Eversource Energy (ES) 10-Q 2021 Q3 Quarterly report

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	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
	FORM	10-Q
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	September 30, 2021
	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: 001-05324

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: 000-00404

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: 001-02301

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: 001-06392

I.R.S. Employer Identification No. 02-0181050

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $5.00 par value per share	ES	New 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.

Yes	No
☒	☐

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).

Yes	No
☒	☐

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 Energy	Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐
The Connecticut Light and Power Company	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☐
NSTAR Electric Company	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☐
Public Service Company of New Hampshire	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging 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):

	Yes	No
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 issuer's classes of common stock, as of the latest practicable date.

Company - Class of Stock	Outstanding as of October 31, 2021
Eversource Energy Common Shares, $5.00 par value	343,805,812	shares
The Connecticut Light and Power Company Common Stock, $10.00 par value	6,035,205	shares
NSTAR Electric Company Common Stock, $1.00 par value	200	shares
Public Service Company of New Hampshire Common Stock, $1.00 par value	301	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 Company	Eversource Energy and subsidiaries
Eversource parent or ES parent	Eversource Energy, a public utility holding company
ES parent and other companies	ES parent and other companies are comprised of Eversource parent, Eversource Service, 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&P	The Connecticut Light and Power Company
NSTAR Electric	NSTAR Electric Company
PSNH	Public Service Company of New Hampshire
PSNH Funding	PSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR Gas	NSTAR Gas Company
EGMA	Eversource Gas Company of Massachusetts
Yankee Gas	Yankee Gas Services Company
Aquarion	Aquarion Company and its subsidiaries
NPT	Northern Pass Transmission LLC
Northern Pass	The high-voltage direct current (HVDC) and associated alternating-current transmission line project from Canada into New Hampshire
HEEC	Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric
Eversource Service	Eversource Energy Service Company
Bay State Wind	Bay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted
North East Offshore	North East Offshore, LLC, an offshore wind business holding company being developed jointly by Eversource and Denmark-based Ørsted
CYAPC	Connecticut Yankee Atomic Power Company
MYAPC	Maine Yankee Atomic Power Company
YAEC	Yankee Atomic Electric Company
Yankee Companies	CYAPC, YAEC and MYAPC
Regulated companies	The 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, NSTAR Gas and EGMA, NPT, Aquarion, and the solar power facilities of NSTAR Electric
Regulators and Government Agencies:
BOEM	U.S. Bureau of Ocean Energy Management
DEEP	Connecticut Department of Energy and Environmental Protection
DOE	U.S. Department of Energy
DOER	Massachusetts Department of Energy Resources
DPU	Massachusetts Department of Public Utilities
EPA	U.S. Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
ISO-NE	ISO New England, Inc., the New England Independent System Operator
MA DEP	Massachusetts Department of Environmental Protection
NHPUC	New Hampshire Public Utilities Commission
PURA	Connecticut Public Utilities Regulatory Authority
SEC	U.S. Securities and Exchange Commission
Other Terms and Abbreviations:
ADIT	Accumulated Deferred Income Taxes
AFUDC	Allowance For Funds Used During Construction
AOCI	Accumulated Other Comprehensive Income
ARO	Asset Retirement Obligation
Bcf	Billion cubic feet
CfD	Contract for Differences
CTA	Competitive Transition Assessment
CWIP	Construction Work in Progress
EDC	Electric distribution company

