Amortization of Regulatory Assets, Net15,890 46,612 
Other(40,315)(12,534)
Changes in Current Assets and Liabilities:  
Receivables and Unbilled Revenues, Net(49,324)(36,627)
Materials, Supplies and REC Inventory59,256 53,599 
Taxes Receivable/Accrued, Net57,584 5,279 
Accounts Payable(88,729)(49,881)
Other Current Assets and Liabilities, Net(80,605)(113,276)
Net Cash Flows Provided by Operating Activities245,887 212,801 
Investing Activities:  
Investments in Property, Plant and Equipment(426,053)(447,545)
Other Investing Activities43 40 
Net Cash Flows Used in Investing Activities(426,010)(447,505)
Financing Activities:  
Cash Dividends on Common Stock(283,200)(196,500)
Cash Dividends on Preferred Stock(980)(980)
Issuance of Long-Term Debt300,000 400,000 
Retirement of Long-Term Debt(250,000)(95,000)
Capital Contributions from Eversource Parent60,000 
Increase in Notes Payable to Eversource Parent200 7,800 
Increase in Notes Payable360,500 131,500 
Other Financing Activities(5,909)(4,946)
Net Cash Flows Provided by Financing Activities180,611 241,874 
Net Increase in Cash and Restricted Cash488 7,170 
Cash and Restricted Cash - Beginning of Period17,410 6,312 
Cash and Restricted Cash - End of Period$17,898 $13,482 
 For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019
    
Operating Activities: 
  
Net Income$197,857
 $183,747
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: 
  
Depreciation157,865
 145,639
Deferred Income Taxes26,062
 11,603
Uncollectible Expense6,826
 11,605
Pension, SERP and PBOP Income, Net(9,296) (7,052)
Pension and PBOP Contributions
 (3,007)
Regulatory (Under)/Over Recoveries, Net(59,685) 17,063
Amortization of Regulatory Assets, Net46,612
 45,768
Other(12,534) (36,973)
Changes in Current Assets and Liabilities: 
  
Receivables and Unbilled Revenues, Net(36,627) (6,769)
Materials, Supplies and REC Inventory53,599
 49,688
Taxes Receivable/Accrued, Net5,279
 25,572
Accounts Payable(49,881) (82,326)
Other Current Assets and Liabilities, Net(113,276) (103,054)
Net Cash Flows Provided by Operating Activities212,801
 251,504
    
Investing Activities: 
  
Investments in Property, Plant and Equipment(447,545) (418,571)
Other Investing Activities40
 41
Net Cash Flows Used in Investing Activities(447,505) (418,530)
    
Financing Activities: 
  
Cash Dividends on Common Stock(196,500) (181,800)
Cash Dividends on Preferred Stock(980) (980)
Issuance of Long-Term Debt400,000
 400,000
Retirement of Long-Term Debt(95,000) 
Capital Contributions from Eversource Parent
 20,000
Increase in Notes Payable to Eversource Parent7,800
 40,300
Increase/(Decrease) in Notes Payable131,500
 (115,500)
Other Financing Activities(4,946) (3,287)
Net Cash Flows Provided by Financing Activities241,874
 158,733
Net Increase/(Decrease) in Cash and Restricted Cash7,170
 (8,293)
Cash and Restricted Cash - Beginning of Period6,312
 14,659
Cash and Restricted Cash - End of Period$13,482
 $6,366

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


12



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)As of June 30, 2021As of December 31, 2020
ASSETS  
Current Assets:  
Cash$279 $141 
Receivables, Net (net of allowance for uncollectible accounts of $17,223 and $17,157
   as of June 30, 2021 and December 31, 2020, respectively)
119,138 119,899 
Accounts Receivable from Affiliated Companies7,274 10,925 
Unbilled Revenues51,150 46,041 
Materials, Supplies and REC Inventory23,333 26,829 
Regulatory Assets99,474 115,852 
Special Deposits35,109 36,767 
Prepaid Property Taxes18,527 26,257 
Prepayments and Other Current Assets5,215 10,788 
Total Current Assets359,499 393,499 
Property, Plant and Equipment, Net3,467,810 3,374,270 
Deferred Debits and Other Assets:  
Regulatory Assets850,912 873,203 
Other Long-Term Assets21,492 23,733 
Total Deferred Debits and Other Assets872,404 896,936 
Total Assets$4,699,713 $4,664,705 
LIABILITIES AND CAPITALIZATION  
Current Liabilities:  
Notes Payable to Eversource Parent$48,600 $46,300 
Long-Term Debt – Current Portion282,000 
Rate Reduction Bonds – Current Portion43,210 43,210 
Accounts Payable122,068 132,635 
Accounts Payable to Affiliated Companies28,191 43,397 
Regulatory Liabilities61,891 58,756 
Other Current Liabilities46,984 58,487 
Total Current Liabilities350,944 664,785 
Deferred Credits and Other Liabilities:  
Accumulated Deferred Income Taxes546,568 537,627 
Regulatory Liabilities384,675 383,183 
Accrued Pension, SERP and PBOP169,001 184,715 
Other Long-Term Liabilities37,523 37,874 
Total Deferred Credits and Other Liabilities1,137,767 1,143,399 
Long-Term Debt1,163,710 817,070 
Rate Reduction Bonds475,307 496,912 
Common Stockholder's Equity: 
Common Stock
Capital Surplus, Paid In1,088,134 928,134 
Retained Earnings483,927 615,018 
Accumulated Other Comprehensive Loss(76)(613)
Common Stockholder's Equity1,571,985 1,542,539 
Commitments and Contingencies (Note 9)00
Total Liabilities and Capitalization$4,699,713 $4,664,705 
(Thousands of Dollars)As of June 30, 2020 As of December 31, 2019
    
ASSETS   
Current Assets:   
Cash$77
 $413
Receivables, Net (net of allowance for uncollectible accounts of $11,777 and $10,497 as of June 30, 2020 and December 31, 2019, respectively)105,902
 99,934
Accounts Receivable from Affiliated Companies5,001
 6,763
Unbilled Revenues45,837
 48,146
Materials, Supplies and REC Inventory22,745
 24,957
Regulatory Assets110,267
 84,053
Special Deposits30,895
 32,513
Prepayments and Other Current Assets27,682
 19,431
Total Current Assets348,406
 316,210
Property, Plant and Equipment, Net3,258,620
 3,129,506
Deferred Debits and Other Assets:   
Regulatory Assets838,931
 861,672
Other Long-Term Assets38,400
 43,270
Total Deferred Debits and Other Assets877,331
 904,942
Total Assets$4,484,357
 $4,350,658
    
LIABILITIES AND CAPITALIZATION   
Current Liabilities:   
Notes Payable to Eversource Parent$119,300
 $27,000
Long-Term Debt – Current Portion122,000
 
Rate Reduction Bonds – Current Portion43,210
 43,210
Accounts Payable133,686
 127,081
Accounts Payable to Affiliated Companies38,136
 37,946
Regulatory Liabilities83,588
 65,766
Accrued Interest18,585
 19,138
Other Current Liabilities26,958
 32,736
Total Current Liabilities585,463
 352,877
Deferred Credits and Other Liabilities:   
Accumulated Deferred Income Taxes518,097
 506,212
Regulatory Liabilities405,773
 413,381
Accrued Pension, SERP and PBOP148,047
 157,638
Other Long-Term Liabilities37,886
 37,075
Total Deferred Credits and Other Liabilities1,109,803
 1,114,306
Long-Term Debt829,645
 951,620
Rate Reduction Bonds518,517
 540,122
Common Stockholder's Equity:   
Common Stock
 
Capital Surplus, Paid In903,134
 903,134
Retained Earnings538,939
 490,306
Accumulated Other Comprehensive Loss(1,144) (1,707)
Common Stockholder's Equity1,440,929
 1,391,733
Commitments and Contingencies (Note 9)


 


Total Liabilities and Capitalization$4,484,357
 $4,350,658

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


13


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Operating Revenues$278,849 $255,224 $572,284 $531,592 
Operating Expenses:    
Purchased Power and Transmission80,513 82,560 172,122 176,698 
Operations and Maintenance56,537 54,017 111,201 101,146 
Depreciation29,825 24,750 59,293 49,084 
Amortization of Regulatory Assets, Net26,274 11,563 44,821 31,673 
Energy Efficiency Programs9,365 8,786 19,713 18,150 
Taxes Other Than Income Taxes23,453 20,457 45,603 40,158 
Total Operating Expenses225,967 202,133 452,753 416,909 
Operating Income52,882 53,091 119,531 114,683 
Interest Expense13,821 14,607 28,452 29,087 
Other Income, Net4,260 3,626 8,427 6,817 
Income Before Income Tax Expense43,321 42,110 99,506 92,413 
Income Tax Expense8,688 10,478 20,197 21,180 
Net Income$34,633 $31,632 $79,309 $71,233 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Operating Revenues$255,224
 $240,900
 $531,592
 $517,335
        
Operating Expenses:       
Purchased Power and Transmission82,560
 85,768
 176,698
 199,299
Operations and Maintenance54,017
 52,729
 101,146
 105,359
Depreciation24,750
 23,261
 49,084
 46,180
Amortization of Regulatory Assets, Net11,563
 5,857
 31,673
 19,523
Energy Efficiency Programs8,786
 6,215
 18,150
 12,929
Taxes Other Than Income Taxes20,457
 20,725
 40,158
 38,037
Total Operating Expenses202,133
 194,555
 416,909
 421,327
Operating Income53,091
 46,345
 114,683
 96,008
Interest Expense14,607
 13,909
 29,087
 28,276
Other Income, Net3,626
 2,984
 6,817
 10,006
Income Before Income Tax Expense42,110
 35,420
 92,413
 77,738
Income Tax Expense10,478
 8,568
 21,180
 18,104
Net Income$31,632
 $26,852
 $71,233
 $59,634

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
(Thousands of Dollars)2021202020212020
Net Income$34,633 $31,632 $79,309 $71,233 
Other Comprehensive Income, Net of Tax:    
Qualified Cash Flow Hedging Instruments266 269 564 538 
Changes in Unrealized Gains/(Losses) on
   Marketable Securities
16 16 (27)25 
Other Comprehensive Income, Net of Tax282 285 537 563 
Comprehensive Income$34,915 $31,917 $79,846 $71,796 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019 2020 2019
        
Net Income$31,632
 $26,852
 $71,233
 $59,634
Other Comprehensive Income, Net of Tax:       
Qualified Cash Flow Hedging Instruments269
 269
 538
 538
Changes in Unrealized Gains on Marketable Securities16
 27
 25
 65
Other Comprehensive Income, Net of Tax285
 296
 563
 603
Comprehensive Income$31,917
 $27,148
 $71,796
 $60,237

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


14


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
(Unaudited)
For the Six Months Ended June 30, 2021
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 2021301 $$928,134 $615,018 $(613)$1,542,539 
Net Income   44,676  44,676 
Dividends on Common Stock   (25,200) (25,200)
Other Comprehensive Income    255 255 
Balance as of March 31, 2021301 928,134 634,494 (358)1,562,270 
Net Income   34,633  34,633 
Dividends on Common Stock(185,200)(185,200)
Capital Contributions from Eversource Parent  160,000  160,000 
Other Comprehensive Income282 282 
Balance as of June 30, 2021301 $$1,088,134 $483,927 $(76)$1,571,985 
 For the Six Months Ended June 30, 2020
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 2020301
 $
 $903,134
 $490,306
 $(1,707) $1,391,733
Net Income 
  
   39,601
   39,601
Dividends on Common Stock 
  
   (22,300)   (22,300)
Adoption of New Accounting Standard (See Note 1B)      (300)   (300)
Other Comprehensive Income 
  
    
 278
 278
Balance as of March 31, 2020301



903,134

507,307

(1,429)
1,409,012
Net Income 
  
   31,632
   31,632
Other Comprehensive Income 
  
     285
 285
Balance as of June 30, 2020301
 $

$903,134

$538,939

$(1,144)
$1,440,929

For the Six Months Ended June 30, 2020
 Common StockCapital
Surplus,
Paid In
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)StockAmount
Balance as of January 1, 2020301 $$903,134 $490,306 $(1,707)$1,391,733 
Net Income   39,601  39,601 
Dividends on Common Stock(22,300)(22,300)
Adoption of Accounting Standards Update 2016-13(300)(300)
Other Comprehensive Income    278 278 
Balance as of March 31, 2020301 903,134 507,307 (1,429)1,409,012 
Net Income   31,632  31,632 
Other Comprehensive Income    285 285 
Balance as of June 30, 2020301 $$903,134 $538,939 $(1,144)$1,440,929 
 For the Six Months Ended June 30, 2019
 Common Stock 
Capital
Surplus,
Paid In
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information)Stock Amount    
Balance as of January 1, 2019301
 $
 $678,134
 $627,258
 $(2,851) $1,302,541
Net Income 
  
   32,781
   32,781
Dividends on Common Stock      (19,000)   (19,000)
Other Comprehensive Income 
  
    
 307
 307
Balance as of March 31, 2019301



678,134

641,039

(2,544)
1,316,629
Net Income 
  
   26,852
   26,852
Dividends on Common Stock    
 (214,000)   (214,000)
Other Comprehensive Income 
  
     296
 296
Balance as of June 30, 2019301
 $

$678,134

$453,891

$(2,248)
$1,129,777

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


15


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
(Thousands of Dollars)20212020
Operating Activities:  
Net Income$79,309 $71,233 
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:  
Depreciation59,293 49,084 
Deferred Income Taxes(842)9,193 
Uncollectible Expense3,226 1,255 
Regulatory Underrecoveries, Net(6,965)(31,159)
Amortization of Regulatory Assets, Net44,821 31,673 
Other(14,445)(5,191)
Changes in Current Assets and Liabilities:  
Receivables and Unbilled Revenues, Net(3,717)(3,237)
Materials, Supplies and REC Inventory3,496 2,212 
Taxes Receivable/Accrued, Net9,183 (5,790)
Accounts Payable(29,320)8,219 
Other Current Assets and Liabilities, Net(5,736)(8,673)
Net Cash Flows Provided by Operating Activities138,303 118,819 
Investing Activities:  
Investments in Property, Plant and Equipment(134,256)(169,239)
Other Investing Activities270 250 
Net Cash Flows Used in Investing Activities(133,986)(168,989)
Financing Activities:  
Cash Dividends on Common Stock(210,400)(22,300)
Capital Contributions from Eversource Parent160,000 
Issuance of Long-Term Debt350,000 
Repayment of Rate Reduction Bonds(21,605)(21,605)
Retirement of Long-Term Debt(282,000)
Increase in Notes Payable to Eversource Parent2,300 92,300 
Other Financing Activities(2,941)(43)
Net Cash Flows (Used in)/Provided by Financing Activities(4,646)48,352 
Net Decrease in Cash and Restricted Cash(329)(1,818)
Cash and Restricted Cash - Beginning of Period39,555 36,688 
Cash and Restricted Cash - End of Period$39,226 $34,870 
 For the Six Months Ended June 30,
(Thousands of Dollars)2020 2019
    
Operating Activities:   
Net Income$71,233
 $59,634
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:   
Depreciation49,084
 46,180
Deferred Income Taxes9,193
 12,030
Uncollectible Expense1,255
 3,143
Regulatory Underrecoveries, Net(31,159) (29,377)
Amortization of Regulatory Assets, Net31,673
 19,523
Other(5,191) (10,524)
Changes in Current Assets and Liabilities:   
Receivables and Unbilled Revenues, Net(3,237) 7,658
Materials, Supplies and REC Inventory2,212
 14,225
Taxes Receivable/Accrued, Net(5,790) 18,029
Accounts Payable8,219
 (1,159)
Other Current Assets and Liabilities, Net(8,673) (17,620)
Net Cash Flows Provided by Operating Activities118,819
 121,742
    
Investing Activities:   
Investments in Property, Plant and Equipment(169,239) (132,791)
Other Investing Activities250
 743
Net Cash Flows Used in Investing Activities(168,989) (132,048)
    
Financing Activities:   
Cash Dividends on Common Stock(22,300) (233,000)
Issuance of Long-Term Debt
 300,000
Repayment of Rate Reduction Bonds(21,605) (30,727)
Increase/(Decrease) in Notes Payable to Eversource Parent92,300
 (36,900)
Other Financing Activities(43) (2,703)
Net Cash Flows Provided by/(Used in) Financing Activities48,352
 (3,330)
Net Decrease in Cash and Restricted Cash(1,818) (13,636)
Cash and Restricted Cash - Beginning of Period36,688
 52,723
Cash and Restricted Cash - End of Period$34,870
 $39,087

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


16




EVERSOURCE ENERGY AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

Refer to the Glossary of Terms included in this combined Quarterly Report on Form 10-Q for abbreviations and acronyms used throughout the combined notes to the unaudited condensed financial statements.

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Basis of Presentation
Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business.  Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas, and NSTAR Gas and Eversource Gas Company of Massachusetts (EGMA) (natural gas utilities) and Aquarion (water utilities). Eversource provides energy delivery and/or water service to approximately 40000004.3 million electric, natural gas and water customers through 89 regulated utilities in Connecticut, Massachusetts and New Hampshire.

The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries.  Intercompany transactions have been eliminated in consolidation.  The accompanying unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC.  Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.  The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource 20192020 Form 10-K, which was filed with the SEC on February 27, 2020.17, 2021. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's and PSNH's financial position as of June 30, 20202021 and December 31, 2019,2020, and the results of operations, comprehensive income and common shareholders' equity for the three and six months ended June 30, 20202021 and 2019,2020 and the cash flows for the six months ended June 30, 20202021 and 2019.2020. The results of operations and comprehensive income for the three and six months ended June 30, 20202021 and 20192020 and the cash flows for the six months ended June 30, 20202021 and 20192020 are not necessarily indicative of the results expected for a full year.  

Eversource's consolidated financial information includes the results of the acquisition of the assets of Columbia Gas of Massachusetts (CMA) on October 9, 2020. The natural gas distribution assets acquired from CMA on October 9, 2020 were assigned to EGMA.

Eversource consolidates the operations of CYAPC and YAEC, both of which are inactive regional nuclear power companies engaged in the long-term storage of their spent nuclear fuel. Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's and PSNH's combined ownership and voting interests in each of these entities is greater than 50 percent.  Intercompany transactions between CL&P, NSTAR Electric, PSNH and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

Eversource holds several equity ownership interests that are not consolidated and are accounted for under the equity method.

Eversource's utility subsidiaries' electric, natural gas and water distribution and transmission businesses 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, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See Note 2, "Regulatory Accounting," for further information.

COVID-19 has adversely affected customers, workers and the economyU.S. economy. We provide a critical service to our customers and caused significant volatility inhave taken extensive measures to maintain its safety and reliability.We continue to address the financial markets. Due to the inherent uncertaintyimpacts of the unprecedentedCOVID-19 pandemic and rapidly evolving situation, we continue to closely monitor how COVID-19the related developments affect Eversource. As ofWe are in the dateearly re-entry phase of our filing and based on available information, wepandemic response plan, in which the majority of our employees under remote work arrangements are starting to transition back to the workplace.We have not experienced nor are we able to predict, significant impacts directly related to the pandemic that could adversely affecthave materially affected our current or future operations, financial position,our workforce, or results of operations, and cash flows. operations. The extent of the impact to us in the future will vary, and depend in large part on the duration, scope and severity of the pandemic and the resulting impact on economic, health care and capital market conditions.





Our The future impact will also depend on the outcome of future proceedings before our state regulatory commissions to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable balances and uncollectible accounts have not been materially adversely impacted by COVID-19. We believe that we are developing successful mechanismsexpenses.

17


Based on the status of our COVID-19 regulatory dockets, communications with our state regulatory commissions, that allow, orand policies and practices in the jurisdictions in which we operate, we believe our state regulatory commissions in Connecticut and Massachusetts will allow us to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows. See Note 1C, "Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts," for further discussion of our evaluation of the allowance for doubtful accounts as of June 30, 20202021 in light of the COVID-19 pandemic.pandemic and Note 2, "Regulatory Accounting," for the amount of net incremental COVID-19 costs deferred on our balance sheet.

An extended economic slowdown could result in lower demand for electricity, natural gas and/or water by our commercial and industrial customers. However, fluctuations in retail sales volumes for CL&P, NSTAR Electric, Yankee Gas, NSTAR Gas and our Connecticut water distribution business are not expected to materially impact earnings due to their respective state regulatory commission-approved distribution revenue decoupling mechanisms.

As of June 30, 2020, we did not identify indicators or triggering events for impairments to our goodwill, long-lived assets, available-for-sale debt securities, or equity method investment carrying values.

Certain reclassifications of prior period data were made in the accompanying financial statements to conform to the current period presentation.

B.    Accounting Standards
Accounting Standards Issued but Not Yet Effective:Recently Adopted: In December 2019,On January 1, 2021, the FASB issuedCompany adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, which eliminates certain exceptions to the general principles of current income tax guidance in ASC 740 and simplifies and improves consistency in application of that income tax guidance through clarifications of and amendments to ASC 740. The guidance is effective in the first quarter of 2021. The ASU isdid not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric and PSNH.

Accounting Standards Recently Adopted: On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which provides a model for recognizing credit losses on financial instruments based on an estimate of current expected losses, requiring immediate recognition of credit losses expected over the life of a financial instrument. The Company determined the impacts of this standard on the allowance for credit losses on its financial instruments, primarily accounts receivable.  As of January 1, 2020, the Company recorded increases to the allowance for uncollectible accounts for late fees and other receivable amounts of $1.6 million, $0.9 million, $0.2 million and $0.3 million at Eversource, CL&P, NSTAR Electric and PSNH, respectively. The impact to retained earnings, net of tax, was $1.5 million, $0.9 million, $0.2 million and $0.3 million at Eversource, CL&P, NSTAR Electric and PSNH, respectively.

The Company also adjusted the allowance for uncollectible amounts of hardship receivables and other low-income assistance programs, which are ultimately collectible in rates at specified points in time under approved regulatory mechanisms. The impact on the allowance, which was offset in other long-term assets on the balance sheets, was an increase of $22.2 million and $21.3 million at Eversource and CL&P, respectively, and a decrease of $1.5 million at NSTAR Electric. See Note 1C, “Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts,” for further information.

The Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment as of January 1, 2020. The ASU simplified the accounting for goodwill impairment by removing a complex step in the goodwill impairment test. Under the guidance, goodwill impairment is measured as the amount by which its carrying value exceeds its fair value. The ASU is not expected to have an impact on the financial statements of Eversource.

On January 1, 2020, the Company adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The ASU aligned the requirements for capitalizing costs incurred to implement a cloud computing arrangement with existing internal-use software guidance. The prospective implementation of this standard did not have any impact on the financial statements of Eversource, CL&P, NSTAR Electric or PSNH for the period ending June 30, 2020.

On January 1, 2020, the Company prospectively adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modified fair value disclosure requirements. The standard includes new disclosure requirements for Level 3 unobservable inputs and eliminated the requirement to disclose certain information relating to transfers between levels. The modified disclosures are included in Note 1D, “Summary of Significant Accounting Policies - Fair Value Measurements,” and Note 4, “Derivative Instruments.”

C.    Allowance for Uncollectible Accounts
Receivables, Net on the balance sheets primarily includes trade receivables from retail customers and customers related to wholesale transmission contracts, wholesale market sales, sales of RECs and property rentals. Receivables, Net also includes customer receivables for the purchase of electricity from a competitive third party supplier, the current portion of customer energy efficiency loans, property damage receivables and other miscellaneous receivables. There is no material concentration of receivables. Receivables are recorded at amortized cost, net of a credit loss provision (or allowance for uncollectible accounts).

Receivables are presented net of expected credit losses at estimated net realizable value by maintaining an allowance for uncollectible accounts. Effective January 1, 2020, theThe current expected credit loss (CECL) model wasis applied to receivables for purposes of calculating the allowance for uncollectible accounts. This model is based on expected losses and results in the recognition of estimated expected credit losses, including uncollectible amounts for both billed and unbilled revenues, over the life of the receivable at the time a receivable is recorded.



The allowance for uncollectible accounts is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category.  Factors in determining credit loss include historical collection, write-off experience, and management's assessment of collectibilitycollectability from customers, including current conditions, reasonable forecasts, and expectations of future collectibilitycollectability and collection efforts. Management continuously assesses the collectibilitycollectability of receivables and adjusts estimates based on actual experience and future expectations based on economic indicators, collection efforts and other factors.  Management also monitors the aging analysis of receivables to determine if there are changes in the collections of accounts receivable. Receivable balances are written off against the allowance for uncollectible accounts when the customer accounts are no longer in service and these balances are deemed to be uncollectible.

As of June 30, 2020,2021, management evaluated the adequacy of the allowance for uncollectible accounts in light of the COVID-19 pandemic and the related economic downturn. This evaluation included an analysis of collection and customer payment trends, in 2020, economic conditions, delinquency statistics, aging-based quantitative assessments, the impact on residential customer bills because of energy usage and change in rates, flexible payment plans and financial hardship arrearage management programs being offered to customers, and the impacts ofCOVID-19 developments, including any potential federal governmental pandemic relief programs for our customers and the expansion of unemployment benefit initiatives, which help to mitigate the potential for increasing customer account delinquencies. Additionally, management considered past economic declines and corresponding uncollectible reserves as part of the current assessment. The collection analysisThis evaluation has shown that our operating companies have experienced somean increase in aged receivables and lower cash collections from customers because of the length of the moratorium on disconnections in Connecticut and Massachusetts, and the economic slowdown resulting from the COVID-19 pandemic, primarily at our natural gas distribution businesses driven by the seasonality of their usage patterns. However, overall it is not a significant reduction in customer payments. pandemic.

Based upon the evaluation performed, in the second quarterfirst half of 2020,2021, management increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by $4.1$32.1 million for Eversource ($12.3 million for CL&P, $6.3 million for NSTAR Electric, and $14.7 million at our natural gas distribution segment. businesses). These COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs at our Connecticut and Massachusetts utilities or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as management believes it is probable that these costs will ultimately be recovered from customers in future rates. As of June 30, 2021, the total amount incurred as a result of COVID-19 included in the allowance for uncollectible accounts was $63.6 million at Eversource ($15.1 million at CL&P, $17.3 million at NSTAR Electric, and $30.1 million at our natural gas businesses).

On July 7, 2021, the NHPUC issued an order to New Hampshire utilities that concluded that recovery of incremental bad debt or waived late fees related to the COVID-19 pandemic would be addressed in a future rate case to the extent those costs are relevant at that time. The NHPUC concluded that New Hampshire utilities would not be permitted to establish a regulatory asset for these items. As a result of the order, in the second quarter of 2021, PSNH removed its $0.6 million deferral of net incremental COVID-19 costs. In New Hampshire, the moratorium on disconnections of non-hardship residential and commercial customers ended in late 2020 and PSNH has resumed disconnection activities, which has resulted in improved collection of outstanding customer receivable balances.

In Connecticut, the moratorium on disconnections of commercial customers ended in June 2021, but is still in place for residential customers. In Massachusetts, the moratorium on disconnections of commercial customers and residential customers ended in September 2020 and July 2021, respectively. Disconnection activities have largely resumed after these moratoria have expired.

18


Management concluded that the reserve balance as of June 30, 20202021 adequately reflected the collection risk and net realizable value for Eversource’s receivables. Management will continue to evaluate the adequacy of the uncollectible allowance in future reporting periods based on an ongoing assessment of accounts receivable collections, delinquency statistics, and analysis of aging-based quantitative assessments.

The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively.  The DPU allows NSTAR Electric, and NSTAR Gas and EGMA to recover in rates amounts associated with certain uncollectible hardship accounts receivable. These uncollectible hardship customer account balances are included in Regulatory Assets or Other Long-Term Assets on the balance sheets. Hardship customers are protected from shut-off in certain circumstances, and historical collection experience has reflected a higher default risk as compared to the rest of the receivable population. As a result of the adoption of ASU 2016-13, management aligned the allowance for uncollectible hardship accounts across all regulatory jurisdictions, usingManagement uses a higher credit risk profile for this pool of trade receivables as compared to non-hardship receivables. Implementation impacts of the accounting standard on the allowance for uncollectible hardship accounts are reflected in the rollforward of the uncollectible allowance in the table below. The allowance for uncollectible hardship accounts is included in the total uncollectible allowance balance.

The total allowance for uncollectible accounts is included in Receivables, Net on the balance sheets. The activity in the allowance for uncollectible accounts by portfolio segment is as follows:
EversourceCL&PNSTAR ElectricPSNH
(Millions of Dollars)Hardship AccountsRetail (Non-Hardship),
Wholesale, and Other Receivables
Total AllowanceHardship AccountsRetail (Non-Hardship),
Wholesale and Other Receivables
Total AllowanceHardship AccountsRetail (Non-Hardship),
Wholesale, and Other Receivables
Total AllowanceTotal Allowance
Three Months Ended 2021
Beginning Balance$197.3 $194.4 $391.7 $138.4 $36.7 $175.1 $31.1 $58.2 $89.3 $17.3 
Uncollectible Expense11.4 11.4 2.8 2.8 3.5 3.5 2.0 
Uncollectible Costs Deferred (1)
16.6 24.5 41.1 9.3 8.3 17.6 4.9 6.9 11.8 (0.3)
Write-Offs(3.4)(18.1)(21.5)(2.3)(5.4)(7.7)(0.1)(7.7)(7.8)(2.0)
Recoveries Collected0.2 2.9 3.1 0.2 0.8 1.0 1.2 1.2 0.2 
Ending Balance$210.7 $215.1 $425.8 $145.6 $43.2 $188.8 $35.9 $62.1 $98.0 $17.2 
Six Months Ended 2021
Beginning Balance$194.8 $164.1 $358.9 $129.1 $28.3 $157.4 $39.7 $51.9 $91.6 $17.2 
Uncollectible Expense27.7 27.7 6.6 6.6 7.4 7.4 3.2 
Uncollectible Costs Deferred (1)
22.0 51.6 73.6 21.2 15.7 36.9 (3.5)15.2 11.7 0.8 
Write-Offs(6.7)(34.8)(41.5)(5.2)(9.3)(14.5)(0.3)(15.2)(15.5)(4.5)
Recoveries Collected0.6 6.5 7.1 0.5 1.9 2.4 2.8 2.8 0.5 
Ending Balance$210.7 $215.1 $425.8 $145.6 $43.2 $188.8 $35.9 $62.1 $98.0 $17.2 
 For the Six Months Ended June 30, 2020
 Eversource CL&P NSTAR Electric PSNH
(Millions of Dollars)Hardship Accounts 
Retail (Non-Hardship),
Wholesale, and Other Receivables
 Total Allowance Hardship Accounts 
Retail (Non-Hardship),
Wholesale and Other Receivables
 Total Allowance Hardship Accounts 
Retail (Non-Hardship),
Wholesale, and Other Receivables
 Total Allowance Total Allowance
Beginning Balance$143.3
 $81.5
 $224.8
 $80.1
 $17.2
 $97.3
 $43.9
 $31.5
 $75.4
 $10.5
ASU 2016-13 Implementation Impact on January 1, 202021.6
 2.2
 23.8
 21.3
 0.9
 22.2
 (1.6) 0.3
 (1.3) 0.3
Uncollectible Expense (1)

 20.6
 20.6
 
 6.2
 6.2
 
 6.8
 6.8
 1.3
Uncollectible Costs Deferred (2)
18.9
 17.0
 35.9
 21.5
 3.4
 24.9
 (7.1) 6.9
 (0.2) 2.4
Write-Offs(9.1) (33.4) (42.5) (7.4) (9.5) (16.9) (0.6) (14.2) (14.8) (3.0)
Recoveries Collected0.8
 6.6
 7.4
 0.8
 2.2
 3.0
 
 2.8
 2.8
 0.3
Ending Balance$175.5
 $94.5
 $270.0
 $116.3
 $20.4
 $136.7
 $34.6
 $34.1
 $68.7
 $11.8

EversourceCL&PNSTAR ElectricPSNH
(Millions of Dollars)Hardship AccountsRetail (Non-Hardship),
Wholesale, and Other Receivables
Total AllowanceHardship AccountsRetail (Non-Hardship),
Wholesale and Other Receivables
Total AllowanceHardship AccountsRetail (Non-Hardship),
Wholesale, and Other Receivables
Total AllowanceTotal Allowance
Three Months Ended 2020
Beginning Balance$172.2 $89.9 $262.1 $110.7 $20.2 $130.9 $38.5 $32.6 $71.1 $11.2 
Uncollectible Expense9.2 9.2 3.0 3.0 3.1 3.1 0.6 
Uncollectible Costs Deferred (1)
7.1 8.5 15.6 8.6 1.6 10.2 (3.7)3.5 (0.2)1.1 
Write-Offs(4.4)(16.6)(21.0)(3.6)(6.0)(9.6)(0.2)(6.2)(6.4)(1.3)
Recoveries Collected0.6 3.5 4.1 0.6 1.6 2.2 1.1 1.1 0.2 
Ending Balance$175.5 $94.5 $270.0 $116.3 $20.4 $136.7 $34.6 $34.1 $68.7 $11.8 
Six Months Ended 2020
Beginning Balance$143.3 $81.5 $224.8 $80.1 $17.2 $97.3 $43.9 $31.5 $75.4 $10.5 
ASU 2016-13 Implementation
  Impact on January 1, 2020
21.6 2.2 23.8 21.3 0.9 22.2 (1.6)0.3 (1.3)0.3 
Uncollectible Expense20.6 20.6 6.2 6.2 6.8 6.8 1.3 
Uncollectible Costs Deferred (1)
18.9 17.0 35.9 21.5 3.4 24.9 (7.1)6.9 (0.2)2.4 
Write-Offs(9.1)(33.4)(42.5)(7.4)(9.5)(16.9)(0.6)(14.2)(14.8)(3.0)
Recoveries Collected0.8 6.6 7.4 0.8 2.2 3.0 2.8 2.8 0.3 
Ending Balance$175.5 $94.5 $270.0 $116.3 $20.4 $136.7 $34.6 $34.1 $68.7 $11.8 

(1) Uncollectible expense associated with customer and other accounts receivable is included in Operations and Maintenance expenseThese expected credit losses are deferred as regulatory costs on the statements of income. For the three and six months ended June 30, 2019,balance sheets, as these amounts are ultimately recovered in rates. Amounts include uncollectible expense included in Operations and Maintenance Expense was $13.0 million and $31.5 million for Eversource, $3.5 million and $7.6 million for CL&P, $5.7 million and $11.6 million for NSTAR Electric and $1.4 million and $3.1 million for PSNH, respectively.

(2) The current period provision for expected credit lossescosts for hardship accounts and other customer receivables, including uncollectible amounts related to COVID-19 that are ultimately recovered in rates is deferred as a regulatory cost on the balance sheets.and uncollectible energy supply costs.


19


D.    Fair Value Measurements
Fair value measurement guidance is applied to derivative contracts that are not elected or designated as "normal purchases" or "normal sales" (normal) and to the marketable securities held in trusts.  Fair value measurement guidance is also applied to valuations of the investments used to calculate the funded status of pension and PBOP plans, the nonrecurring fair value measurements of nonfinancial assets such as goodwill, long-lived assets, equity method investments, and AROs, and in the estimatedvaluation of the acquisition of CMA's assets in 2020. The fair value measurement guidance was also applied in estimating the fair value of preferred stock, long-term debt and RRBs.

Fair Value Hierarchy:  In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable inputs.  Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes.  The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement.  Eversource evaluates the classification of assets and liabilities measured at fair value on a quarterly basis. The three levels of the fair value hierarchy are described below:

Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.  

Level 2 - Inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable.

Level 3 - Quoted market prices are not available.  Fair value is derived from valuation techniques in which one or more significant inputs or assumptions are unobservable.  Where possible, valuation techniques incorporate observable market inputs that can be validated to external sources such as industry exchanges, including prices of energy and energy-related products.  

Uncategorized - Investments that are measured at net asset value are not categorized within the fair value hierarchy.

Determination of Fair Value:  The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note 10, "Fair Value of Financial Instruments," to the financial statements.

E.    Other Income, Net
The components of Other Income, Net on the statements of income were as follows:
 For the Three Months Ended
 June 30, 2021June 30, 2020
(Millions of Dollars)EversourceCL&PNSTAR ElectricPSNHEversourceCL&PNSTAR ElectricPSNH
Pension, SERP and PBOP Non-Service
   Income Components
$22.1 $4.3 $10.2 $2.7 $10.7 $0.9 $7.1 $1.6 
AFUDC Equity9.2 1.7 6.2 0.3 10.8 3.9 5.3 1.2 
Equity in Earnings of Unconsolidated Affiliates (1)
4.7 0.1 5.9 0.1 
Investment Income1.9 1.2 0.6 0.3 1.8 2.2 0.3 
Interest Income8.4 2.7 4.8 0.9 1.0 1.4 0.5 0.5 
Other0.3 0.1 0.1 0.1 
Total Other Income, Net$46.6 $9.9 $21.9 $4.3 $30.2 $8.5 $13.1 $3.6 
 For the Six Months Ended
 June 30, 2021June 30, 2020
(Millions of Dollars)EversourceCL&PNSTAR ElectricPSNHEversourceCL&PNSTAR ElectricPSNH
Pension, SERP and PBOP Non-Service
   Income Components
$42.2 $7.0 $20.2 $5.4 $23.4 $2.1 $15.0 $3.5 
AFUDC Equity18.4 3.4 12.4 0.9 21.4 7.9 10.3 2.6 
Equity in Earnings of Unconsolidated Affiliates (1)
8.4 0.2 9.8 0.2 
Investment Income/(Loss)1.3 1.5 0.8 0.4 (2.5)(1.3)(1.3)(0.2)
Interest Income9.9 2.8 4.9 1.6 1.8 1.6 0.7 0.8 
Other0.6 0.1 0.2 0.1 0.4 0.1 0.5 0.1 
Total Other Income, Net$80.8 $14.8 $38.7 $8.4 $54.3 $10.4 $25.4 $6.8 
(1)    Equity in earnings of unconsolidated affiliates includes $2.1 million of pre-tax unrealized gains associated with an investment in a renewable energy fund for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2020, equity in earnings of unconsolidated affiliates included $2.4 million of primarily realized gains associated with this investment.
 For the Three Months Ended
 June 30, 2020 June 30, 2019
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
   Income/(Expense) Components
$10.7
 $0.9
 $7.1
 $1.6
 $5.8
 $(0.9) $5.4
 $1.5
AFUDC Equity10.8
 3.9
 5.3
 1.2
 13.1
 3.2
 5.1
 0.9
Equity in Earnings of Unconsolidated Affiliates (1)
5.9
 
 0.1
 
 25.9
 0.1
 0.2
 
Investment Income/(Loss)1.8
 2.2
 
 0.3
 (0.6) (0.1) (0.3) (0.1)
Interest Income1.0
 1.4
 0.5
 0.5
 1.3
 0.5
 0.2
 0.7
Other
 0.1
 0.1
 
 0.4
 0.1
 0.1
 
Total Other Income, Net$30.2
 $8.5
 $13.1
 $3.6
 $45.9
 $2.9
 $10.7
 $3.0
                
                
 For the Six Months Ended
 June 30, 2020 June 30, 2019
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
   Income/(Expense) Components
$23.4
 $2.1
 $15.0
 $3.5
 $13.1
 $(1.6) $12.4
 $2.0
AFUDC Equity21.4
 7.9
 10.3
 2.6
 24.1
 5.8
 9.1
 1.1
Equity in Earnings of Unconsolidated Affiliates (1)
9.8
 
 0.2
 
 30.9
 0.1
 0.4
 
Investment Income/(Loss)(2.5) (1.3) (1.3) (0.2) 0.6
 1.7
 (0.6) 0.2
Interest Income1.8
 1.6
 0.7
 0.8
 7.8
 0.8
 0.4
 6.6
Other0.4
 0.1
 0.5
 0.1
 0.4
 (0.1) 
 0.1
Total Other Income, Net$54.3
 $10.4
 $25.4
 $6.8
 $76.9
 $6.7
 $21.7
 $10.0


(1)

20


Equity in Earnings of Unconsolidated Affiliates includes $2.4 million of primarily realized gains associated with an investment in renewable energy fund for the three and six months ended June 30, 2020, respectively. For both the three and six months ended June 30, 2019, unrealized gains on this investment totaled $20.4 million.