i

EDIT	Excess Deferred Income Taxes
EPS	Earnings Per Share
ERISA	Employee Retirement Income Security Act of 1974
ESOP	Employee Stock Ownership Plan
Eversource 2020 Form 10-K	The Eversource Energy and Subsidiaries 2020 combined Annual Report on Form 10-K as filed with the SEC
Fitch	Fitch Ratings
FMCC	Federally Mandated Congestion Charge
GAAP	Accounting principles generally accepted in the United States of America
GSC	Generation Service Charge
GWh	Gigawatt-Hours
IPP	Independent Power Producers
ISO-NE Tariff	ISO-NE FERC Transmission, Markets and Services Tariff
kV	Kilovolt
kVa	Kilovolt-ampere
kW	Kilowatt (equal to one thousand watts)
LNG	Liquefied natural gas
LRS	Supplier of last resort service
MG	Million gallons
MGP	Manufactured Gas Plant
MMBtu	One million British thermal units
MMcf	Million cubic feet
Moody's	Moody's Investors Services, Inc.
MW	Megawatt
MWh	Megawatt-Hours
NETOs	New England Transmission Owners (including Eversource, National Grid and Avangrid)
OCI	Other Comprehensive Income/(Loss)
PAM	Pension and PBOP Rate Adjustment Mechanism
PBOP	Postretirement Benefits Other Than Pension
PBOP Plan	Postretirement Benefits Other Than Pension Plan
Pension Plan	Single uniform noncontributory defined benefit retirement plan
PPA	Power purchase agreement
RECs	Renewable Energy Certificates
Regulatory ROE	The average cost of capital method for calculating the return on equity related to the distribution business segment excluding the wholesale transmission segment
ROE	Return on Equity
RRBs	Rate Reduction Bonds or Rate Reduction Certificates
RSUs	Restricted share units
S&P	Standard & Poor's Financial Services LLC
SBC	Systems Benefits Charge
SCRC	Stranded Cost Recovery Charge
SERP	Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
SS	Standard service
UI	The United Illuminating Company
VIE	Variable 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 I – FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)
	Eversource Energy and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Common Shareholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	The Connecticut Light and Power Company (Unaudited)
	Condensed Balance Sheets	6
	Condensed Statements of Income	7
	Condensed Statements of Comprehensive Income	7
	Condensed Statements of Common Stockholder's Equity	8
	Condensed Statements of Cash Flows	9
	NSTAR Electric Company and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	10
	Condensed Consolidated Statements of Income	11
	Condensed Consolidated Statements of Comprehensive Income	11
	Condensed Consolidated Statements of Common Stockholder's Equity	12
	Condensed Consolidated Statements of Cash Flows	13
	Public Service Company of New Hampshire and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	14
	Condensed Consolidated Statements of Income	15
	Condensed Consolidated Statements of Comprehensive Income	15
	Condensed Consolidated Statements of Common Stockholder's Equity	16
	Condensed Consolidated Statements of Cash Flows	17
	Combined Notes to Condensed Financial Statements (Unaudited)	18
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Eversource Energy and Subsidiaries	42
	The Connecticut Light and Power Company, NSTAR Electric Company and Subsidiary, and Public Service Company of New Hampshire and Subsidiaries	61
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	69
ITEM 4.	Controls and Procedures	69
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	70
ITEM 1A.	Risk Factors	70
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
ITEM 6.	Exhibits	72
SIGNATURES		74

iii

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Thousands of Dollars)	As of September 30, 2021		As of December 31, 2020
ASSETS
Current Assets:
Cash	$	88,204	$	106,599
Receivables, Net (net of allowance for uncollectible accounts of $441,723    and $358,851 as of September 30, 2021 and December 31, 2020, respectively)	1,288,758		1,195,925
Unbilled Revenues	176,325		233,025
Fuel, Materials, Supplies and REC Inventory	217,286		265,599
Regulatory Assets	1,016,304		1,076,556
Prepayments	177,869		105,620
Other Current Assets	108,807		146,819
Total Current Assets	3,073,553		3,130,143
Property, Plant and Equipment, Net	32,467,069		30,882,523
Deferred Debits and Other Assets:
Regulatory Assets	5,458,928		5,493,330
Goodwill	4,453,618		4,445,988
Investments in Unconsolidated Affiliates	1,356,313		1,107,143
Marketable Securities	466,628		456,617
Other Long-Term Assets	737,946		583,854
Total Deferred Debits and Other Assets	12,473,433		12,086,932
Total Assets	$	48,014,055	$	46,099,598
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	711,000	$	1,249,325
Long-Term Debt – Current Portion	798,880		1,053,186
Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	1,289,225		1,370,647
Regulatory Liabilities	612,931		389,430
Other Current Liabilities	802,831		809,214
Total Current Liabilities	4,258,077		4,915,012
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	4,341,105		4,095,339
Regulatory Liabilities	3,907,582		3,850,781
Derivative Liabilities	256,569		294,535
Asset Retirement Obligations	505,005		499,713
Accrued Pension, SERP and PBOP	1,330,037		1,653,788
Other Long-Term Liabilities	974,497		948,506
Total Deferred Credits and Other Liabilities	11,314,795		11,342,662
Long-Term Debt	17,420,300		15,125,876
Rate Reduction Bonds	453,702		496,912
Noncontrolling Interest – Preferred Stock of Subsidiaries	155,570		155,570
Common Shareholders' Equity:
Common Shares	1,789,092		1,789,092
Capital Surplus, Paid In	8,050,872		8,015,663
Retained Earnings	4,906,151		4,613,201
Accumulated Other Comprehensive Loss	(71,865)		(76,411)
Treasury Stock	(262,639)		(277,979)
Common Shareholders' Equity	14,411,611		14,063,566
Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	$	48,014,055	$	46,099,598

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)	2021		2020		2021		2020
Operating Revenues	$	2,432,794	$	2,343,642	$	7,381,172	$	6,670,497
Operating Expenses:
Purchased Power, Fuel and Transmission	880,639		806,254		2,529,217		2,312,957
Operations and Maintenance	389,065		332,031		1,265,754		1,006,148
Depreciation	276,846		244,453		822,197		721,179
Amortization	45,236		57,515		158,860		130,687
Energy Efficiency Programs	143,796		145,047		460,814		408,794
Taxes Other Than Income Taxes	213,881		197,112		623,827		556,726
Total Operating Expenses	1,949,463		1,782,412		5,860,669		5,136,491
Operating Income	483,331		561,230		1,520,503		1,534,006
Interest Expense	147,962		134,066		431,162		403,067
Other Income, Net	43,768		29,218		124,588		83,565
Income Before Income Tax Expense	379,137		456,382		1,213,929		1,214,504
Income Tax Expense	94,091		108,242		294,461		275,621
Net Income	285,046		348,140		919,468		938,883
Net Income Attributable to Noncontrolling Interests	1,880		1,880		5,639		5,639
Net Income Attributable to Common Shareholders	$	283,166	$	346,260	$	913,829	$	933,244
Basic Earnings Per Common Share	$	0.82	$	1.01	$	2.66	$	2.77
Diluted Earnings Per Common Share	$	0.82	$	1.01	$	2.65	$	2.76
Weighted Average Common Shares Outstanding:
Basic	344,023,846		343,076,614		343,848,905		337,375,172
Diluted	344,669,782		343,773,602		344,480,056		338,424,100

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Net Income	$	285,046	$	348,140	$	919,468	$	938,883
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	115		602		967		1,218
Changes in Unrealized (Losses)/Gains on    Marketable Securities	(106)		(134)		(569)		295
Changes in Funded Status of Pension, SERP and    PBOP Benefit Plans	2,468		1,693		4,148		3,149
Other Comprehensive Income, Net of Tax	2,477		2,161		4,546		4,662
Comprehensive Income Attributable to    Noncontrolling Interests	(1,880)		(1,880)		(5,639)		(5,639)
Comprehensive Income Attributable to Common    Shareholders	$	285,643	$	348,421	$	918,375	$	937,906