F.    Other Taxes
Eversource's companies that serve customers in Connecticut collect gross receipts taxes levied by the state of Connecticut from their customers. These gross receipts taxes are recorded separately with collections in Operating Revenues and with payments in Taxes Other Than Income Taxes on the statements of income as follows:
 For the Three Months EndedFor the Six Months Ended
(Millions of Dollars)June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Eversource$39.9 $37.6 $88.5 $80.7 
CL&P35.4 33.1 74.6 68.6
 For the Three Months Ended For the Six Months Ended
(Millions of Dollars)June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Eversource$37.6
 $36.4
 $80.7
 $81.4
CL&P33.1
 31.8
 68.6
 68.0


Separate from above were amounts recorded as Taxes Other Than Income Taxes at CL&P related to the remittance to the State of Connecticut of energy efficiency funds collected from customers of $10.7 million and $21.4 million for the three and six months ended June 30, 2019, respectively. Energy efficiency funds collected from customers after July 1, 2019 are no longer subject to remittance to the State of Connecticut. These amounts were recorded separately, with collections in Operating Revenues and with payments in Taxes Other Than Income Taxes on the Eversource and CL&P statements of income.  

As agents for state and local governments, Eversource's companies that serve customers in Connecticut and Massachusetts collect certain sales taxes that are recorded on a net basis with no impact on the statements of income. 

G.    Supplemental Cash Flow Information
Non-cash investing activities include plant additions included in Accounts Payable as follows:
(Millions of Dollars)As of June 30, 2021As of June 30, 2020
Eversource$344.8 $336.1 
CL&P66.4 95.0 
NSTAR Electric103.8 75.5 
PSNH33.9 48.3 
(Millions of Dollars)As of June 30, 2020 As of June 30, 2019
Eversource$336.1
 $323.7
CL&P95.0
 114.0
NSTAR Electric75.5
 85.2
PSNH48.3
 29.9


The following table reconciles cash as reported on the balance sheets to the cash and restricted cash balance as reported on the statements of cash flows:
 As of June 30, 2021As of December 31, 2020
(Millions of Dollars)EversourceCL&PNSTAR ElectricPSNHEversourceCL&PNSTAR ElectricPSNH
Cash as reported on the Balance Sheets$217.4 $198.4 $0.6 $0.3 $106.6 $90.8 $0.1 $0.1 
Restricted cash included in:
Special Deposits71.8 8.6 17.2 35.1 73.6 8.7 17.2 36.8 
Marketable Securities34.1 0.4 0.1 0.6 41.2 0.3 0.1 0.6 
Other Long-Term Assets44.7 3.2 43.6 2.1 
Cash and Restricted Cash as reported on the
    Statements of Cash Flows
$368.0 $207.4 $17.9 $39.2 $265.0 $99.8 $17.4 $39.6 
 As of June 30, 2020 As of December 31, 2019
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Cash as reported on the Balance Sheets$64.9
 $6.9
 $1.2
 $0.1
 $15.4
 $
 $0.1
 $0.4
Restricted cash included in:               
Special Deposits63.4
 8.7
 12.2
 30.9
 52.5
 4.6
 6.2
 32.5
Marketable Securities45.4
 0.4
 0.1
 0.7
 46.0
 0.4
 
 0.6
Other Long-Term Assets3.2
 
 
 3.2
 3.2
 
 
 3.2
Cash and Restricted Cash reported on the
   Statements of Cash Flows
$176.9
 $16.0
 $13.5
 $34.9
 $117.1
 $5.0
 $6.3
 $36.7


Special Deposits represent cash collections related to the PSNH RRB customer charges that are held in trust, required ISO-NE cash deposits, and CYAPC and YAEC cash balances. Special Deposits are included in Current Assets on the balance sheets. Restricted cash included in Marketable Securities represents money market funds held in trusts to fund certain non-qualified executive benefits and restricted trusts to fund CYAPC and YAEC's spent nuclear fuel storage obligations.

H.     Pending Acquisition of Restricted cash included in Other Long-Term Assets of Columbia Gas of Massachusetts
On February 26, 2020, Eversourceincludes $41.5 million related to an Energy Relief Fund for energy efficiency and NiSource Inc. entered intoclean energy measures in the Merrimack Valley, and an asset purchase agreement (the Agreement) pursuant to which Eversource would acquire certain assets that comprise NiSource’s local natural gas distribution business in Massachusetts, which is doing business as Columbia Gas of Massachusetts (CMA). The purchase price of $1.1 billion includes a target working capital amount that is subject to adjustment to reflect actual working capital asadditional energy efficiency program established under the terms of the closing date.EGMA settlement agreement.

The liabilities to be assumed by Eversource under the Agreement specifically exclude any liabilities (past or future) arising out of, or related to, the fires and explosions that occurred on September 13, 2018 in Lawrence, Andover and North Andover, Massachusetts related to the delivery of natural gas by CMA, including certain subsequent events, all as described and in the DPU's Order on Scope dated December 23, 2019 (D.P.U. 19-141) (the Greater Lawrence Incident or GLI). The liabilities to be assumed also exclude any further emergency events prior to the closing of the acquisition related to the restoration and reconstruction with respect to the GLI, including any losses arising out of, or related to, any litigation, demand, cause of action, claim, suit, investigation, proceeding, indemnification agreements or rights. Eversource is not assuming any of CMA's or NiSource Inc.'s debt obligations or notes payable.






The transaction requires approval from the DPU, the Maine Public Utilities Commission, the FERC, and the Federal Communications Commission, and the resulting rate plan requires DPU approval as well. The relevant review period under the Hart-Scott-Rodino Act has expired. On July 2, 2020, Eversource, CMA and NiSource filed an application with the DPU seeking approval of the sale of CMA assets to Eversource, which included a settlement with the Massachusetts Attorney General’s Office, the DOER, and the Low-Income Weatherization and Fuel Assistance Program Network. The application requests approval of the transaction and the related rate plan by September 30, 2020.

Eversource expects to finance the asset acquisition through a combination of debt and equity issuances in a ratio that is consistent with its current consolidated capital structure. The transaction is expected to close shortly after the end of the third quarter of 2020.

2.    REGULATORY ACCOUNTING

Eversource's utility 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 considers 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, plus a return on investment.

The application of accounting guidance for rate-regulated enterprises results in recording regulatory assets and liabilities. Regulatory assets represent the deferral of incurred costs that are probable of future recovery in customer rates. Regulatory assets are amortized as the incurred costs are recovered through customer rates. Regulatory liabilities represent either revenues received from customers to fund expected costs that have not yet been incurred or probable future refunds to customers.

Management believes it is probable that each of the regulated companies will recover its respective investments in long-lived assets includingand the regulatory assets.assets that have been recorded.  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 if management could not conclude it is probable that costs would be recovered from customers in future rates, the applicable costs would be charged to net income in the period in which the determination is made.

21


Regulatory Assets:  The components of regulatory assets were as follows:
 As of June 30, 2021As of December 31, 2020
(Millions of Dollars)EversourceCL&PNSTAR
Electric
PSNHEversourceCL&PNSTAR
Electric
PSNH
Benefit Costs$2,625.1 $551.7 $653.9 $255.1 $2,794.2 $632.3 $690.0 $267.6 
Income Taxes, Net755.4 460.5 112.2 17.4 747.1 458.9 110.4 15.2 
Securitized Stranded Costs500.5 500.5 522.1 522.1 
Storm Restoration Costs, Net745.9 500.2 169.5 76.2 765.6 515.1 186.4 64.1 
Regulatory Tracker Mechanisms950.9 347.5 378.8 79.1 850.5 246.6 332.2 95.3 
Derivative Liabilities279.7 279.7 296.3 293.1 
Goodwill-related306.2 262.9 314.7 270.2 
Asset Retirement Obligations118.2 33.2 55.8 4.0 118.4 32.1 58.6 3.9 
Other Regulatory Assets151.4 31.6 51.3 18.1 161.0 33.7 56.1 20.9 
Total Regulatory Assets6,433.3 2,204.4 1,684.4 950.4 6,569.9 2,211.8 1,703.9 989.1 
Less:  Current Portion1,186.9 458.6 448.0 99.5 1,076.6 345.6 399.9 115.9 
Total Long-Term Regulatory Assets$5,246.4 $1,745.8 $1,236.4 $850.9 $5,493.3 $1,866.2 $1,304.0 $873.2 
 As of June 30, 2020 As of December 31, 2019
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
Benefit Costs$2,306.7
 $493.5
 $615.6
 $209.9
 $2,382.9
 $539.0
 $629.8
 $218.2
Income Taxes, Net731.8
 462.4
 109.1
 12.6
 725.8
 458.8
 108.0
 12.8
Securitized Stranded Costs543.7
 
 
 543.7
 565.3
 
 
 565.3
Storm Restoration Costs, Net486.6
 251.9
 176.9
 57.8
 540.6
 274.6
 200.6
 65.4
Regulatory Tracker Mechanisms590.7
 251.0
 222.4
 106.7
 411.5
 78.3
 207.1
 65.8
Derivative Liabilities321.9
 322.0
 
 
 334.5
 329.2
 
 
Goodwill-related323.1
 
 277.4
 
 331.5
 
 284.6
 
Asset Retirement Obligations102.5
 31.7
 53.8
 3.7
 97.2
 30.8
 50.3
 3.6
Other Regulatory Assets127.6
 24.5
 59.2
 14.8
 125.4
 25.2
 55.2
 14.7
Total Regulatory Assets5,534.6
 1,837.0

1,514.4

949.2

5,514.7
 1,735.9

1,535.6

945.8
Less:  Current Portion805.1
 349.2
 296.4
 110.3
 651.1
 178.6
 285.6
 84.1
Total Long-Term Regulatory Assets$4,729.5
 $1,487.8

$1,218.0

$838.9

$4,863.6
 $1,557.3

$1,250.0

$861.7


Regulatory Costs in Long-Term Assets:  Eversource's regulated companies had $176.3$255.6 million (including $85.2$115.5 million for CL&P, $49.0$77.1 million for NSTAR Electric and $15.0$3.1 million for PSNH) and $146.0$196.9 million (including $51.8$84.1 million for CL&P, $55.7$69.8 million for NSTAR Electric and $18.0$4.3 million for PSNH) of additional regulatory costs as of June 30, 20202021 and December 31, 2019,2020, respectively, that were included in 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.

As of June 30, 2021 and December 31, 2020, these regulatory costs included net incremental COVID-19 related costs deferred byof $45.8 million and $24.0 million at Eversource, totaled $6.6 million,respectively, of which, $4.1$39.1 million wasand $15.8 million, respectively, related to non-tracked uncollectible expense incurredand the remainder related to facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment. Net incremental COVID-19 related costs deferred at our natural gas distribution segment.CL&P and NSTAR Electric totaled $13.2 million and $15.8 million, respectively, as of June 30, 2021, and $4.7 million and $11.9 million, respectively, as of December 31, 2020, and primarily related to deferred non-tracked uncollectible expense.



Regulatory Liabilities:  The components of regulatory liabilities were as follows:
 As of June 30, 2021As of December 31, 2020
(Millions of Dollars)EversourceCL&PNSTAR
Electric
PSNHEversourceCL&PNSTAR
Electric
PSNH
EDIT due to Tax Cuts and Jobs Act of 2017$2,748.6 $1,005.4 $1,030.5 $364.2 $2,778.6 $1,010.7 $1,044.0 $371.5 
Cost of Removal657.1 108.7 374.4 17.1 624.8 98.4 363.6 12.9 
Benefit Costs70.4 60.2 83.6 72.5 
Regulatory Tracker Mechanisms474.7 190.3 147.7 51.0 366.5 148.9 139.7 47.8 
AFUDC - Transmission78.7 43.9 34.8 76.8 44.6 32.2 
Other Regulatory Liabilities383.1 78.8 77.5 14.3 309.9 39.5 63.2 9.8 
Total Regulatory Liabilities4,412.6 1,427.1 1,725.1 446.6 4,240.2 1,342.1 1,715.2 442.0 
Less:  Current Portion532.5 219.8 173.0 61.9 389.4 137.2 164.8 58.8 
Total Long-Term Regulatory Liabilities$3,880.1 $1,207.3 $1,552.1 $384.7 $3,850.8 $1,204.9 $1,550.4 $383.2 
 As of June 30, 2020 As of December 31, 2019
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
EDIT due to Tax Cuts and Jobs Act$2,817.7
 $1,016.7
 $1,056.5
 $390.1
 $2,844.6
 $1,022.8
 $1,071.2
 $392.8
Cost of Removal590.5
 84.6
 345.7
 12.1
 559.8
 64.6
 330.6
 16.3
Benefit Costs83.9
 
 72.4
 
 84.5
 
 72.2
 
Regulatory Tracker Mechanisms417.7
 156.4
 154.9
 78.6
 325.1
 94.8
 165.6
 57.0
AFUDC - Transmission75.5
 45.3
 30.2
 
 73.2
 46.0
 27.2
 
Other Regulatory Liabilities136.6
 35.8
 52.8
 8.6
 132.0
 19.6
 59.0
 13.1
Total Regulatory Liabilities4,121.9
 1,338.8

1,712.5

489.4

4,019.2
 1,247.8

1,725.8

479.2
Less:  Current Portion442.0
 155.2
 185.3
 83.6
 361.2
 82.8
 209.2
 65.8
Total Long-Term Regulatory Liabilities$3,679.9
 $1,183.6

$1,527.2

$405.8

$3,658.0
 $1,165.0

$1,516.6

$413.4


Recent Regulatory Developments:

CL&P Tropical Storm Isaias Costs: On August 4, 2020, Tropical Storm Isaias caused catastrophic damage to our electric distribution system, which resulted in significant numbers and durations of customer outages, primarily in Connecticut. In terms of customer outages, this storm was one of the worst in CL&P’s history. PURA will investigate the prudence of costs incurred by CL&P to restore service in response to Tropical Storm Isaias. That investigation is expected to occur either in a separate proceeding not yet initiated or as part of CL&P’s next rate review proceeding. Tropical Storm Isaias resulted in deferred storm restoration costs of approximately $225 million at CL&P and $243 million at Eversource as of June 30, 2021. The estimated cost of restoration may continue to change as additional cost information becomes available and final storm costs are deferred or capitalized. Although PURA found that CL&P’s performance in its preparation for and response to Tropical Storm Isaias fell below applicable performance standards in certain instances, CL&P believes it will be able to present credible evidence in a future proceeding demonstrating there is no reasonably close causal connection between the alleged sub-standard performance and the storm costs incurred. While it is possible that some amount of storm costs may be disallowed by PURA in a future proceeding, any such amount cannot be estimated at this time. CL&P continues to believe that these storm restoration costs associated with Tropical Storm Isaias were prudently incurred and meet the criteria for cost recovery; and as a result, management does not expect the storm cost review by PURA to have a material impact on the financial position or results of operations of Eversource or CL&P.
22



CL&P Tropical Storm Isaias Response Investigation: On April 28, 2021, PURA issued a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances. See Note 9G, “Commitments and Contingencies - CL&P Tropical Storm Isaias Response Investigation,” for an assessment by PURA accrued and recorded within current regulatory liabilities on CL&P’s balance sheet and for further information.

PURA New Rate Design and Rate Review Proceeding: Pursuant to an October 2020 Connecticut law, PURA opened a proceeding related to new rate designs to consider the implementation of an interim rate decrease, low-income and economic development rates for electric customers, and a review of that rate design implementation process. The proceeding has separate phases. The first phase of the proceeding is not expected to have a material impact on CL&P’s earnings, financial position, or cash flows. In the second phase of this case, PURA is considering a potential interim rate decrease for CL&P. It is unclear how such a decrease would relate to the 90 basis point reduction PURA ordered as part of its April 28, 2021 decision concerning Tropical Storm Isaias. It is also unclear how long such a decrease, if implemented, would last. As a result, we cannot predict the ultimate outcome or the resulting financial impact on CL&P. A negative outcome in this phase of the proceeding could adversely impact CL&P’s future revenues, earnings and cash flows. Hearings commenced in May 2021. We expect to receive a draft decision on the interim rate decrease in September 2021, with a final decision in October 2021.

3.    PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

The following tables summarize property, plant and equipment by asset category:
EversourceAs of June 30, 2021As of December 31, 2020
(Millions of Dollars)
Distribution - Electric$17,104.8 $16,703.2 
Distribution - Natural Gas6,227.8 6,111.2 
Transmission - Electric12,296.8 11,954.0 
Distribution - Water1,772.7 1,743.1 
Solar200.4 201.5 
Utility37,602.5 36,713.0 
Other (1)
1,386.9 1,269.0 
Property, Plant and Equipment, Gross38,989.4 37,982.0 
Less:  Accumulated Depreciation  
Utility   (8,756.6)(8,476.3)
Other(525.8)(477.6)
Total Accumulated Depreciation(9,282.4)(8,953.9)
Property, Plant and Equipment, Net29,707.0 29,028.1 
Construction Work in Progress2,171.6 1,854.4 
Total Property, Plant and Equipment, Net$31,878.6 $30,882.5 
As of June 30, 2021As of December 31, 2020
EversourceAs of June 30, 2020 As of December 31, 2019
(Millions of Dollars) (Millions of Dollars)CL&PNSTAR
Electric
PSNHCL&PNSTAR
Electric
PSNH
Distribution - Electric$16,289.5
 $15,880.0
Distribution - Electric$6,989.4 $7,716.5 $2,439.2 $6,820.7 $7,544.4 $2,378.4 
Distribution - Natural Gas4,025.6
 3,931.1
Transmission - Electric11,330.7
 10,958.4
Transmission - Electric5,653.4 4,866.5 1,778.6 5,512.0 4,701.3 1,742.4 
Distribution - Water1,760.4
 1,726.5
Solar201.2
 200.2
Solar200.4 201.5 
Utility33,607.4
 32,696.2
Other (1)
1,136.3
 1,025.6
Property, Plant and Equipment, Gross34,743.7
 33,721.8
Property, Plant and Equipment, Gross12,642.8 12,783.4 4,217.8 12,332.7 12,447.2 4,120.8 
Less: Accumulated Depreciation   Less: Accumulated Depreciation(2,559.4)(3,182.8)(879.9)(2,475.4)(3,074.1)(848.9)
Utility (7,689.5) (7,483.5)
Other(431.4) (387.4)
Total Accumulated Depreciation(8,120.9) (7,870.9)
Property, Plant and Equipment, Net26,622.8
 25,850.9
Property, Plant and Equipment, Net10,083.4 9,600.6 3,337.9 9,857.3 9,373.1 3,271.9 
Construction Work in Progress1,988.0
 1,734.6
Construction Work in Progress395.8 836.6 129.9 377.3 750.0 102.4 
Total Property, Plant and Equipment, Net$28,610.8
 $27,585.5
Total Property, Plant and Equipment, Net$10,479.2 $10,437.2 $3,467.8 $10,234.6 $10,123.1 $3,374.3 

(1)    These assets are primarily comprised of computer software, hardware and equipment at Eversource Service and buildings at The Rocky River Realty Company.
 As of June 30, 2020 As of December 31, 2019
(Millions of Dollars)CL&P 
NSTAR
Electric
 PSNH CL&P 
NSTAR
Electric
 PSNH
Distribution - Electric$6,683.8
 $7,328.8
 $2,317.2
 $6,485.5
 $7,163.7
 $2,271.1
Transmission - Electric5,166.4
 4,509.3
 1,650.2
 5,043.0
 4,411.9
 1,498.7
Solar
 201.2
 
 
 200.2
 
Property, Plant and Equipment, Gross11,850.2
 12,039.3
 3,967.4
 11,528.5
 11,775.8
 3,769.8
Less:  Accumulated Depreciation(2,445.6) (2,969.8) (826.0) (2,385.7) (2,895.3) (799.9)
Property, Plant and Equipment, Net9,404.6
 9,069.5
 3,141.4
 9,142.8
 8,880.5
 2,969.9
Construction Work in Progress508.7
 703.7
 117.2
 483.0
 592.3
 159.6
Total Property, Plant and Equipment, Net$9,913.3
 $9,773.2
 $3,258.6
 $9,625.8
 $9,472.8
 $3,129.5


(1)
These assets are primarily comprised of computer software, hardware and equipment at Eversource Service and buildings at The Rocky River Realty Company.

4.    DERIVATIVE INSTRUMENTS

The electric and natural gas companies purchase and procure energy and energy-related products, which are subject to price volatility, for their customers.  The costs associated with supplying energy to customers are recoverable from customers in future rates.  These regulated companies manage the risks associated with the price volatility of energy and energy-related products through the use of derivative and non-derivative contracts.  

Many of the derivative contracts meet the definition of, and are designated as, normal and qualify for accrual accounting under the applicable accounting guidance.  The costs and benefits of derivative contracts that meet the definition of normal are recognized in Operating Expenses on the statements of income, as applicable, as electricity or natural gas is delivered.


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Derivative contracts that are not designated as normal are recorded at fair value as current or long-term Derivative Assets or Derivative Liabilities on the balance sheets.  For the electric and natural gas companies, regulatory assets or regulatory liabilities are recorded to offset the fair values of derivatives, as contract settlement amounts are recovered from, or refunded to, customers in their respective energy supply rates.  

The gross fair values of derivative assets and liabilities with the same counterparty are offset and reported as net Derivative Assets or Derivative Liabilities, with current and long-term portions, on the balance sheets.  The following table presents the gross fair values of contracts, categorized by risk type, and the net amounts recorded as current or long-term derivative assets or liabilities:
 As of June 30, 2021As of December 31, 2020
(Millions of Dollars)Fair Value HierarchyCommodity Supply and Price Risk
Management
Netting (1)
Net Amount
Recorded as a Derivative
Commodity Supply and Price Risk
Management
Netting (1)
Net Amount
Recorded as
a Derivative
Current Derivative Assets:      
CL&PLevel 3$14.1 $(0.4)$13.7 $13.7 $(0.4)$13.3 
Long-Term Derivative Assets:    
CL&PLevel 355.0 (1.7)53.3 58.7 (1.8)56.9 
Current Derivative Liabilities:    
CL&PLevel 3(70.9)(70.9)(68.8)(68.8)
OtherLevel 2(3.3)0.1 (3.2)
Long-Term Derivative Liabilities:    
CL&PLevel 3(275.8)(275.8)(294.5)(294.5)
   As of June 30, 2020 As of December 31, 2019
(Millions of Dollars)Fair Value Hierarchy 
Commodity Supply and Price Risk
Management
 
Netting (1)
 
Net Amount
Recorded as a Derivative
 Commodity Supply and Price Risk
Management
 
Netting (1)
 
Net Amount
Recorded as
a Derivative
Current Derivative Assets:             
CL&PLevel 3 $13.3
 $(0.4) $12.9
 $12.2
 $(0.4) $11.8
OtherLevel 2 0.8
 (0.5) 0.3
 
 
 
Long-Term Derivative Assets:             
CL&PLevel 3 65.3
 (2.0) 63.3
 67.5
 (2.1) 65.4
Current Derivative Liabilities:             
CL&PLevel 3 (70.1) 
 (70.1) (67.8) 
 (67.8)
OtherLevel 2 
 
 
 (5.2) 
 (5.2)
Long-Term Derivative Liabilities:             
CL&PLevel 3 (328.1) 
 (328.1) (338.6) 
 (338.6)
OtherLevel 2 (0.2) 
 (0.2) (0.1) 
 (0.1)


(1)
(1)Amounts represent derivative assets and liabilities that Eversource elected to record net on the balance sheets.  These amounts are subject to master netting agreements or similar agreements for which the right of offset exists.

For further information on the fair valuebalance sheets.  These amounts are subject to master netting agreements or similar agreements for which the right of derivative contracts, see Note 1D, "Summary of Significant Accounting Policies - Fair Value Measurements," to the financial statements.offset exists.

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts
Commodity Supply and Price Risk Management:  As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities.  CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI.  The combined capacities of these contracts as of both June 30, 20202021 and December 31, 2019,2020 were 676675 MW. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets. In addition, CL&P has a contract to purchase 0.1 million MWh of energy per year through 2020.   

As of June 30, 2020 and December 31, 2019,2020, Eversource had New York Mercantile Exchange (NYMEX) financial contracts for natural gas futures in order to reduce variability associated with the price of 6.0 million and 9.68.9 million MMBtu of natural gas, respectively.gas. These contracts were classified as Level 2 in the fair value hierarchy. NSTAR Gas terminated its financial contracts swap program in April 2021.

For the three months ended June 30, 20202021 and 2019,2020, there were gains of $0.9 million and losses of less than $0.1 million and $5.1 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. For the six months ended June 30, 20202021 and 2019,2020, there were losses of $18.0$10.2 million and $10.3$18.0 million, respectively.

Fair Value Measurements of Derivative Instruments
Derivative contracts classified as Level 2 in the fair value hierarchy relate to the financial contracts for natural gas futures.  Prices are obtained from broker quotes and are based on actual market activity.  The contracts are valued using NYMEX natural gas prices.  Valuations of these contracts also incorporate discount rates using the yield curve approach.
The fair value of derivative contracts classified as Level 3 utilizes significant unobservable inputs.  The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions related to exit price.  Significant observable inputs for valuations of these contracts include energy and energy-related product prices in future years for which quoted prices in an active market exist.  Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy and energy-related products, and accounting requirements.  The future capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full term of the contract.  

Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty's credit rating for assets and the Company's credit rating for liabilities.  Valuations incorporate estimates of premiums or discounts that would be required by a market participant to arrive at an exit price, using historical market transactions adjusted for the terms of the contract.  



The following is a summary of Level 3 derivative contracts and the range of the significant unobservable inputs utilized in the valuations over the duration of the contracts:
 As of June 30, 2021As of December 31, 2020
CL&PRange
Weighted Average (1)
Period CoveredRange
Weighted Average (1)
Period Covered
Capacity Prices$2.61$2.61 per kW-Month2025 - 2026$4.30 $5.30$4.63 per kW-Month2024 - 2026
Forward Reserve Prices$0.54 $0.90$0.72 per kW-Month2021 - 2024$0.54 $0.90$0.72 per kW-Month2021 - 2024
 As of June 30, 2020 As of December 31, 2019
CL&PRange 
Weighted Average (1)
   Period Covered Range Period Covered
Capacity Prices$4.30
  $5.95 $4.85
 per kW-Month 2024 - 2026 $3.01
  $7.34 per kW-Month 2023 - 2026
Forward Reserve Prices0.80
  0.90 0.85
 per kW-Month 2020 - 2024 0.80
  1.90 per kW-Month 2020 - 2024

(1)    Unobservable inputs were weighted by the relative future capacity and forward reserve prices and contractual MWs over the periods covered.

(1)
24


Unobservable inputs were weighted by the relative future capacity and forward reserve prices and contractual MWs over the periods covered.

Exit price premiums of 16.0 percent through 12.510.4 percent, or a weighted average of 11.49.3 percent, are also applied to these contracts and reflect the uncertainty and illiquidity premiums that would be required based on the most recent market activity available for similar type contracts. The risk premium was weighted by the relative fair value of the net derivative instruments.

Significant increases or decreases in future capacity or forward reserve prices in isolation would decrease or increase, respectively, the fair value of the derivative liability.  Any increases in risk premiums would increase the fair value of the derivative liability.  Changes in these fair values are recorded as a regulatory asset or liability and do not impact net income.  

Valuations using significant unobservable inputs:The following table presents changes in the Level 3 category of derivative assets and derivative liabilities measured at fair value on a recurring basis.  The derivative assets and liabilities are presented on a net basis.
CL&PFor the Three Months Ended June 30, For the Six Months Ended June 30,CL&PFor the Three Months Ended June 30,For the Six Months Ended June 30,
(Millions of Dollars)2020 2019 2020 2019(Millions of Dollars)2021202020212020
Derivatives, Net:       Derivatives, Net:  
Fair Value as of Beginning of Period$(333.8) $(353.1) $(329.2) $(356.5)Fair Value as of Beginning of Period$(293.1)$(333.8)$(293.1)$(329.2)
Net Realized/Unrealized Losses Included
in Regulatory Assets
(1.3) (2.5) (17.6) (7.8)
Net Realized/Unrealized Gains/(Losses) Included in Regulatory AssetsNet Realized/Unrealized Gains/(Losses) Included in Regulatory Assets0.9 (1.3)(11.5)(17.6)
Settlements13.1
 10.2
 24.8
 18.9
Settlements12.5 13.1 24.9 24.8 
Fair Value as of End of Period$(322.0) $(345.4) $(322.0) $(345.4)Fair Value as of End of Period$(279.7)$(322.0)$(279.7)$(322.0)


5.    MARKETABLE SECURITIES

Eversource holds marketable securities that are primarily used to fund certain non-qualified executive benefits.  The trusts that hold marketable securities are not subject to regulatory oversight by state or federal agencies.  CYAPC and YAEC maintain legally restricted trusts, each of which holds marketable securities, to fund the spent nuclear fuel removal obligations of their nuclear fuel storage facilities.

Equity Securities: Unrealized gains and losses on equity securities held in Eversource's non-qualified executive benefit trust are recorded in Other Income, Net on the statements of income. The fair value of these equity securities as of June 30, 20202021 and December 31, 20192020 was $41.6$39.9 million and $45.7$40.9 million, respectively.  For the three months ended June 30, 20202021 and 2019,2020, there were unrealized gains of $6.6$1.9 million and $2.3$6.6 million respectively, recorded in Other Income, Net related to these equity securities. For the six months ended June 30, 20202021 and 2019,2020, there were unrealized gains of $3.0 million and unrealized losses of $2.5 million, and unrealized gains of $3.3 million, respectively.

Eversource's equity securities also include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts, which had fair values of $172.3$207.3 million and $182.8$205.1 million as of June 30, 20202021 and December 31, 2019,2020, respectively.  Unrealized gains and losses for these spent nuclear fuel trusts are subject to regulatory accounting treatment and are recorded in Marketable Securities with the corresponding offset to Other Long-Term Liabilities on the balance sheets, with no impact on the statements of income.

Available-for-Sale Debt Securities: The following is a summary of the available-for-sale debt securities, which are recorded at fair value and are included in current and long-term Marketable Securities on the balance sheets.
As of June 30, 2021As of December 31, 2020
Eversource
(Millions of Dollars)
Amortized CostPre-Tax
Unrealized Gains
Pre-Tax
Unrealized
Losses
Fair ValueAmortized CostPre-Tax
Unrealized Gains
Pre-Tax
Unrealized
Losses
Fair Value
Debt Securities$224.0 $7.0 $(0.1)$230.9 $213.1 $11.2 $(0.1)$224.2 
 As of June 30, 2020 As of December 31, 2019
Eversource
(Millions of Dollars)
Amortized Cost 
Pre-Tax
Unrealized Gains
 
Pre-Tax
Unrealized
Losses
 Fair Value Amortized Cost 
Pre-Tax
Unrealized Gains
 
Pre-Tax
Unrealized
Losses
 Fair Value
Debt Securities$219.0
 $9.6
 $(0.2) $228.4
 $228.4
 $5.8
 $(0.1) $234.1


Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of $193.6$198.4 million and $198.1$192.5 million as of June 30, 20202021 and December 31, 2019,2020, respectively.

Unrealized gains and losses on available-for-sale debt securities held in Eversource's non-qualified benefit trust are recorded in Accumulated Other Comprehensive Income, excluding amounts related to credit losses or losses on securities intended to be sold, which are recorded in Other Income, Net. There have been no significant unrealized losses and no credit losses for the three and six months ended June 30, 20202021 and 2019,2020, and no allowance for credit losses as of June 30, 2020. 2021. Factors considered in determining whether a credit loss exists include adverse conditions specifically affecting the issuer, the payment history, ratings and rating changes of the security, and the severity of the impairment.  For asset-


backedasset-backed debt securities, underlying collateral and expected future cash flows are also evaluated. Debt securities included in Eversource's non-qualified benefit trust portfolio are investment-grade bonds with a lower default risk based on their credit quality.

As of June 30, 2020,2021, the contractual maturities of available-for-sale debt securities were as follows:
Eversource
(Millions of Dollars)
Amortized CostFair Value
Less than one year (1)
$36.5 $36.5 
One to five years67.5 69.4 
Six to ten years49.7 51.4 
Greater than ten years70.3 73.6 
Total Debt Securities$224.0 $230.9 
(1)    Amounts in the Less than one year category include securities in the CYAPC and YAEC spent nuclear fuel trusts, which are restricted and are classified in long-term Marketable Securities on the balance sheets.
25


Eversource
(Millions of Dollars)
Amortized Cost Fair Value
Less than one year (1)
$51.0
 $51.0
One to five years44.7
 46.5
Six to ten years41.0
 43.3
Greater than ten years82.3
 87.6
Total Debt Securities$219.0
 $228.4

(1)
Amounts in the Less than one year category include securities in the CYAPC and YAEC spent nuclear fuel trusts, which are restricted and are classified in long-term Marketable Securities on the balance sheets.

Realized Gains and Losses:  Realized gains and losses are recorded in Other Income, Net for Eversource's benefit trust and are offset in Other Long-Term Liabilities for CYAPC and YAEC.  Eversource utilizes the specific identification basis method for the Eversource non-qualified benefit trust, and the average cost basis method for the CYAPC and YAEC spent nuclear fuel trusts to compute the realized gains and losses on the sale of marketable securities.

Fair Value Measurements:  The following table presents the marketable securities recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:
Eversource
(Millions of Dollars)
As of June 30, 2021As of December 31, 2020
Level 1:    
Mutual Funds and Equities$247.2 $246.0 
Money Market Funds34.1 41.2 
Total Level 1$281.3 $287.2 
Level 2:  
U.S. Government Issued Debt Securities (Agency and Treasury)$100.8 $72.9 
Corporate Debt Securities62.8 63.8 
Asset-Backed Debt Securities13.6 11.9 
Municipal Bonds6.4 24.0 
Other Fixed Income Securities13.2 10.4 
Total Level 2$196.8 $183.0 
Total Marketable Securities$478.1 $470.2 
Eversource
(Millions of Dollars)
As of June 30, 2020 As of December 31, 2019
Level 1:     
Mutual Funds and Equities$213.9
 $228.5
Money Market Funds45.4
 46.0
Total Level 1$259.3
 $274.5
Level 2:   
U.S. Government Issued Debt Securities (Agency and Treasury)$62.6
 $96.8
Corporate Debt Securities64.1
 44.0
Asset-Backed Debt Securities12.8
 12.9
Municipal Bonds33.8
 26.7
Other Fixed Income Securities9.7
 7.7
Total Level 2$183.0
 $188.1
Total Marketable Securities$442.3
 $462.6


U.S. government issued debt securities are valued using market approaches that incorporate transactions for the same or similar bonds and adjustments for yields and maturity dates.  Corporate debt securities are valued using a market approach, utilizing recent trades of the same or similar instruments and also incorporating yield curves, credit spreads and specific bond terms and conditions.  Asset-backed debt securities include collateralized mortgage obligations, commercial mortgage backed securities, and securities collateralized by auto loans, credit card loans or receivables.  Asset-backed debt securities are valued using recent trades of similar instruments, prepayment assumptions, yield curves, issuance and maturity dates, and tranche information.  Municipal bonds are valued using a market approach that incorporates reported trades and benchmark yields.  Other fixed income securities are valued using pricing models, quoted prices of securities with similar characteristics, and discounted cash flows.

6.    SHORT-TERM AND LONG-TERM DEBT

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $1.45$2.00 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas, Yankee Gas and Aquarion Water Company of Connecticut are also parties to a five-year $1.45 billion revolving credit facility, which terminates on December 6, 2024. TheEversource parent and EGMA have a short-term $550 million revolving credit facility, serveswhich terminates on October 20, 2021. These revolving credit facilities serve to backstop Eversource parent's $1.45$2.00 billion commercial paper program.  

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit facility, which terminates on December 6, 2024. The revolving credit facility serves to backstop NSTAR Electric's $650 million commercial paper program.  



The amount of borrowings outstanding and available under the commercial paper programs were as follows:
Borrowings Outstanding as ofAvailable Borrowing Capacity as ofWeighted-Average Interest Rate as of
June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2021December 31, 2020
(Millions of Dollars)
Eversource Parent Commercial Paper Program$1,447.0 $1,054.3 $553.0 $945.7 0.19 %0.25 %
NSTAR Electric Commercial Paper Program555.5 195.0 94.5 455.0 0.11 %0.16 %
 Borrowings Outstanding as of Available Borrowing Capacity as of Weighted-Average Interest Rate as of
 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019
(Millions of Dollars)     
Eversource Parent Commercial Paper Program$351.5
 $1,224.9
 $1,098.5
 $225.1
 0.18% 1.98%
NSTAR Electric Commercial Paper Program142.0
 10.5
 508.0
 639.5
 0.12% 1.63%


There were 0 borrowings outstanding on either the Eversource parent or NSTAR Electric revolving credit facilities as of June 30, 20202021 or December 31, 2019.2020.

On May 15, 2020, CL&P and PSNH entered intohave uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire byon May 14, 2021. The CL&P agreements total $450 million and the PSNH agreements total $300 million.12, 2022. There are 0 borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of June 30, 2020.2021.

Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time.

The Company expects the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with existing borrowing availability and access to both debt and equity markets, will be sufficient to meet any working capital and future operating requirements, and capital investment forecasted opportunities.

26


Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of June 30, 2021, there were intercompany loans from Eversource parent to PSNH of $48.6 million, and to a subsidiary of NSTAR Electric of $21.5 million. As of December 31, 2020, there were intercompany loans from Eversource parent to CL&P of $272.0 million, to PSNH of $119.3$46.3 million, and to a subsidiary of NSTAR Electric of $38.1 million. As of December 31, 2019, there were intercompany loans from Eversource parent to CL&P of $63.8 million, to PSNH of $27.0 million, and to a subsidiary of NSTAR Electric of $30.3$21.3 million. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets.

Availability under Long-Term Debt Issuance Authorization: Authorizations:On January 27, 2020,March 31, 2021, the DPU approved NSTAR Gas'Electric's request for authorization to issue up to $270$1.6 billion in long-term debt through December 31, 2023. On May 18, 2021, EGMA filed a petition with the DPU for authorization to issue up to $725 million in long-term debt through December 31, 2021. On July 31, 2020, the NHPUC approved PSNH's request for authorization to issue up to $200 million in2023. Currently, EGMA has no external long-term debt through December 31, 2020.and has long-term intercompany borrowings from Eversource parent. The remaining Eversource operating companies, including CL&P and PSNH, have utilized the long-term debt authorizations in place with the respective regulatory commissions.