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 Nine Months Ended September 30, 2021
	Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	Shares	Amount
Balance as of January 1, 2021	342,954,023	$	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 Shares	480,275			16,182						8,981		25,163
Other Comprehensive Income								1,188				1,188
Balance as of March 31, 2021	343,434,298	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 Shares	166,805			10,679						3,120		13,799
Other Comprehensive Income								881				881
Balance as of June 30, 2021	343,601,103	1,789,092		8,032,959		4,830,058		(74,342)		(265,878)		14,311,889
Net Income						285,046						285,046
Dividends on Common Shares - $0.6025 Per Share						(207,073)						(207,073)
Dividends on Preferred Stock						(1,880)						(1,880)
Long-Term Incentive Plan Activity				6,478								6,478
Issuance of Treasury Shares	173,221			11,435						3,239		14,674
Other Comprehensive Income								2,477				2,477
Balance as of September 30, 2021	343,774,324	$	1,789,092	$	8,050,872	$	4,906,151	$	(71,865)	$	(262,639)	$	14,411,611

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

3

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY

(Unaudited)

	For the Nine Months Ended September 30, 2020
	Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	Shares	Amount
Balance as of January 1, 2020	329,880,645	$	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 value	5,960,000	29,800		402,300								432,100
Long-Term Incentive Plan Activity				(15,295)								(15,295)
Issuance of Treasury Shares	570,542			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 Income								1,948				1,948
Balance as of March 31, 2020	336,411,187	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 value	6,000,000	30,000		487,560								517,560
Long-Term Incentive Plan Activity				7,694								7,694
Issuance of Treasury Shares	216,675			12,524						4,024		16,548
Capital Stock Expense				(8,321)								(8,321)
Other Comprehensive Income								553				553
Balance as of June 30, 2020	342,627,862	1,789,092		7,979,146		4,384,093		(62,558)		(284,515)		13,805,258
Net Income						348,140						348,140
Dividends on Common Shares - $0.5675 Per Share						(194,493)						(194,493)
Dividends on Preferred Stock						(1,880)						(1,880)
Long-Term Incentive Plan Activity				6,921								6,921
Issuance of Treasury Shares	169,611			10,909						3,001		13,910
Other Comprehensive Income								2,161				2,161
Balance as of September 30, 2020	342,797,473	$	1,789,092	$	7,996,976	$	4,535,860	$	(60,397)	$	(281,514)	$	13,980,017

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

4

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020
Operating Activities:
Net Income	$	919,468	$	938,883
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	822,197		721,179
Deferred Income Taxes	191,346		156,795
Uncollectible Expense	39,690		31,101
Pension, SERP and PBOP (Income)/Expense, Net	(10,882)		9,153
Pension and PBOP Contributions	(140,000)		(107,985)
Regulatory Over/(Under) Recoveries, Net	87,455		(29,287)
Charges at CL&P related to PURA Settlement Agreement and Storm Performance Penalty	103,583		—
Amortization	158,860		130,687
Other	(229,878)		(69,216)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(158,205)		(193,895)
Fuel, Materials, Supplies and REC Inventory	48,312		21,102
Taxes Receivable/Accrued, Net	44,003		89,759
Accounts Payable	(258,509)		(121,034)
Other Current Assets and Liabilities, Net	(97,167)		(81,033)
Net Cash Flows Provided by Operating Activities	1,520,273		1,496,209
Investing Activities:
Investments in Property, Plant and Equipment	(2,211,136)		(2,101,564)
Proceeds from Sales of Marketable Securities	334,619		386,712
Purchases of Marketable Securities	(313,961)		(391,368)
Proceeds from the Sale of Hingham Water System	—		110,536
Investments in Unconsolidated Affiliates, Net	(245,245)		(31,677)
Other Investing Activities	17,436		17,647
Net Cash Flows Used in Investing Activities	(2,418,287)		(2,009,714)
Financing Activities:
Issuance of Common Shares, Net of Issuance Costs	—		929,025
Cash Dividends on Common Shares	(603,611)		(555,655)
Cash Dividends on Preferred Stock	(5,639)		(5,639)
Decrease in Notes Payable	(458,325)		(1,174,870)
Repayment of Rate Reduction Bonds	(43,210)		(43,210)
Issuance of Long-Term Debt	3,150,000		2,360,000
Retirement of Long-Term Debt	(1,142,500)		(302,236)
Other Financing Activities	(45,522)		18,030
Net Cash Flows Provided by Financing Activities	851,193		1,225,445
Net (Decrease)/Increase in Cash and Restricted Cash	(46,821)		711,940
Cash and Restricted Cash - Beginning of Period	264,950		117,063
Cash and Restricted Cash - End of Period	$	218,129	$	829,003