Long-Term Debt:Debt Issuances and Repayments: The following table summarizes long-term debt issuances and repayments:
(Millions of Dollars)Issuance/(Repayment)Issue Date or Repayment DateMaturity DateUse of Proceeds for Issuance/
Repayment Information
CL&P:
2.05% Series A First Mortgage Bonds$425.0 June 2021July 2031Repaid short-term debt, paid capital expenditures and working capital
NSTAR Electric:
3.10% 2021 Debentures300.0 May 2021June 2051
Refinanced investments in eligible green
expenditures, which were previously financed in
2019 and 2020
3.50% Series F Senior Notes(250.0)June 2021September 2021Paid on par call date in advance of maturity date
PSNH:
4.05% Series Q First Mortgage Bonds(122.0)March 2021June 2021Paid on par call date in advance of maturity date
3.20% Series R First Mortgage Bonds(160.0)June 2021September 2021Paid on par call date in advance of maturity date
2.20% Series V First Mortgage Bonds350.0 June 2021June 2031Repaid short-term debt, including short-term debt used to redeem Series R First Mortgage Bonds, paid capital expenditures and working capital
Other:
Eversource Parent 2.50% Series I Senior Notes(450.0)February 2021March 2021Paid on par call date in advance of maturity date
Eversource Parent 2.55% Series S Senior Notes350.0 March 2021March 2031Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes
Aquarion Water Company of Connecticut 3.31%
   Senior Notes
100.0 April 2021April 2051Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital
Aquarion Water Company of Connecticut 5.50% Notes(40.0)April 2021April 2021Paid at maturity
(Millions of Dollars)Issuance/(Repayment) Issue Date or Repayment Date Maturity Date Use of Proceeds for Issuance/
Repayment Information
NSTAR Electric:       
3.95% 2020 Debentures$400.0
 March 2020 April 2030 Refinanced investments in eligible green expenditures, which were previously financed in 2018 and 2019
5.10% Series E Senior Notes(95.0) March 2020 March 2020 Paid at maturity
Other:       
Eversource Parent 3.45% Series P Senior Notes350.0
 January 2020 January 2050 Paid short-term borrowings
NSTAR Gas 4.46% Series N First Mortgage Bonds(125.0) January 2020 January 2020 Paid at maturity
Yankee Gas 4.87% Series K First Mortgage Bonds(50.0) April 2020 April 2020 Paid at maturity
NSTAR Gas 2.33% Series R First Mortgage Bonds75.0
 May 2020 May 2025 Refinanced existing indebtedness, funded capital expenditures and for general corporate purposes
NSTAR Gas 3.15% Series S First Mortgage Bonds115.0
 May 2020 May 2050 Refinanced existing indebtedness, funded capital expenditures and for general corporate purposes


In June 2020, Aquarion Water Company of MassachusettsJuly 2021, CL&P provided notice to its bondholdersthe trustee of the CL&P 4.375% PCRBs that itCL&P will redeem $32.2the $120.5 million of long-term debtbonds on September 1, 2021, in connection withadvance of the sale to the town of Hingham, Massachusetts of its water system and treatment plant that supplies water to the towns of Hingham, Hull and North Cohasset.  As a result, this debt was classified as current as of June 30, 2020.2028 maturity date.

7.    RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

Rate Reduction Bonds: OnIn May 8, 2018, PSNH Funding, a wholly-owned subsidiary of PSNH, issued $635.7 million of securitized RRBs in multiple tranches with a weighted average interest rate of 3.66 percent, and final maturity dates ranging from 2026 to 2035.  The RRBs are expected to be repaid by February 1, 2033. RRB payments consist of principal and interest and are paid semi-annually, beginning on February 1, 2019. The RRBs were issued pursuant to a finance order issued by the NHPUC onin January 30, 2018 to recover remaining costs resulting from the divestiture of PSNH’s generation assets.


27



PSNH Funding was formed solely to issue RRBs to finance PSNH's unrecovered remaining costs associated with the divestiture of its generation assets. PSNH Funding is considered a VIE primarily because the equity capitalization is insufficient to support its operations. PSNH has the power to direct the significant activities of the VIE and is most closely associated with the VIE as compared to other interest holders. Therefore, PSNH is considered the primary beneficiary and consolidates PSNH Funding in its consolidated financial statements. The following tables summarize the impact of PSNH Funding on PSNH's balance sheets and income statements:
(Millions of Dollars)   
Balance Sheet:As of June 30, 2020 As of December 31, 2019
Restricted Cash - Current Portion (included in Current Assets)$30.6
 $32.5
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)3.2
 3.2
Securitized Stranded Cost (included in Regulatory Assets)543.7
 565.3
Other Regulatory Liabilities (included in Regulatory Liabilities)4.1
 5.6
Accrued Interest (included in Other Current Liabilities)8.3
 8.6
Rate Reduction Bonds - Current Portion43.2
 43.2
Rate Reduction Bonds - Long-Term Portion518.5
 540.1
(Millions of Dollars)For the Three Months Ended For the Six Months Ended
Income Statement:June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)$10.8
 $10.8
 $21.6
 $21.5
Interest Expense on RRB Principal (included in Interest Expense)5.0
 5.3
 10.0
 10.7


(Millions of Dollars)
PSNH Balance Sheets:As of June 30, 2021As of December 31, 2020
Restricted Cash - Current Portion (included in Current Assets)$34.9 $36.8 
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)3.2 2.1 
Securitized Stranded Cost (included in Regulatory Assets)500.5 522.1 
Other Regulatory Liabilities (included in Regulatory Liabilities)8.9 9.1 
Accrued Interest (included in Other Current Liabilities)7.7 8.0 
Rate Reduction Bonds - Current Portion43.2 43.2 
Rate Reduction Bonds - Long-Term Portion475.3 496.9 

(Millions of Dollars)
PSNH Income Statements:
For the Three Months EndedFor the Six Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)$10.8 $10.8 $21.6 $21.6 
Interest Expense on RRB Principal (included in Interest Expense)4.6 5.0 9.3 10.0 

8.    PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSION

Eversource provides defined benefit retirement plans (Pension Plans) that cover eligible employees.  In addition to the Pension Plans, Eversource maintains non-qualified defined benefit retirement plans (SERP Plans), which provide benefits in excess of Internal Revenue Code limitations to eligible participants consisting of current and retired employees. Eversource also provides defined benefit postretirement plans (PBOP Plans) that provide life insurance and a health reimbursement arrangement created for the purpose of reimbursing retirees and dependents for health insurance premiums and certain medical expenses to eligible employees that meet certain age and service eligibility requirements.

The components of net periodic benefit plan expense/(income) for the Pension, SERP and PBOP Plans, prior to amounts capitalized as Property, Plant and Equipment or deferred as regulatory assets for future recovery, are shown below.  The service cost component of net periodic benefit plan expense/(income), less the capitalized portion, is included in Operations and Maintenance expense on the statements of income. The remaining components of net periodic benefit plan expense/(income), less the deferred portion, are included in Other Income, Net on the statements of income. Pension, SERP and PBOP expense reflected in the statements of cash flows for CL&P, NSTAR Electric and PSNH does not include the intercompany allocations or the corresponding capitalized and deferred portion,of net periodic benefit plan expense/(income), as these amounts are cash settled on a short-term basis.
 Pension and SERP PBOP
 For the Three Months Ended June 30, 2020 For the Three Months Ended June 30, 2020
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Service Cost$18.7
 $5.4
 $3.8
 $2.0
 $2.0
 $0.4
 $0.5
 $0.2
Interest Cost44.3
 9.3
 9.7
 4.8
 6.4
 1.0
 1.6
 0.8
Expected Return on Plan Assets(99.3) (19.8) (25.7) (11.1) (18.7) (2.5) (8.5) (1.4)
Actuarial Loss50.7
 9.7
 14.0
 3.9
 2.0
 0.2
 0.5
 0.3
Prior Service Cost/(Credit)0.3
 
 0.1
 
 (5.2) 0.2
 (4.3) 0.1
Total Net Periodic Benefit Expense/(Income)$14.7
 $4.6
 $1.9
 $(0.4) $(13.5) $(0.7) $(10.2) $
Intercompany AllocationsN/A
 $2.4
 $2.3
 $0.8
 N/A
 $(0.2) $(0.2) $(0.1)
 Pension and SERP PBOP
 For the Six Months Ended June 30, 2020 For the Six Months Ended June 30, 2020
(Millions of Dollars)Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Service Cost$38.3
 $11.1
 $7.6
 $4.2
 $4.9
 $0.9
 $1.1
 $0.4
Interest Cost88.6
 18.8
 19.3
 9.7
 12.2
 2.2
 3.3
 1.4
Expected Return on Plan Assets(199.6) (39.8) (51.5) (22.4) (36.8) (4.9) (17.0) (2.8)
Actuarial Loss100.0
 19.7
 27.3
 8.0
 4.1
 0.6
 1.2
 0.4
Prior Service Cost/(Credit)0.6
 
 0.2
 
 (10.6) 0.4
 (8.5) 0.2
Total Net Periodic Benefit Expense/(Income)$27.9
 $9.8
 $2.9
 $(0.5) $(26.2) $(0.8) $(19.9) $(0.4)
Intercompany AllocationsN/A
 $4.3
 $4.2
 $1.4
 N/A
 $(0.6) $(0.6) $(0.3)


 Pension and SERP PBOP
 For the Three Months Ended June 30, 2019 For the Three Months Ended June 30, 2019
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
Service Cost$16.1
 $4.4
 $3.6
 $1.5
 $1.8
 $0.3
 $0.4
 $0.1
Interest Cost54.8
 11.4
 12.3
 6.0
 8.2
 1.6
 2.4
 0.8
Expected Return on Plan Assets(91.7) (18.1) (24.2) (10.1) (16.8) (2.3) (7.5) (1.3)
Actuarial Loss35.6
 6.3
 11.8
 2.3
 1.6
 0.3
 0.7
 
Prior Service Cost/(Credit)0.3
 
 
 
 (5.8) 0.3
 (4.2) 0.1
Total Net Periodic Benefit Expense/(Income)$15.1
 $4.0
 $3.5
 $(0.3) $(11.0) $0.2
 $(8.2) $(0.3)
Intercompany AllocationsN/A
 $5.8
 $5.3
 $
 N/A
 $(0.3) $(0.4) $(0.1)
 Pension and SERP PBOP
 For the Six Months Ended June 30, 2019 For the Six Months Ended June 30, 2019
(Millions of Dollars)Eversource CL&P 
NSTAR
Electric
 PSNH Eversource CL&P 
NSTAR
Electric
 PSNH
Service Cost$35.4
 $9.2
 $7.5
 $4.1
 $3.9
 $0.7
 $0.9
 $0.4
Interest Cost109.1
 23.0
 24.2
 12.2
 16.3
 3.1
 4.7
 1.7
Expected Return on Plan Assets(183.8) (36.9) (48.6) (20.4) (33.4) (4.5) (15.1) (2.8)
Actuarial Loss72.1
 14.3
 21.2
 5.9
 4.1
 0.7
 1.7
 0.2
Prior Service Cost/(Credit)0.6
 
 0.1
 
 (11.6) 0.5
 (8.5) 0.2
Total Net Periodic Benefit Expense/(Income)$33.4
 $9.6
 $4.4
 $1.8
 $(20.7) $0.5
 $(16.3) $(0.3)
Intercompany AllocationsN/A
 $13.6
 $8.4
 $2.5
 N/A
 $(0.4) $(0.6) $(0.2)


 Pension and SERPPBOP
 For the Three Months Ended June 30, 2021For the Three Months Ended June 30, 2021
(Millions of Dollars)EversourceCL&PNSTAR ElectricPSNHEversourceCL&PNSTAR ElectricPSNH
Service Cost$18.4 $5.5 $3.9 $2.2 $3.3 $0.6 $0.6 $0.3 
Interest Cost27.1 6.7 6.7 3.6 4.2 0.8 1.1 0.4 
Expected Return on Plan Assets(87.4)(21.7)(27.1)(11.8)(19.8)(2.6)(9.2)(1.5)
Actuarial Loss47.8 10.8 15.3 5.2 1.3 0.4 0.5 0.1 
Prior Service Cost/(Credit)0.3 0.1 (5.3)0.3 (4.2)0.1 
Total Net Periodic Benefit Plan Expense/(Income)$6.2 $1.3 $(1.1)$(0.8)$(16.3)$(0.5)$(11.2)$(0.6)
Intercompany Expense/(Income) AllocationsN/A$2.3 $2.5 $0.7 N/A$(0.6)$(0.6)$(0.2)
Pension and SERPPBOP
For the Six Months Ended June 30, 2021For the Six Months Ended June 30, 2021
(Millions of Dollars)EversourceCL&PNSTAR
Electric
PSNHEversourceCL&PNSTAR
Electric
PSNH
Service Cost$39.7 $11.8 $7.9 $4.4 $6.8 $1.2 $1.2 $0.6 
Interest Cost59.7 14.0 13.4 7.2 8.6 1.6 2.2 0.9 
Expected Return on Plan Assets(196.3)(43.3)(54.0)(23.7)(39.5)(5.2)(18.5)(3.0)
Actuarial Loss109.4 23.8 30.8 10.1 3.9 0.8 1.1 0.3 
Prior Service Cost/(Credit)0.6 0.2 (10.6)0.5 (8.4)0.2 
Total Net Periodic Benefit Plan Expense/(Income)$13.1 $6.3 $(1.7)$(2.0)$(30.8)$(1.1)$(22.4)$(1.0)
Intercompany Expense/(Income) AllocationsN/A$3.6 $4.0 $1.2 N/A$(0.9)$(1.0)$(0.3)
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Pension and SERPPBOP
For the Three Months Ended June 30, 2020For the Three Months Ended June 30, 2020
(Millions of Dollars)EversourceCL&PNSTAR
Electric
PSNHEversourceCL&PNSTAR
Electric
PSNH
Service Cost$18.7 $5.4 $3.8 $2.0 $2.0 $0.4 $0.5 $0.2 
Interest Cost44.3 9.3 9.7 4.8 6.4 1.0 1.6 0.8 
Expected Return on Plan Assets(99.3)(19.8)(25.7)(11.1)(18.7)(2.5)(8.5)(1.4)
Actuarial Loss50.7 9.7 14.0 3.9 2.0 0.2 0.5 0.3 
Prior Service Cost/(Credit)0.3 0.1 (5.2)0.2 (4.3)0.1 
Total Net Periodic Benefit Plan Expense/(Income)$14.7 $4.6 $1.9 $(0.4)$(13.5)$(0.7)$(10.2)$
Intercompany Expense/(Income) AllocationsN/A$2.4 $2.3 $0.8 N/A$(0.2)$(0.2)$(0.1)
Pension and SERPPBOP
For the Six Months Ended June 30, 2020For the Six Months Ended June 30, 2020
(Millions of Dollars)EversourceCL&PNSTAR
Electric
PSNHEversourceCL&PNSTAR
Electric
PSNH
Service Cost$38.3 $11.1 $7.6 $4.2 $4.9 $0.9 $1.1 $0.4 
Interest Cost88.6 18.8 19.3 9.7 12.2 2.2 3.3 1.4 
Expected Return on Plan Assets(199.6)(39.8)(51.5)(22.4)(36.8)(4.9)(17.0)(2.8)
Actuarial Loss100.0 19.7 27.3 8.0 4.1 0.6 1.2 0.4 
Prior Service Cost/(Credit)0.6 0.2 (10.6)0.4 (8.5)0.2 
Total Net Periodic Benefit Plan Expense/(Income)$27.9 $9.8 $2.9 $(0.5)$(26.2)$(0.8)$(19.9)$(0.4)
Intercompany Expense/(Income) AllocationsN/A$4.3 $4.2 $1.4 N/A$(0.6)$(0.6)$(0.3)

Eversource Contributions: Eversource currently expects to make contributions of $180 million to the Pension Plans in 2021, of which $99 million and $30 million will be contributed by CL&P and NSTAR Electric, respectively.

9.    COMMITMENTS AND CONTINGENCIES

A.    Environmental Matters
Eversource, CL&P, NSTAR Electric and PSNH are subject to environmental laws and regulations intended to mitigate or remove the effect of past operations and improve or maintain the quality of the environment. These laws and regulations require the removal or the remedy of the effect on the environment of the disposal or release of certain specified hazardous substances at current and former operating sites. Eversource, CL&P, NSTAR Electric and PSNH have an active environmental auditing and training program and each believes it is substantially in compliance with all enacted laws and regulations.

The number of environmental sites and related reserves for which remediation or long-term monitoring, preliminary site work or site assessment is being performed are as follows:
 As of June 30, 2021As of December 31, 2020
Number of SitesReserve
(in millions)
Number of SitesReserve
(in millions)
Eversource62 $108.8 63 $102.4 
CL&P14 10.7 15 12.3 
NSTAR Electric12 3.9 12 4.7 
PSNH6.6 7.1 
 As of June 30, 2020 As of December 31, 2019
 Number of Sites 
Reserve
(in millions)
 Number of Sites 
Reserve
(in millions)
Eversource55
 $78.5
 57
 $81.0
CL&P15
 11.2
 15
 11.4
NSTAR Electric13
 5.8
 15
 8.0
PSNH9
 7.3
 9
 7.5

The increase in the reserve balance was due primarily to a change in cost estimate at an NSTAR Gas MGP site under investigation for which we now know of additional remediation that is required.

Included in the number of sites and reserve amounts above are former MGP sites that were operated several decades ago and manufactured natural gas from coal and other processes, which resulted in certain by-products remaining in the environment that may pose a potential risk to human health and the environment, for which Eversource may have potential liability.  The reserve balances related to these former MGP sites were $67.5$101.0 million and $67.9$92.2 million as of June 30, 20202021 and December 31, 2019,2020, respectively, and related primarily to the natural gas business segment.

These reserve estimates are subjective in nature as they take into consideration several different remediation options at each specific site.  The reliability and precision of these estimates can be affected by several factors, including new information concerning either the level of contamination at the site, the extent of Eversource's, CL&P's, NSTAR Electric's and PSNH's responsibility for remediation or the extent of remediation required, recently enacted laws and regulations or changes in cost estimates due to certain economic factors.  It is possible that new information or future developments could require a reassessment of the potential exposure to required environmental remediation.  As this information becomes available, management will continue to assess the potential exposure and adjust the reserves accordingly.



29


B.    Long-Term Contractual Arrangements
The following is an update to the current status of long-term contractual arrangements set forth in Note 13B of the Eversource 2020 Form 10-K.

Renewable Energy: Renewable energy contracts include non-cancelable commitments under contracts of NSTAR Electric for the purchase of energy and RECs from renewable energy facilities.
NSTAR Electric      
(Millions of Dollars)20212022202320242025ThereafterTotal
Renewable Energy$48.1 $103.6 $229.3 $339.4 $346.2 $6,527.7 $7,594.3 

The table has been updated to include long-term commitments of NSTAR Electric pertaining to the Massachusetts Clean Energy 83D contract, for which construction commenced in 2021. Estimated costs under this contract are expected to begin in 2023 and range between $150 million and $415 million per year under a 20-year contract, totaling approximately $6.7 billion.

C.    Guarantees and Indemnifications
In the normal course of business, Eversource parent provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric and PSNH, in the form of guarantees. Management does not anticipate a material impact to net income or cash flows as a result of these various guarantees and indemnifications. 

Guarantees issued on behalf of unconsolidated entities, including equity method offshore wind investments, for which Eversource parent is the guarantor, are recorded at fair value as a liability on the balance sheet at the inception of the guarantee. Eversource regularly reviews performance risk under these guarantee arrangements, and in the event it becomes probable that Eversource parent will be required to perform under the guarantee, the amount of probable payment will be recorded. The fair value of guarantees issued on behalf of unconsolidated entities are recorded within Other Long-Term Liabilities on the balance sheet, and was $0.5 million as of June 30, 2021.

The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries and affiliates to external parties asparties:  
As of June 30, 2021
Company (Obligor)DescriptionMaximum Exposure
(in millions)
Expiration Dates
North East Offshore LLC
Construction-related purchase agreements with third-party contractors (1)
$29.7 
 (1)
Eversource Investment LLC
Funding and indemnification obligations of North East Offshore LLC (2)
 (2)
Sunrise Wind LLC
OREC capacity production (3)
2.2 
 (3)
South Fork Wind, LLCTransmission interconnection1.6 
Bay State Wind LLCReal estate purchase2.5 2022
Various
Surety bonds (4)
59.5 2021 - 2023
Rocky River Realty Company and
   Eversource Service
Lease payments for real estate4.4 2024

(1)    Eversource parent issued guarantees on behalf of June 30, 2020:  its 50 percent-owned affiliate, North East Offshore LLC (NEO), under which Eversource parent agreed to guarantee 50 percent of NEO’s performance of obligations under certain purchase agreements with third-party contactors, in an amount not to exceed $1.3 billion with an expiration date in 2025. Eversource parent also issued a separate guarantee to Ørsted on behalf of NEO, under which Eversource parent agreed to guarantee 50 percent of NEO’s payment obligations under certain offshore wind project construction-related agreements with Ørsted in an aggregate amount not to exceed $62.5 million. Any amounts paid under this guarantee to Ørsted will count toward, but not increase, the maximum amount of the Funding Guarantee described in Note 2, below. The guarantee expires upon the full performance of the guaranteed obligations.    

(2)    Eversource parent issued a guarantee (Funding Guarantee) on behalf of Eversource Investment LLC (EI), its wholly-owned subsidiary that holds a 50 percent ownership interest in NEO, under which Eversource parent agreed to guarantee certain funding obligations and certain indemnification payments of EI under the Amended and Restated Limited Liability Company Operating Agreement of NEO, in an amount not to exceed $910 million. The guaranteed obligations include payment of EI's funding obligations during the construction phase of NEO’s underlying offshore wind projects and indemnification obligations associated with third party credit support for its investment in NEO. Eversource parent’s obligations under the Funding Guarantee expire upon the full performance of the guaranteed obligations.

(3)    Eversource parent issued a guarantee on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guarantee Sunrise Wind LLC's performance of certain obligations, in an amount not to exceed $15.4 million, under the Offshore Wind Renewable Energy Certificate Purchase and Sale Agreement (the Agreement). The Agreement was executed on October 23, 2019, by and between the New York State Energy Research and Development Authority (NYSERDA) and Sunrise Wind LLC. The guarantee expires upon the full performance of the guaranteed obligations.    

(4)    Surety bond expiration dates reflect termination dates, the majority of which will be renewed or extended.  Certain surety bonds contain credit ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource parent are downgraded. 

30


Company Description 
Maximum Exposure
(in millions)
 Expiration Dates
Various 
Surety Bonds (1)
 $30.9
 2020 - 2023
Rocky River Realty Company and Eversource Service Lease Payments for Real Estate 5.9
 2024
Bay State Wind LLC Real Estate Purchase 2.5
 2021
Sunrise Wind LLC 
Offshore Wind (2)
 2.2
 -
Letter of Credit: On September 16, 2020, Eversource parent entered into a guarantee on behalf of EI, which holds Eversource's investments in offshore wind-related equity method investments, under which Eversource parent would guarantee EI's obligations under a letter of credit facility with a financial institution that EI may request in an aggregate amount of up to approximately $25 million.

(1)
Surety bond expiration dates reflect termination dates, the majority of which will be renewed or extended.  Certain surety bonds contain credit ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource parent are downgraded.  

(2)
On October 25, 2019, Eversource parent issued a guaranty on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guaranty Sunrise Wind LLC’s performance of certain obligations, in an amount not to exceed $15.4 million, under the Offshore Wind Renewable Energy Certificate Purchase and Sale Agreement (the Agreement). The Agreement was executed on October 23, 2019, by and between the New York State Energy Research and Development Authority (NYSERDA) and Sunrise Wind LLC. The Company regularly reviews performance risk under this arrangement, and in the event it becomes probable that Eversource parent will be required to perform under the guarantee, the amount of probable payment will be recorded. As of June 30, 2020, the fair value of the guarantee was immaterial.

C.D.     Spent Nuclear Fuel Obligations - Yankee Companies
CL&P, NSTAR Electric and PSNH have plant closure and fuel storage cost obligations to the Yankee Companies, which have each completed the physical decommissioning of their respective nuclear power facilities and are now engaged in the long-term storage of their spent fuel. The Yankee Companies fund these costs through litigation proceeds received from the DOE and, to the extent necessary, through wholesale, FERC-approved rates charged under power purchase agreements with several New England utilities, including CL&P, NSTAR Electric and PSNH. CL&P, NSTAR Electric and PSNH, in turn recover these costs from their customers through state regulatory commission-approved retail rates. The Yankee Companies collect amounts that management believes are adequate to recover the remaining plant closure and fuel storage cost estimates for the respective plants. Management believes CL&P and NSTAR Electric will recover their shares of these obligations from their customers. PSNH has recovered its total share of these costs from its customers.

Spent Nuclear Fuel Litigation:
The Yankee Companies have filed complaints against the DOE in the Court of Federal Claims seeking monetary damages resulting from the DOE's failure to accept delivery of, and provide for a permanent facility to store, spent nuclear fuel pursuant to the terms of the 1983 spent fuel and high-level waste disposal contracts between the Yankee Companies and the DOE. The court previously awarded the Yankee Companies damages for Phases I, II, III and IIIIV of litigation resulting from the DOE's failure to meet its contractual obligations. These Phases covered damages incurred in the years 1998 through 2012,2016, and the awarded damages have been received by the Yankee Companies with certain amounts of the damages refunded to their customers.

DOE Phase IVV Damages - On May 22, 2017,March 25, 2021, each of the Yankee Companies filed a fourthfifth set of lawsuits against the DOE in the Court of Federal Claims. The Yankee Companies soughtare calculating and will be seeking monetary damages totaling $104.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 20132017 to 20162020 (DOE Phase IV)V). On February 21, 2019, the Yankee Companies received a partial summary judgment and partial final judgment in their favor for the undisputed amount of monetary damages of $103.2 million. The court awarded CYAPC, YAEC and MYAPC damages of $40.7 million, $28.1 million and $34.4 million, respectively. The DOE did not appeal the court's judgment and the decision became final on April 23, 2019. On June 12, 2019, each of the Yankee Companies received the damages proceeds. On June 12, 2019, the court accepted an offer of judgment in the amount of $0.5 million to settle the disputed amount of approximately $1 million in Phase IV contested damages. The Yankee Companies received the $0.5 million payment in July 2019.

In September 2019, the Yankee Companies made a required informational filing with FERC as to the use of proceeds, for which approval was received in the fourth quarter of 2019. In December 2019, YAEC and MYAPC returned proceeds of $5.4 million and $21.0 million, respectively, to its member companies, of which the Eversource utilities (CL&P, NSTAR Electric and PSNH) received a total of $2.8 million from YAEC and $5.0 million from MYAPC. The Eversource utilities refund these amounts received to their utility customers. Also, in December 2019, CYAPC paid $29.0 million to the DOE to partially settle its pre-1983 spent nuclear fuel obligation.



D.E.    FERC ROE Complaints
Four separate complaints were filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (collectively, the Complainants). In each of the first three complaints, filed on October 1, 2011, December 27, 2012, and July 31, 2014, respectively, the Complainants challenged the NETOs' base ROE of 11.14 percent that had been utilized since 2005 and sought an order to reduce it prospectively from the date of the final FERC order and for the separate 15-month complaint periods. In the fourth complaint, filed April 29, 2016, the Complainants challenged the NETOs' base ROE billed of 10.57 percent and the maximum ROE for transmission incentive (incentive cap) of 11.74 percent, asserting that these ROEs were unjust and unreasonable.

The ROE originally billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent. On October 16, 2014, the FERC set the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017 by the U.S. Court of Appeals for the D.C. Circuit (the Court).

All amounts associated with the first complaint period have been refunded, which totaled $38.9 million (pre-tax and excluding interest) at Eversource and reflected both the base ROE and incentive cap prescribed by the FERC order. The refund consisted of $22.4 million for CL&P, $13.7 million for NSTAR Electric and $2.8 million for PSNH.

Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of June 30, 20202021 and December 31, 2019.2020. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of June 30, 20202021 and December 31, 2019.2020.

On October 16, 2018, FERC issued an order on all four complaints describing how it intends to address the issues that were remanded by the Court. FERC proposed a new framework to determine (1) whether an existing ROE is unjust and unreasonable and, if so, (2) how to calculate a replacement ROE. Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the October 16, 2018 order provided the FERC does not change the proposed methodology or alter its implementation in a manner that has a material impact on the results.

The FERC order included illustrative calculations for the first complaint using FERC's proposed frameworks with financial data from that complaint. Those illustrative calculations indicated that for the first complaint period, for the NETOs, which FERC concludes are of average financial risk, the preliminary just and reasonable base ROE is 10.41 percent and the preliminary incentive cap on total ROE is 13.08 percent.

If the results of the illustrative calculations were included in a final FERC order for each of the complaint periods, then a 10.41 percent base ROE and a 13.08 percent incentive cap would not have a significant impact on our financial statements for all of the complaint periods. These preliminary calculations are not binding and do not represent what we believe to be the most likely outcome of a final FERC order.

On November 21, 2019, FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners, in which FERC adopted a new methodology for determining base ROEs. Various parties sought rehearing. On December 23, 2019, the NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs’ cases.
31



On May 21, 2020, the FERC issued its order in Opinion No. 569-A on the rehearing of the MISO transmission owners' cases, in which FERC again changed its methodology for determining the MISO transmission owners' base ROEs. Various parties have appealed the MISO transmission owners' opinion. ThisOn November 19, 2020, the FERC issued Opinion No. 569-B denying rehearing of Opinion No. 569-A and reaffirmed the methodology previously adopted in Opinion No. 569-A. The new methodology differs significantly from the methodology proposed by FERC in its October 16, 2018 order to determine the NETOs' base ROEs in its four pending cases.

Given the significant uncertainty regarding the applicability of the FERC opinions in the MISO transmission owners' two complaint cases to the NETOs' pending four complaint cases, Eversource concluded that there is no reasonable basis for a change to the reserve or recognized ROEs for any of the complaint periods at this time. As well, Eversource cannot reasonably estimate a range of any gain or loss for any of the four complaint proceedings at this time.

Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

A change of 10 basis points to the base ROE used to establish the reserves would impact Eversource's after-tax earnings by an average of approximately $3 million for each of the four 15-month complaint periods.



E.F.    Eversource and NSTAR Electric Boston Harbor Civil Action
In 2016, the United States Attorney on behalf of the United States Army Corps of Engineers filed a civil action in the United States District Court for the District of Massachusetts against NSTAR Electric, HEEC, and the Massachusetts Water Resources Authority (together with NSTAR Electric and HEEC, the "Defendants").  The action alleged that the Defendants failed to comply with certain permitting requirements related to the placement of the HEEC-owned electric distribution cable beneath Boston Harbor.

The parties reached a settlement pursuant to which HEEC agreed to install a new 115kV distribution cable across Boston Harbor to Deer Island, utilizing a different route, and remove portions of the existing cable. Construction of the new distribution cable was completed in August 2019, and removal of the portions of the existing cable was completed in January 2020. All issues surrounding the current permit from the United States Army Corps of Engineers are expected to be resolved, and subsequently, such litigation then dismissed with prejudice.

G.    CL&P Tropical Storm Isaias Response Investigation
In August 2020, PURA opened a docket to investigate the preparation for and response to Tropical Storm Isaias by Connecticut utilities, including CL&P. On April 28, 2021, PURA issued a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances. Specifically, PURA concluded that CL&P did not satisfy the performance standards for managing its municipal liaison program, timely removing electrical hazards from blocked roads, communicating critical information to its customers, or meeting its obligation to secure adequate external contractor and mutual aid resources in a timely manner. Based on its findings, PURA ordered CL&P to adjust its future rates in a pending or future rate proceeding to reflect a monetary penalty in the form of a downward adjustment of 90 basis points in its allowed rate of return on equity (ROE), which is currently 9.25 percent. In its decision, PURA explained that additional monetary penalties and further enforcement orders pursuant to Connecticut statute would be considered in a separate proceeding that was initiated on May 6, 2021. On June 10, 2021, CL&P appealed the April 28, 2021 PURA decision.

On May 6, 2021, as part of the penalty proceeding, PURA issued a notice of violation that included an assessment of $30 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $1.6 million fine for violations of accident reporting requirements to be paid to the State of Connecticut’s general fund. On July 14, 2021, PURA issued a final decision in this penalty proceeding that included an assessment of $28.6 million, maintaining the $28.4 million performance penalty and reducing the $1.6 million fine for accident reporting to $0.2 million. PURA directed the $28.4 million performance penalty to be credited to customers on electric bills beginning on August 1, 2021 through July 31, 2022. The $28.4 million is the maximum statutory penalty amount under applicable Connecticut law in effect at the time of Tropical Storm Isaias, which is 2.5 percent of CL&P’s annual distribution revenues. Management has accrued PURA’s assessment in the first quarter of 2021. As of June 30, 2021, the liability for the assessment was recorded as a current regulatory liability on CL&P’s balance sheet and as a charge to Operations and Maintenance expense on the six months ended June 30, 2021 income statement. The after-tax earnings impact of this charge was $0.07 per share. The Company believes it has meritorious defenses and intends to vigorously defend CL&P’s position, but does not have an estimate of the ultimate outcome on CL&P’s financial position, results of operations or cash flows at this time.

The estimated annual impact of a 90 basis point ROE reduction at CL&P would be a decrease of approximately $31 million of future annual revenues and approximately $21 million of lower annual earnings. The ROE reduction would impact revenues and earnings prospectively, once new rates are established. PURA stated it intends to use its interim rate decrease proceeding that is currently pending to implement the storm-related return on equity penalty ordered in the April 28, 2021 decision, which is subject to our pending court appeal. In light of our pending court appeal, coupled with the uncertainty of how long that penalty, if implemented, would last, we cannot predict the ultimate outcome or the resulting financial impact on CL&P.

32


10.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:

Preferred Stock, Long-Term Debt and Rate Reduction Bonds:  The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections.  The fair value of long-term debt and RRB debt securities is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields.  The fair values provided in the table below are classified as Level 2 within the fair value hierarchy.  Carrying amounts and estimated fair values are as follows:
 EversourceCL&PNSTAR ElectricPSNH
(Millions of Dollars)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
As of June 30, 2021:       
Preferred Stock Not Subject to Mandatory Redemption$155.6 $166.4 $116.2 $122.2 $43.0 $44.2 $$
Long-Term Debt16,651.2 18,364.0 4,335.6 5,049.8 3,688.3 4,208.4 1,163.7 1,239.0 
Rate Reduction Bonds518.5 579.6 518.5 579.6 
As of December 31, 2020:       
Preferred Stock Not Subject to Mandatory Redemption$155.6 $169.1 $116.2 $123.4 $43.0 $45.7 $$
Long-Term Debt16,179.1 18,420.1 3,914.8 4,800.9 3,643.2 4,294.0 1,099.1 1,207.0 
Rate Reduction Bonds540.1 603.4 540.1 603.4 
 Eversource CL&P NSTAR Electric PSNH
(Millions of Dollars)
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
As of June 30, 2020:               
Preferred Stock Not Subject to Mandatory Redemption$155.6
 $164.9
 $116.2
 $120.5
 $43.0
 $44.4
 $
 $
Long-Term Debt14,398.7
 16,329.6
 3,518.1
 4,251.6
 3,642.6
 4,240.9
 951.6
 1,050.3
Rate Reduction Bonds561.7
 619.2
 
 
 
 
 561.7
 619.2
                
As of December 31, 2019:               
Preferred Stock Not Subject to Mandatory Redemption$155.6
 $162.0
 $116.2
 $117.8
 $43.0
 $44.2
 $
 $
Long-Term Debt14,098.2
 15,170.2
 3,518.1
 4,058.0
 3,342.1
 3,659.9
 951.6
 1,005.7
Rate Reduction Bonds583.3
 625.9
 
 
 
 
 583.3
 625.9


Derivative Instruments and Marketable Securities: Derivative instruments and investments in marketable securities are carried at fair value.  For further information, see Note 4, "Derivative Instruments," and Note 5, "Marketable Securities," to the financial statements.  

See Note 1D, "Summary of Significant Accounting Policies - Fair Value Measurements," for the fair value measurement policy and the fair value hierarchy.

11.    ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in accumulated other comprehensive income/(loss) by component, net of tax, are as follows:
For the Six Months Ended June 30, 2021For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Qualified
Cash Flow
Hedging
Instruments
Unrealized
Gains/(Losses) on Marketable
Securities
Defined
Benefit Plans
TotalQualified
Cash Flow
Hedging
Instruments
Unrealized
Gains on Marketable
Securities
Defined
Benefit Plans
Total
Balance as of January 1st$(1.4)$1.1 $(76.1)$(76.4)$(3.0)$0.7 $(62.8)$(65.1)
OCI Before Reclassifications(0.5)(2.4)(2.9)0.4 (1.6)(1.2)
Amounts Reclassified from AOCI0.9 4.1 5.0 0.6 3.1 3.7 
Net OCI0.9 (0.5)1.7 2.1 0.6 0.4 1.5 2.5 
Balance as of June 30th$(0.5)$0.6 $(74.4)$(74.3)$(2.4)$1.1 $(61.3)$(62.6)
 For the Six Months Ended June 30, 2020 For the Six Months Ended June 30, 2019
Eversource 
(Millions of Dollars)
Qualified
Cash Flow
Hedging
Instruments
 
Unrealized
Gains on Marketable
Securities
 
Defined
Benefit Plans
 Total 
Qualified
Cash Flow
Hedging
Instruments
 
Unrealized
Gains/(Losses)
on Marketable
Securities
 
Defined
Benefit Plans
 Total
Balance as of January 1st$(3.0) $0.7
 $(62.8) $(65.1) $(4.4) $(0.5) $(55.1) $(60.0)
                
OCI Before Reclassifications
 0.4
 (1.6) (1.2) 
 1.1
 2.6
 3.7
Amounts Reclassified from AOCI0.6
 
 3.1
 3.7
 0.6
 
 2.1
 2.7
Net OCI0.6
 0.4
 1.5
 2.5
 0.6
 1.1
 4.7
 6.4
Balance as of June 30th$(2.4) $1.1
 $(61.3) $(62.6) $(3.8) $0.6
 $(50.4) $(53.6)


Defined benefit plan OCI amounts before reclassifications relate to actuarial gains and losses that arose during the year and were recognized in AOCI. The unamortized actuarial gains and losses and prior service costs on the defined benefit plans are amortized from AOCI into Other Income, Net over the average future employee service period, and are reflected in amounts reclassified from AOCI.



12.    COMMON SHARES

The following table sets forth the Eversource parent common shares and the shares of common stock of CL&P, NSTAR Electric and PSNH that were authorized and issued, as well as the respective per share par values:  
 Shares
 Authorized as of June 30, 2021 and December 31, 2020Issued as of
 Par ValueJune 30, 2021December 31, 2020
Eversource$380,000,000 357,818,402 357,818,402 
CL&P$10 24,500,000 6,035,205 6,035,205 
NSTAR Electric$100,000,000 200 200 
PSNH$100,000,000 301 301 
 Shares
   Authorized as of June 30, 2020 and December 31, 2019 Issued as of
 Par Value  June 30, 2020 December 31, 2019
Eversource$5
 380,000,000
 357,818,402
 345,858,402
CL&P$10
 24,500,000
 6,035,205
 6,035,205
NSTAR Electric$1
 100,000,000
 200
 200
PSNH$1
 100,000,000
 301
 301


Common Share Issuances and 2019 Forward Sale Agreement: On June 15, 2020, Eversource completed an equity offering of 6,000,000 common shares at a price per share of $86.26. Eversource plans to use the net proceeds of this offering to fund a portion of the planned purchase of the assets of CMA. The issuance of these common shares resulted in proceeds of $509.2 million, net of issuance costs.

In June 2019, Eversource completed an equity offering consisting of 5,980,000 common shares issued directly by the Company and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. Under the forward sale agreement, 11,960,000 common shares were borrowed from third parties and sold by the underwriters. The forward sale agreement allowed Eversource, at its election and prior to May 29, 2020, to physically settle the forward sale agreement by issuing common shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially, $71.48 per share) or, alternatively, to settle the forward sale agreement in whole or in part through the delivery or receipt of shares or cash. The forward sale price was subject to adjustment daily based on a floating interest rate factor and would decrease in respect of certain fixed amounts specified in the agreement, such as dividends.

Eversource previously issued 6,000,000 common shares under the forward sale agreement in December 2019. On March 23, 2020, Eversource physically settled a portion of the forward sale agreement by delivering 1,500,000 common shares in exchange for net proceeds of $105.7 million. Subsequently, on March 26, 2020, Eversource physically settled the remaining portion of the forward sale agreement by delivering 4,460,000 common shares in exchange for net proceeds of $314.1 million. The forward sale price used to determine the cash proceeds received by Eversource was calculated based on the initial forward sale price, as adjusted in accordance with the forward sale agreement.

The March and June 2020 common share issuances of 5,960,000 and 6,000,000, respectively, resulted in total proceeds of $929.0 million, net of issuance costs, and were reflected in shareholders' equity and as financing activities on the statement of cash flows.

Issuances of shares under the forward sale agreement are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreement were recorded in the financial statements until settlements took place. Prior to any settlements, the only impact to the financial statements was the inclusion of incremental shares within the calculation of diluted EPS using the treasury stock method. See Note 14, "Earnings Per Share," to the financial statements for information on the forward sale agreement’s impact on the calculation of diluted EPS.

Eversource used the net proceeds received upon the direct issuance of common shares and the net proceeds received upon settlement of the forward sale agreement to repay short-term debt under the commercial paper program, to fund capital spending and clean energy initiatives, and for general corporate purposes.

Treasury Shares: As of June 30, 20202021 and December 31, 2019,2020, there were 15,190,540 14,217,299 and 15,977,75714,864,379 Eversource common shares held as treasury shares, respectively. As of June 30, 20202021 and December 31, 2019,2020, Eversource common shares outstanding were 342,627,862were 343,601,103 and 329,880,645,342,954,023, respectively.
33



Eversource issues treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment and share purchase plan, and matching contributions under the Eversource 401k Plan. The issuance of treasury shares represents a non-cash transaction, as the treasury shares were used to fulfill Eversource's obligations that require the issuance of common shares.

13.    COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $1.9 million for each of the three months ended June 30, 20202021 and 20192020 and $3.8 million for each of the six months ended June 30, 20202021 and 2019.2020. These dividends were presented as Net Income Attributable to Noncontrolling Interests on the Eversource statements of income. Noncontrolling Interest – Preferred Stock of Subsidiaries on the Eversource balance sheets totaled $155.6 million as of June 30, 20202021 and December 31, 2019.2020. On the Eversource balance sheets, Common Shareholders' Equity was fully attributable to Eversource parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest.



14.    EARNINGS PER SHARE

Basic EPS is computed based upon the weighted average number of common shares outstanding during each period.  Diluted EPS is computed on the basis of the weighted average number of common shares outstanding plus the potential dilutive effect of certain share-based compensation awards and the equity forward sale agreement, as if they were converted into outstanding common shares.  The dilutive effect of unvested RSU and performance share awards as well as the equity forward sale agreement, is calculated using the treasury stock method.  RSU and performance share awards are included in basic weighted average common shares outstanding as of the date that all necessary vesting conditions have been satisfied.
As described in Note 12, "Common Shares," earnings per There were 0 antidilutive share dilution, if any, related toawards excluded from the forward sale agreement is determined under the treasury stock method until settlementcomputation of the forward sale agreement. Under this method, the number of Eversource common shares used in calculating diluted EPS is deemed to be increased byfor the excess, if any, of the number of shares that would be issued upon physical settlement of the forward sale agreement less the number of shares that would be purchased by Eversource in the market (based on the average market price during the same reporting period) using the proceeds receivable upon settlement (based on the adjusted forward sale price at the end of that reporting period). Share dilution occurs when the average market price of Eversource's common shares is higher than the adjusted forward sale price.

three and six months ended June 30, 2021. For the three and six months ended June 30, 2020, there were 158,242 and 79,121 antidilutive share awards excluded from the EPS computation respectively, as their impact would have been antidilutive.antidilutive. Antidilutive shares pertained to a purchase option extended to underwriters in connection with Eversource'sEversource’s common share issuance on June 15, 2020. See Note 12, "Common Shares," for further information. There were 0 antidilutive share awards excluded from the computation for the three and six months ended June 30, 2019. 

The following table sets forth the components of basic and diluted EPS:
Eversource
(Millions of Dollars, except share information)
For the Three Months EndedFor the Six Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Net Income Attributable to Common Shareholders$264.5 $252.2 $630.7 $587.0 
Weighted Average Common Shares Outstanding:    
Basic343,844,626 337,946,663 343,761,435 334,524,452 
Dilutive Effect of:
Share-Based Compensation Awards and Other591,070 614,986 623,758 681,110 
Equity Forward Sale Agreement543,842 
Total Dilutive Effect591,070 614,986 623,758 1,224,952 
Diluted344,435,696 338,561,649 344,385,193 335,749,404 
Basic and Diluted EPS$0.77 $0.75 $1.83 $1.75 
Eversource
(Millions of Dollars, except share information)
For the Three Months Ended For the Six Months Ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Net Income Attributable to Common Shareholders$252.2
 $31.5
 $587.0
 $340.1
Weighted Average Common Shares Outstanding:       
Basic337,946,663
 319,664,998
 334,524,452
 318,644,796
Dilutive Effect of:       
Share-Based Compensation Awards and Other614,986
 645,450
 681,110
 668,470
Equity Forward Sale Agreement
 78,042
 543,842
 39,021
Total Dilutive Effect614,986
 723,492
 1,224,952
 707,491
Diluted338,561,649
 320,388,490
 335,749,404
 319,352,287
Basic and Diluted EPS$0.75
 $0.10
 $1.75
 $1.07




15.    REVENUES

The following tables present operating revenues disaggregated by revenue source:
For the Three Months Ended June 30, 2021
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
Revenues from Contracts with Customers
Retail Tariff Sales
Residential$882.1 $174.2 $$36.0 $$$1,092.3 
Commercial594.1 89.6 16.1 (1.3)698.5 
Industrial82.0 34.8 1.1 (4.4)113.5 
Total Retail Tariff Sales Revenues1,558.2 298.6 53.2 (5.7)1,904.3 
Wholesale Transmission Revenues416.9 20.3 (345.9)91.3 
Wholesale Market Sales Revenues97.2 15.7 1.0 113.9 
Other Revenues from Contracts with Customers25.1 1.0 3.4 1.2 309.7 (307.0)33.4 
Total Revenues from Contracts with Customers1,680.5 315.3 420.3 55.4 330.0 (658.6)2,142.9 
Alternative Revenue Programs(4.8)(3.4)(9.3)(2.7)(1.2)(21.4)
Other Revenues (1)
0.8 (0.1)0.2 0.1 1.0 
Total Operating Revenues$1,676.5 $311.8 $411.2 $52.8 $330.0 $(659.8)$2,122.5 
 For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
 Natural Gas
Distribution
 Electric
Transmission
 Water Distribution Other Eliminations Total
Revenues from Contracts with Customers             
Retail Tariff Sales             
Residential$916.0
 $116.1
 $
 $39.7
 $
 $
 $1,071.8
Commercial526.0
 67.8
 
 15.9
 
 (1.3) 608.4
Industrial77.7
 21.1
 
 1.2
 
 (3.4) 96.6
Total Retail Tariff Sales Revenues1,519.7

205.0
 
 56.8


 (4.7) 1,776.8
Wholesale Transmission Revenues
 
 383.4
 
 19.2
 (332.2) 70.4
Wholesale Market Sales Revenues60.5
 10.1
 
 0.9
 
 
 71.5
Other Revenues from Contracts with Customers18.8
 0.9
 3.3
 1.8
 264.6
 (262.8) 26.6
Amortization/(Reserve) for Revenues Subject to Refund2.3
 0.5
 
 (0.9) 
 
 1.9
Total Revenues from Contracts with Customers1,601.3

216.5
 386.7
 58.6

283.8
 (599.7) 1,947.2
Alternative Revenue Programs14.2
 (5.3) (10.2) (3.2) 
 9.4
 4.9
Other Revenues (1)
0.7
 
 0.2
 0.1
 
 
 1.0
Total Operating Revenues$1,616.2

$211.2
 $376.7
 $55.5

$283.8
 $(590.3) $1,953.1
              
              
 For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
Revenues from Contracts with Customers             
Retail Tariff Sales             
Residential$1,879.7
 $354.1
 $
 $67.5
 $
 $
 $2,301.3
Commercial1,133.0
 202.4
 
 30.6
 
 (2.3) 1,363.7
Industrial157.5
 49.5
 
 2.3
 
 (6.6) 202.7
Total Retail Tariff Sales Revenues3,170.2
 606.0
 
 100.4
 
 (8.9) 3,867.7
Wholesale Transmission Revenues
 
 719.7
 
 36.6
 (615.8) 140.5
Wholesale Market Sales Revenues151.5
 23.2
 
 1.8
 
 
 176.5
Other Revenues from Contracts with Customers38.0
 1.7
 6.6
 3.7
 541.9
 (538.9) 53.0
Amortization/(Reserve) for Revenues Subject to Refund4.6
 1.1
 
 (1.7) 
 
 4.0
Total Revenues from Contracts with Customers3,364.3
 632.0
 726.3
 104.2
 578.5
 (1,163.6) 4,241.7
Alternative Revenue Programs53.1
 26.9
 19.6
 (2.1) 
 (18.1) 79.4
Other Revenues (1)
4.2
 0.9
 0.4
 0.3
 
 
 5.8
Total Operating Revenues$3,421.6
 $659.8
 $746.3
 $102.4
 $578.5
 $(1,181.7) $4,326.9
34


For the Six Months Ended June 30, 2021
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
Revenues from Contracts with Customers
Retail Tariff Sales
Residential$1,948.1 $641.1 $$63.7 $$$2,652.9 
Commercial1,154.0 297.4 29.8 (2.7)1,478.5 
Industrial165.0 90.8 2.2 (8.0)250.0 
Total Retail Tariff Sales Revenues3,267.1 1,029.3 95.7 (10.7)4,381.4 
Wholesale Transmission Revenues811.2 39.5 (666.9)183.8 
Wholesale Market Sales Revenues246.3 42.0 1.8 290.1 
Other Revenues from Contracts with Customers43.4 2.4 6.8 2.4 633.5 (628.3)60.2 
Total Revenues from Contracts with Customers3,556.8 1,073.7 818.0 99.9 673.0 (1,305.9)4,915.5 
Alternative Revenue Programs18.2 18.6 (6.6)(0.9)1.0 30.3 
Other Revenues (1)
1.9 0.5 0.2 2.6 
Total Operating Revenues$3,576.9 $1,092.3 $811.9 $99.2 $673.0 $(1,304.9)$4,948.4 
For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
Revenues from Contracts with Customers
Retail Tariff Sales
Residential$916.0 $116.1 $$39.7 $$$1,071.8 
Commercial526.0 67.8 15.9 (1.3)608.4 
Industrial77.7 21.1 1.2 (3.4)96.6 
Total Retail Tariff Sales Revenues1,519.7 205.0 56.8 (4.7)1,776.8 
Wholesale Transmission Revenues383.4 19.2 (332.2)70.4 
Wholesale Market Sales Revenues60.5 10.1 0.9 71.5 
Other Revenues from Contracts with Customers21.1 1.4 3.3 0.9 264.6 (262.8)28.5 
Total Revenues from Contracts with Customers1,601.3 216.5 386.7 58.6 283.8 (599.7)1,947.2 
Alternative Revenue Programs14.2 (5.3)(10.2)(3.2)9.4 4.9 
Other Revenues (1)
0.7 0.2 0.1 1.0 
Total Operating Revenues$1,616.2 $211.2 $376.7 $55.5 $283.8 $(590.3)$1,953.1 
For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
Revenues from Contracts with Customers
Retail Tariff Sales
Residential$1,879.7 $354.1 $$67.5 $$$2,301.3 
Commercial1,133.0 202.4 30.6 (2.3)1,363.7 
Industrial157.5 49.5 2.3 (6.6)202.7 
Total Retail Tariff Sales Revenues3,170.2 606.0 100.4 (8.9)3,867.7 
Wholesale Transmission Revenues719.7 36.6 (615.8)140.5 
Wholesale Market Sales Revenues151.5 23.2 1.8 176.5 
Other Revenues from Contracts with Customers42.6 2.8 6.6 2.0 541.9 (538.9)57.0 
Total Revenues from Contracts with Customers3,364.3 632.0 726.3 104.2 578.5 (1,163.6)4,241.7 
Alternative Revenue Programs53.1 26.9 19.6 (2.1)(18.1)79.4 
Other Revenues (1)
4.2 0.9 0.4 0.3 5.8 
Total Operating Revenues$3,421.6 $659.8 $746.3 $102.4 $578.5 $(1,181.7)$4,326.9 



35


For the Three Months Ended June 30, 2021For the Three Months Ended June 30, 2020
For the Three Months Ended June 30, 2019
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
(Millions of Dollars)(Millions of Dollars)CL&PNSTAR ElectricPSNHCL&PNSTAR ElectricPSNH
Revenues from Contracts with Customers             Revenues from Contracts with Customers
Retail Tariff Sales             Retail Tariff Sales
Residential$805.0
 $100.2
 $
 $33.6
 $
 $
 $938.8
Residential$440.8 $304.7 $136.6 $469.3 $311.5 $135.2 
Commercial612.8
 69.5
 
 16.0
 
 (0.9) 697.4
Commercial215.7 296.1 82.8 199.3 261.0 66.1 
Industrial81.3
 23.5
 
 1.1
 
 (2.8) 103.1
Industrial28.4 29.1 24.5 33.3 24.8 19.6 
Total Retail Tariff Sales Revenues1,499.1
 193.2
 
 50.7
 
 (3.7) 1,739.3
Total Retail Tariff Sales Revenues684.9 629.9 243.9 701.9 597.3 220.9 
Wholesale Transmission Revenues
 
 281.2
 
 14.7
 (239.8) 56.1
Wholesale Transmission Revenues195.7 160.1 61.1 191.4 142.5 49.5 
Wholesale Market Sales Revenues39.4
 14.4
 
 0.9
 
 
 54.7
Wholesale Market Sales Revenues68.1 18.9 10.2 39.3 13.2 8.0 
Other Revenues from Contracts with Customers15.1
 0.4
 3.7
 1.8
 236.1
 (236.8) 20.3
Other Revenues from Contracts with Customers9.5 15.3 4.4 8.1 11.1 5.9 
(Reserve)/Amortization for Revenues
Subject to Refund
(3.1) 1.5
 
 (0.6) 
 
 (2.2)
Total Revenues from Contracts with Customers1,550.5
 209.5
 284.9
 52.8
 250.8
 (480.3) 1,868.2
Total Revenues from Contracts with Customers958.2 824.2 319.6 940.7 764.1 284.3 
Alternative Revenue Programs6.3
 (2.7) 64.6
 0.7
 
 (58.8) 10.1
Alternative Revenue Programs(1.1)(15.3)2.3 (7.5)3.6 7.9 
Other Revenues (1)
5.0
 0.9
 0.1
 0.2
 
 
 6.2
Other Revenues (1)
(0.2)0.7 0.5 0.2 0.7 
EliminationsEliminations(127.3)(122.2)(43.6)(116.0)(107.4)(37.0)
Total Operating Revenues$1,561.8
 $207.7
 $349.6
 $53.7
 $250.8
 $(539.1) $1,884.5
Total Operating Revenues$829.6 $687.4 $278.8 $817.4 $661.0 $255.2 
             
             For the Six Months Ended June 30, 2021For the Six Months Ended June 30, 2020
For the Six Months Ended June 30, 2019
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
(Millions of Dollars)(Millions of Dollars)CL&PNSTAR ElectricPSNHCL&PNSTAR ElectricPSNH
Revenues from Contracts with Customers             Revenues from Contracts with Customers
Retail Tariff Sales             Retail Tariff Sales
Residential$1,838.3
 $359.1
 $
 $60.5
 $
 $
 $2,257.9
Residential$986.6 $667.1 $294.4 $959.2 $642.4 $278.1 
Commercial1,265.3
 213.3
 
 30.3
 
 (2.0) 1,506.9
Commercial429.9 564.4 160.6 425.6 562.9 145.3 
Industrial163.4
 54.4
 
 2.2
 
 (5.5) 214.5
Industrial65.2 53.6 46.2 67.3 51.6 38.6 
Total Retail Tariff Sales Revenues3,267.0
 626.8
 
 93.0
 
 (7.5) 3,979.3
Total Retail Tariff Sales Revenues1,481.7 1,285.1 501.2 1,452.1 1,256.9 462.0 
Wholesale Transmission Revenues
 
 606.1
 
 28.3
 (510.7) 123.7
Wholesale Transmission Revenues384.6 307.2 119.4 343.2 277.3 99.2 
Wholesale Market Sales Revenues90.8
 36.1
 
 1.9
 
 
 128.8
Wholesale Market Sales Revenues177.8 43.4 25.1 104.0 27.6 19.9 
Other Revenues from Contracts with Customers27.7
 1.4
 6.9
 3.5
 480.7
 (482.2) 38.0
Other Revenues from Contracts with Customers16.8 27.0 7.6 17.0 21.8 11.8 
(Reserve)/Amortization for Revenues
Subject to Refund
(6.1) 3.1
 
 (1.2) 
 
 (4.2)
Total Revenues from Contracts with Customers3,379.4
 667.4
 613.0
 97.2
 509.0
 (1,000.4) 4,265.6
Total Revenues from Contracts with Customers2,060.9 1,662.7 653.3 1,916.3 1,583.6 592.9 
Alternative Revenue Programs8.4
 7.7
 77.0
 1.5
 
 (69.8) 24.8
Alternative Revenue Programs7.8 (1.5)5.3 37.1 23.0 12.6 
Other Revenues (1)
7.8
 1.5
 0.1
 0.5
 
 
 9.9
Other Revenues (1)
0.1 1.8 0.5 1.9 2.1 0.6 
EliminationsEliminations(251.9)(238.6)(86.8)(238.2)(213.9)(74.5)
Total Operating Revenues$3,395.6
 $676.6
 $690.1
 $99.2
 $509.0
 $(1,070.2) $4,300.3
Total Operating Revenues$1,816.9 $1,424.4 $572.3 $1,717.1 $1,394.8 $531.6 



 For the Three Months Ended June 30, 2020 For the Three Months Ended June 30, 2019
(Millions of Dollars)CL&P NSTAR Electric PSNH CL&P NSTAR Electric PSNH
Revenues from Contracts with Customers           
Retail Tariff Sales           
Residential$469.3
 $311.5
 $135.2
 $402.8
 $282.3
 $119.9
Commercial199.3
 261.0
 66.1
 224.7
 315.8
 72.7
Industrial33.3
 24.8
 19.6
 33.8
 28.9
 18.6
Total Retail Tariff Sales Revenues701.9
 597.3
 220.9
 661.3
 627.0
 211.2
Wholesale Transmission Revenues191.4
 142.5
 49.5
 115.9
 127.5
 37.8
Wholesale Market Sales Revenues39.3
 13.2
 8.0
 12.1
 17.2
 10.1
Other Revenues from Contracts with Customers8.1
 11.1
 3.6
 9.1
 6.1
 4.2
Amortization/(Reserve) for Revenues
Subject to Refund

 
 2.3
 
 
 (3.1)
Total Revenues from Contracts with Customers940.7
 764.1
 284.3
 798.4
 777.8
 260.2
Alternative Revenue Programs(7.5) 3.6
 7.9
 55.1
 2.1
 13.7
Other Revenues (1)
0.2
 0.7
 
 2.7
 1.9
 0.5
Eliminations(116.0) (107.4) (37.0) (115.4) (99.9) (33.5)
Total Operating Revenues$817.4
 $661.0
 $255.2
 $740.8
 $681.9
 $240.9
            
 For the Six Months Ended June 30, 2020 For the Six Months Ended June 30, 2019
(Millions of Dollars)CL&P NSTAR Electric PSNH CL&P NSTAR Electric PSNH
Revenues from Contracts with Customers           
Retail Tariff Sales           
Residential$959.2
 $642.4
 $278.1
 $913.4
 $653.2
 $271.7
Commercial425.6
 562.9
 145.3
 461.3
 652.3
 152.6
Industrial67.3
 51.6
 38.6
 68.4
 57.8
 37.2
Total Retail Tariff Sales Revenues1,452.1
 1,256.9
 462.0
 1,443.1
 1,363.3
 461.5
Wholesale Transmission Revenues343.2
 277.3
 99.2
 270.7
 250.1
 85.3
Wholesale Market Sales Revenues104.0
 27.6
 19.9
 25.8
 41.6
 23.4
Other Revenues from Contracts with Customers17.0
 21.8
 7.2
 18.0
 10.1
 7.8
Amortization/(Reserve) for Revenues
Subject to Refund

 
 4.6
 
 
 (6.1)
Total Revenues from Contracts with Customers1,916.3
 1,583.6
 592.9
 1,757.6
 1,665.1
 571.9
Alternative Revenue Programs37.1
 23.0
 12.6
 60.9
 9.3
 15.2
Other Revenues (1)
1.9
 2.1
 0.6
 3.7
 3.4
 0.8
Eliminations(238.2) (213.9) (74.5) (232.1) (198.3) (70.6)
Total Operating Revenues$1,717.1
 $1,394.8
 $531.6
 $1,590.1
 $1,479.5
 $517.3

(1)    Other Revenues include certain fees charged to customers that are not considered revenue from contracts with customers. (1)
Other Revenues include certain fees charged to customers that are not considered revenue from contracts with customers. Other revenues also include lease revenues under lessor accounting guidance of $1.0 million (including $0.2 million at CL&P and $0.7 million at NSTAR Electric) and $1.1 million (including $0.2 million at CL&P and $0.7 million at NSTAR Electric) for the three months ended June 30, 2021 and 2020, respectively, and $2.7 million (including $0.4 million at CL&P and $1.8 million at NSTAR Electric) and $1.1 million (including $0.3 million at CL&P and $0.7 million at NSTAR Electric) for the three months ended June 30, 2020 and 2019, respectively, and $2.2 million (including $0.4 million at CL&P and $1.4 million at NSTAR Electric) and $2.2 million (including $0.5 million at CL&P and $1.3 million at NSTAR Electric) for the six months ended June 30, 2020 and 2019, respectively.

CL&P, NSTAR Electric, Yankee Gas, NSTAR Gas and the Connecticut water distribution business each have a revenue decoupling mechanism approved by a regulatory commission. The revenue decoupling mechanisms mitigate the impact of lower demand and resulting lost sales revenues by replacing actual customer usage with a fixed annual revenue stream, which is reconciled each year as part of our annual decoupling filing in each respective jurisdiction. These revenue decoupling mechanisms qualify as alternative revenue programs in accordance with accounting guidance for rate-regulated operations. The increase in Eversource's revenues from Alternative Revenue Programs for the six months ended June 30, 2021 and 2020, as compared to the six months ended June 30, 2019, was primarily the result of a higher decoupling deferral adjustment driven by lower distribution sales volumes in the first half of 2020. The decoupling deferral adjustment to revenues is recorded as a regulatory tracker mechanism within Regulatory Assets on the balance sheets.respectively.



16.    SEGMENT INFORMATION

Eversource is organized into the Electric Distribution, Electric Transmission, Natural Gas Distribution and Water Distribution reportable segments and Other based on a combination of factors, including the characteristics of each segments' services, the sources of operating revenues and expenses and the regulatory environment in which each segment operates.  These reportable segments represent substantially all of Eversource's total consolidated revenues.  Revenues from the sale of electricity, natural gas and water primarily are derived from residential, commercial and industrial customers and are not dependent on any single customer.  The Electric Distribution reportable segment includes the results of NSTAR Electric's solar power facilities. Eversource's reportable segments are determined based upon the level at which Eversource's chief operating decision maker assesses performance and makes decisions about the allocation of company resources.
 
The remainder of Eversource's operations is presented as Other in the tables below and primarily consists of 1) the equity in earnings of Eversource parent from its subsidiaries and intercompany interest income, both of which are eliminated in consolidation, and interest expense related to the debt of Eversource parent, 2) the revenues and expenses of Eversource Service, most of which are eliminated in consolidation, 3) the operations of CYAPC and YAEC, 4) Eversource Water Ventures, Inc., parent company of Aquarion, 5) the results of other unregulated subsidiaries, which are not part of its core business, and 6)5) Eversource parent's equity ownership interests that are not consolidated, which primarily include the offshore wind business, a natural gas pipeline owned by Enbridge, Inc., and a renewable energy investment fund.

In the ordinary course of business, Yankee Gas, and NSTAR Gas and EGMA purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline project described above. These affiliate transaction costs total $62.5$77.7 million annually and are classified as Purchased Power, Fuel and Transmission on the Eversource statements of income.

36


Each of Eversource's subsidiaries, including CL&P, NSTAR Electric and PSNH, has 1 reportable segment.

Cash flows used for investments in plant included in the segment information below are cash capital expenditures that do not include amounts incurred but not paid, cost of removal, AFUDC related to equity funds, and the capitalized portions of pension and PBOP expense.   

Eversource's segment information is as follows:
For the Three Months Ended June 30, 2021
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
Operating Revenues$1,676.5 $311.8 $411.2 $52.8 $330.0 $(659.8)$2,122.5 
Depreciation and Amortization(132.3)(34.6)(74.5)(11.5)(28.4)1.1 (280.2)
Other Operating Expenses(1,360.3)(257.7)(121.9)(25.4)(285.7)660.3 (1,390.7)
Operating Income, Net$183.9 $19.5 $214.8 $15.9 $15.9 $1.6 $451.6 
Interest Expense$(61.1)$(14.6)$(32.6)$(8.1)$(41.8)$12.8 $(145.4)
Other Income, Net29.9 4.6 6.8 0.9 309.2 (304.8)46.6 
Net Income Attributable to Common Shareholders121.6 4.1 137.6 8.9 282.7 (290.4)264.5 
For the Six Months Ended June 30, 2021
Eversource
(Millions of Dollars)
Electric DistributionNatural Gas DistributionElectric TransmissionWater DistributionOtherEliminationsTotal
Operating Revenues$3,576.9 $1,092.3 $811.9 $99.2 $673.0 $(1,304.9)$4,948.4 
Depreciation and Amortization(354.3)(80.3)(148.0)(22.8)(55.7)2.1 (659.0)
Other Operating Expenses(2,890.8)(793.6)(237.3)(50.5)(585.2)1,305.2 (3,252.2)
Operating Income$331.8 $218.4 $426.6 $25.9 $32.1 $2.4 $1,037.2 
Interest Expense$(114.4)$(28.5)$(65.3)$(16.0)$(83.4)$24.4 $(283.2)
Other Income, Net50.6 8.5 12.2 1.9 733.4 (725.8)80.8 
Net Income Attributable to Common Shareholders214.9 151.6 273.0 12.6 677.6 (699.0)630.7 
Cash Flows Used for Investments in Plant510.4 305.9 443.2 53.8 109.9 1,423.2 
For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution (1)
Electric
Transmission
Water Distribution
Other (1)
Eliminations (1)
Total
Operating Revenues$1,616.2 $211.2 $376.7 $55.5 $283.8 $(590.3)$1,953.1 
Depreciation and Amortization(140.7)(21.2)(68.8)(10.8)(22.7)0.3 (263.9)
Other Operating Expenses(1,293.3)(176.1)(111.2)(25.4)(243.1)593.5 (1,255.6)
Operating Income$182.2 $13.9 $196.7 $19.3 $18.0 $3.5 $433.6 
Interest Expense$(54.3)$(10.7)$(32.1)$(8.4)$(37.6)$8.8 $(134.3)
Other Income, Net16.4 0.4 10.6 303.2 (300.4)30.2 
Net Income Attributable to Common Shareholders115.0 2.6 129.5 10.4 282.8 (288.1)252.2 
For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution (1)
Electric
Transmission
Water Distribution
Other (1)
Eliminations (1)
Total
Operating Revenues$3,421.6 $659.8 $746.3 $102.4 $578.5 $(1,181.7)$4,326.9 
Depreciation and Amortization(308.1)(40.3)(136.2)(22.2)(44.0)0.9 (549.9)
Other Operating Expenses(2,732.9)(487.7)(218.0)(50.4)(500.0)1,184.8 (2,804.2)
Operating Income$380.6 $131.8 $392.1 $29.8 $34.5 $4.0 $972.8 
Interest Expense$(107.4)$(22.0)$(62.7)$(17.1)$(80.3)$20.5 $(269.0)
Other Income, Net28.9 1.8 15.7 0.1 686.9 (679.1)54.3 
Net Income Attributable to Common Shareholders245.1 88.6 256.2 12.5 639.2 (654.6)587.0 
Cash Flows Used for Investments in Plant563.2 205.6 460.8 46.0 124.6 1,400.2 

(1) On October 9, 2020, Eversource completed the CMA asset acquisition, with Yankee Energy System, Inc. (Yankee parent) as the acquiring entity. Yankee parent is the parent company of Yankee Gas, NSTAR Gas, EGMA and Hopkinton LNG Corp. As a result of the acquisition, in the fourth quarter of 2020, our chief operating decision maker assessed the performance of the Natural Gas Distribution segment including Yankee parent. Previously, Yankee parent was presented within Other and its equity in earnings were eliminated in consolidation. Prior comparative periods were revised to conform to the current period segment presentation.
37


 For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
Operating Revenues$1,616.2
 $211.2
 $376.7
 $55.5
 $283.8
 $(590.3) $1,953.1
Depreciation and Amortization(140.7) (21.2) (68.8) (10.8) (22.7) 0.3
 (263.9)
Other Operating Expenses(1,293.3) (176.1) (111.2) (25.4) (243.1) 593.5
 (1,255.6)
Operating Income$182.2
 $13.9
 $196.7
 $19.3
 $18.0
 $3.5
 $433.6
Interest Expense$(54.3) $(10.7) $(32.1) $(8.4) $(37.6) $8.8
 $(134.3)
Other Income, Net16.4
 0.4
 10.6
 
 306.5
 (303.7) 30.2
Net Income Attributable to Common Shareholders115.0
 3.3
 129.5
 10.4
 285.4
 (291.4) 252.2
              
 For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric Distribution Natural Gas Distribution Electric Transmission Water Distribution Other Eliminations Total
Operating Revenues$3,421.6
 $659.8
 $746.3
 $102.4
 $578.5
 $(1,181.7) $4,326.9
Depreciation and Amortization(308.1) (40.3) (136.2) (22.2) (44.0) 0.9
 (549.9)
Other Operating Expenses(2,732.9) (487.7) (218.0) (50.4) (500.0) 1,184.8
 (2,804.2)
Operating Income$380.6
 $131.8
 $392.1
 $29.8
 $34.5
 $4.0
 $972.8
Interest Expense$(107.4) $(22.0) $(62.7) $(17.1) $(80.3) $20.5
 $(269.0)
Other Income, Net28.9
 1.8
 15.7
 0.1
 774.7
 (766.9) 54.3
Net Income Attributable to Common Shareholders245.1
 87.8
 256.2
 12.5
 727.8
 (742.4) 587.0
Cash Flows Used for Investments in Plant563.2
 205.6
 460.8
 46.0
 124.6
 
 1,400.2


 For the Three Months Ended June 30, 2019
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
Operating Revenues$1,561.8
 $207.7
 $349.6
 $53.7
 $250.8
 $(539.1) $1,884.5
Depreciation and Amortization(150.1) (19.5) (62.3) (12.0) (14.7) 0.6
 (258.0)
Impairment of Northern Pass Transmission
 
 (239.6) 
 
 
 (239.6)
Other Operating Expenses(1,243.0) (179.8) (108.4) (25.0) (218.4) 538.7
 (1,235.9)
Operating Income/(Loss)$168.7
 $8.4
 $(60.7) $16.7
 $17.7
 $0.2
 $151.0
Interest Expense$(50.8) $(11.9) $(30.5) $(8.6) $(44.5) $13.6
 $(132.7)
Other Income/(Loss), Net12.2
 0.7
 8.7
 0.1
 (114.9) 139.1
 45.9
Net Income/(Loss) Attributable to Common Shareholders105.4
 (1.8) (87.4) 8.0
 (145.6) 152.9
 31.5
              
              
 For the Six Months Ended June 30, 2019
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 
Electric
Transmission
 Water Distribution Other Eliminations Total
Operating Revenues$3,395.6
 $676.6
 $690.1
 $99.2
 $509.0
 $(1,070.2) $4,300.3
Depreciation and Amortization(329.3) (39.9) (123.7) (23.9) (28.3) 1.1
 (544.0)
Impairment of Northern Pass Transmission
 
 (239.6) 
 
 
 (239.6)
Other Operating Expenses(2,718.6) (521.1) (207.2) (49.9) (444.0) 1,069.8
 (2,871.0)
Operating Income$347.7
 $115.6
 $119.6
 $25.4
 $36.7
 $0.7
 $645.7
Interest Expense$(100.0) $(23.7) $(61.0) $(17.2) $(88.6) $26.1
 $(264.4)
Other Income, Net30.4
 1.0
 16.8
 0.4
 316.8
 (288.5) 76.9
Net Income Attributable to Common Shareholders225.4
 74.7
 30.9
 8.8
 262.0
 (261.7) 340.1
Cash Flows Used for Investments in Plant571.3
 202.7
 449.2
 51.4
 103.2
 
 1,377.8

The following table summarizes Eversource's segmented total assets:
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution
Electric
Transmission
Water DistributionOtherEliminationsTotal
As of June 30, 2021$25,904.6 $6,593.2 $12,289.3 $2,419.6 $21,669.0 $(21,641.1)$47,234.6 
As of December 31, 202024,981.9 6,450.5 11,695.0 2,375.2 22,089.4 (21,492.4)46,099.6 
Eversource
(Millions of Dollars)
Electric
Distribution
 
Natural Gas
Distribution
 Electric
Transmission
 Water Distribution Other Eliminations Total
As of June 30, 2020$23,166.1
 $4,503.3
 $11,224.7
 $2,394.6
 $21,202.0
 $(20,452.0) $42,038.7
As of December 31, 201922,541.9
 4,345.5
 10,904.0
 2,351.7
 20,469.6
 (19,488.8) 41,123.9



17.     ACQUISITION OF ASSETS OF COLUMBIA GAS OF MASSACHUSETTS

On October 9, 2020, Eversource acquired certain assets and liabilities that comprised the NiSource Inc. (NiSource) natural gas distribution business in Massachusetts, which was previously doing business as CMA, pursuant to an asset purchase agreement (the Agreement) entered into on February 26, 2020 between Eversource and NiSource. The cash purchase price was $1.1 billion, plus a working capital amount of $68.6 million, as finalized in the first quarter of 2021. The natural gas distribution assets acquired from CMA were assigned to EGMA, an indirect wholly-owned subsidiary of Eversource formed in 2020. The LNG assets acquired from CMA were assigned to Hopkinton LNG Corp.

Preliminary Purchase Price Allocation: The purchase price allocation reflects measurement period adjustments recorded as of June 30, 2021 to reduce the fair values of certain regulatory and plant assets and certain liabilities acquired, resulting in a corresponding increase to Goodwill, based on new information received during the measurement period.

The preliminary allocation of the cash purchase price is as follows:
(Millions of Dollars)
Current Assets$138 
Restricted Cash57 
PP&E1,184 
Goodwill50 
Other Noncurrent Assets, excluding Goodwill131 
Other Current Liabilities(81)
Other Noncurrent Liabilities(310)
Cash Purchase Price$1,169 





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EVERSOURCE ENERGY AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, the combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2020,2021, as well as the Eversource 20192020 combined Annual Report on Form 10-K.  References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries.  All per-share amounts are reported on a diluted basis.  The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."  

Refer to the Glossary of Terms included in this combined Quarterly Report on Form 10-Q for abbreviations and acronyms used throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.  

The only common equity securities that are publicly traded are common shares of Eversource. The earnings and EPS of each business discussed below do not represent a direct legal interest in the assets and liabilities of such business, but rather represent a direct interest in our assets and liabilities as a whole. EPS by business is a financial measure not recognized under GAAP (non-GAAP) that is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. Our earnings discussion also includes a non-GAAP financial measuresmeasure referencing our 2021 and 2020 earnings and EPS excluding certain acquisition costs and our Q2 2019 earnings and EPS excluding the impairment charge for the NPT project.transition costs.

We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our 20202021 and 20192020 results without including these items. We believe the acquisition costs and the NPT impairment chargetransition costs are not indicative of our ongoing costs and performance. Due to the nature and significance of the effect of these items on Net Income Attributable to Common Shareholders and EPS, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business. These non-GAAP financial measures should not be considered as alternatives to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as indicators of operating performance.

From time to time, weWe make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify our forward-looking statements through the use of words or phrases such as "estimate," "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other similar expressions. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause our actual results to differ materially from those contained in our forward-looking statements, including, but not limited to:

cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers,
•    disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly,
•    the negative impacts of the 2019 novel coronavirus (COVID-19) pandemic, including any new or emerging variants, on our customers, vendors, employees, regulators, and operations,
•    changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability,
•    ability or inability to commence and complete our major strategic development projects and opportunities,
•    acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems,
•    actions or inaction of local, state and federal regulatory, public policy and taxing bodies,
•    substandard performance of third-party suppliers and service providers,
•    fluctuations in weather patterns, including extreme weather due to climate change,
•    changes in business conditions, which could include disruptive technology or development of alternative energy sources related to our current or future business model,
•    contamination of, or disruption in, our water supplies,
•    changes in levels or timing of capital expenditures, including the Columbia Gas of Massachusetts asset acquisition;
•    changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations,
•    changes in accounting standards and financial reporting regulations,
•    actions of rating agencies, and
•    other presently unknown or unforeseen factors.
 
Other risk factors are detailed in our reports filed with the SEC and updated as necessary, and we encourage you to consult such disclosures.

All such factors are difficult to predict and contain uncertainties that may materially affect our actual results, many of which are beyond our control.  You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business

39


or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A, Risk Factors, included in this combined Quarterly Report on Form 10-Q and in Eversource's 20192020 combined Annual Report on Form 10-K.  This combined Quarterly Report on Form 10-Q and Eversource's 20192020 combined Annual Report on Form 10-K also describe material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Financial Statements.  We encourage you to review these items.

Financial Condition and Business Analysis

Executive Summary

Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business.  Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas, NSTAR Gas and Eversource Gas Company of Massachusetts (EGMA) (natural gas utilities) and Aquarion (water utilities). Eversource is organized into the electric distribution, electric transmission, natural gas distribution and water distribution reportable segments.