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

5

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

(Thousands of Dollars)	As of September 30, 2021		As of December 31, 2020
ASSETS
Current Assets:
Cash	$	62,791	$	90,801
Receivables, Net (net of allowance for uncollectible accounts of $195,463 and    $157,447 as of September 30, 2021 and December 31, 2020, respectively)	549,144		459,214
Accounts Receivable from Affiliated Companies	38,544		17,486
Unbilled Revenues	52,589		57,407
Materials and Supplies	54,894		57,924
Regulatory Assets	325,268		345,622
Prepaid Property Taxes	76,829		25,779
Prepayments and Other Current Assets	47,402		58,171
Total Current Assets	1,207,461		1,112,404
Property, Plant and Equipment, Net	10,598,836		10,234,556
Deferred Debits and Other Assets:
Regulatory Assets	1,981,805		1,866,152
Other Long-Term Assets	267,312		242,862
Total Deferred Debits and Other Assets	2,249,117		2,109,014
Total Assets	$	14,055,414	$	13,455,974
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Accounts Payable	$	473,287	$	451,240
Accounts Payable to Affiliated Companies	98,298		51,118
Obligations to Third Party Suppliers	53,183		49,967
Regulatory Liabilities	311,269		137,166
Derivative Liabilities	72,249		68,767
Other Current Liabilities	168,547		102,060
Total Current Liabilities	1,176,833		860,318
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,495,407		1,408,343
Regulatory Liabilities	1,213,469		1,204,942
Derivative Liabilities	256,569		294,535
Accrued Pension, SERP and PBOP	313,206		478,325
Other Long-Term Liabilities	154,249		133,690
Total Deferred Credits and Other Liabilities	3,432,900		3,519,835
Long-Term Debt	4,215,096		3,914,835
Preferred Stock Not Subject to Mandatory Redemption	116,200		116,200
Common Stockholder's Equity:
Common Stock	60,352		60,352
Capital Surplus, Paid In	2,810,765		2,810,765
Retained Earnings	2,243,004		2,173,367
Accumulated Other Comprehensive Income	264		302
Common Stockholder's Equity	5,114,385		5,044,786
Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	$	14,055,414	$	13,455,974

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

6

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Operating Revenues	$	919,643	$	994,270	$	2,736,513	$	2,711,394
Operating Expenses:
Purchased Power and Transmission	392,301		399,117		1,073,712		1,089,232
Operations and Maintenance	137,816		147,487		465,630		417,717
Depreciation	85,304		80,583		253,132		238,735
Amortization of Regulatory Assets, Net	28,921		36,365		76,637		37,215
Energy Efficiency Programs	35,714		41,829		100,810		109,655
Taxes Other Than Income Taxes	99,901		97,715		275,178		260,571
Total Operating Expenses	779,957		803,096		2,245,099		2,153,125
Operating Income	139,686		191,174		491,414		558,269
Interest Expense	42,778		38,369		124,371		114,972
Other Income, Net	6,903		5,917		21,690		16,273
Income Before Income Tax Expense	103,811		158,722		388,733		459,570
Income Tax Expense	33,658		38,625		104,626		103,464
Net Income	$	70,153	$	120,097	$	284,107	$	356,106

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

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Net Income	$	70,153	$	120,097	$	284,107	$	356,106
Other Comprehensive Loss, Net of Tax:
Qualified Cash Flow Hedging Instruments	(7)		(7)		(20)		(20)
Changes in Unrealized (Losses)/Gains on    Marketable Securities	(2)		(4)		(18)		11
Other Comprehensive Loss, Net of Tax	(9)		(11)		(38)		(9)
Comprehensive Income	$	70,144	$	120,086	$	284,069	$	356,097

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

7

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)

	For the Nine Months Ended September 30, 2021
	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, 2021	6,035,205	$	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, 2021	6,035,205	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								3		3
Balance as of June 30, 2021	6,035,205	60,352		2,810,765		2,244,341		273		5,115,731
Net Income						70,153				70,153
Dividends on Preferred Stock						(1,390)				(1,390)
Dividends on Common Stock						(70,100)				(70,100)
Other Comprehensive Loss								(9)		(9)
Balance as of September 30, 2021	6,035,205	$	60,352	$	2,810,765	$	2,243,004	$	264	$	5,114,385

	For the Nine Months Ended September 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, 2020	6,035,205	$	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, 2020	6,035,205	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, 2020	6,035,205	60,352		2,535,765		1,954,221		318		4,550,656
Net Income						120,097				120,097
Dividends on Preferred Stock						(1,390)				(1,390)
Capital Contributions from Eversource Parent				125,000						125,000
Other Comprehensive Loss								(11)		(11)
Balance as of September 30, 2020	6,035,205	$	60,352	$	2,660,765	$	2,072,928	$	307	$	4,794,352

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

8

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020
Operating Activities:
Net Income	$	284,107	$	356,106
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	253,132		238,735
Deferred Income Taxes	77,147		92,590
Uncollectible Expense	10,183		10,013
Pension, SERP, and PBOP Expense, Net	4,478		8,629
Pension Contributions	(78,913)		(23,200)
Regulatory Underrecoveries, Net	(19,404)		(32,051)
Charges related to PURA Settlement Agreement and Storm Performance Penalty	103,583		—
Amortization of Regulatory Assets, Net	76,637		37,215
Other	(74,179)		(63,525)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(165,423)		(153,464)
Taxes Receivable/Accrued, Net	45,762		(1,515)
Accounts Payable	(54,226)		(1,976)
Other Current Assets and Liabilities, Net	(12,315)		(68,316)
Net Cash Flows Provided by Operating Activities	450,569		399,241
Investing Activities:
Investments in Property, Plant and Equipment	(563,234)		(609,690)
Other Investing Activities	251		496
Net Cash Flows Used in Investing Activities	(562,983)		(609,194)
Financing Activities:
Cash Dividends on Common Stock	(210,300)		(69,500)
Cash Dividends on Preferred Stock	(4,169)		(4,169)
Capital Contributions from Eversource Parent	—		125,000
Issuance of Long-Term Debt	425,000		—
Retirement of Long-Term Debt	(120,500)		—
Increase in Notes Payable to Eversource Parent	—		172,100
Other Financing Activities	(5,664)		(1,214)
Net Cash Flows Provided by Financing Activities	84,367		222,217
Net (Decrease)/Increase in Cash and Restricted Cash	(28,047)		12,264
Cash and Restricted Cash - Beginning of Period	99,809		4,971
Cash and Restricted Cash - End of Period	$	71,762	$	17,235