The following items in this executive summary are explained in more detail in this combined Quarterly Report on Form 10-Q:

Earnings Overview and Future Outlook: 

We earned $264.5 million, or $0.77 per share, in the second quarter of 2021, and $630.7 million, or $1.83 per share, in the first half of 2021, compared with $252.2 million, or $0.75 per share, in the second quarter of 2020, and $587.0 million, or $1.75 per share, in the first half of 2020, compared with $31.52020. Our results include after-tax transition and acquisition costs of $6.8 million, or $0.10$0.02 per share, in the second quarter of 2019,2021, and $340.1$13.0 million, or $1.07$0.04 per share, in the first half of 2019. Our 2020 results include after-tax acquisition costs related to our planned purchase of the assets of Columbia Gas of Massachusetts (CMA) of2021, compared with $3.9 million, or $0.01 per share, in the second quarter of 2020, and $7.4 million, or $0.02 per share, in the first half of 2020. Our 2019 results include an after-tax impairment charge of $204.4Excluding those transition and acquisition costs, we earned $271.3 million, or $0.64$0.79 per share, related to our investment in the NPT project. Excluding those acquisition costssecond quarter of 2021, and $643.7 million, or $1.87 per share, in 2020, we earnedthe first half of 2021, compared with $256.1 million, or $0.76 per share, in the second quarter of 2020, and $594.4 million, or $1.77 per share, in the first half of 2020. Excluding the NPT impairment charge in 2019, we earned $235.9 million, or $0.74 per share, in the second quarter of 2019, and $544.5 million, or $1.71 per share, in the

The first half of 2019.

Our2021 earnings include an after-tax charge of $0.07 per share at CL&P recorded within the electric distribution segment earned $115.0 million, or $0.34 per share,primarily for customer bill credits assessed by PURA as a result of CL&P’s preparation for and response to Tropical Storm Isaias in the second quarterAugust 2020.

We reaffirmed our projection of 2020, and $245.1 million, or $0.73 per share, in the first half of 2020, compared with $105.4 million, or $0.33 per share, in the second quarter of 2019, and $225.4 million, or $0.71 per share, in the first half of 2019. Our natural gas distribution segment earned $3.3 million, or $0.01 per share, in the second quarter of 2020, and $87.8 million, or $0.26 per share, in the first half of 2020, compared with a loss of $1.8 million in the second quarter of 2019, and earnings of $74.7 million, or $0.23 per share, in the first half of 2019.  Our water distribution segment earned $10.4 million, or $0.03 per share, in the second quarter of 2020, and $12.5 million, or $0.04 per share, in the first half of 2020, compared with $8.0 million, or $0.02 per share, in the second quarter of 2019, and $8.8 million, or $0.03 per share, in the first half of 2019.

Our electric transmission segment earned $129.5 million, or $0.39 per share, in the second quarter of 2020, and $256.2 million, or $0.76 per share, in the first half of 2020, compared with a net loss of $87.4 million, or $0.27 per share, in the second quarter of 2019, and earnings of $30.9 million, or $0.10 per share in the first half of 2019. Excluding the after-tax NPT impairment charge of $204.4 million, or $0.64 per share, our electric transmission segment earned $117.0 million, or $0.37 per share, in the second quarter of 2019, and $235.3 million, or $0.74 per share, in the first half of 2019.
Eversource parent and other companies had net losses of $6.0 million, or $0.02 per share, in the second quarter of 2020, and $14.6 million, or $0.04 per share, in the first half of 2020, compared with earnings of $7.3 million, or $0.02 per share, in the second quarter of 2019, and $0.3 million in the first half of 2019.  Excluding acquisition costs, Eversource parent and other companies had net losses of $2.1 million, or $0.01 per share, in the second quarter of 2020, and $7.2 million, or $0.02 per share, in the first half of 2020.

We reaffirm 2020 earnings of between $3.60 per share and $3.70 per share and our long-term EPS growth rate through 20242025 from our regulated utility businesses in the upper half of betweenthe 5 to 7 percent.  

Aspercent range. We estimate to earn toward the lower end of the date2021 non-GAAP earnings guidance range of between $3.81 per share and $3.93 per share, which excludes the impact of transition costs related to our filing,October 2020 purchase of the outbreakassets of COVID-19 has not resulted in significant financial or operational impacts. We are continuing to closely monitorCMA and acquisition costs. That 2021 non-GAAP earnings estimate includes the COVID-19 pandemic, and we continue to operate under our pandemic$0.07 per share charge for the penalty proceeding for CL&P’s Tropical Storm Isaias response plan. However, we cannot at this time predict the impacts that the COVID-19 pandemic will havePURA assessed on our future financial condition, results of operations, cash flows, and our business operations.May 6, 2021.

Liquidity:

Cash flows provided by operating activities totaled $807.4 million in the first half of 2021, compared with $1.01 billion in the first half of 2020, compared with $924.6 million in the first half of 2019.2020. Investments in property, plant and equipment totaled $1.42 billion in the first half of 2021, compared with $1.40 billion in the first half of 2020, compared with $1.38 billion in the first half of 2019.2020.  Cash totaled $64.9$217.4 million as of June 30, 2020,2021, compared with $15.4$106.6 million as of December 31, 2019.2020. Our available borrowing capacity under our commercial paper programs totaled $1.61 billion$647.5 million as of June 30, 2020.2021.




In the first half of 2020,2021, we issued 11,960,000 common shares, which resulted in proceeds of $929.0 million, net of issuance costs.

In the first half of 2020, we issued $940 million$1.53 billion of new long-term debt, consisting of $400$425 million byat CL&P, $300 million at NSTAR Electric, $350 million by Eversource parent, and $190at PSNH, $350 million by NSTAR Gas. Proceeds from these new issuances were used primarily to refinance investments in eligible green expenditures at NSTAR Electric, to pay short-term borrowings at Eversource parent, and to refinance existing indebtedness, fund capital expenditures and for general corporate purposes$100 million at Aquarion Water Company of Connecticut. In the first half of 2021, we repaid $1.02 billion of long-term debt, consisting of $250 million at NSTAR Gas.Electric, $282 million at PSNH, $450 million at Eversource parent, and $40 million at Aquarion Water Company of Connecticut.

On May 6, 2020,5, 2021, our Board of Trustees approved a common share dividend payment of $0.5675$0.6025 per share, which was paid on June 30, 20202021 to shareholders of record as of May 20, 2020.2021.

Regulatory Items:
Impact
On April 28, 2021, PURA issued a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances. On May 6, 2021, as part of COVID-19
COVID-19 has adversely affected workersa separate penalty proceeding, PURA issued a notice of violation to CL&P that included an assessment of $30 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $1.6 million fine to be paid to the economyState of Connecticut’s general fund. On July 14, 2021, PURA issued a final decision in this penalty proceeding that included an assessment of $28.6 million, maintaining the $28.4 million performance penalty and caused significant volatilityreducing the $1.6 million fine for accident reporting to $0.2 million. We have accrued PURA’s assessment in the financial markets. Duefirst quarter of 2021, which resulted in an after-tax charge of $0.07 per share on the six months ended June 30, 2021 income statement. We believe we have meritorious defenses and intend to the inherent uncertaintyvigorously defend CL&P’s position, but do not have an estimate of the unprecedented and rapidly evolving situation, we continue to closely monitor how COVID-19 related developments affect Eversource. As of the date of our filing and basedultimate outcome on available information, we have not experienced, nor are we able to predict, significant impacts directly related to the pandemic that could adversely affect our current or future operations,CL&P’s financial position, results of operations andor cash flows. The extent offlows at this time. On June 10, 2021, CL&P appealed the impactApril 28, 2021 PURA decision.
40



In PURA’s April 28, 2021 decision, PURA also ordered CL&P to usadjust its future rates in a pending or future rate proceeding to reflect a monetary penalty in the form of a downward adjustment of 90 basis points in its allowed rate of return on equity (ROE), which is currently 9.25 percent. The estimated annual impact of a 90 basis point ROE reduction at CL&P would be a decrease of approximately $31 million of future will varyannual revenues and depend in large part onapproximately $21 million of lower annual earnings. The ROE reduction would impact revenues and earnings prospectively, once new rates are established. In light of our pending court appeal, coupled with the duration, scope and severityuncertainty of how long that penalty, if implemented, would last, we cannot predict the pandemic, andultimate outcome or the resulting financial impact on economic, health care and capital market conditions.

CL&P.
Operational: We provide a critical service to our customers and have taken extensive measures to maintain its safety and reliability. We have implemented our company-wide pandemic plan, which guides our emergency response, business continuity, and the precautionary measures we are taking to ensure the safety, health, and well-being of our employees, our customers, and our communities. We continue to adjust our company-wide pandemic plan to address various scenarios, including reduced workforce levels and limited mutual aid in the event of a significant storm event, and have implemented protective measures to mitigate the impact of COVID-19 on our workforce. We have implemented work from home policies where appropriate, resulting in nearly half of our employees working remotely. For our employees performing essential functions that are required onsite, such as field crews and system operations, we have taken significant safety measures, including establishing social distancing measures, enabling critical operations to be shifted to different control center locations if necessary, and increasing facility sanitization efforts and promoting both the availability and use of personal protective equipment.

In mid-March, we suspended non-critical work inside customer premises, which included energy audits inside our customers’ homes and businesses. These activities resumed in early July withPURA has an ongoing proceeding related to new rate designs to consider the implementation of new healthan interim rate decrease, low-income and safety guidelineseconomic development rates for the restart of energy efficiency services to customers. As of the date of our filing, we do not expect a significant impact on our 2020 energy efficiency program spending and efforts, which assumes the resumption of energy efficiency programs throughout the second half of 2020. Actual energy efficiency spending levels will depend on the extent and duration of the pandemic.

At this time, our workforce staffing levels continue to enable us to safely and reliably deliver our critical services to customers. Through August 5, 2020, a total of 50 employees had contracted COVID-19,electric customers, and a cumulative totalreview of 772 employees had self-quarantined, of which 751 employees have returned to the workforce. The number of quarantined employees peaked at 215 in April.

We are also preparing for the re-entry of our employees working remotely.  Our re-entry plan includes a multi-phase approach that is measured, cautious and gradual. The plan is informed by public health guidance with the safety of our employees and customers as our highest priority.   We are in the early phases of our re-entry plan and have returned fewer than 100 remote employees back to the workplace. State and federal guidelines, external conditions, and critical business priorities continue to inform the pace of our re-entry plan.  Significant health and safety measures and pandemic protocols, including social distancing requirements, the use of personal protective equipment, sanitization efforts and employee training, are in place for all employees working onsite today and specific plans have been developed for our eventual re-entry to the workplace.

In the states we serve, COVID-19 is currently spreading in a slower manner, as compared to the initial outbreak that began in mid-March, and measures used to control it, such as social distancing and face coverings, are having a positive reduction in its spread. Each of our states has seen a decrease in the infection rate and in the number of positive tests, as well as more capacity in hospitals, and improved testing availability and contact tracing.

Financial: Overall, our future financial position, results of operations, and cash flows could be negatively impacted by COVID-19 as it relates to the valuation of customer receivables, collectibility estimates and customer payment plans, elimination of late payment revenues, lower sales volumes primarily from PSNH's commercial and industrial customers, energy efficiency spending levels and incentives earned, and increased expenses for cleaning and supplies for personal protective equipment. Other potential negative financial impacts relate to market volatility on our equity and debt securities, access to, as well as cost of, capital resources, and the ability of various third-party vendors and suppliers to fulfill their obligations.



As of June 30, 2020, our allowance for uncollectible customer receivable balances of $270.0 million, of which $175.5 million relates to hardship accounts that are specifically recovered in rates charged to customers, adequately reflected the collection risk and net realizable value for our receivables and has not been materially impacted by COVID-19.  We will continue to evaluate the adequacy of the uncollectible allowance in future reporting periods based on an ongoing assessment of accounts receivable collections, delinquency statistics, the impact on electric residential customer bills because of higher usage in July driven by warmer than normal weather, COVID-19 developments, including any potential federal legislation, and analysis of aging-based quantitative assessments.  We continue to work closely with our state regulatory commissions and consumer advocates on several customer assistance measures, including more flexible and new payment plan options in order to mitigate the impact on customer rates in the future, as well as financial hardship and arrearage management programs for those customers who are unable to pay their utility bills. We developed these long-term solutions for customers in order to help minimize the extent of the impact of COVID-19 on customer receivable balances and customers’ affordability in light of the current financial impact they may experience. Our operating companies have also eliminated late payment charges at this time.

Beginning in March 2020, Connecticut, Massachusetts and New Hampshire established moratoriums on disconnections of residential and commercial customers for non-payment for utility service. In Connecticut, the moratorium on disconnections remains in place for residential customers, but the moratorium for commercial customers ended on August 1, 2020. In Massachusetts, the moratorium remains in place until it is lifted by the governor or state regulatory commission. In New Hampshire, the moratorium for both residential and commercial customers ended on July 15, 2020, however, PSNH has not yet begun to disconnect customers. As of the date of our filing, our operating companies have experienced some lower cash collections from customers because of the moratorium on disconnections and the economic slowdown resulting from the COVID-19 pandemic, primarily at our natural gas distribution businesses driven by the seasonality of their usage patterns. However, overall it is not a significant reduction in customer payments. We believe that we are developing successful mechanisms with our state regulatory commissions that allow, or will allow, us to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows.  As such, as of the date of our filing, our reserve for uncollectible accounts has not been materially adversely impacted.

As of June 30, 2020, net incremental costs as a result of COVID-19 that we have deferred totaled $6.6 million, of which $4.1 million was related to uncollectible expense incurred at our natural gas distribution segment.design implementation process. In the second quarter and first halfphase of 2020, respectively, incremental COVID-19 expenses that reduced pre-tax earnings totaled $6.2 million and $7.5 million and relatedthis case, PURA is considering a potential interim rate decrease for CL&P. It is unclear how such a decrease would relate to facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment. For further information on Connecticut, Massachusetts and New Hampshire COVID-19-related regulatory developments, see "Regulatory Developments and Rate Matters - COVID-19 Regulatory Dockets" included in this Management’s Discussion and Analysis.

An extended economic slowdown could result in lower demand for electricity, natural gas and/or water by our commercial and industrial customers. However, fluctuations in retail sales volumes for CL&P, NSTAR Electric, Yankee Gas, NSTAR Gas and our Connecticut water distribution business are not expected to materially impact earnings due to their respective state regulatory commission-approved distribution revenue decoupling mechanisms. Overall, we believe our risk of exposure to lower demand and resulting lost sales revenues is limited as our regulated utilities, with the exception of PSNH, are under cost-of-service rates with revenue decoupling mechanisms and a significant portion of uncollectible expenses are tracked for ultimate recovery. Our revenue decoupling mechanisms replace actual customer usage with a fixed annual revenue stream, and is reconciled each year90 basis point reduction PURA ordered as part of our annual decoupling filingits April 28, 2021 decision concerning Tropical Storm Isaias. It is also unclear how long such a decrease, if implemented, would last. As a result, we cannot predict the ultimate outcome or the resulting financial impact on CL&P. A negative outcome in each respective jurisdiction.

As of June 30, 2020, we did not identify indicators or triggering events for impairments to our goodwill, long-lived assets, available-for-sale debt securities, or equity method investment carrying values. Asthis phase of the date of our filing, based on available informationproceeding could adversely impact CL&P’s future revenues, earnings and the current market trends, we do not expect an impairment to these assets for the remainder of 2020.

We continue to monitor Eversource parent’s and our operating companies’ ability to access the global capital and credit markets. At the onset of the pandemic in the United States, liquidity in the commercial paper credit market began to deteriorate rapidly. However, federal legislative actions, including actions taken by the Federal Reserve, have provided sufficient liquidity and stabilization of the credit markets. An extended economic slowdown could result in Eversource parent and our operating companies finding difficulty in accessing necessary capital resources and incurring higher costs for those capital resources. As of the date of our filing, based on available information and the current market trends, we believe we will continue to have access to needed liquidity and capital resources to successfully execute our projected 2020 capital expenditures and strategies. We expect our existing borrowing availability under our commercial paper programs, our existing revolving credit facilities that serve to backstop those commercial paper programs, in addition to access to the debt and equity markets, will be sufficient to meet our future liquidity and capital resource needs.

cash flows.
In addition, the successful execution of our timeline for developing our offshore wind projects is based on several factors, including state and federal siting and permitting approvals. We are developing mitigation plans to address permitting delays due to COVID-19 restrictions on our offshore wind projects. For further information, see "Business Development and Capital Expenditures - Offshore Wind Business" included in this Management’s Discussion and Analysis.



Pension and PBOP plan assets and obligations are remeasured annually using a December 31st measurement date. Our future pension and PBOP obligations are highly dependent on benefit plan asset returns, interest rates, and discount rates, all of which could be materially impacted by an extended economic slowdown. Should these financial metrics be negatively impacted by COVID-19 as of December 31, 2020, it could result in the underperformance of our pension and PBOP plan investments, an increase in pension and PBOP obligations and employee benefit plan costs, and in a minimum pension funding requirement due by March 31, 2022 for the 2021 Plan year. We continue to monitor federal legislative pension developments that could provide additional pension funding relief.As of the date of our filing, we are unable to determine whether the pandemic will have a material impact to our future pension and PBOP obligations and plan costs and minimum funding requirements. NSTAR Electric and NSTAR Gas recover qualified pension and PBOP expenses through a rate reconciling mechanism that fully tracks the change in net pension and PBOP expenses each year. Our electric transmission companies' rates provide for an annual true-up of estimated to actual costs, which include pension and PBOP expenses.

Earnings Overview

Consolidated:  Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net Income Attributable to Common Shareholders and diluted EPS.
 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2020 2019 2020 2019
(Millions of Dollars, Except Per Share Amounts)Amount Per Share Amount Per Share Amount Per Share Amount Per Share
Net Income Attributable to Common
  Shareholders (GAAP)
$252.2
 $0.75
 $31.5
 $0.10
 $587.0
 $1.75
 $340.1
 $1.07
                
Regulated Companies (non-GAAP)$258.2
 $0.77
 $228.6
 $0.72
 $601.6
 $1.79
 $544.2
 $1.71
Eversource Parent and Other Companies (non-GAAP)(2.1) (0.01) 7.3
 0.02
 (7.2) (0.02) 0.3
 
Non-GAAP Earnings$256.1
 $0.76
 $235.9
 $0.74
 $594.4
 $1.77
 $544.5
 $1.71
Acquisition-Related Costs (after-tax) (1)
(3.9) (0.01) 
 
 (7.4) (0.02) 
 
Impairment of Northern Pass Transmission
  (after-tax)

 
 (204.4) (0.64) 
 
 (204.4) (0.64)
Net Income Attributable to Common
  Shareholders (GAAP)
$252.2
 $0.75
 $31.5

$0.10
 $587.0
 $1.75
 $340.1
 $1.07

 For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
(Millions of Dollars, Except Per Share Amounts)AmountPer ShareAmountPer ShareAmountPer ShareAmountPer Share
Net Income Attributable to Common Shareholders (GAAP)$264.5 $0.77 $252.2 $0.75 $630.7 $1.83 $587.0 $1.75 
Regulated Companies (1)
$272.2 $0.79 $257.5 $0.77 $652.1 $1.89 $602.4 $1.79 
Eversource Parent and Other Companies (non-GAAP) (1)
(0.9)— (1.4)(0.01)(8.4)(0.02)(8.0)(0.02)
Non-GAAP Earnings$271.3 $0.79 $256.1 $0.76 $643.7 $1.87 $594.4 $1.77 
Transition and Acquisition Costs (after-tax) (2)
(6.8)(0.02)(3.9)(0.01)(13.0)(0.04)(7.4)(0.02)
Net Income Attributable to Common Shareholders (GAAP)$264.5 $0.77 $252.2 $0.75 $630.7 $1.83 $587.0 $1.75 

(1)The 2020 amounts were revised to conform to the current period segment presentation.

(2) TheseThe 2020 acquisition costs are associated with our pending acquisitionpurchase of the assets of Columbia GasCMA on October 9, 2020. The 2021 costs are for the transition of Massachusetts.systems as a result of the CMA acquisition and costs associated with our pending water business acquisition.

Regulated Companies:  Our regulated companies comprise the electric distribution, electric transmission, natural gas distribution and water distribution segments. A summary of our segment earnings and EPS is as follows: 
 For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
(Millions of Dollars, Except Per Share Amounts)AmountPer ShareAmountPer ShareAmountPer ShareAmountPer Share
Electric Distribution$121.6 $0.35 $115.0 $0.34 $214.9 $0.62 $245.1 $0.73 
Electric Transmission137.6 0.40 129.5 0.39 273.0 0.79 256.2 0.76 
Natural Gas Distribution (1)
4.1 0.01 2.6 0.01 151.6 0.44 88.6 0.26 
Water Distribution8.9 0.03 10.4 0.03 12.6 0.04 12.5 0.04 
Net Income - Regulated Companies$272.2 $0.79 $257.5 $0.77 $652.1 $1.89 $602.4 $1.79 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
 2020 2019 2020 2019
(Millions of Dollars, Except Per Share Amounts)Amount Per Share Amount Per Share Amount Per Share Amount Per Share
Net Income - Regulated Companies (GAAP)$258.2
 $0.77
 $24.2
 $0.08
 $601.6
 $1.79
 $339.8
 $1.07
                
Electric Distribution$115.0
 $0.34
 $105.4
 $0.33
 $245.1
 $0.73
 $225.4
 $0.71
Electric Transmission, excluding Northern Pass Transmission impairment (Non-GAAP)129.5
 0.39
 117.0
 0.37
 256.2
 0.76
 235.3
 0.74
Natural Gas Distribution3.3
 0.01
 (1.8) 
 87.8
 0.26
 74.7
 0.23
Water Distribution10.4
 0.03
 8.0
 0.02
 12.5
 0.04
 8.8
 0.03
Net Income - Regulated Companies (Non-GAAP)$258.2
 $0.77
 $228.6
 $0.72
 $601.6
 $1.79
 $544.2
 $1.71
Impairment of Northern Pass Transmission
  (after-tax)

 
 (204.4) (0.64) 
 
 (204.4) (0.64)
Net Income - Regulated Companies (GAAP)$258.2
 $0.77
 $24.2
 $0.08
 $601.6
 $1.79
 $339.8
 $1.07

(1) The 2020 amounts were revised to conform to the current period segment presentation.

Our electric distribution segment earnings increased $9.6$6.6 million in the second quarter of 2020,2021, as compared to the second quarter of 2019,2020, due primarily to base distribution rate increases at PSNH effective July 1, 2019, at CL&P effective May 1, 2020 and May 1, 2019, and at NSTAR Electric effective January 1, 2020,2021 and at PSNH effective January 1, 2021, and higher earnings from CL&P's capital tracker mechanism due to increased electric system improvements. The earnings increase was partially offset by higher operations and maintenance expense, higher depreciation expense, and higher interestproperty tax expense.

Our electric distribution segment earnings increased $19.7decreased $30.2 million in the first half of 2020,2021, as compared to the first half of 2019,2020, due primarily to an after-tax charge of $0.07 per share at CL&P for the accrual of an assessment by PURA recorded in the first quarter of 2021 as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020. For further information, see "Regulatory Developments and Rate Matters - Connecticut" included in this Management’s Discussion and Analysis. Earnings were also unfavorably impacted by higher operations and maintenance expense driven by higher employee-related expenses and higher storm restoration costs, higher depreciation expense, higher property tax expense, and higher interest expense. The earnings decrease was partially offset by base distribution rate increases at NSTAR Electric effective January 1, 2021, at PSNH effective JulyJanuary 1, 2019,2021 and at CL&P effective May 1, 2020 and May 1, 2019, and at NSTAR Electric effective January 1, 2020, and higher earnings from CL&P's capital tracker mechanism due to increased electric system improvements. The earnings increase was partially offset by higher depreciation expense, higher operations and maintenance expense, higher interest expense, and the absence of the first quarter 2019 recognition of carrying charges on PSNH's 2013 through 2016 storm costs approved for recovery.
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Our electric transmission segment earnings increased $216.9$8.1 million and $225.3$16.8 million in the second quarter and the first half of 2020,2021, respectively, as compared to the second quarter and first half of 2019, due primarily to the absence in 2020 of the second quarter 2019 impairment of NPT, which resulted in an after-tax charge of $204.4 million, or $0.64 per share. Excluding the NPT impairment charge, earnings increased $12.5 million and $20.9 million in the second quarter and first half of 2020, respectively, as compared to the second quarter and first half of 2019, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure, andpartially offset by a higherlower benefit from the annual billing and cost reconciliation filing with FERC.

Our natural gas distribution segment earnings increased $5.1$1.5 million in the second quarter of 2020,2021, as compared to the second quarter of 2019,2020, due primarily to base distribution rate increases at Yankee Gas effective January 1, 2021 (with changes to customer rates beginning March 1, 2021) and at NSTAR Gas effective November 1, 2020. The earnings increase was partially offset by a loss from the addition of Eversource Gas Company of Massachusetts (EGMA) operations of $5.6 million due to the seasonality of the natural gas business, higher depreciation expense, and higher property tax expense.

Our natural gas distribution segment earnings increased $63.0 million in the first half of 2021, as compared to the first half of 2020, due primarily to the addition of EGMA earnings of $41.7 million. Additionally, the earnings increase was due to base distribution rate increases at NSTAR Gas effective November 1, 2020 and at Yankee Gas effective January 1, 2021 (with changes to customer rates beginning March 1, 2021), and higher earnings from capital tracker mechanisms due to continued investments in natural gas infrastructure, a base distribution rateinfrastructure. The earnings increase at Yankee Gas effective January 1, 2020 and lower interest expense,was partially offset by higher property taxdepreciation expense, higher operations and maintenance expense, and higher depreciation expense.

Our natural gas distribution segment earnings increased $13.1 million in the first half of 2020, as compared to the first half of 2019, due primarily to a base distribution rate increase at Yankee Gas effective January 1, 2020, higher earnings from capital tracker mechanisms due to
continued investments in natural gas infrastructure and lower interest expense, partially offset by higher operations and maintenance expense, higher depreciation expense, and higher property tax expense.

Our water distribution segment earnings increased $2.4decreased $1.5 million and $3.7increased $0.1 million in the second quarter and the first half of 2020,2021, respectively, as compared to the second quarter and the first half of 2019,2020. The earnings decrease in the second quarter was due primarily to higherlower revenues from Connecticut's capital tracker mechanism due to increased infrastructure improvements and lower depreciation expense.the sale of the Hingham, Massachusetts water system in the third quarter of 2020.

Eversource Parent and Other Companies:  Eversource parent and other companies had increased losses of $13.3$2.4 million and $14.9$6.0 million in the second quarter and the first half of 2020,2021, respectively, as compared to the second quarter and the first half of 2019,2020, due primarily to lower unrealized gains associated withan increase in the transition and integration costs of EGMA of $2.9 million and $5.6 million, respectively.

Impact of COVID-19
COVID-19 has adversely affected customers, workers and the U.S. economy. We provide a critical service to our equity method investmentcustomers and have taken extensive measures to maintain its safety and reliability. We continue to address the impacts of the COVID-19 pandemic and how the related developments affect Eversource. We are in a renewable energy fund, and acquisition coststhe early re-entry phase of our pandemic response plan, in which the majority of our employees under remote work arrangements are starting to transition back to the workplace. We have not experienced significant impacts directly related to the pending acquisitionpandemic that have materially affected our current operations, our workforce, or results of operations. The extent of the assetsimpact to us in the future will vary, and depend on the duration, scope and severity of Columbia Gasthe pandemic and the resulting impact on economic, health care and capital market conditions. The future impact will also depend on the outcome of future proceedings before our state regulatory commissions to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses.

The current and expected future financial impacts of COVID-19 as it relates to our businesses primarily relate to collectability of customer receivables and customer payment plans and increased expenses for cleaning and supplies for personal protective equipment.

As of June 30, 2021, our allowance for uncollectible customer receivable balance of $425.8 million, of which $210.7 million relates to hardship accounts that are specifically recovered in rates charged to customers, adequately reflected the collection risk and net realizable value for our receivables. We continue to evaluate the adequacy of the uncollectible allowance based on an ongoing assessment of accounts receivable collections and customer payment trends, economic conditions, delinquency statistics, aging-based quantitative assessments, the impact on residential customer bills because of energy usage and change in rates, flexible payment plans and financial hardship arrearage management programs being offered to customers, and COVID-19 developments, including any potential federal governmental pandemic relief programs and the expansion of unemployment benefit initiatives, which help to mitigate the potential for increasing customer account delinquencies. Additionally, management considered past economic declines and corresponding uncollectible reserves as part of the current assessment. This evaluation has shown that our operating companies have experienced an increase in aged receivables and lower cash collections from customers because of the length of the moratorium on disconnections in Connecticut and Massachusetts, and the economic slowdown resulting from the COVID-19 pandemic.

Based upon the evaluation performed, in the first half of $3.92021, we increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by $32.1 million for Eversource ($12.3 million for CL&P, $6.3 million for NSTAR Electric, and $7.4$14.7 million at our natural gas businesses). These COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs at our Connecticut and Massachusetts utilities or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as we believe it is probable that these costs will ultimately be recovered from customers in future rates. As of June 30, 2021, the total amount incurred as a result of COVID-19 included in the allowance for uncollectible accounts was $63.6 million at Eversource ($15.1 million at CL&P, $17.3 million at NSTAR Electric, and $30.1 million at our natural gas businesses). Based on the status of our COVID-19 regulatory dockets, communications with our state regulatory commissions, and policies and practices in the jurisdictions in which we operate, we believe our state regulatory commissions in Connecticut and Massachusetts will allow us to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows.

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On July 7, 2021, the NHPUC issued an order to New Hampshire utilities that concluded that recovery of incremental bad debt or waived late fees related to the COVID-19 pandemic would be addressed in a future rate case to the extent those costs are relevant at that time. The NHPUC concluded that New Hampshire utilities would not be permitted to establish a regulatory asset for these items. As a result of the order, in the second quarter of 2021, PSNH removed its $0.6 million deferral of net incremental COVID-19 costs. In New Hampshire, the moratorium on disconnections of non-hardship residential and commercial customers ended in late 2020 and PSNH has resumed disconnection activities, which has resulted in improved collection of outstanding customer receivable balances.

In Connecticut, the moratorium on disconnections of commercial customers ended in June 2021, but is still in place for residential customers. In Massachusetts, the moratorium on disconnections of commercial customers and residential customers ended in September 2020 and July 2021, respectively. Disconnection activities have largely resumed after these moratoria have expired.

We continue to work closely with our state regulatory commissions and consumer advocates on customer assistance measures, including payment plan options in order to mitigate the impact on customer rates in the future, as well as financial hardship and arrearage management programs for those customers who are unable to pay their utility bills. We developed these long-term solutions for customers in order to help minimize the extent of the impact of COVID-19 on customer receivable balances and customers’ affordability in light of the current financial impact they may experience.

In the first half of 2020, respectively, partially offset by a higher return at Eversource Service2021, net incremental costs incurred as a result of increased investments in property, plantCOVID-19 totaled $23.8 million, and related to uncollectible expense that impacts earnings, facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment, net of cost savings and lower interest expense.benefits under the CARES Act. In the first half of 2021, we deferred $21.8 million of these net incremental COVID-19 costs on the balance sheet. Net incremental COVID-19 expenses that reduced pre-tax earnings totaled $2.0 million on the statement of income in the first half of 2021. As of June 30, 2021, we deferred $45.8 million of net incremental COVID-19 costs on the balance sheet, of which $39.1 million of that deferral related to uncollectible expense that impacts earnings and $6.7 million related to cleaning and supplies for personal protective equipment.

Liquidity

Cash totaled $64.9$217.4 million as of June 30, 2020,2021, compared with $15.4$106.6 million as of December 31, 2019.2020.

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $1.45$2.00 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas, Yankee Gas and Aquarion Water Company of Connecticut are also parties to a five-year $1.45 billion revolving credit facility, which terminates on December 6, 2024. TheEversource parent and EGMA have a short-term $550 million revolving credit facility, serveswhich terminates on October 20, 2021. These revolving credit facilities serve to backstop Eversource parent's $1.45$2.00 billion commercial paper program.  

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit facility, which terminates on December 6, 2024. The revolving credit facility serves to backstop NSTAR Electric's $650 million commercial paper program.  

The amount of borrowings outstanding and available under the commercial paper programs were as follows:
Borrowings Outstanding as ofAvailable Borrowing Capacity as ofWeighted-Average Interest Rate as of
June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2021December 31, 2020
(Millions of Dollars)
Eversource Parent Commercial Paper Program$1,447.0 $1,054.3 $553.0 $945.7 0.19 %0.25 %
NSTAR Electric Commercial Paper Program555.5 195.0 94.5 455.0 0.11 %0.16 %
 Borrowings Outstanding as of Available Borrowing Capacity as of Weighted-Average Interest Rate as of
 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019
(Millions of Dollars)     
Eversource Parent Commercial Paper Program$351.5
 $1,224.9
 $1,098.5
 $225.1
 0.18% 1.98%
NSTAR Electric Commercial Paper Program142.0
 10.5
 508.0
 639.5
 0.12% 1.63%

There were no borrowings outstanding on either the Eversource parent or NSTAR Electric revolving credit facilities as of June 30, 20202021 or December 31, 2019.2020.

On May 15, 2020, CL&P and PSNH entered intohave uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire byon May 14, 2021. The CL&P agreements total $450 million and the PSNH agreements total $300 million.12, 2022. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of June 30, 2020.2021.

Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time.

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of June 30, 2021, there were intercompany loans from Eversource parent to PSNH of $48.6 million, and to a subsidiary of NSTAR Electric of $21.5 million. As of December 31, 2020, there were intercompany loans from Eversource parent to CL&P of $272.0 million, to PSNH of $119.3$46.3 million, and to a subsidiary of NSTAR Electric of $38.1 million. As of December 31, 2019, there were intercompany loans from Eversource parent to CL&P of $63.8 million, to PSNH of $27.0 million, and to a subsidiary of NSTAR Electric of $30.3$21.3 million. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets.


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Availability under Long-Term Debt Issuance Authorizations: On March 31, 2021, the DPU approved NSTAR Electric's request for authorization to issue up to $1.6 billion in long-term debt through December 31, 2023. On May 18, 2021, EGMA filed a petition with the DPU for authorization to issue up to $725 million in long-term debt through December 31, 2023. Currently, EGMA has no external long-term debt and has long-term intercompany borrowings from Eversource parent. The remaining Eversource operating companies, including CL&P and PSNH, have utilized the long-term debt authorizations in place with the respective regulatory commissions.

Long-Term Debt:Debt Issuances and Repayments: The following table summarizes long-term debt issuances and repayments:
(Millions of Dollars)Issuance/(Repayment)Issue Date or Repayment DateMaturity DateUse of Proceeds for Issuance/
Repayment Information
CL&P:
2.05% Series A First Mortgage Bonds$425.0 June 2021July 2031Repaid short-term debt, paid capital expenditures and working capital
NSTAR Electric:
3.10% 2021 Debentures300.0 May 2021June 2051
Refinanced investments in eligible green
expenditures, which were previously financed in
2019 and 2020
3.50% Series F Senior Notes(250.0)June 2021September 2021Paid on par call date in advance of maturity date
PSNH:
4.05% Series Q First Mortgage Bonds(122.0)March 2021June 2021Paid on par call date in advance of maturity date
3.20% Series R First Mortgage Bonds(160.0)June 2021September 2021Paid on par call date in advance of maturity date
2.20% Series V First Mortgage Bonds350.0 June 2021June 2031Repaid short-term debt, including short-term debt used to redeem Series R First Mortgage Bonds, paid capital expenditures and working capital
Other:
Eversource Parent 2.50% Series I Senior Notes(450.0)February 2021March 2021Paid on par call date in advance of maturity date
Eversource Parent 2.55% Series S Senior Notes350.0 March 2021March 2031Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes
Aquarion Water Company of Connecticut 3.31%
   Senior Notes
100.0 April 2021April 2051Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital
Aquarion Water Company of Connecticut 5.50% Notes(40.0)April 2021April 2021Paid at maturity
(Millions of Dollars)Issuance/(Repayment) Issue Date or Repayment Date Maturity Date Use of Proceeds for Issuance/
Repayment Information
NSTAR Electric:       
3.95% 2020 Debentures$400.0
 March 2020 April 2030 Refinanced investments in eligible green expenditures, which were previously financed in 2018 and 2019
5.10% Series E Senior Notes(95.0) March 2020 March 2020 Paid at maturity
Other:       
Eversource Parent 3.45% Series P Senior Notes350.0
 January 2020 January 2050 Paid short-term borrowings
NSTAR Gas 4.46% Series N First Mortgage Bonds(125.0) January 2020 January 2020 Paid at maturity
Yankee Gas 4.87% Series K First Mortgage Bonds(50.0) April 2020 April 2020 Paid at maturity
NSTAR Gas 2.33% Series R First Mortgage Bonds75.0
 May 2020 May 2025 Refinanced existing indebtedness, funded capital expenditures and for general corporate purposes
NSTAR Gas 3.15% Series S First Mortgage Bonds115.0
 May 2020 May 2050 Refinanced existing indebtedness, funded capital expenditures and for general corporate purposes


In June 2020, Aquarion Water Company of MassachusettsJuly 2021, CL&P provided notice to its bondholdersthe trustee of the CL&P 4.375% PCRBs that itCL&P will redeem $32.2the $120.5 million of long-term debtbonds on September 1, 2021, in connection withadvance of the sale to the town of Hingham, Massachusetts of its water system and treatment plant that supplies water to the towns of Hingham, Hull and North Cohasset.  As a result, this debt was classified as current as of June 30, 2020.

2028 maturity date.
Long-Term Debt Issuance Authorization:
On January 27, 2020, the DPU approved NSTAR Gas' request for authorization to issue up to $270 million in long-term debt through December 31, 2021. On July 31, 2020, the NHPUC approved PSNH's request for authorization to issue up to $200 million in long-term debt through December 31, 2020.

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $21.6 million of RRB principal payments and $9.6 million of interest payments in the first half of 2021, and paid $21.6 million of RRB principal payments and $10.3 million of interest payments in the first half of 2020 and paid $30.7 million of RRB principal payments and $16.2 million of interest payments in the first half of 2019.2020.

Common Share Issuances and 2019 Forward Sale Agreement: On June 15, 2020, Eversource completed an equity offering of 6,000,000 common shares at a price per share of $86.26. Eversource plans to use the net proceeds of this offering to fund a portion of the planned purchase of the assets of CMA. The issuance of these common shares resulted in proceeds of $509.2 million, net of issuance costs.

In June 2019, Eversource completed an equity offering consisting of 5,980,000 common shares issued directly by the Company and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. Under the forward sale agreement, 11,960,000 common shares were borrowed from third parties and sold by the underwriters. The forward sale agreement allowed Eversource, at its election and prior to May 29, 2020, to physically settle the forward sale agreement by issuing common shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially, $71.48 per share) or, alternatively, to settle the forward sale agreement in whole or in part through the delivery or receipt of shares or cash. The forward sale price was subject to adjustment daily based on a floating interest rate factor and would decrease in respect of certain fixed amounts specified in the agreement, such as dividends.

Eversource previously issued 6,000,000 common shares under the forward sale agreement in December 2019. On March 23, 2020, Eversource physically settled a portion of the forward sale agreement by delivering 1,500,000 common shares in exchange for net proceeds of $105.7 million. Subsequently, on March 26, 2020, Eversource physically settled the remaining portion of the forward sale agreement by delivering 4,460,000 common shares in exchange for net proceeds of $314.1 million. The forward sale price used to determine the cash proceeds received by Eversource was calculated based on the initial forward sale price, as adjusted in accordance with the forward sale agreement.

The March and June 2020 common share issuances of 5,960,000 and 6,000,000, respectively, resulted in total proceeds of $929.0 million, net of issuance costs, and were reflected in shareholders' equity and as financing activities on the statement of cash flows.

Eversource used the net proceeds received upon the direct issuance of common shares and the net proceeds received upon settlement of the forward sale agreement to repay short-term debt under the commercial paper program, to fund capital spending and clean energy initiatives, and for general corporate purposes.

Cash Flows:  Cash flows provided by operating activities totaled $807.4 million in the first half of 2021, compared with $1.01 billion in the first half of 2020, compared with $924.62020. Operating cash flows were unfavorably impacted by income tax payments made of $91.0 million in the first half of 2019. The increase in operating cash flows was due primarily to2021, compared with income tax refunds received of $37.9 million in the first half of 2020, as compared to income tax payments of $51.3 million in the same period in 2019 and the timing of other working capital items. The income tax cash flowpayments made on our accounts payable, a $71.1 million increase was driven primarily byin Pension and PBOP contributions made in the deferralfirst half of estimated tax2021, cash payments frommade in the second quarterfirst half of 20202021 for storm restoration costs of approximately $49 million related to July 2020 under COVID-19 relief legislation. Partially offsetting these favorable impacts wereTropical Storm Isaias at CL&P, the timing of cash collections on our accounts receivable, and cash payments made on our accounts payable,the timing of other working capital items. These unfavorable impacts were partially offset by improvements in the timing of collections for regulatory tracking mechanisms primarily related to transmission costs and the absenceaddition of $68.8 million in DOE Phase IV proceeds received by CYAPC and YAEC in the second quartercash flows of 2019.EGMA.



On May 6, 2020,5, 2021, our Board of Trustees approved a common share dividend payment of $0.5675$0.6025 per share, which was paid on June 30, 20202021 to shareholders of record as of May 20, 2020.2021. In the first half of 2021, we paid cash dividends of $402.2 million and issued non-cash dividends of $11.6 million in the form of treasury shares, totaling dividends of $413.8 million. In the first half of 2020, we paid cash dividends of $366.8 million and issued non-cash dividends of $11.6 million in the form of treasury shares, totaling dividends of $378.4 million. In the first half of 2019, we paid cash dividends of $323.3 million and issued non-cash dividends of $16.3 million in the form of treasury shares, totaling dividends of $339.6 million.

Eversource issues treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment and share purchase plan, and matching contributions under the Eversource 401k Plan.

In the first half of 2020,2021, CL&P, NSTAR Electric and PSNH paid $69.5$140.2 million, $196.5$283.2 million, and $22.3$210.4 million, respectively, in common stock dividends to Eversource parent.

Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP expense.  In the first half of 2020,2021, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $1.40$1.42 billion, $407.2$393.3 million, $447.5$426.1 million, and $169.2$134.3 million, respectively.

We expect the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to both debt and equity markets, will be sufficient to meet any working capital and future operating requirements, and capital investment forecasted opportunities.
44



Credit Ratings: On May 6, 2021, S&P changed CL&P’s outlook from stable to negative and affirmed its existing outlook for Eversource parent, NSTAR Electric and PSNH. On June 14, 2021, Moody’s changed Eversource parent’s and CL&P’s outlook from stable to negative.

Business Development and Capital Expenditures

Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP expense (all of which are non-cash factors), totaled $1.46 billion in the first half of 2021, compared to $1.44 billion in the first half of 2020, compared to $1.41 billion in the first half of 2019.2020.  These amounts included $127.0$105.6 million and $97.6$127.0 million in the first half of 20202021 and 2019,2020, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.

Electric Transmission Business:  Our consolidated electric transmission business capital expenditures increaseddecreased by $1.0$22.0 million in the first half of 2020,2021, as compared to the first half of 2019.2020.  A summary of electric transmission capital expenditures by company is as follows:  
 For the Six Months Ended June 30,
(Millions of Dollars)20212020
CL&P$163.4 $192.7 
NSTAR Electric199.8 159.9 
PSNH72.1 104.7 
Total Electric Transmission Segment$435.3 $457.3 
 For the Six Months Ended June 30,
(Millions of Dollars)2020 2019
CL&P$192.7
 $220.6
NSTAR Electric159.9
 166.4
PSNH104.7
 59.6
NPT
 9.7
Total Electric Transmission Segment$457.3
 $456.3

Eastern Massachusetts and New Hampshire Transmission Projects: These projects consist of a portfolio of electric transmission upgrades in southern New Hampshire, northern Massachusetts and continuing into the greater Boston metropolitan area, of which 28 upgrades are in Eversource's service territory (two in New Hampshire and 26 in Massachusetts). The two New Hampshire upgrades, including the Merrimack Valley Reliability Project, have been placed in service, and 2023 Massachusetts upgrades have been placed in service. On December 17, 2019, the Massachusetts Siting Board issued a favorable decision on the Sudbury-Hudson Reliability Project, the last project requiring such approval. On January 17, 2020, the Town of Sudbury and Protect Sudbury, a community group, appealed the decision to the Massachusetts Supreme Judicial Court. On June 25, 2021, the Massachusetts Supreme Judicial Court and oral arguments were conducted on March 17, 2020. On July 9, 2020, a similarrejected the Town’s appeal, by the Town of Winchesteraffirming all aspects of the Massachusetts Siting Board’s order approvingfinal decision. On March 11, 2021, Protect Sudbury filed a petition with the Wakefield - Woburn Reliability Project was unanimouslySurface Transportation Board, a federal agency, claiming the Massachusetts Bay Transportation Authority (MBTA) did not have the right to lease a portion of its inactive railroad corridor, a claim previously rejected by the Massachusetts AppealsLand Court. The Court simultaneously rejectedMBTA filed its response on April 30, 2021 and a decision is anticipated by the Town’s subsequent appealend of the Siting Board’s decision allowing local permitting processes to be bypassed. Construction on our portion ofyear. The two other remaining upgrades, the project had commenced inMystic-Woburn and the Towns of Stoneham and Woburn in May 2020. The remaining upgradesWakefield-Woburn reliability projects, are under construction and are expected to be placed in service in 2021.2022. We estimate our portion of the investment will be approximately $750 million, of which, $466.8$549 million has been spent and capitalized through June 30, 2020.2021.

Hartford-AreaSoutheastern Massachusetts Transmission ProjectsProjects:: These projects consist of 27a portfolio of electric transmission and substation upgrades in southeastern Massachusetts, including Cape Cod, required to reinforce the Southeastern Massachusetts transmission system and bring the system into compliance with applicable national and regional reliability standards. Of the twelve upgrades in Eversource’s service territory, four require siting approvals from the Massachusetts regulatory agencies, of which, one has received approval and is currently under construction, two have completed hearings and are awaiting orders and one, a joint project with National Grid, has yet to be filed. In addition to the project with siting approval, three additional projects, in the Hartford, Connecticut area with an expected investment of
approximately $350 million. As of June 30, 2020, 26permitted locally, are under construction, and five projects have been placed in service, and one project is in active construction and is expected toin-service. We estimate our portion of the investment will be placed in service in the fourth quarterapproximately $175 million, of 2020.  As of June 30, 2020, CL&P hadwhich, $36 million has been spent and capitalized $290.8 million in costs associated with these projects.

through June 30, 2021.
Seacoast Reliability Project
:  The Seacoast Reliability Project consists of a 13-mile, 115kV transmission line within several New Hampshire communities, using a combination of overhead, underground and underwater line designs to help meet the growing demand for electricity in the Seacoast region. The project was placed in service on May 29, 2020 and resulted in an investment of approximately $123 million.



Ready Path Solution: The Ready Path Solution was chosen by ISO-NE as part of the first competitive solicitation for reliability upgrades in New England to meet the energy shortfall that will be created with the retirement of the Mystic Generating Station in Massachusetts in 2024.  Our portion of the portfolio consists of installing new equipment at Eversource’s existing North Cambridge Substation with an estimated investment of approximately $14 million.

All project costs are anticipated to be fully recoverable through transmission rates.

Distribution Business:  A summary of distribution capital expenditures is as follows:
For the Six Months Ended June 30,
(Millions of Dollars) CL&P NSTAR Electric PSNH Total Electric Natural GasWater Total
2021
Basic Business$102.0 $79.4 $26.9 $208.3 $97.3 $6.6 $312.2 
Aging Infrastructure71.8 106.0 33.1 210.9 207.4 44.1 462.4 
Load Growth and Other36.0 68.2 6.6 110.8 32.4 0.3 143.5 
Total Distribution209.8 253.6 66.6 530.0 337.1 51.0 918.1 
Solar— (1.1)— (1.1)— — (1.1)
Total$209.8 $252.5 $66.6 $528.9 $337.1 $51.0 $917.0 
2020
Basic Business$92.8 $101.9 $22.1 $216.8 $38.3 $4.9 $260.0 
Aging Infrastructure91.0 113.6 45.0 249.6 175.8 49.6 475.0 
Load Growth and Other36.2 51.0 8.1 95.3 23.4 0.4 119.1 
Total Distribution220.0 266.5 75.2 561.7 237.5 54.9 854.1 
Solar— 1.0 — 1.0 — — 1.0 
Total$220.0 $267.5 $75.2 $562.7 $237.5 $54.9 $855.1 

45

 For the Six Months Ended June 30,
(Millions of Dollars) CL&P  NSTAR Electric  PSNH  Total Electric  Natural Gas Water  Total
2020             
Basic Business$92.8
 $101.9
 $22.1
 $216.8
 $38.3
 $4.9
 $260.0
Aging Infrastructure91.0
 113.6
 45.0
 249.6
 175.8
 49.6
 475.0
Load Growth and Other36.2
 51.0
 8.1
 95.3
 23.4
 0.4
 119.1
Total Distribution220.0
 266.5
 75.2
 561.7
 237.5
 54.9
 854.1
Solar
 1.0
 
 1.0
 
 
 1.0
Total$220.0
 $267.5
 $75.2
 $562.7
 $237.5
 $54.9
 $855.1
2019             
Basic Business$142.9
 $142.4
 $19.1
 $304.4
 $29.4
 $5.6
 $339.4
Aging Infrastructure96.0
 96.6
 52.7
 245.3
 125.8
 42.9
 414.0
Load Growth and Other32.0
 28.6
 7.1
 67.7
 26.3
 0.9
 94.9
Total Distribution270.9
 267.6
 78.9
 617.4
 181.5
 49.4
 848.3
Solar
 4.8
 
 4.8
 
 
 4.8
Total$270.9
 $272.4
 $78.9
 $622.2
 $181.5
 $49.4
 $853.1


For the electric distribution business, basic business includes the purchase of meters, tools, vehicles, information technology, transformer replacements, equipment facilities, and the relocation of plant. Aging infrastructure relates to reliability and the replacement of overhead lines, plant substations, underground cable replacement, and equipment failures. Load growth and other includes requests for new business and capacity additions on distribution lines and substation additions and expansions.

For the natural gas distribution business, basic business addresses daily operational needs including meters, pipe relocations due to public works projects, vehicles, and tools. Aging infrastructure projects seek to improve the reliability of the system through enhancements related to cast iron and bare steel replacement of main and services, corrosion mediation, and station upgrades. Load growth and other reflects growth in existing service territories including new developments, installation of services, and expansion.

For the water distribution business, basic business addresses daily operational needs including periodic meter replacement, water main relocation, facility maintenance, and tools. Aging infrastructure relates to reliability and the replacement of water mains, regulators, storage tanks, pumping stations, wellfields, reservoirs, and treatment facilities. Load growth and other reflects growth in our service territory, including improvements of acquisitions, installation of new services, and interconnections of systems.

Pending Acquisition of Assets of Columbia Gas of MassachusettsNew England Service Company:: On February 26, 2020, EversourceApril 8, 2021, Aquarion and NiSource Inc.New England Service Company (NESC) entered into an asset purchasea definitive agreement (the Agreement) pursuant to which EversourceAquarion would acquire certain assets that comprise NiSource’s local natural gas distribution businessall outstanding shares of NESC. NESC provides regulated water service to approximately 10,000 customers in Connecticut, Massachusetts, which is doing businessand New Hampshire. The acquisition will be structured as Columbia Gas of Massachusetts (CMA). The purchase price of $1.1 billion includes a target working capital amount that is subject to adjustment to reflect actual working capital as of the closing date.stock-for-stock exchange and Eversource would acquirewill issue approximately 330,000 residential, commercial, and industrial natural gas customers, as well as over 5,000 miles of natural gas distribution pipeline across more than 60 communities in Massachusetts.

The liabilities to be assumed by Eversource under the Agreement specifically exclude any liabilities (past or future) arising out of, or related to, the fires and explosions that occurred on September 13, 2018 in Lawrence, Andover and North Andover, Massachusetts related to the delivery of natural gas by CMA, including certain subsequent events, all as described and in the DPU's Order on Scope dated December 23, 2019 (D.P.U. 19-141) (the Greater Lawrence Incident or GLI). The liabilities to be assumed also exclude any further emergency events prior to the closing of the acquisition related to the restoration and reconstruction with respect to the GLI, including any losses arising out of, or related to, any litigation, demand, cause of action, claim, suit, investigation, proceeding, indemnification agreements or rights. Eversource is not assuming any of CMA's or NiSource Inc.'s debt obligations or notes payable.

463,000 common shares at closing. The transaction requires approval from the PURA, DPU, the Maine Public Utilities Commission, the FERC,NHPUC and the Federal Communications Commission,other regulators and the resulting rate plan requires DPU approval as well. The relevant review period under the Hart-Scott-Rodino Act has expired. On July 2, 2020, Eversource, CMA and NiSource filed an application with the DPU seeking approval of the sale of CMA assets to Eversource, which included a settlement with the Massachusetts Attorney General’s Office, the DOER, and the Low-Income Weatherization and Fuel Assistance Program Network. The application requests approval of the transaction and the related rate plan by September 30, 2020.



Eversource expects to finance the asset acquisition through a combination of debt and equity issuances in a ratio that is consistent with our current consolidated capital structure. The transaction is expected to close shortly afterby the end of 2021. On August 3, 2021, NESC shareholders voted to approve the third quarter of 2020.pending acquisition.

Offshore Wind Business: Our offshore wind business includes 50 percent ownership interests in both North East Offshore and Bay State Wind, which together hold PPAs and contracts for the Revolution Wind, South Fork Wind and Sunrise Wind projects, as well as offshore leases throughissued by BOEM. Our offshore wind projects are being developed and constructed through a joint and equal partnership with Ørsted. This partnership also participates in new procurement opportunities for offshore wind energy in the Northeast U.S. On July 21, 2020, New York's second

The offshore wind RFP for up to 2,500 MW was issued, and we expect to participate in that RFP.

Eversource has a 50 percent ownership interest in North East Offshore, which holds the Revolution Wind and South Fork Wind projects, as well asleases include a 257 square-mile ocean lease off the coasts of Massachusetts and Rhode Island. Eversource also hasIsland and a 50 percent ownership interest in Bay State Wind, which holds the Sunrise Wind project. Bay State Wind's separate, adjacent 300-square-mile ocean lease is located approximately 25 miles south of the coast of Massachusetts adjacent to the North East Offshore area.Massachusetts. In aggregate, the Bay State Wind and the North East Offshorethese ocean lease sites jointly-owned by Eversource and Ørsted could eventually develop at least 4,000 MW of clean, renewable offshore wind energy. As of June 30, 2020, Eversource's total equity investment balance in its offshore wind business was $660.3 million.

We are preparing our final project designs and advancing the appropriate federal, state and local siting and permitting processes along with our offshore wind partner, Ørsted, all of which is competitively sensitive. We currently expect to make investments in our offshore wind business of approximately $200$300 million to $400$500 million during 2020,2021, subject to advancing our final project designs and federal, state and local permitting processes. As of June 30, 2021 and December 31, 2020, Eversource's total equity investment balance in its offshore wind business was $982.6 million and $887.1 million, respectively.

The following table provides a summary of the Eversource and Ørsted major projects with announced contracts:
Wind ProjectState ServicingSize (MW)Term (Years)Price per MWhPricing TermsContract Status
Revolution WindRhode Island40020$98.43Fixed price contract; no price escalationApproved
Revolution WindConnecticut30420$98.43 - $99.50Fixed price contracts; no price escalationApproved
South Fork WindNew York (LIPA)9020$160.332 percent average price escalationApproved
South Fork WindNew York (LIPA)4220$86.252 percent average price escalationApproved
Sunrise WindNew York (NYSERDA)
924 (1)
25
$110.37 (2)
Fixed price contract; no price escalationApproved
Wind ProjectState ServicingSize (MW)Term (Years)Price per MWhPricing TermsContract Status
Revolution WindRhode Island40020$98.43Fixed price contract; no price escalationApproved
Revolution WindConnecticut30420
(1) 
Fixed price contracts; no price escalationApproved
South Fork WindNew York (LIPA)9020$160.332 percent average price escalationApproved
South Fork WindNew York (LIPA)4020$86.252 percent average price escalation
(3) 
Sunrise WindNew York (NYSERDA)88025
$110.37 (2)
Fixed price contract; no price escalationApproved


(1)(1)    The contractual capacity increased from 880 MWs to 924 MWs, as allowed under the original agreement with NYSERDA.
The pricing for the Revolution Wind contracts in Connecticut has not been publicly disclosed.
(2)
Index Offshore Wind Renewable Energy Certificate (OREC) strike price.
(3)
The Long Island Power Authority (LIPA) agreed to expand the original 20-year PPA from 90 MW to 130 MW through an amendment to the original agreement. Negotiations are currently underway, and a final amendment is expected in 2020.

The in-service dates for our(2)    Index Offshore Wind Renewable Energy Certificate (OREC) strike price.

Our offshore wind projects are subject to receipt of federal, state and local approvals necessary to construct and operate the projects. The federal permitting process is governed by BOEM, and state approvals are required from New York, Rhode Island and Massachusetts. Significant delays in the siting and permitting process resulting from the timeline for obtaining approval from BOEM and the state and local agencies as well as the impact of COVID-19, could adversely impact the timing of these projects' in-service dates.

In June 2020, BOEM released its Offshore Wind Cumulative Impact Analysis as part of the Draft Supplemental Environmental Impact Statement (EIS) for a non-affiliated offshore wind project. The study assessed the environmental, social,Federal Siting and economic impacts of constructing 22 GW of offshore wind projects in every federal lease area along the East Coast. While this analysis was performed for the purpose of completing the permitting review of a non-affiliated project, we anticipate that this analysis has produced a replicable methodology for completing this analysis that should reduce the timeline for completing future BOEM reviews.

Permitting Process:The South Fork Wind project has commenced the federal siting and permitting process with the filing of its Construction Operations Plan (COP) application with BOEM in October 2018. The first major milestone in the BOEM review process is an issuance of a Notice of Intent (NOI) to complete an Environmental Impact Statement (NOI)(EIS), which South Fork Wind has received. Althoughreceived in 2018. In August 2020, we have received BOEM's NOIthe final review schedule from BOEM regarding South Fork Wind’s COP approval. In January 2021, BOEM released its Draft EIS for the South Fork Wind project, we are awaitingwhich assessed the environmental, social, and economic impacts of constructing the project. Identified impacts were negligible to major adverse impacts to marine and terrestrial archaeological resources and to historic, and non-historic visual resources from project construction and operations. The Draft EIS also analyzed four alternatives to be evaluated as part of the process. Each of the identified alternative configurations had a confirmed review schedule outlining when BOEM will complete its reviewsimilar level of environmental impacts, and if an alternative configuration was selected, the South Fork Wind COP.project would still meet the contractual output under its PPA. A Final EIS is expected in the third quarter of 2021 and a final decision is expected in January 2022.

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Based on BOEM’s final review schedule and final United States Army Corps of Engineers approval, we expect to start construction on South Fork in early 2022. South Fork Wind is designated as a “Covered Project” pursuant to Title 41 of the Fixing America’s Surface Transportation Act (“FAST41”)(FAST41) and a Major Infrastructure Project under Section 3(e) of Executive Order 13807, which provides greater federal attention on meeting the project’s permitting timelines. South Fork Wind’s FAST41 designation is due for reauthorization in 2020.

Revolution Wind and Sunrise Wind filed itstheir COP applicationapplications with BOEM in March 2020 and will seekSeptember 2020, respectively. Both projects received FAST41 designation in 2020. On April 30, 2021, Revolution Wind received BOEM’s NOI to prepare an EIS for the review of the COP submitted by Revolution Wind. For Revolution Wind, a final EIS is expected in the endfirst quarter of 2020. We2023, and a final decision is expected in the third quarter of 2023. For Sunrise Wind, we are awaiting BOEM to outline its timeline for completing the review of the Revolution Windits COP in an NOI. The Sunrise Wind COP application is expectedNOI, which we expect to be filedreceive in 2020.2021.



State and Local Siting and Permitting Process:South Fork Wind commenced the New York state sittingsiting process in 2018. On April 8,September 17, 2020, South Fork Wind filed a Joint Proposal in the New York State Article VII siting application. Among other things, the Joint Proposal included proposed mitigations to certain environmental, community and construction impacts associated with constructing electrical infrastructure. South Fork Wind was joined by PSEG Long Island and several citizens advocacy organizations. On October 9, 2020, the state ofJoint Proposal was signed by the New York Administrative Law Judge grantedDepartments of Public Service, Environmental Conservation, Transportation and State as well as the Office of Parks, Recreation and Historic Preservation. On March 18, 2021, the New York Public Service Commission approved an order adopting the Joint Proposal and granting a changeCertificate of Environmental Compatibility and Public Need. Two petitions for re-hearing of the New York Public Service Commission decision have been filed, and South Fork Wind responded on May 3, 2021 opposing the re-hearing requests. In April 2021, South Fork Wind filed its Environmental Management and Construction Plan with the New York Public Service Commission, which details the plans on how the project will be constructed in accordance with the conditions of the approved Joint Proposal. Comments from reviewing agencies and parties have been received and South Fork Wind is in the process of reviewing and addressing those comments in the plan.

On September 10, 2020, the Town of East Hampton and the East Hampton Town Trustees announced that they had reached an agreement with South Fork Wind to issue the start ofnecessary easements and other real estate rights necessary to construct the South Fork Wind evidentiary hearing schedule to September 30, 2020, due to ongoing COVID-19 workproject. The Town approved the easements on January 21, 2021, and travel restrictions. OnshoreTrustees approved the lease on January 25, 2021.

State permitting applications in Rhode Island for Revolution Wind and near-shore site investigation activities occurring within New York’s jurisdiction were suspended in March 2020 due to work restrictions imposed in response to the COVID-19 pandemic. The activities that were suspended included offshore site investigations, and onshore environmental and geotechnical surveys. These activities resumed in early June following the release of revised guidance from the New York Statefor Sunrise Wind were filed in December 2020. The Revolution Wind state siting application was deemed complete on January 22, 2021, and the preliminary hearing was completed on March 22, 2021. On April 26, 2021, the Rhode Island Energy ResearchFacilities Siting Board issued a Preliminary Decision and Development Authority (NYSERDA). We are developing mitigation plansOrder on scheduling with Advisory Opinions for local and state agencies to addressbe submitted by August 26, 2021, and evidentiary hearings will begin prior to October 12, 2021. The Sunrise Wind state siting application was deemed complete on July 1, 2021, initiating the impacts offormal review process for the approximately two-month suspension of field activities due to these COVID-19 restrictions. These mitigation plans are intended to limit the impact and risk to our project timelines.project.

Because BOEM has not yet released a confirmedProjected In-Service Dates: Based on BOEM’s permit schedule outlining when BOEM will complete its review of the South Fork Wind COP, as well as the impacts from the COVID-19 related shut-downs in New York, these impacts will very likely delay the in-service date ofwe expect the South Fork Wind project to beyondbe in-service by the projected end of 2022 in-service date.

We anticipate the principal state permitting applications for2023. For Revolution Wind, and Sunrise Wind will be filed in Rhode Island and New York, respectively,based on the BOEM permit schedule included in the second half of 2020. Sunrise Wind was subjectNOI, we currently expect an in-service date in 2025, and are continuing to analyze the same New York work restrictions as South Fork Wind between March 2020 and June 2020.overall project schedule. For Sunrise Wind, these restrictions prevented progressing our site surveys in New York and within New York jurisdictional waters due to COVID-19 restrictions. These restrictions adversely impact the preparation of our federal and statewe do not yet have BOEM’s permitting applications. At this time, we are unable to predict the potential impact of those delaystimeline. Therefore, depending on the projectedschedule included in the pending BOEM NOI, we would expect an in-service dates of the end of 2023 and the end of 2024date in 2025 for Revolution Wind and Sunrise Wind, respectively.Wind.

FERC Regulatory Matters

FERC ROE Complaints: Four separate complaints were filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (collectively, the Complainants). In each of the first three complaints, filed on October 1, 2011, December 27, 2012, and July 31, 2014, respectively, the Complainants challenged the NETOs' base ROE of 11.14 percent that had been utilized since 2005 and sought an order to reduce it prospectively from the date of the final FERC order and for the separate 15-month complaint periods. In the fourth complaint, filed April 29, 2016, the Complainants challenged the NETOs' base ROE billed of 10.57 percent and the maximum ROE for transmission incentive (incentive cap) of 11.74 percent, asserting that these ROEs were unjust and unreasonable.

The ROE originally billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent. On October 16, 2014, the FERC set the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017 by the U.S. Court of Appeals for the D.C. Circuit (the Court).

All amounts associated with the first complaint period have been refunded. Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of June 30, 20202021 and December 31, 2019.2020. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of June 30, 20202021 and December 31, 2019.2020.

On October 16, 2018, FERC issued an order on all four complaints describing how it intends to address the issues that were remanded by the Court. FERC proposed a new framework to determine (1) whether an existing ROE is unjust and unreasonable and, if so, (2) how to calculate a replacement ROE. Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the October 16, 2018 order provided the FERC does not change the proposed methodology or alter its implementation in a manner that has a material impact on the results.

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The FERC order included illustrative calculations for the first complaint using FERC's proposed frameworks with financial data from that complaint. Those illustrative calculations indicated that for the first complaint period, for the NETOs, which FERC concludes are of average financial risk, the preliminary just and reasonable base ROE is 10.41 percent and the preliminary incentive cap on total ROE is 13.08 percent.

If the results of the illustrative calculations were included in a final FERC order for each of the complaint periods, then a 10.41 percent base ROE and a 13.08 percent incentive cap would not have a significant impact on our financial statements for all of the complaint periods. These preliminary calculations are not binding and do not represent what we believe to be the most likely outcome of a final FERC order.

On November 21, 2019, FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners, in which FERC adopted a new methodology for determining base ROEs. Various parties sought rehearing. On December 23, 2019, the NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs’ cases.

On May 21, 2020, the FERC issued its order in Opinion No. 569-A on the rehearing of the MISO transmission owners' cases, in which FERC again changed its methodology for determining the MISO transmission owners' base ROEs. Various parties have appealed the MISO transmission owners' opinion. ThisOn November 19, 2020, the FERC issued Opinion No. 569-B denying rehearing of Opinion No. 569-A and reaffirmed the methodology previously adopted in Opinion No. 569-A. The new methodology differs significantly from the methodology proposed by FERC in its October 16, 2018 order to determine the NETOs' base ROEs in its four pending cases.



Given the significant uncertainty regarding the applicability of the FERC opinions in the MISO transmission owners' two complaint cases to the NETOs' pending four complaint cases, Eversource concluded that there is no reasonable basis for a change to the reserve or recognized ROEs for any of the complaint periods at this time. As well, Eversource cannot reasonably estimate a range of any gain or loss for any of the four complaint proceedings at this time.

Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

A change of 10 basis points to the base ROE used to establish the reserves would impact Eversource's after-tax earnings by an average of approximately $3 million for each of the four 15-month complaint periods. From the date of a final FERC order, a change of 10 basis points to the base ROE would impact Eversource’s 2021 after-tax earnings by approximately $5 million, or $0.01 per share, per year, and will increase slightly over time as we continue to invest in our transmission infrastructure.

FERC Notice of Inquiry on ROE:On March 21, 2019, FERC issued a Notice of Inquiry (NOI) seeking comments from all stakeholders on FERC's policies for evaluating ROEs for electric public utilities, and interstate natural gas and oil pipelines. On June 26, 2019, the NETOs jointly filed comments supporting the methodology established in the FERC’s October 16, 2018 order with minor enhancements going forward. The NETOs jointly filed reply comments in the FERC ROE NOI on July 26, 2019. On May 12, 2020, the NETOs filed supplemental comments in the NOI ROE docket. At this time, Eversource cannot predict how this proceeding will affect its transmission ROEs.

FERC Notice of Inquiry and Proposed Rulemaking on Transmission Incentives:On March 21, 2019, FERC issued an NOI seeking comments on FERC's policies for implementing electric transmission incentives. On June 26, 2019, Eversource filed comments requesting that FERC retain policies that have been effective in encouraging new transmission investment and remain flexible enough to attract investment in new and emerging transmission technologies. Eversource filed reply comments on August 26, 2019. On March 20, 2020, FERC issued a Notice of Proposed Rulemaking (NOPR) on transmission incentives. The NOPR intends to revise FERC’s electric transmission incentive policies to reflect competing uses of transmission due to generation resource mix, technological innovation and shifts in load patterns. FERC proposes to grant transmission incentives based on measurable project economics and reliability benefits to consumers rather than its current project risks and challenges framework. On July 1, 2020, Eversource filed comments generally supporting the NOPR.

On April 15, 2021, FERC issued a Supplemental NOPR that proposes to eliminate the existing 50 basis point return on equity for utilities that have been participating in a regional transmission organization (RTO ROE incentive) for more than three years. On June 25, 2021, the NETOs jointly filed comments strongly opposing the Commission’s proposal. On July 26, 2021, the NETOs filed Supplemental NOPR reply comments responding to various parties advocating for the elimination of the RTO Adder. If the FERC issues a final order eliminating the RTO ROE incentive as proposed in the Supplemental NOPR, the estimated annual impact (using 2020 actual data) on Eversource’s after-tax earnings is approximately $15 million. The Supplemental NOPR contemplates an effective date 30 days from the final order.

At this time, Eversource cannot predict howthe ultimate outcome of these proceedings, will affectincluding possible appellate review, and the resulting impact on its transmission incentives.

FERC Transmission Rate Settlement:
On December 28, 2015, FERC initiated a proceeding to review the NETOs' regional and local transmission formula rates due to a lack of transparency, finding that the formula rates appeared to lack sufficient details to determine how costs are derived and recovered in rates. Parties have been engaged in further settlement negotiations and reached an agreement in principle on October 22, 2019.  On June 15, 2020, the NETOs (including CL&P, NSTAR Electric and PSNH) filed an uncontested Settlement Agreement with FERC, which was signed by all six New England state regulatory commissions, New England States Committee on Electricity, New England Municipals and all the NETOs. The Settlement Agreement proposes to implement a new regional and local rate structure effective on January 1, 2021, establishes annual formula rate transparency procedures effective June 15, 2021 and contains a rate moratorium through December 31, 2024. There is no time requirement under which the FERC must issue an order, which is required for the new formula rate template to go into effect.

U.S. Federal Corporate Income Taxes: Local and regional transmission service rates do not currently reflect amortization of excess ADIT (EDIT) balances that resulted from the Tax Cuts and Job Act (the Act). On November 15, 2018, FERC issued a Policy Statement and a separate Notice of Proposed Rulemaking addressing accounting and rate issues related to ADIT changes resulting from the Act. On November 21, 2019, FERC issued its final rule requiring public utilities with transmission formula rates to make adjustments to ADIT and EDIT. On July 30, 2020, Eversource submitted its filing in compliance with FERC's final rule to address the EDIT resulting from the Act.

Regulatory Developments and Rate Matters

Electric, Natural Gas and Water Utility Base Distribution Rates: The regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first half of 2020,2021, changes made to the regulated companies’ rates did not have a material impact on their earnings, financial position, or cash flows.  For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource 20192020 Form 10-K.

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Connecticut:
COVID-19 Regulatory Dockets:
CL&P Tropical Storm Isaias Costs: Beginning in March 2020, Connecticut, Massachusetts and New Hampshire established moratoriums on disconnections of residential and commercial customers for non-payment for utility service.  In Connecticut, the moratorium for residential customers will remain in place until the declared COVID-19 state of emergency is lifted by the governor or state regulatory commission, but ended on August 1, 2020 for commercial customers. In New Hampshire, the moratorium on residential and commercial utility disconnections ended on July 15, 2020, however PSNH has not yet begun to disconnect customers. In Massachusetts, although several utilities petitioned the state regulatory commission on May 29, 2020 to extend the moratorium until September 1, 2020 for commercial customers and November 15, 2020 for residential customers, the commission has not acted on that petition, and therefore, the moratorium will remain in place until it is lifted by the governor or commission.

In Connecticut, PURA opened a docket to address COVID-19 developments, including issuing orders on March 18, 2020, April 29, 2020 and May 15, 2020 that authorized electric, natural gas and water utilities to establish a regulatory asset for COVID-19 uncollectible customer receivable expenses and costs associated with the related orders.  PURA’s April 29, 2020 order, as supplemented on May 15, 2020, also allowed the inclusion of working capital costs in the regulatory asset, and authorized electric, natural gas and water utilities to establish a payment plan program designed to assist any customer who requests financial assistance during the COVID-19 pandemic. On July 10, 2020, PURA denied a request from a coalition of large industrial customers to reduce or suspend certain electric and natural gas charges during the COVID-19 pandemic.



In Massachusetts, on April 17, 2020, a coalition of electric, natural gas and water utilities submitted a comprehensive proposal to the DPU that would enable the state’s utilities to provide flexible payment arrangements to those customers who need financial assistance, while simultaneously maintaining the financial integrity necessary to continue to conduct and finance utility operations through appropriate ratemaking treatment and the establishment of a regulatory asset for COVID-19 related expenses, including uncollectible customer receivable expenses, among other proposals. On May 11, 2020, the DPU opened an inquiry into establishing policies and practices regarding customer assistance and ratemaking measures for electric and natural gas companies in response to the effects of COVID-19. On June 26, 2020, the DPU approved a COVID-19 customer outreach plan.

Consistent with the above-described developments in Connecticut and Massachusetts, Eversource continues to work closely with the NHPUC on COVID-19 developments impacting our New Hampshire electric and water utilities, including the proposed establishment of flexible payment plan options for those customers who need financial assistance in order to mitigate the size of the uncollectible customer receivable balances that would be borne by all customers in the future.

For information on COVID-19-related regulatory deferrals recorded and COVID-19 charges incurred, see "Impact of COVID-19" included in this Management’s Discussion and Analysis.

Storm Event:

On August 4, 2020, Tropical Storm Isaias caused extensive and catastrophic damage to our electric distribution system, which resulted in significant numbers and significantdurations of customer outages, primarily in Connecticut. In terms of customer outages, this storm was one of the worst in CL&P’s history. AsPURA will investigate the prudence of costs incurred by CL&P to restore service in response to Tropical Storm Isaias. That investigation is expected to occur either in a separate proceeding not yet initiated or as part of CL&P’s next rate review proceeding. Tropical Storm Isaias resulted in deferred storm restoration processcosts of approximately $225 million at CL&P and $243 million at Eversource as of June 30, 2021. The estimated cost of restoration may continue to change as additional cost information becomes available and final storm costs are deferred or capitalized. Although PURA found that CL&P’s performance in its preparation for and response to Tropical Storm Isaias fell below applicable performance standards in certain instances, CL&P believes it will be able to present credible evidence in a future proceeding demonstrating there is currently underway,no reasonably close causal connection between the alleged sub-standard performance and the storm costs incurred. While it is possible that some amount of storm costs may be disallowed by PURA in a future proceeding, any such amount cannot be estimated at this time. Management expects theCL&P continues to believe that these storm restoration costs toassociated with Tropical Storm Isaias were prudently incurred and meet the criteria for specific cost recoveryrecovery; and as a result, management does not expect the storm costs incurredcost review by PURA to have a material impact toon the financial position or results of operations of Eversource or CL&P.

CL&P expectsTropical Storm Isaias Response Investigation: In August 2020, PURA opened a docket to investigate the preparation for and response to Tropical Storm Isaias by Connecticut utilities, including CL&P. On April 28, 2021, PURA issued a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances. Specifically, PURA concluded that CL&P did not satisfy the performance standards for managing its municipal liaison program, timely removing electrical hazards from blocked roads, communicating critical information to its customers, or meeting its obligation to secure adequate external contractor and mutual aid resources in a timely manner. Based on its findings, PURA ordered CL&P to adjust its future rates in a pending or future rate proceeding to reflect a monetary penalty in the form of a downward adjustment of 90 basis points in its allowed rate of return on equity (ROE), which is currently 9.25 percent. In its decision, PURA explained that additional monetary penalties and further enforcement orders pursuant to Connecticut statute would be considered in a separate proceeding that was initiated on May 6, 2021. On June 10, 2021, CL&P appealed the April 28, 2021 PURA decision.

On May 6, 2021, as part of the penalty proceeding, PURA issued a notice of violation that included an assessment of $30 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $1.6 million fine for violations of accident reporting requirements to be paid to the State of Connecticut’s general fund. On July 14, 2021, PURA issued a final decision in this penalty proceeding that included an assessment of $28.6 million, maintaining the $28.4 million performance penalty and reducing the $1.6 million fine for accident reporting to $0.2 million. PURA directed the $28.4 million performance penalty to be credited to customers on electric bills beginning on August 1, 2021 through July 31, 2022. The $28.4 million is the maximum statutory penalty amount under applicable Connecticut law in effect at the time of Tropical Storm Isaias, which is 2.5 percent of CL&P’s annual distribution revenues. We have accrued PURA’s assessment in the first quarter of 2021. As of June 30, 2021, the liability for the assessment was recorded as a current regulatory liability on CL&P’s balance sheet and as a charge to Operations and Maintenance expense on the six months ended June 30, 2021 income statement. The after-tax earnings impact of this charge was $0.07 per share. We believe we have meritorious defenses and intend to vigorously defend CL&P’s position, but do not have an estimate of the ultimate outcome on CL&P’s financial position, results of operations or cash flows at this time.

The estimated annual impact of a 90 basis point ROE reduction at CL&P would be a decrease of approximately $31 million of future annual revenues and approximately $21 million of lower annual earnings. The ROE reduction would impact revenues and earnings prospectively, once new rates are established. PURA stated it intends to use its interim rate decrease proceeding that is currently pending to implement the storm-related return on equity penalty ordered in the April 28, 2021 decision, which is subject to our pending court appeal. In light of our pending court appeal, coupled with the uncertainty of how long that penalty, if implemented, would last, we cannot predict the ultimate outcome or the resulting financial impact on CL&P.

PURA New Rate Design and Rate Review Proceeding: Pursuant to an October 2020 Connecticut law, PURA opened a proceeding related to new rate designs to consider the implementation of an interim rate decrease, low-income and economic development rates for electric customers, and a review of that rate design implementation process. The proceeding has separate phases. In the first phase, PURA issued a final decision on June 23, 2021 directing CL&P to offer new rates to certain small commercial and industrial customers that will reduce demand charges and instead include volumetric charges for electricity based on kWh used. Customers can elect to transition to these new offered rates, which are effective November 1, 2021. CL&P does not expect the PURA decision in the first phase of the proceeding to have a material impact on its earnings, financial position, or cash flows.

In the second phase of this case, PURA is considering a potential interim rate decrease for CL&P. It is unclear how such a decrease would relate to the 90 basis point reduction PURA ordered as part of its April 28, 2021 decision concerning Tropical Storm Isaias. It is also unclear how long such a decrease, if implemented, would last. As a result, we cannot predict the ultimate outcome or the resulting financial impact on CL&P. A negative outcome in this phase of the proceeding could adversely impact CL&P’s future revenues, earnings and cash flows. Hearings commenced in May 2021. We expect to receive a draft decision on the interim rate decrease in September 2021, with a final decision in October 2021. As part of the second phase, PURA is also investigating low-income and other economic development rates. A procedural schedule for this part of the second phase has not yet been set by PURA. We cannot estimate the final impact to CL&P as a result of this proceeding at this time.

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Residential Customer Bill Credits and Reimbursements for Storm-Related Outages: On June 30, 2021, in accordance with an October 2020 Connecticut law, PURA issued a final decision establishing standards and procedures for residential customers to receive bill credits and other compensation for spoiled food and medicine from Connecticut utilities, including CL&P, after future weather-related emergencies. The PURA decision requires, effective after July 1, 2021, that Connecticut utilities provide customers with a $25 bill credit for each 24-hour period of time subsequent to 96 consecutive hours of an electric distribution outage after a major storm or emergency. The decision also authorizes residential customers to submit a claim to receive up to $250 in compensation for any medication and food that expired or spoiled due to an electric distribution outage lasting longer than 96 consecutive hours. The decision also establishes a process by which the electric utilities (i) can elect to submit a filing within seven days of a storm event that proposes when the 96-hour time period commenced for that storm event based on relevant weather data, when it was safe to deploy crews into the field, and the other relevant factors identified in the decision; and (ii) can elect to seek recoverywithin 14 days of these anticipated deferreda storm costs through its applicable regulatory recovery process.event a waiver from providing customer bill credits, for reasons such as line worker safety and continuing emergency or potentially hazardous conditions that prevented or delayed restoration activities.

Connecticut:

CL&P Rate SuspensionAdjustment Mechanisms (RAM) Filing:: On July 31, 2020, PURA temporarily suspended its June 26, 2020 approval of certain delivery rate components effective July 1, 2020, and ordered CL&P to restore rates to those in effect as of June 30, 2020.2020 in order to allow PURA ordered that it willtime to reexamine the administrative changes torates. Rates were adjusted effective August 1, 2020. On December 2, 2020, PURA issued a final decision in which it adjusted the energy and transmission adjustment clauses provisionally permitted by its June 26, 2020 letter.  PURA indicated that this was due totiming of the convergence of a number of recent events, including the COVID-19 crisis and its corresponding effect on customer energy usage, as well as the warmer than normal weather in July. PURA intends to reexamine rates to ensure that CL&P is not over-collecting revenues in the short-term. These rates, the Revenue Decoupling Mechanism Charge,annual rate adjustments for the Transmission Adjustment Clause (TAC) charge, the Non-Bypassable Federally Mandated Congestion Charge and(NBFMCC), the Electric System Improvements Tracker charge, are adjusted periodically(ESI), Competitive Transition Assessment (CTA), System Benefits Charge (SBC) and reconciled annuallyRevenue Decoupling Mechanism (RDM) so that these rates take effect on May 1st of each year. On March 1, 2021, consistent with this new timing, CL&P filed for new rates for these rate components for effect on May 1, 2021. Additionally, CL&P proposed delaying and extending recovery of 2020 under-recoveries associated with these rates beginning October 1, 2021. On April 28, 2021, PURA issued its interim decision on CL&P’s proposal that accepted the May 1, 2021 rate proposals for the CTA, TAC, ESI and RDM, but ordered that these rate changes go into effect on June 1, 2021, as opposed to May 1, 2021. Further, PURA elected to keep in accordance withplace the policiescurrent rates for the NBFMCC and proceduresSBC until further review of the costs being recovered in those rates could be performed. Finally, PURA indicated it would further review CL&P’s proposal to begin recovery of 2020 under-recoveries associated with any differences refundedthese rates on October 1, 2021, and over what the period of recovery would be at a later time. We expect to or recovered from, customers.  We do not expect the delayreceive a draft decision in changes of the rates will haveAugust and a material impactfinal decision on our financial position, results of operations or cash flows.September 15, 2021.

Massachusetts:

NSTAR GasCL&P Impact of 2021 Rate CaseChanges:: On November 8, 2019, NSTAR Gas filed its application with the DPU, which sought a distributionJune 1, 2021, CL&P implemented an overall rate increase of $38.0 million. As part$0.00411 per kWh for residential customers. The rate increase included delivery rate changes for the CTA, TAC, ESI and RDM charges. Partially offsetting the rate increase was a base distribution rate decrease, which was driven by a reduction to storm cost amortization resulting from a 2019 PURA decision. For residential customers with 700 kWh monthly usage, the impact of this filing, NSTAR Gas also proposedthe June 1, 2021 rate changes equated to continuean increase of $2.88 on monthly customer bills. For residential customers on standard offer service, on July 1, 2021, CL&P implemented a decrease in the supply rate, resulting in an overall rate decrease of $0.01388 per kWh. For residential customers on standard offer service with 700 kWh monthly usage, the impact of the July 1, 2021 rate decrease equated to a reduction of $9.72 on monthly customer bills.

By September 1, 2021, CL&P expects to adjust its ongoing Gas System Enhancement Program (GSEP), includerates for the GSEP investments since 2015 into base$28.4 million penalty imposed by PURA for non-compliance with performance standards that will be provided as credits on customer bills. This credit will go back to customers over a one-year period. On October 1, 2021, CL&P expects to implement new NBFMCC and SBC delivery rates and implementto adjust rates for $196 million of under-recoveries as of December 31, 2020 associated with the NBFMCC, TAC and RDM. We expect a performance-based ratemaking plan. A final decision from PURA on these rate changes and the DPU is expected by October 30, 2020, with rates effective November 1, 2020.corresponding collection period for the under-recoveries balance on September 15, 2021.

Massachusetts:

NSTAR Electric Grid Modernization and AMI Filing: On July 1, 2021, NSTAR Electric submitted for DPU approval its four-year $198.8 million grid modernization plan for the years 2022 through 2025 and proposed $620 million Advanced Metering Infrastructure (AMI) investment and implementation plan for the years 2023 through 2028. As required, the plan includes a ten-year vision, five-year strategic plan, including a full deployment of advanced metering functionality, separate four-year grid-facing and customer-facing short-term investment plans, and a composite business case in support of the AMI plan. NSTAR Electric has requested expedited approval of $38.3 million of the $198.8 million grid modernization plan before December 2021 for previously approved continuing investments that are currently in process and are expected to be spent in 2022 so these activities will not be interrupted pending full plan approval. NSTAR Electric expects DPU guidance for all investment years by the second quarter of 2022. For AMI investments, additional review of the cost recovery mechanism will be conducted in a subsequent proceeding that will be filed later in 2021 with a decision expected in the second half of 2022.

New Hampshire:

COVID Regulatory Docket: On July 7, 2021, the NHPUC issued an order to New Hampshire utilities that concluded that recovery of incremental bad debt or waived late fees related to the COVID-19 pandemic would be addressed in the context of the utility’s next rate case when related costs, to the extent those costs remain relevant under test year based rate-setting, would be considered in the context of the utility’s full revenue requirement and overall rate of return. The NHPUC concluded that New Hampshire utilities would not be permitted to establish a regulatory asset for these items. As a result of the order, in the second quarter of 2021, PSNH removed its $0.6 million deferral of net incremental COVID-19 costs.

PSNH Distribution Rates: In connection with an October 9, 2020 settlement agreement, PSNH is permitted step increases effective August 1, 2021 and August 1, 2022 to reflect plant additions in the calendar years 2020 and 2021, respectively. On April 26, 2019, PSNH filed an application with the NHPUC for approval of a temporary annual base distribution rate increase, effective July 1, 2019. On June 27, 2019,30, 2021, the NHPUC approved a settlement agreement that was reached by PSNH, the NHPUC Staff, the Office of the Consumer Advocate, and another settling party, to implement a temporary annual base distribution rate increase of $28.3 million. Although new rates were implemented on August 1, 2019 to customers, the provisions of the temporary base distribution rate increase were effective July 1, 2019. The settlement agreement also permits PSNHstep adjustment for 2020 plant in service to recover approximately $68.5a revenue requirement of $11.0 million, in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges, which is included in the temporary rate increase.

On May 28, 2019, PSNH filed an application with the NHPUC for a permanent increase in base distribution rates of approximately $70 million, effective July 1, 2020, which includes the temporary rate increase request.  The temporary rates are subject to reconciliation based on the outcomeafter completion of the permanent rate case now before the NHPUC. The NHPUC is permitted up to twelve months to adjudicate the permanent rate application from the date of filing.  On April 24, 2020, Governor Sununu issued an emergency order, which extends the maximum adjudication period by six months,audit, for a maximum of 18 months. A decision by the NHPUC is now expected in the fourth quarter of 2020.  Temporary rates will remain in effect with a reconciliation of permanent rates retroactive to Julyeffective August 1, 2019 once permanent rates are set.

2021.
Audit Report of Generation Asset Divestiture-Related Costs: On May 15, 2020, the NHPUC Audit Staff issued a final report on the audit of PSNH’s generation asset divestiture-related costs and resulting securitized and stranded costs. The findings in the audit report as well as other aspects of the divestiture process were further investigated by NHPUC Staff through the discovery phase, which was completed in July. Technical sessions and settlement discussions will continue through the third quarter of 2020 and a final decision is expected by the end of 2020.  We continue to believe the amounts deferred are probable of recovery.


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Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and, at times, difficult, subjective or complex judgments.  Changes in these estimates, assumptions and judgments, in and of themselves, could materially impact our financial position, results of operations or cash flows.  Our management communicates to and discusses with the Audit Committee of our Board of Trustees significant matters relating to critical accounting policies.  Our critical accounting policies that we believed were the most critical in nature were reported in the Eversource 20192020 Form 10-K.  There have been no material changes with regard to these critical accounting policies.

Other Matters

Accounting Standards:  For information regarding new accounting standards, see Note 1B, "Summary of Significant Accounting Policies – Accounting Standards," to the financial statements.

Contractual Obligations and Commercial Commitments: There have been noSee Note 9B, "Commitments and Contingencies – Long-Term Contractual Arrangements," for discussion of material changes to contractual obligations identified and no material changes
with regard to the contractual obligations and commercial commitments previously disclosed insince the Eversource 20192020 Form 10-K.

Web Site:  Additional financial information is available through our website at www.eversource.com.  We make available through our website a link to the SEC's EDGAR website (http://www.sec.gov/edgar/searchedgar/companysearch.html), at which site Eversource's, CL&P's, NSTAR Electric's and PSNH's combined Annual Reports on Form 10-K, combined Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports may be reviewed.  Information contained on the Company's website or that can be accessed through the website is not incorporated into and does not constitute a part of this combined Quarterly Report on Form 10-Q.


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RESULTS OF OPERATIONS – EVERSOURCE ENERGY AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for Eversource for the three and six months ended June 30, 20202021 and 20192020 included in this combined Quarterly Report on Form 10-Q:  
For the Three Months Ended June 30,For the Six Months Ended June 30,
(Millions of Dollars)20212020Increase/(Decrease)20212020Increase
Operating Revenues$2,122.5 $1,953.1 $169.4 $4,948.4 $4,326.9 $621.5 
Operating Expenses: 
Purchased Power, Fuel and Transmission650.1 630.1 20.0 1,648.6 1,506.7 141.9 
Operations and Maintenance411.1 332.1 79.0 876.7 674.1 202.6 
Depreciation274.6 240.5 34.1 545.4 476.7 68.7 
Amortization5.6 23.4 (17.8)113.6 73.2 40.4 
Energy Efficiency Programs129.0 115.4 13.6 317.0 263.7 53.3 
Taxes Other Than Income Taxes200.5 178.0 22.5 409.9 359.7 50.2 
Total Operating Expenses1,670.9 1,519.5 151.4 3,911.2 3,354.1 557.1 
Operating Income451.6 433.6 18.0 1,037.2 972.8 64.4 
Interest Expense145.4 134.2 11.2 283.1 268.9 14.2 
Other Income, Net46.6 30.2 16.4 80.8 54.3 26.5 
Income Before Income Tax Expense352.8 329.6 23.2 834.9 758.2 76.7 
Income Tax Expense86.4 75.5 10.9 200.4 167.4 33.0 
Net Income266.4 254.1 12.3 634.5 590.8 43.7 
Net Income Attributable to Noncontrolling Interests1.9 1.9 — 3.8 3.8 — 
Net Income Attributable to Common Shareholders$264.5 $252.2 $12.3 $630.7 $587.0 $43.7 
 For the Three Months Ended June 30, For the Six Months Ended June 30,
(Millions of Dollars)2020 2019 Increase/
(Decrease)
 2020 2019 Increase/
(Decrease)
Operating Revenues$1,953.1
 $1,884.5
 $68.6
 $4,326.9
 $4,300.3
 $26.6
Operating Expenses: 
  
  
    
  
Purchased Power, Fuel and Transmission630.1
 620.9
 9.2
 1,506.7
 1,595.8
 (89.1)
Operations and Maintenance332.1
 328.0
 4.1
 674.1
 663.6
 10.5
Depreciation240.5
 219.1
 21.4
 476.7
 434.0
 42.7
Amortization23.4
 38.9
 (15.5) 73.2
 109.9
 (36.7)
Energy Efficiency Programs115.4
 105.8
 9.6
 263.7
 246.0
 17.7
Taxes Other Than Income Taxes178.0
 181.2
 (3.2) 359.7
 365.7
 (6.0)
Impairment of Northern Pass Transmission
 239.6
 (239.6) 
 239.6
 (239.6)
Total Operating Expenses1,519.5
 1,733.5
 (214.0) 3,354.1
 3,654.6
 (300.5)
Operating Income433.6
 151.0
 282.6
 972.8
 645.7
 327.1
Interest Expense134.2
 132.7
 1.5
 268.9
 264.5
 4.4
Other Income, Net30.2
 45.9
 (15.7) 54.3
 76.9
 (22.6)
Income Before Income Tax Expense329.6
 64.2
 265.4
 758.2
 458.1
 300.1
Income Tax Expense75.5
 30.8
 44.7
 167.4
 114.2
 53.2
Net Income254.1
 33.4
 220.7
 590.8
 343.9
 246.9
Net Income Attributable to Noncontrolling Interests1.9
 1.9
 
 3.8
 3.8
 
Net Income Attributable to Common Shareholders$252.2
 $31.5
 $220.7
 $587.0
 $340.1
 $246.9

Eversource's consolidated financial information includes the results of EGMA beginning on October 9, 2020. The natural gas distribution assets acquired from CMA on October 9, 2020 were assigned to EGMA.

Operating Revenues
Sales Volumes: A summary of our retail electric GWh sales volumes, our firm natural gas MMcf sales volumes, and our water MG sales volumes, and percentage changes, is as follows: 
ElectricFirm Natural GasWater
 Sales Volumes (GWh)Percentage
Increase
Sales Volumes (MMcf)Percentage
(Decrease)/Increase
Sales Volumes (MG)Percentage
(Decrease)/Increase
Three Months Ended June 30:202120202021202020212020
Traditional1,853 1,789 3.6 %— — — %311 482 (35.5)%
Decoupled and Special Contracts (1)(2)
10,142 9,658 5.0 %24,790 26,772 (7.4)%5,530 5,185 6.7 %
Total Sales Volumes11,995 11,447 4.8 %24,790 26,772 (7.4)%5,841 5,667 3.1 %
Six Months Ended June 30:
Traditional3,804 3,695 2.9 %— — — %570 916 (37.8)%
Decoupled and Special Contracts (1)(2)
20,874 20,123 3.7 %90,792 87,335 4.0 %10,007 9,557 4.7 %
Total Sales Volumes24,678 23,818 3.6 %90,792 87,335 4.0 %10,577 10,473 1.0 %
 Electric Firm Natural Gas Water
 Sales Volumes (GWh) Percentage
Increase/(Decrease)
 Sales Volumes (MMcf) Percentage
Increase/(Decrease)
 Sales Volumes (MG) Percentage
Increase
Three Months Ended June 30:2020 2019  2020 2019  2020 2019 
Traditional1,789
 1,757
 1.8 % 
 
  % 482
 459
 5.0%
Decoupled and Special Contracts (1)
9,658
 9,853
 (2.0)% 18,506
 18,191
 1.7 % 5,185
 4,834
 7.3%
Total Sales Volumes11,447
 11,610
 (1.4)% 18,506
 18,191
 1.7 % 5,667
 5,293
 7.1%
                  
Six Months Ended June 30:                 
Traditional3,695
 3,724
 (0.8)% 
 
  % 916
 910
 0.7%
Decoupled and Special Contracts (1)
20,123
 21,037
 (4.3)% 57,568
 63,358
 (9.1)% 9,557
 9,212
 3.7%
Total Sales Volumes23,818
 24,761
 (3.8)% 57,568
 63,358
 (9.1)% 10,473
 10,122
 3.5%

(1)    Special contracts are unique to Yankee Gas natural gas distribution customers who take service under such an arrangement and generally specify the amount of distribution revenue to be paid to Yankee Gas regardless of the customers' usage.

(1)
(2)    Eversource acquired CMA's natural gas distribution assets on October 9, 2020. Prior year sales volumes have been presented for comparative purposes.

Special contracts are unique to Yankee Gas natural gas distribution customers who take service under such an arrangement and generally specify the amount of distribution revenue to be paid to Yankee Gas regardless of the customers' usage.

Weather, fluctuations in energy supply costs, conservation measures (including utility-sponsored energy efficiency programs), and economic conditions affect customer energy usage and water consumption.  Industrial sales volumes are less sensitive to temperature variations than residential and commercial sales volumes.  In our service territories, weather impacts both electric and water sales volumes during the summer and both electric and natural gas sales volumes during the winter; however, natural gas sales volumes are more sensitive to temperature variations than electric sales volumes.  Customer heating or cooling usage may not directly correlate with historical levels or with the level of degree-days that occur.

Fluctuations in retail electric sales volumes at PSNH impact earnings ("Traditional" in the table above).  For CL&P, NSTAR Electric, YankeeNSTAR Gas, NSTAREGMA, Yankee Gas, and our Connecticut water distribution business, fluctuations in retail sales volumes do not materially impact earnings due to their respective regulatory commission-approved distribution revenue decoupling mechanisms ("Decoupled" in the table above).  These distribution revenues are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized.

52




Operating Revenues: Operating Revenues by segment increased/(decreased) for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, as follows:
(Millions of Dollars)Three Months EndedSix Months Ended
Electric Distribution$60.3 $155.3 
Natural Gas Distribution100.6 432.5 
Electric Transmission34.5 65.6 
Water Distribution(2.7)(3.2)
Other46.2 94.5 
Eliminations(69.5)(123.2)
Total Operating Revenues$169.4 $621.5 
(Millions of Dollars)Three Months Ended Six Months Ended
Electric Distribution$54.4
 $26.0
Natural Gas Distribution3.5
 (16.8)
Electric Transmission27.1
 56.2
Water Distribution1.8
 3.2
Other33.0
 69.5
Eliminations(51.2) (111.5)
Total Operating Revenues$68.6
 $26.6

Electric and Natural Gas (excluding EGMA) Distribution Revenues:
Base Distribution Revenues:
Base electric distribution revenues increased $32.1$22.9 million and $63.9$46.1 million for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, respectively, due primarily to the impact of a PSNH temporary base distribution rate increase effective July 1, 2019, which includes recovery of storm costs and certain other items that do not impact earnings, CL&P's base distribution rate increases at NSTAR Electric effective January 1, 2021, at PSNH effective January 1, 2021, and at CL&P effective May 1, 2020, and May 1, 2019, which include recovery of storm costs and certain other items that do not impact earnings, and an NSTAR Electricpartially offset by a base distribution rate increase effective Januarydecrease at CL&P implemented June 1, 2020.2021.

Base natural gas distribution revenues increased $3.4$11.4 million and $12.0$40.4 million for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, respectively, due primarily to a base distribution rate increaseincreases at NSTAR Gas effective November 1, 2020, which includes a shift of recovery into base rates of certain GSEP investments, and at Yankee Gas effective January 1, 2020.2021. Although new rates at Yankee Gas were implemented on March 1, 2021 to customers, the provisions of the base distribution rate increase were effective January 1, 2021.

Tracked Distribution Revenues: Tracked distribution revenues consist of certain costs that are recovered from customers in retail rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs has no impact on earnings.  However, trackedTracked revenues doalso include certain incentives earned, return on rate base and on capital tracking mechanisms, and carrying charges that are billed in rates to customers, which do impact earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply and natural gas supply procurement and other energy-related costs, electric retail transmission charges, energy efficiency program costs, electric restructuring and stranded cost recovery revenues (including securitized RRB charges), and additionally for NSTAR Electric,the Massachusetts utilities, pension and PBOP benefits and net metering for distributed generation. Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market, sales of natural gas to third party marketers, and the sale of RECs to various counterparties.

Tracked distribution revenues increased/(decreased) for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to the following:
Electric DistributionNatural Gas Distribution
(Millions of Dollars)Three Months EndedSix Months EndedThree Months EndedSix Months Ended
Retail Tariff Tracked Revenues:
Energy supply procurement$(71.8)$(100.9)$2.0 $31.1 
Retail transmission60.2 79.2 — — 
Other distribution tracking mechanisms19.8 46.2 (5.5)11.2 
Wholesale Market Sales Revenue36.7 94.8 (2.2)2.1 
 Electric Distribution Natural Gas Distribution
(Millions of Dollars)Three Months Ended Six Months Ended Three Months Ended Six Months Ended
Retail Tariff Tracked Revenues:       
Energy supply procurement$(31.3) $(142.3) $(6.9) $(34.9)
Other distribution tracking mechanisms26.6
 25.7
 12.0
 22.8
Wholesale Market Sales Revenue21.1
 60.7
 (4.3) (12.9)

The decrease in energy supply procurement within electric distribution for the three months ended June 30, 2021, as compared to the same period in 2020, was driven primarily by lower average prices for the three month period and lower average supply-related sales volumes andvolumes. The decrease in energy supply procurement within electric distribution for the six months ended June 30, 2021, as compared to the same period in 2020, was driven primarily by lower average prices, partially offset by higher average supply-related sales volumes. The increase in energy supply procurement within natural gas distribution for the six month period. months ended June 30, 2021, as compared to the same period in 2020, was driven primarily by higher average prices and higher average supply-related sales volumes.

The increase in the electric distribution wholesale market sales revenue within electric distribution was due primarily to higher average electricity market prices for wholesale sales at CL&P for both the three and six months ended June 30, 2021, respectively, as compared to the same periods in 2020. ISO-NE average wholesale market prices for CL&P’s wholesale sales increased approximately 62 percent and 94 percent for the three and six months ended June 30, 2021, respectively, as compared to the same periods in 2020, driven primarily by increased market demand as a new zero-carbonresult of colder winter temperatures in 2021.Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA that CL&P entered into by CL&P in 2019, as required by regulation, from which the energy purchased from Millstone Nuclear Power Station (Millstone) was sold into the market beginning in the fourth quarter of 2019.

regulation.
Electric Transmission
EGMA Natural Gas Distribution Revenues: Electric transmissionThe addition of EGMA increased total operating revenues increased $27.1at the natural gas distribution segment by $96.8 million and $56.2$349.4 million for the three and six months ended June 30, 2020,2021, respectively.

53


Electric Transmission Revenues:  Electric transmission revenues increased $34.5 million and $65.6 million for the three and six months ended June 30, 2021, respectively, as compared to the same periods in 2019,2020, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure and a higher benefit from the annual billing and cost reconciliation filing with FERC.infrastructure.

Other Revenues and Eliminations: Other revenues primarily include the revenues of Eversource's service company, most of which are eliminated in consolidation. Eliminations are also primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business.business in rates charged to their customers.



Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity and natural gas on behalf of our customers.  These electric and natural gas supply costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs).  Purchased Power, Fuel and Transmission expense increased/(decreased)increased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to the following:
(Millions of Dollars)Three Months EndedSix Months Ended
Purchased Power Costs$(38.0)$(56.3)
Natural Gas Costs41.5 175.2 
Transmission Costs59.0 75.6 
Eliminations(42.5)(52.6)
Total Purchased Power, Fuel and Transmission$20.0 $141.9 
(Millions of Dollars)Three Months Ended Six Months Ended
Purchased Power Costs$47.1
 $23.1
Natural Gas Costs(10.9) (45.8)
Transmission Costs(3.9) (18.2)
Eliminations(23.1) (48.2)
Total Purchased Power, Fuel and Transmission$9.2
 $(89.1)

The increasedecrease in purchased power expense at the electric distribution business for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, was driven primarily by the impact of energy purchases from the new Millstone PPA, partially offset by lower expense related toaverage prices associated with the procurement of energy supply resulting fromand lower average prices.supply-related sales volumes. The increasedecrease in purchased power expense at the electric distribution business for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, was driven primarily by the impact of energy purchases from the new Millstone PPA, partially offset by lower expense related toaverage prices associated with the procurement of energy supply, resulting from lower average sales volumespartially offset by higher long-term contractual energy-related costs that are recovered in the NBFMCC mechanism at CL&P. The increase in costs at the natural gas distribution segment for the three and lower average prices.

The decreasesix months ended June 30, 2021, as compared to the same periods in 2020, was due primarily to the addition of EGMA natural gas supply costs as a result of the 2020 CMA asset acquisition of $27.3 million and $122.4 million, respectively, and higher average prices. The increase in costs at ourthe natural gas distribution businesssegment for the threesix months ended June 30, 2020,2021, as compared to the same period in 2019,2020, was also due primarily to lower average prices, partially offset by higher average supply-related sales volumes. The decrease in natural gas supply costs for the six months ended June 30, 2020, as compared to the same period in 2019, was due primarily to lower average sales volumes and lower average prices.

The decreaseincrease in transmission costs for the three and six months ended June 30, 2020,2021, as compared to the same periodperiods in 2019,2020, was primarily the result of an increase in costs billed by ISO-NE that support regional grid investments and an increase in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network. This was partially offset by a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers. This was partially offset by an increase in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network and an increase in costs billed by ISO-NE that support regional grid investments.

The decrease in transmission costs for the six months ended June 30, 2020, as compared to the same period in 2019, was primarily the result of a decrease in the retail transmission cost deferral, and a decrease in costs billed by ISO-NE that support regional grid investments. This was partially offset by an increase in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network.

Operations and Maintenance expense includes tracked costs and costs that are part of base electric, natural gas and water distribution rates with changes impacting earnings (non-tracked costs).  Operations and Maintenance expense increased/(decreased)increased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to the following:
(Millions of Dollars)Three Months EndedSix Months Ended
Base Electric Distribution (Non-Tracked Costs):
CL&P assessment by PURA for Tropical Storm Isaias response$(1.4)$28.6 
Employee-related expenses, including labor and benefits13.8 28.6 
Storm restoration costs6.3 15.8 
Operations-related expenses, including vegetation management, vehicles, and outside services2.7 10.6 
Shared corporate costs (including computer software depreciation at Eversource Service)5.5 10.8 
Other non-tracked operations and maintenance5.0 6.4 
Total Base Electric Distribution (Non-Tracked Costs)31.9 100.8 
Tracked Costs (Electric Distribution and Electric Transmission)8.9 16.9 
Natural Gas Distribution:
Base (Non-Tracked) Costs, excluding EGMA(1.4)3.2 
Tracked Costs, excluding EGMA2.3 3.3 
EGMA Operations and Maintenance39.9 85.5 
Total Natural Gas Distribution40.8 92.0 
Water Distribution— — 
Parent and Other Companies and eliminations:
Eversource Parent and Other Companies - other operations and maintenance39.0 78.2 
Transition and Acquisition Costs3.9 7.6 
Eliminations(45.5)(92.9)
Total Operations and Maintenance$79.0 $202.6 

54

(Millions of Dollars)Three Months Ended 
Six Months
Ended
Base Electric Distribution (Non-Tracked Costs):   
Employee-related expenses, including labor and benefits$(7.4) $(9.8)
Operations-related expenses, including vegetation management, storm restoration, vehicles, and outside services12.5
 4.5
Shared corporate costs (including computer software depreciation at Eversource Service)5.6
 10.8
COVID-19 Costs5.5
 6.7
Other non-tracked operations and maintenance(3.1)
(1.0)
Total Base Electric Distribution (Non-Tracked Costs)13.1

11.2
Base Natural Gas Distribution (Non-Tracked Costs)1.2
 2.4
Water Distribution0.2
 (0.1)
Tracked Costs (Electric Distribution, Electric Transmission and Natural Gas Distribution)(3.4)
7.3
Other and eliminations:   
Eversource Parent and Other Companies - other operations and maintenance18.7
 45.1
Acquisition costs related to our planned purchase of the assets of CMA5.4
 10.3
Eliminations(31.1) (65.7)
Total Operations and Maintenance$4.1

$10.5


Depreciation expense increased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due to higher utility plant in service balances.balances, and due to the addition of EGMA utility plant balances as a result of the 2020 CMA asset acquisition of $11.8 million and $23.5 million, respectively.



Amortization expense includes the deferral of energy supply, energy-related costs and other costs that are included in certain regulatory commission-approved cost tracking mechanisms, and the amortization of certain costs as those costs are collected in rates.mechanisms. This deferral adjusts expense to match the corresponding revenues.revenues compared to the actual costs incurred. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. Amortization expense also includes the amortization of certain costs as those costs are collected in rates.

Amortization decreased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to a decrease in storm amortization expense at CL&P related to the completion of the amortization period of certain storm cost deferred assets, and the deferral adjustment of energy supply, energy-related and other costs. Amortization increased for the six months ended June 30, 2020,2021, as compared to the same periodsperiod in 2019,2020, due primarily to the under recoverydeferral adjustment of energy purchasessupply, energy-related and other costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. The increase for the six-month period was partially offset by a decrease in storm amortization expense at CL&P related to the Millstone PPA and deferralcompletion of energy supply and energy-related costs at CL&P, partially offset by an increase inthe amortization period of certain storm cost recovery at PSNH.deferred assets.

Energy Efficiency Programs expense increased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to the deferral adjustment at CL&P,NSTAR Electric and PSNH, and NSTAR Gas, which reflects the actual costs of energy efficiency programs compared to the amounts billed to customers, and the timing of the recovery of energy efficiency costs. The increase in the second quarter and first half of 2021 was partially offset by a decrease in spending on certain largealso due to the addition of EGMA energy efficiency projects inprogram costs as a result of the 2020 compared to 2019 at NSTAR Electric due to timing.CMA asset acquisition of $11.5 million and $41.2 million, respectively. The costs for the majority of the state energy policy initiatives and expanded energy efficiency programs are recovered from customers in rates and have no impact on earnings.

Taxes Other Than Income Taxes expense decreasedincreased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to a decrease of $10.7 million and $21.4 million related to CL&P's remittance of energy efficiency funds to the State of Connecticut, respectively. Energy efficiency funds collected from customers after July 1, 2019 are no longer subject to remittance to the State of Connecticut. The decrease is partially offset by an increase in property taxes as a result of higher utility plant balances.balances, the addition of EGMA property taxes as a result of the 2020 CMA asset acquisition of $10.5 million and $17.9 million, respectively, and higher Connecticut gross earnings taxes.

Interest Expense increased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to an increase in interest on long-term debt as a result of new debt issuances ($6.66.3 million and $13.4$15.7 million, respectively) and an increase in interest expense on regulatory deferrals ($1.55.2 million and $3.2$2.9 million, respectively). Partially offsetting these increases were, partially offset by a decrease in interest on notes payable ($6.50.1 million and $8.8$4.6 million, respectively) and an increase in AFUDC related to debt funds and other capitalized interest ($0.40.7 million and $3.5$0.1 million, respectively).

Other Income, Net decreasedincreased for the three and six months ended June 30, 2020,2021, as compared to the same periods in 2019,2020, due primarily to a decrease in equity in earnings related to Eversource's equity method investments ($20.0 million and $21.1 million, respectively), partially offset by an increase related to pension, SERP and PBOP non-service income components ($4.911.4 million and $10.3$18.8 million, respectively).
Other Income, Net further decreased for the six month period due to the absence in 2020 of the recognition of the equity component of the carrying charges related to PSNH storm costs recorded, an increase in interest income in the first quarter of 2019primarily from regulatory deferrals ($5.2 million),7.4 million and investment losses$8.1 million, respectively) and an increase in 2020, as compared to investment income in 2019 driven by market volatility ($3.10.1 million and $3.8 million), partially offset by lower AFUDC related to equity funds ($1.6 million and $3.0 million, respectively).

Income Tax Expense increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to higher pre-tax earnings ($5.44.9 million), higher state taxes ($3.04.9 million), by the absence in 2020 of the impairment of NPTlower share-based payment excess tax benefits ($35.20.4 million), and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($2.50.9 million), partially offset by an increase in share-based payment excess tax benefits ($0.4 million) and an increase in amortization of EDIT ($1.00.2 million).

Income Tax Expense increased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to higher pre-tax earnings ($12.716.1 million), higher state taxes ($8.012.0 million), by the absencelower share-based payment excess tax benefits ($2.7 million), an increase in 2020 of the impairment of NPTa valuation allowance ($35.21.7 million), and an increase in flow-through items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($5.12.8 million), partially offset by an increase in share-based payment excess tax benefits ($5.1 million) and an increase in amortization of EDIT ($2.72.3 million).


55


RESULTS OF OPERATIONS –
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P, NSTAR Electric and PSNH for the six months ended June 30, 20202021 and 20192020 included in this combined Quarterly Report on Form 10-Q:
 For the Six Months Ended June 30,
CL&PNSTAR ElectricPSNH
(Millions of Dollars)20212020Increase/
(Decrease)
20212020Increase/
(Decrease)
20212020Increase/
(Decrease)
Operating Revenues$1,816.9 $1,717.1 $99.8 $1,424.4 $1,394.8 $29.6 $572.3 $531.6 $40.7 
Operating Expenses:     
Purchased Power and Transmission681.4 690.1 (8.7)417.6 434.7 (17.1)172.1 176.7 (4.6)
Operations and Maintenance327.8 270.2 57.6 279.6 238.1 41.5 111.2 101.1 10.1 
Depreciation167.8 158.2 9.6 166.7 157.9 8.8 59.3 49.1 10.2 
Amortization of Regulatory Assets, Net47.7 0.9 46.8 15.9 46.6 (30.7)44.8 31.7 13.1 
Energy Efficiency Programs65.1 67.8 (2.7)139.4 125.4 14.0 19.7 18.2 1.5 
Taxes Other Than Income Taxes175.3 162.8 12.5 108.7 99.4 9.3 45.7 40.1 5.6 
Total Operating Expenses1,465.1 1,350.0 115.1 1,127.9 1,102.1 25.8 452.8 416.9 35.9 
Operating Income351.8 367.1 (15.3)296.5 292.7 3.8 119.5 114.7 4.8 
Interest Expense81.6 76.7 4.9 69.5 64.0 5.5 28.4 29.1 (0.7)
Other Income, Net14.8 10.4 4.4 38.7 25.4 13.3 8.4 6.8 1.6 
Income Before Income Tax Expense285.0 300.8 (15.8)265.7 254.1 11.6 99.5 92.4 7.1 
Income Tax Expense71.0 64.8 6.2 60.9 56.2 4.7 20.2 21.2 (1.0)
Net Income$214.0 $236.0 $(22.0)$204.8 $197.9 $6.9 $79.3 $71.2 $8.1 
 For the Six Months Ended June 30,
 CL&P NSTAR Electric PSNH
(Millions of Dollars)2020 2019 Increase/
(Decrease)
 2020 2019 
Increase/
(Decrease)
 2020 2019 
Increase/
(Decrease)
Operating Revenues$1,717.1
 $1,590.1
 $127.0
 $1,394.8
 $1,479.5
 $(84.7) $531.6
 $517.3
 $14.3
Operating Expenses: 
  
  
      
      
Purchased Power and Transmission690.1
 566.4
 123.7
 434.7
 558.5
 (123.8) 176.7
 199.3
 (22.6)
Operations and Maintenance270.2
 264.0
 6.2
 238.1
 221.9
 16.2
 101.1
 105.4
 (4.3)
Depreciation158.2
 147.8
 10.4
 157.9
 145.6
 12.3
 49.1
 46.2
 2.9
Amortization of Regulatory Assets, Net0.9
 48.0
 (47.1) 46.6
 45.8
 0.8
 31.7
 19.5
 12.2
Energy Efficiency Programs67.8
 46.8
 21.0
 125.4
 142.6
 (17.2) 18.2
 12.9
 5.3
Taxes Other Than Income Taxes162.8
 178.5
 (15.7) 99.4
 93.1
 6.3
 40.1
 38.0
 2.1
Total Operating Expenses1,350.0
 1,251.5
 98.5
 1,102.1
 1,207.5
 (105.4) 416.9
 421.3
 (4.4)
Operating Income367.1
 338.6
 28.5
 292.7
 272.0
 20.7
 114.7
 96.0
 18.7
Interest Expense76.7
 72.7
 4.0
 64.0
 56.1
 7.9
 29.1
 28.3
 0.8
Other Income, Net10.4
 6.7
 3.7
 25.4
 21.7
 3.7
 6.8
 10.0
 (3.2)
Income Before Income Tax Expense300.8
 272.6
 28.2
 254.1
 237.6
 16.5
 92.4
 77.7
 14.7
Income Tax Expense64.8
 57.3
 7.5
 56.2
 53.9
 2.3
 21.2
 18.1
 3.1
Net Income$236.0
 $215.3
 $20.7
 $197.9
 $183.7
 $14.2
 $71.2
 $59.6
 $11.6

Operating Revenues
Sales Volumes: A summary of our retail electric GWh sales volumes is as follows:
 For the Six Months Ended June 30,
 20212020IncreasePercentage Increase
CL&P9,952 9,520 432 4.5 %
NSTAR Electric10,922 10,603 319 3.0 %
PSNH3,804 3,695 109 2.9 %
 For the Six Months Ended June 30,
 2020 2019 Decrease Percentage Decrease
CL&P9,520
 9,953
 (433) (4.4)%
NSTAR Electric10,603
 11,084
 (481) (4.3)%
PSNH3,695
 3,724
 (29) (0.8)%

Fluctuations in retail electric sales volumes at PSNH impact earnings.  For CL&P and NSTAR Electric, fluctuations in retail electric sales volumes do not impact earnings due to their respective regulatory commission-approved distribution revenue decoupling mechanisms.

Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased $127.0$99.8 million at CL&P, and $14.3 million at PSNH, and decreased $84.7$29.6 million at NSTAR Electric, and $40.7 million at PSNH, for the six months ended June 30, 2020,2021, as compared to the same period in 2019.2020.

Base Distribution Revenues:
CL&P's distribution revenues increased $22.8$5.7 million due primarily to the impact of its base distribution rate increasesincrease effective May 1, 2020, and Maypartially offset by the base distribution rate decrease implemented June 1, 2019, which includes2021. The decrease in the base distribution rate on June 1, 2021 was due primarily to the completion of the recovery of certain storm costscost amortization and certain other items that dotherefore the decrease in revenues did not impact earnings.
NSTAR Electric's distribution revenues increased $14.9$25.3 million due primarily to the impact of its base distribution rate increase effective January 1, 2020.2021.
PSNH's distribution revenues increased $26.2$15.1 million due primarily to the impact of its temporary base distribution rate increase effective JulyJanuary 1, 2019, which includes recovery of storm costs and certain other items that do not impact earnings.2021.

Tracked Revenues: Tracked distribution revenues consist of certain costs that are recovered from customers in retail rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs has no impact on earnings.  However, trackedTracked revenues doalso include certain incentives earned, return on rate base and on capital tracking mechanisms, and carrying charges that are billed in rates to customers, which do impact earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, electric restructuring and stranded cost recovery revenues (including securitized RRB charges), and additionally for NSTAR Electric, pension and PBOP benefits and net metering for distributed generation. Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties.

56




Tracked revenues increased/(decreased) for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:
(Millions of Dollars)CL&PNSTAR ElectricPSNH
Retail Tariff Tracked Revenues:
Energy supply procurement$(16.1)$(61.7)$(23.1)
Retail transmission9.1 40.2 29.9 
Other distribution tracking mechanisms12.2 21.3 12.7 
Wholesale Market Sales Revenue73.8 15.8 5.2 
(Millions of Dollars)CL&P NSTAR Electric PSNH
Retail Tariff Tracked Revenues:     
Energy supply procurement$(46.1) $(79.1) $(17.1)
CL&P FMCC40.8
 
 
Other distribution tracking mechanisms16.0
 (33.2) 2.1
Wholesale Market Sales Revenue78.2
 (14.0) (3.5)

The decreasesdecrease in energy supply procurement at CL&P and PSNH was driven by lower average prices, partially offset by higher average supply-related sales volumes. The decrease in energy supply procurement at NSTAR Electric reflectwas driven by both lower average sales volumes and lower average prices and at PSNH reflect lower average supply-related sales volumes.

The increase in the electric distribution wholesale market sales revenue at CL&P was due primarily to higher average electricity market prices for wholesale sales for the six months ended June 30, 2020,2021, as compared to the same period in 2019.

Revenues from CL&P's other distribution tracking mechanisms include higher earnings from its capital tracker mechanism due to increased electric system improvements. CL&P's2020. ISO-NE average wholesale market prices for CL&P’s wholesale sales revenue increased dueapproximately 94 percent comparatively, primarily to energydriven by increased market demand as a result of colder winter temperatures in 2021. Volumes sold ininto the wholesale market resulting from energy purchasedwere primarily from the newsale of output generated by the Millstone PPA.PPA that CL&P entered into in 2019, as required by regulation.

Transmission Revenues: Transmission revenues increased $20.0$26.8 million at CL&P, $24.8$26.0 million at NSTAR Electric, and $11.4$12.8 million at PSNH for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure and a higher benefit from the annual billing and cost reconciliation filing with FERC.infrastructure.

Eliminations: Eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business.business in rates charged to their customers. The impact of eliminations decreased revenues by $6.1$13.7 million at CL&P, $15.6$24.7 million at NSTAR Electric and $3.9$12.3 million at PSNH for the six months ended June 30, 2020,2021, as compared to the same period in 2019.2020.

Purchased Power and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P, NSTAR Electric and PSNH's customers.  These energy supply costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power and Transmission expense increased/(decreased)decreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:
(Millions of Dollars)CL&PNSTAR ElectricPSNH
Purchased Power Costs$(2.7)$(32.3)$(21.3)
Transmission Costs6.7 39.9 29.0 
Eliminations(12.7)(24.7)(12.3)
Total Purchased Power and Transmission$(8.7)$(17.1)$(4.6)
(Millions of Dollars)CL&P NSTAR Electric PSNH
Purchased Power Costs$149.0
 $(102.3) $(23.6)
Transmission Costs(17.3) (5.9) 5.0
Eliminations(8.0) (15.6) (4.0)
Total Purchased Power and Transmission$123.7
 $(123.8) $(22.6)

Purchased Power Costs: Included in purchased power costs are the costs associated with providing electric generation service supply to all customers who have not migrated to third party suppliers and the cost of energy purchase contracts, as required by regulation.

The increase at CL&P was due primarily to the new Millstone PPA energy purchases, partially offset by lower expense related to the procurement of energy supply resulting from lower average sales volumes and lower average prices.
The decrease at NSTAR ElectricCL&P was due primarily to lower expense related to the procurement of energy supply resulting from lower average sales volumesprices, partially offset by higher long-term contractual energy-related costs that are recovered in the NBFMCC mechanism.
The decrease at NSTAR Electric was due primarily to lower expense related to the procurement of energy supply resulting from lower average prices and lower average prices.supply-related sales volumes.
The decrease at PSNH was due primarily to lower expense related to the procurement of energy supply resulting from lower average prices.

Transmission Costs: Included in transmission costs are charges that recover the cost of transporting electricity over high-voltage lines from generation facilities to substations, including costs allocated by ISO-NE to maintain the wholesale electric market.

The decreaseincrease in transmission costs at CL&P and NSTAR Electric was due primarily to a reduction to the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers and a decrease in costs billed by ISO-NE that support regional grid investments. This was partially offset byto an increase in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network.
The increase in transmission costs at PSNH was primarily the result of an increase in Local Network Service chargesnetwork, and an increase in costs billed by ISO-NE that support regional grid investments. This was partially offset by a decrease in the retail transmission cost deferral.deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers.

The increase in transmission costs at NSTAR Electric was primarily the result of an increase in costs billed by ISO-NE, partially offset by a decrease in the retail transmission cost deferral.

The increase in transmission costs at PSNH was due primarily to an increase in Local Network Service charges, an increase in costs billed by ISO-NE, and an increase in the retail transmission cost deferral.

57


Operations and Maintenance expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs).  Operations and Maintenance expense increased/(decreased)increased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:
(Millions of Dollars)CL&PNSTAR ElectricPSNH
Base Electric Distribution (Non-Tracked Costs): 
CL&P assessment by PURA for Tropical Storm Isaias response$28.6 $— $— 
Employee-related expenses, including labor and benefits5.7 13.6 0.8 
Storm restoration costs8.4 5.7 1.7 
Operations-related expenses, including vegetation management, vehicles, and outside services5.9 0.9 3.8 
Shared corporate costs (including computer software depreciation at Eversource Service)3.0 6.9 0.9 
Other non-tracked operations and maintenance2.6 1.6 2.2 
Total Base Electric Distribution (Non-Tracked Costs)54.2 28.7 9.4 
Tracked Costs:
Transmission expenses3.7 4.2 2.5 
Other tracked operations and maintenance(0.3)8.6 (1.8)
Total Tracked Costs3.4 12.8 0.7 
Total Operations and Maintenance$57.6 $41.5 $10.1 
(Millions of Dollars)CL&P NSTAR Electric PSNH
Base Electric Distribution (Non-Tracked Costs):     
Employee-related expenses, including labor and benefits$0.7
 $(7.8) $(2.7)
Operations-related expenses, including vegetation management, storm restoration, vehicles, and outside services(0.5) 0.6
 4.4
Shared corporate costs (including computer software depreciation at Eversource Service)4.3
 5.1
 1.4
COVID-19 Costs2.8
 2.8
 1.1
Other non-tracked operations and maintenance(3.3) 1.4
 0.9
Total Base Electric Distribution (Non-Tracked Costs)4.0
 2.1
 5.1
Tracked Costs:     
Transmission expenses(4.7) 3.9
 (1.3)
Other tracked operations and maintenance6.9
 10.2
 (8.1)
Total Tracked Costs2.2
 14.1
 (9.4)
Total Operations and Maintenance$6.2
 $16.2
 $(4.3)

Depreciation increased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, for CL&P, NSTAR Electric and PSNH due to higher net plant in service balances.

Amortization of Regulatory Assets, Net expense includes the deferral of energy supply, energy-related costs and other costs that are included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain costs as those costs are collected in rates.mechanisms. This deferral adjusts expense to match the corresponding revenues.revenues compared to the actual costs incurred. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. Amortization expense also includes the amortization of certain costs as those costs are collected in rates. Amortization of Regulatory Assets, Net increased/decreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The decreaseincrease at CL&P was due primarily to the under recovery of energy purchases related to the Millstone PPA and deferral adjustment of energy supply, energy-related and energy-relatedother tracked costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. The increase was partially offset by a decrease in storm amortization expense related to the completion of the amortization period of certain storm cost deferred assets.
The decrease at NSTAR Electric was due to the deferral adjustment of energy supply, energy-related costs and other tracked costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.
The increase at PSNH was due to an increase in storm cost recovery, partially offset by the deferral adjustment of energy supplyenergy-related and energyother tracked costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

Energy Efficiency Programs expense includes costs of various state energy policy initiatives and expanded energy efficiency programs that are recovered from customers in rates, most of which have no impact on earnings. Energy Efficiency Programs expense increased/decreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The increasedecrease at CL&P and PSNH was due to the deferral adjustment, which reflects actual costs of energy efficiency programs compared to the estimated amounts billed to customers, and the timing of the recovery of energy efficiency costs.
The decreaseincreases at NSTAR Electric wasand PSNH were due to the deferral adjustment, which reflects actual costs of energy efficiency programs compared to the estimated amounts billed to customers, and the timing of spending on certain largethe recovery of energy efficiency projects in 2020, as compared to 2019.costs.

Taxes Other Than Income Taxes increased/decreasedincreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The decreaseincrease at CL&P was related to a $21.4 million decrease in the remittance of energy efficiency funds to the State of Connecticut. Energy efficiency funds collected from customers after July 1, 2019 are no longer subject to remittance to the State of Connecticut. The decrease was partially offset by higher property taxes as a result of a higher utility plant balances.balance and higher gross earnings taxes.
The increases at NSTAR Electric and PSNH were due to higher property taxes as a result of higher utility plant balances.

Interest Expense increased at CL&P and NSTAR Electric and decreased at PSNH for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The increase at CL&P was due to a decrease in AFUDC related to debt funds ($2.4 million), an increase in interest expense on regulatory deferrals ($1.7 million), and higher interest on long-term debt ($1.6 million).
Theincrease at NSTAR Electric was due to higher interest on long-term debt ($5.03.4 million), partially offset by and an increase in AFUDC related to debt fundsinterest expense on regulatory deferrals ($0.32.5 million).
Theincrease at NSTAR Electric was due to higher interest on long-term debt ($7.5 million), an increase in interest expense on regulatory deferrals ($3.5 million), and a decrease in AFUDC related to debt funds ($0.6 million). Partially offsetting these increases was a decrease in interest on notes payable ($2.6 million).
The increasedecrease at PSNH was due to higher interest on long-term debt ($1.9 million), partially offset by a decrease on RRB interest expense ($0.7 million) and a decrease in interest expense on regulatory deferrals ($0.61.1 million) and a decrease in RRB interest expense ($0.7 million), partially offset by a decrease in AFUDC related to debt funds ($0.9 million).

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Other Income, Net increased/decreasedincreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The increase at CL&P was due primarily to an increase related to pension, SERP and PBOP non-service income components ($3.74.9 million), investment income in 2021 compared to investment losses in 2020 driven by market volatility ($2.8 million), and an increase in interest income primarily on regulatory deferrals ($1.2 million), partially offset by a decrease in AFUDC related to equity funds ($2.14.5 million), partially offset by investment losses in 2020, as compared to investment income in 2019 driven by market volatility ($3.0 million).
The increase at NSTAR Electric was due primarily to an increase related to pension, SERP and PBOP non-service income components ($2.65.2 million), an increase in interest income primarily on regulatory deferrals ($4.2 million), investment income in 2021 compared to investment losses in 2020 driven by market volatility ($2.1 million), and an increase in AFUDC related to equity funds ($1.22.1 million), partially offset by higher investment losses driven by market volatility ($0.7 million).
The decreaseincrease at PSNH was due primarily to the absence in 2020 of the recognition of the equity component of the carrying charges related to storm costs recorded in interest income in 2019 ($5.2 million) and investment losses in 2020, as compared to investment income in 2019 driven by market volatility ($0.4 million). Partially offsetting these decreases were an increase related to pension, SERP and PBOP non-service income components ($1.51.9 million), higher interest income primarily on regulatory deferrals ($0.8 million), and an increaseinvestment income in 2021 compared to investment losses in 2020 driven by market volatility ($0.6 million), partially offset by a decrease in AFUDC related to equity funds ($1.51.7 million).

Income Tax Expense increasedincreased/decreased for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:

The increase at CL&P was due primarily to higher pre-tax earnings ($5.9 million), higher state taxes ($1.0 million) and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($2.46.1 million), partially offset by an increase inlower share-based payment excess tax benefits ($1.80.8 million).
The increase at NSTAR Electric was due primarily to higher pre-tax earnings ($3.5 million) and higher state taxes ($1.1 million), partially offset by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.5 million), and an increase in share-based payment excess tax benefitsa valuation allowance ($1.8 million).
The increase at PSNH was due primarily to higher pre-tax earnings ($3.01.7 million) and higher state taxes ($0.9 million), partially offset by an increase in share-based payment excess tax benefits ($0.6 million) and in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.20.9 million), partially offset by lower pre-tax earnings ($3.3 million).

The increase at NSTAR Electric was due primarily to higher pre-tax earnings ($2.4 million), higher state taxes ($0.5 million), an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.9 million), and lower share-based payment excess tax benefits ($0.9 million).
The decrease at PSNH was due primarily to an increase in amortization of EDIT ($3.4 million) and lower state taxes ($0.4 million), partially offset by higher pre-tax earnings ($1.5 million), lower share-based payment excess tax benefits ($0.3 million), and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.0 million).

EARNINGS SUMMARY

CL&P's earnings increased $20.7decreased $22.0 million for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to an after-tax charge of $0.07 per share for the accrual of an assessment by PURA recorded in the first quarter of 2021 as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020. Earnings were also unfavorably impacted by higher operations and maintenance expense, higher depreciation expense, higher property and other tax expense, and higher interest expense. The earnings decrease was partially offset by higher earnings from its capital tracker mechanism due to increased electric system improvements, an increase in transmission earnings driven by a higher transmission rate base, and the base distribution rate increasesincrease effective May 1, 2020 and May 1, 2019, and higher earnings from its capital tracker mechanism due to increased electric system improvements. The earnings increase was partially offset by higher depreciation expense, higher operations and maintenance expense, and higher interest expense.2020.

NSTAR Electric's earnings increased $14.2$6.9 million for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to thethe base distribution rate increase effective January 1, 20202021 and an increase in transmission earnings driven by a higher transmission rate base. The earnings increase was partially offset by higher operations and maintenance expense driven by higher employee-related expenses and higher storm restoration costs. Earnings were also unfavorably impacted by higher depreciation expense, higher interestproperty tax expense and higher property taxinterest expense.

PSNH's earnings increased $11.6$8.1 million for the six months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the temporary base distribution rate increase effective JulyJanuary 1, 2019, and2021, an increase in transmission earnings driven by a higher transmission rate base.base, and the impact in 2021 of a new tracker mechanism at PSNH approved as part of the 2020 rate settlement agreement. The earnings increase was partially offset by the absence of the first quarter 2019 recognition of carrying charges on its 2013 through 2016 storm costs approved for recovery and higher operations and maintenance expense, higher depreciation expense and higher property tax expense.

LIQUIDITY

Cash Flows: CL&P had cash flows provided by operating activities of $282.9$224.0 million for the six months ended June 30, 2020,2021, as compared to $345.6$282.9 million in the same period of 2019.2020. The decrease in operating cash flows was due primarily to the timing of cash payments made on our accounts payable and the timing of cash collections on our accounts receivable, and regulatory tracking mechanisms. Partially offsetting these unfavorable impacts werecash payments made in the first half of 2021 for storm restoration costs of approximately $49 million related to Tropical Storm Isaias, pension contributions of $37.9 million made in the first half of 2021, income tax payments of $5.9 million in the first half of 2021, as compared to income tax refunds received of $26.4 million in the first half of 2020, as compared to income taxand the timing of cash payments of $3.9 million in the same period in 2019 driven primarilymade on our accounts payable. These unfavorable impacts were partially offset by the deferraltiming of estimated tax payments fromcollections for regulatory tracking mechanisms and the second quartertiming of 2020other working capital items, and an increase in non-cash adjustments to July 2020 under COVID-19 relief legislation.net income.

NSTAR Electric had cash flows provided by operating activities of $212.8$245.9 million for the six months ended June 30, 2020,2021, as compared to $251.5$212.8 million in the same period of 2019.2020. The decreaseincrease in operating cash flows was due primarily to the timing of collections for regulatory tracking mechanisms, primarily relatedthe timing of other working capital items, and an increase of $14.3 million in income tax refunds received in the first half of 2021, as compared to transmission costs andthe same period in 2020. These favorable impacts were partially offset by the timing of cash payments made on our accounts payable, the timing of cash collections on our accounts receivable. Partially offsetting these unfavorablereceivable, and pension contributions of $10.0 million made in the first half of 2021.

59


PSNH had cash flows provided by operating activities of $138.3 million for the six months ended June 30, 2021, as compared to $118.8 million in the same period of 2020.  The increase in operating cash flows was due primarily to the timing of collections for regulatory tracking mechanisms, the timing of other working capital items, and an increase in non-cash adjustments to net income. These favorable impacts were partially offset by the timing of cash payments made on our accounts payable, and an increase of $7.4 million in income tax refunds received of $10.9 millionpayments made in the first half of 2020, as compared to income tax payments of $10.9 million in the same period in 2019 driven by the deferral of estimated tax payments under COVID-19 relief legislation.2021.



PSNH had cash flows provided by operating activities of $118.8 million for the six months ended June 30, 2020, as compared to $121.7 million in the same period of 2019.  The decrease in operating cash flows was due primarily to income tax payments of $4.8 million in the first half of 2020, as compared to income tax refunds received of $11.8 million in the same period in 2019, the timing of REC inventories and the timing of cash collections on our accounts receivable. Partially offsetting these unfavorable impacts were the temporary base distribution rate increase effective July 1, 2019 and the timing of cash payments on our accounts payable and other working capital items.

For further information on CL&P's, NSTAR Electric's and PSNH's liquidity and capital resources, see "Liquidity" and "Business Development and Capital Expenditures" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.


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RESULTS OF OPERATIONS – THE CONNECTICUT LIGHT AND POWER COMPANY

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P for the three months ended June 30, 20202021 and 20192020 included in this combined Quarterly Report on Form 10-Q:
 For the Three Months Ended June 30,
(Millions of Dollars)20212020Increase/(Decrease)
Operating Revenues$829.6 $817.4 $12.2 
Operating Expenses:   
Purchased Power and Transmission308.1 315.4 (7.3)
Operations and Maintenance152.4 134.6 17.8 
Depreciation84.4 79.7 4.7 
Amortization of Regulatory Liabilities, Net(15.1)(5.7)(9.4)
Energy Efficiency Programs29.5 32.3 (2.8)
Taxes Other Than Income Taxes84.0 80.0 4.0 
Total Operating Expenses643.3 636.3 7.0 
Operating Income186.3 181.1 5.2 
Interest Expense42.6 38.7 3.9 
Other Income, Net9.9 8.5 1.4 
Income Before Income Tax Expense153.6 150.9 2.7 
Income Tax Expense38.0 33.6 4.4 
Net Income$115.6 $117.3 $(1.7)
 For the Three Months Ended June 30,
(Millions of Dollars)2020 2019 Increase/(Decrease)
Operating Revenues$817.4
 $740.8
 $76.6
Operating Expenses: 
  
  
Purchased Power and Transmission315.4
 246.5
 68.9
Operations and Maintenance134.6
 133.4
 1.2
Depreciation79.7
 74.6
 5.1
Amortization of Regulatory (Liabilities)/Assets, Net(5.7) 12.4
 (18.1)
Energy Efficiency Programs32.3
 20.8
 11.5
Taxes Other Than Income Taxes80.0
 86.4
 (6.4)
Total Operating Expenses636.3
 574.1
 62.2
Operating Income181.1
 166.7
 14.4
Interest Expense38.7
 36.9
 1.8
Other Income, Net8.5
 2.9
 5.6
Income Before Income Tax Expense150.9
 132.7
 18.2
Income Tax Expense33.6
 27.9
 5.7
Net Income$117.3
 $104.8
 $12.5

Operating Revenues
Sales Volumes: CL&P's retail electric GWh sales volumes were 4,5794,797 and 4,6024,579 for the three months ended June 30, 20202021 and 2019,2020, respectively, resulting in a decreasean increase of 0.54.8 percent. Fluctuations in retail electric sales volumes do not impact earnings due to its PURA-approved distribution revenue decoupling mechanism.

Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased $76.6$12.2 million for the three months ended June 30, 2020,2021, as compared to the same period in 2019.2020.

Base Distribution Revenues: CL&P's distribution revenues increased $9.4decreased $3.0 million due primarily to the impact of itsa base distribution rate increases effective Maydecrease implemented on June 1, 2020 and May 1, 2019, which includes2021. The decrease in the base distribution rate was due primarily to the completion of the recovery of certain storm costscost amortization and certain other items that dotherefore the decrease in revenues did not impact earnings.

Tracked Revenues: Tracked revenues increased/(decreased)increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to an increase in wholesale market sales revenue ($28.8 million), due primarily to higher average electricity market prices for wholesale sales for the following:three months ended June 30, 2021, as compared to the same period in 2020. ISO-NE average wholesale market prices increased approximately 62 percent comparatively. Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA entered into in 2019, as required by regulation. This increase was partially offset by a decrease in energy supply procurement revenues ($18.5 million). The decrease in energy supply procurement was driven by lower average prices, partially offset by higher average supply-related sales volumes.
(Millions of Dollars) 
Retail Tariff Tracked Revenues 
Energy supply procurement$(5.7)
FMCC23.4
Other distribution tracking mechanisms13.4
Wholesale Market Sales Revenue27.2

Transmission Revenues: Transmission revenues increased $8.7$12.3 million due primarily to a higher transmission rate base as a result of continued investment in our transmission infrastructure and a higher benefit from the annual billing and cost reconciliation filing with FERC.infrastructure.

Eliminations: Eliminations are primarily related to transmission revenues derived from ISO-NE regional transmission charges to the distribution business that recover the costs of the wholesale transmission business. The impact of eliminations decreased revenues by $0.6$11.3 million.

Purchased Power and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P's customers. These energy supply costs are recovered from customers in PURA-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power and Transmission expense increased/(decreased)decreased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:
(Millions of Dollars)
Purchased Power Costs$(1.0)
Transmission Costs3.9 
Eliminations(10.2)
Total Purchased Power and Transmission$(7.3)

61

(Millions of Dollars) 
Purchased Power Costs$77.8
Transmission Costs(6.5)
Eliminations(2.4)
Total Purchased Power and Transmission$68.9




The increasedecrease in purchased power costs was due primarily to the new Millstone PPA energy purchases, partially offset by lower expense related to the procurement of energy supply resulting from lower average prices.prices, partially offset by higher long-term contractual energy-related costs that are recovered in the NBFMCC mechanism. The decreaseincrease in transmission costs was due primarily to a reduction toan increase in Local Network Service charges, which reflects the retailcost of transmission cost deferralservice provided by Eversource over our local transmission network, and a decreasean increase in costs billed by ISO-NE that support regional grid investments. This was partially offset by an increasea decrease in Local Network Service charges.the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers.

Operations and Maintenance expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs).  Operations and Maintenance expense increased/(decreased)increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the following:
(Millions of Dollars)
Base Electric Distribution (Non-Tracked Costs):
Storm Restoration Costs$6.3 
Operations-related expenses, including vegetation management, vehicles, and outside services5.2 
Employee-related expenses, including labor and benefits2.5 
Other non-tracked operations and maintenance2.4 
Total Base Electric Distribution (Non-Tracked Costs)16.4 
Total Tracked Costs1.4 
Total Operations and Maintenance$17.8 
(Millions of Dollars) 
Base Electric Distribution (Non-Tracked Costs): 
Operations-related expenses, including vegetation management, vehicles, and outside services$(4.4)
Storm Restoration Costs2.6
COVID-19 Costs2.4
Other non-tracked operations and maintenance1.9
Total Base Electric Distribution (Non-Tracked Costs)2.5
Total Tracked Costs(1.3)
Total Operations and Maintenance$1.2

Depreciation expense increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to a higher net plant in service balance.

Amortization of Regulatory (Liabilities)/Assets,Liabilities, Net expense includes the deferral of energy supply, energy-related costs and other costs that are included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain costs as those costs are collected in rates. This deferral adjusts expense to match the corresponding revenues. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. Amortization of Regulatory (Liabilities)/Assets, Net decreased at CL&P for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the under recovery of energy purchasesa decrease in storm amortization expense related to the Millstone PPAcompletion of the amortization period of certain storm cost deferred assets, and to the deferral adjustment of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

Energy Efficiency Programs expense includes costs of various state energy policy initiatives and expanded energy efficiency programs that are recovered from customers in rates, most of which have no impact on earnings. Energy Efficiency Programs expense increaseddecreased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to the deferral adjustment, which reflects the actual costs of energy efficiency programs compared to the estimated amounts billed to customers, and the timing of the recovery of energy efficiency costs.

Taxes Other Than Income Taxes decreasedincreased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to a decrease of $10.7 million related to the remittance of energy efficiency funds to the State of Connecticut. Energy efficiency funds collected from customers after July 1, 2019 are no longer subject to remittance to the State of Connecticut. The decrease was partially offset byhigher gross earnings taxes and higher property taxes as a result of a higher utility plant balances.balance.

Interest Expense increased at CL&P for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to an increase in interest expense on long-termregulatory deferrals ($2.3 million) and a decrease in AFUDC related to debt funds ($1.61.1 million).

Other Income, Net increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to investment income in 2020, as compared to investment losses in 2019 driven by market volatility ($2.3 million) and an increase related to pension, SERP and PBOP non-service income components ($1.83.4 million) and an increase in interest income primarily on regulatory deferrals ($1.3 million), partially offset by a decrease in AFUDC related to equity funds ($2.2 million) and a decrease in investment income ($1.0 million).

Income Tax Expense increased for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to higher pre-tax earnings ($3.80.6 million), and higher state taxes ($0.4 million) and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.53.8 million).

EARNINGS SUMMARY

CL&P's earnings increased $12.5decreased $1.7 million for the three months ended June 30, 2020,2021, as compared to the same period in 2019,2020, due primarily to an increase in transmissionhigher operations and maintenance expense, higher depreciation expense, and higher property and other tax expense. The earnings drivendecrease was partially offset by a higher transmission rate base, the base distribution rate increases effective May 1, 2020 and May 1, 2019, and higher earnings from its capital tracker mechanism due to increased electric system improvements. Theimprovements and an increase in transmission earnings increase was partially offsetdriven by a higher depreciation expense, higher operations and maintenance expense, and higher interest expense.transmission rate base.
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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

Commodity Price Risk Management:  Our regulated companies enter into energy contracts to serve our customers, and the economic impacts of those contracts are passed on to our customers. Accordingly, the regulated companies have no exposure to loss of future earnings or fair values due to these market risk-sensitive instruments.  Eversource's Energy Supply Risk Committee, comprised of senior officers, reviews and approves all large-scale energy related transactions entered into by its regulated companies.

Other Risk Management Activities

Interest Rate Risk Management:  We manage our interest rate risk exposure in accordance with our written policies and procedures.

Credit Risk Management:  Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties pursuant to the terms of our contractual obligations.  We serve a wide variety of customers and transact with suppliers that include IPPs, industrial companies, natural gas and electric utilities, oil and natural gas producers, financial institutions, and other energy marketers.  Margin accounts exist within this diverse group, and we realize interest receipts and payments related to balances outstanding in these margin accounts.  This wide customer and supplier mix generates a need for a variety of contractual structures, products and terms that, in turn, require us to manage the portfolio of market risk inherent in those transactions in a manner consistent with the parameters established by our risk management process.

Our regulated companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies.  Our regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor contracting risks, including credit risk.  As of June 30, 2020,2021, our regulated companies held collateral (letters of credit or cash) of $15.0$20.5 million from counterparties related to our standard service contracts.  As of June 30, 2020,2021, Eversource had $29.6$34.6 million of cash posted with ISO-NE related to energy transactions.

We have provided additional disclosures regarding interest rate risk management and credit risk management in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," in Eversource's 20192020 Form 10-K, which is incorporated herein by reference. There have been no additional risks identified and no material changes with regard to the items previously disclosed in the Eversource 20192020 Form 10-K.

ITEM 4.CONTROLS AND PROCEDURES
ITEM 4.    CONTROLS AND PROCEDURES

Management, on behalf of Eversource, CL&P, NSTAR Electric and PSNH, evaluated the design and operation of the disclosure controls and procedures as of June 30, 20202021 to determine whether they are effective in ensuring that the disclosure of required information is made timely and in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the SEC.  This evaluation was made under management's supervision and with management's participation, including the principal executive officer and principal financial officer as of the end of the period covered by this Quarterly Report on Form 10-Q.  There are inherent limitations of disclosure controls and procedures, including the possibility of human error and the circumventing or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.  The principal executive officer and principal financial officer have concluded, based on their review, that the disclosure controls and procedures of Eversource, CL&P, NSTAR Electric and PSNH are effective to ensure that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and regulations and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in internal controls over financial reporting for Eversource, CL&P, NSTAR Electric and PSNH during the quarter ended June 30, 20202021 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.



63


PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS
ITEM 1.    LEGAL PROCEEDINGS

We are parties to various legal proceedings.  We have disclosed certain legal proceedings in Part I, Item 3, "Legal Proceedings," and elsewhere in our 20192020 Form 10-K.  These disclosures are incorporated herein by reference.  

There have been no material legal proceedings identified and no material changes with regard to the legal proceedings previously disclosed in our 20192020 Form 10-K.

ITEM 1A.RISK FACTORS
ITEM 1A.    RISK FACTORS

We are subject to a variety of significant risks in addition to the matters set forth under our forward-looking statements section in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report on Form 10-Q.  We have identified a number of these risk factors in Part I, Item 1A, "Risk Factors," in our 20192020 Form 10-K, which risk factors are incorporated herein by reference.  These risk factors should be considered carefully in evaluating our risk profile.  The following risk factor should be read in conjunction
with the risk factors described in the 20192020 Form 10-K.

Regulatory, Legislative and Compliance Risks:

The global pandemicactions of regulators and legislators could result in outcomes that may adversely affect our earnings and liquidity.

The rates that our electric, natural gas and water companies charge their customers are determined by their state regulatory commissions and by the FERC. These commissions also regulate the companies' accounting, operations, the issuance of certain securities and certain other matters. The FERC also regulates the transmission of electric energy, the sale of electric energy at wholesale, accounting, issuance of certain securities and certain other matters, including reliability standards through the North American Electric Reliability Corporation (NERC).

Under state and federal law, our electric, natural gas and water companies are entitled to charge rates that are sufficient to allow them an opportunity to recover their prudently incurred operating and capital costs and a reasonable rate of return on invested capital, to attract needed capital and maintain their financial integrity, while also protecting relevant public interests. Our electric, natural gas and water companies are required to engage in regulatory approval proceedings as a part of the 2019 novel coronavirus (COVID-19) has resultedprocess of establishing the terms and rates for their respective services. Each of these companies prepares and submits periodic rate filings with their respective regulatory commissions for review and approval, which allows for various entities to challenge our current or future rates, structures or mechanisms and could alter or limit the rates we are allowed to charge our customers. These proceedings typically involve multiple parties, including governmental bodies and officials, consumer advocacy groups, and various consumers of energy, who have differing concerns. Any change in widespread disruptionrates, including changes in allowed rate of return, are subject to regulatory approval proceedings that can be contentious, lengthy, and subject to appeal. This may lead to uncertainty as to the many systemsultimate result of those proceedings. Established rates are also subject to subsequent prudency reviews by state regulators, whereby various portions of rates could be adjusted, subject to refund or disallowed, including cost recovery mechanisms. The ultimate outcome and processestiming of daily life,regulatory rate proceedings could have a significant effect on our ability to recover costs or earn an adequate return. Adverse decisions in our proceedings could adversely affect our financial position, results of operations and cash flows.

There can be no assurance that regulators will approve the recovery of all costs incurred by our electric, natural gas and water companies, including costs for construction, operation and maintenance, and storm restoration. The inability to recover a significant amount of operating costs could have an adverse effect on a company’s financial position, results of operations and cash flows.

Changes to rates may occur at times different from when costs are incurred. Additionally, catastrophic events at other utilities could result in our regulators and legislators imposing additional requirements that may lead to additional costs for the companies.

In addition to the risk of disallowance of incurred costs, regulators may also impose downward adjustments in a company’s allowed ROE as well as the overall economic marketassess penalties and outlook, which could cause various unfavorable impacts tofines. These actions would have an adverse effect on our customers, vendors, employees, regulators, andfinancial position, results of operations and cash flows.

The FERC has jurisdiction over our transmission costs recovery and our allowed ROEs. Certain outside parties have filed four complaints against all electric companies under the jurisdiction of ISO-NE alleging that our allowed ROEs are unjust and unreasonable. An adverse decision in any of these four complaints could adversely affect our financial position, results of operations and cash flows.

We are respondingFERC's policy has encouraged competition for transmission projects, even within existing service territories of electric companies. Implementation of FERC's goals, including within our service territories, may expose us to COVID-19 by taking stepscompetition for construction of transmission projects, additional regulatory considerations, and potential delay with respect to mitigate the potential risks to Eversource posed by its spread. We provide a critical service tofuture transmission projects, which may adversely affect our customers, which means it is paramount that we keep our employees who operate our businesses safe and minimize unnecessary risk of exposure to COVID-19. We have updated and implemented our company-wide pandemic plan to address specific aspects of the COVID-19 pandemic. This plan guides our emergency response, business continuity, and the precautionary measures we are taking on behalf of employees and our customers. As part of our pandemic plan, we are taking extra precautions to mitigate an adverse material impact to the following risk factors that we believe could continue to be impacted by COVID-19:

Cybersecurity attacks: We have seen a consistent volume of perimeter scanning for vulnerabilities throughout the COVID-19 time frame, which is higher than pre-COVID-19 volumes.  This scanning can be leveraged to compromise a system. We have also seen increased phishing attempts targeted at our employees by outside parties to gain control of our systems and network.  We continue to implement strong cybersecurity measures and have increased the education of our employees and contractors to ensure that our systems remain functional in order to both serve our operational needs with a remote workforce and to ensure uninterrupted service to our customers.  We also continuously review and update our response plans to include responding to an event while in a remote work environment.

Access to, or cost of, capital resources: We utilize the commercial paper market extensively for our short-term borrowing needs. At the onset of the pandemic in the United States, there had been reduced liquidity in the commercial paper credit market. However, federal legislative actions, as well as increased liquidity and the reduction in the federal funds rate by the Federal Reserve, have enabled the credit markets to function. We continue to monitor the ability for us to access the global capital and credit markets; however, if we are unable to access these markets, then our financial condition may be adversely affected.

Actions of regulators: We continue to work closely with our state regulatory commissions and consumer advocates on several customer assistance measures, including more flexible and new payment plan options in order to mitigate the impact on customer rates in the future, as well as financial hardship and arrearage management programs for those customers who are unable to pay their utility bills. We developed these long-term solutions for customers in order to help minimize the extent of the impact of COVID-19 on customer receivable balances and customers’ affordability in light of the adverse financial impact they may experience. We believe that we are developing successful mechanisms with our state regulatory commissions to recover our costs associated with COVID-19, while balancing the impact on our customers’ bills.

Timing of strategic development opportunities: The successful execution of our timeline for developing our offshore wind projects is based on several factors, including state and federal siting and permitting approvals. Between March 2020 and June 2020, COVID-19-related work restrictions prohibited work in New York and within New York jurisdictional waters. Those restrictions delayed offshore site investigations, and onshore environmental and geotechnical surveys, which could adversely impact our project siting and permit filing timelines. On April 8, 2020, the state of New York Administrative Law Judge granted a change to the start of the South Fork Wind evidentiary hearing schedule to September 30, 2020, due to ongoing COVID-19 work and travel restrictions. Although we are unable to predict the impact of those delays on our offshore wind projects at this time, we are currently developing mitigation plans to address permitting delays due to COVID-19 restrictions on our offshore wind projects. Similarly, we are unable to assess the potential impact that a reintroduction of these work restrictions in response to a future increase in COVID-19 infections would have on our projects.

Suppliers and Vendors: We have instituted measures to ensure our supply chain remains open to us; however, there could be global shortages that will impact our maintenance, capital programs, and storm response that we currently cannot anticipate.



Loss of key personnel: We continue to adjust our pandemic plan to address various scenarios including reduced workforce levels and limited mutual aid in the event of a significant storm event. We have implemented remote work arrangements for our workforce by enabling nearly half of our employees to work from home and taking extra precautions for our field-based employees. We have taken significant safety measures to ensure adequate social distancing for our field crews to safely provide essential services to our customers. We have also adopted protocols to ensure the safety and health of those employees who work onsite in critical facilities. We continue to monitor COVID-19 developments affecting our workforce and will take additional precautions that we determine are necessary in order to mitigate the impacts. Although to date our workforce continues to be able to safely and reliably deliver our critical services to customers, we are unable to predict the extent of the impact of COVID-19 on our employees.

Impact to Benefit Plans: As of June 30, 2020, under the Pension Protection Act, the funded status of our pension plan was approximately 99 percent. The pension and PBOP plans' funded status is highly dependent on benefit plan asset returns, interest rates, and discount rates, all of which could be materially impacted by an extended economic slowdown. Should these financial metrics be negatively impacted by COVID-19 as of December 31, 2020, it could result in the underperformance of our pension and PBOP plan investments, an increase in pension and PBOP obligations and employee benefit plan costs, and in a minimum pension funding requirement due by March 31, 2022 for the 2021 Plan year. We continue to monitor federal legislative pension developments that could provide additional pension funding relief.

We are currently unable to estimate the potential impact of COVID-19 to our financial position, results of operations and lower rate base growth.

Changes in tax laws, as well as the potential tax effects of business decisions could negatively impact our business, results of operations (including our expected project returns from our planned offshore wind facilities), financial condition and cash flows.

Other than as set forth above, there have been no additional risk factors identified and no material changes with regard to the risk factors previously disclosed in our 20192020 Form 10-K.

64
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table discloses purchases of our common shares made by us or on our behalf for the periods shown below.  The common shares purchased consist of open market purchases made by the Company or an independent agent.  These share transactions related to matching contributions under the Eversource 401k Plan.
PeriodTotal Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
April 1 - April 30, 2021— $— — — 
May 1 - May 31, 2021121 85.23 — — 
June 1 - June 30, 20212,445 80.41 — — 
Total2,566 $80.64 — — 

65
Period
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
April 1 - April 30, 2020
$


May 1 - May 31, 2020108
75.69


June 1 - June 30, 20202,309
83.35


Total2,417
$83.01





ITEM 6.    EXHIBITS    

ITEM 6.EXHIBITS

Each document described below is filed herewith, unless designated with an asterisk (*), which exhibits are incorporated by reference by the registrant under whose name the exhibit appears.
Exhibit No.Description
Listing of Exhibits (Eversource)
31
31.1
32
Listing of Exhibits (CL&P)
*314
31
31.1
32
Listing of Exhibits (NSTAR Electric Company)
*314
31
31.1
32
Listing of Exhibits (PSNH)
*314
31
31.1
32
Listing of Exhibits (Eversource, CL&P, NSTAR Electric, PSNH)
101.INSInline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation
101.DEFInline XBRL Taxonomy Extension Definition
66


101.LABInline XBRL Taxonomy Extension Labels
101.PREInline XBRL Taxonomy Extension Presentation
104The cover page from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020,2021, formatted in Inline XBRL

67


SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EVERSOURCE ENERGY
August 7, 20206, 2021By:/s/ Jay S. Buth
Jay S. Buth
Vice President, Controller and Chief Accounting Officer



SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE CONNECTICUT LIGHT AND POWER COMPANY
August 7, 20206, 2021By:/s/ Jay S. Buth
Jay S. Buth
Vice President, Controller and Chief Accounting Officer



SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NSTAR ELECTRIC COMPANY
August 7, 20206, 2021By:/s/ Jay S. Buth
Jay S. Buth
Vice President, Controller and Chief Accounting Officer



SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
August 7, 20206, 2021By:/s/ Jay S. Buth
Jay S. Buth
Vice President, Controller and Chief Accounting Officer

69
68