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

9

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Thousands of Dollars)	As of September 30, 2021		As of December 31, 2020
ASSETS
Current Assets:
Cash	$	3,538	$	102
Receivables, Net (net of allowance for uncollectible accounts of $105,020 and    $91,583 as of September 30, 2021 and December 31, 2020, respectively)	489,503		403,045
Accounts Receivable from Affiliated Companies	27,417		30,095
Unbilled Revenues	47,844		38,342
Materials, Supplies and REC Inventory	83,667		133,894
Taxes Receivable	—		65,051
Regulatory Assets	388,408		399,882
Prepayments and Other Current Assets	22,490		21,833
Total Current Assets	1,062,867		1,092,244
Property, Plant and Equipment, Net	10,611,728		10,123,062
Deferred Debits and Other Assets:
Regulatory Assets	1,247,715		1,304,019
Prepaid PBOP	224,244		204,138
Other Long-Term Assets	185,555		162,836
Total Deferred Debits and Other Assets	1,657,514		1,670,993
Total Assets	$	13,332,109	$	12,886,299
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	138,000	$	195,000
Notes Payable to Eversource Parent	24,600		21,300
Long-Term Debt – Current Portion	—		250,000
Accounts Payable	338,369		383,558
Accounts Payable to Affiliated Companies	78,974		95,703
Obligations to Third Party Suppliers	137,211		98,572
Renewable Portfolio Standards Compliance Obligations	72,124		127,536
Regulatory Liabilities	205,771		164,761
Other Current Liabilities	118,747		72,118
Total Current Liabilities	1,113,796		1,408,548
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,494,976		1,459,906
Regulatory Liabilities	1,561,572		1,550,390
Accrued Pension and SERP	110,752		172,571
Other Long-Term Liabilities	344,088		337,245
Total Deferred Credits and Other Liabilities	3,511,388		3,520,112
Long-Term Debt	3,984,724		3,393,221
Preferred Stock Not Subject to Mandatory Redemption	43,000		43,000
Common Stockholder's Equity:
Common Stock	—		—
Capital Surplus, Paid In	2,053,942		1,993,942
Retained Earnings	2,624,784		2,527,167
Accumulated Other Comprehensive Income	475		309
Common Stockholder's Equity	4,679,201		4,521,418
Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	$	13,332,109	$	12,886,299

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

10

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Operating Revenues	$	918,698	$	875,371	$	2,343,116	$	2,270,174
Operating Expenses:
Purchased Power and Transmission	294,052		267,375		711,667		702,117
Operations and Maintenance	142,074		131,143		421,649		369,293
Depreciation	84,820		80,366		251,530		238,232
Amortization of Regulatory Assets, Net	8,073		22,527		23,963		69,139
Energy Efficiency Programs	86,699		85,244		226,071		210,666
Taxes Other Than Income Taxes	54,723		54,680		163,501		153,985
Total Operating Expenses	670,441		641,335		1,798,381		1,743,432
Operating Income	248,257		234,036		544,735		526,742
Interest Expense	37,329		31,029		106,829		95,000
Other Income, Net	20,215		12,802		58,941		38,152
Income Before Income Tax Expense	231,143		215,809		496,847		469,894
Income Tax Expense	53,692		50,081		114,560		106,309
Net Income	$	177,451	$	165,728	$	382,287	$	363,585

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Net Income	$	177,451	$	165,728	$	382,287	$	363,585
Other Comprehensive (Loss)/Income, Net of Tax:
Changes in Funded Status of SERP Benefit Plan	(40)		(43)		(122)		(129)
Qualified Cash Flow Hedging Instruments	5		109		293		327
Changes in Unrealized (Losses)/Gains on      Marketable Securities	(1)		(1)		(5)		2
Other Comprehensive (Loss)/Income, Net of Tax	(36)		65		166		200
Comprehensive Income	$	177,415	$	165,793	$	382,453	$	363,785

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

11

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)

	For the Nine Months Ended September 30, 2021
	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, 2021	200	$	—	$	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, 2021	200	—		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 Parent				60,000						60,000
Other Comprehensive Income								141		141
Balance as of June 30, 2021	200	—		2,053,942		2,447,823		511		4,502,276
Net Income						177,451				177,451
Dividends on Preferred Stock						(490)				(490)
Other Comprehensive Loss								(36)		(36)
Balance as of September 30, 2021	200	$	—	$	2,053,942	$	2,624,784	$	475	$	4,679,201

	For the Nine Months Ended September 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, 2020	200	$	—	$	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, 2020	200	—		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, 2020	200	—		1,813,442		2,346,504		290		4,160,236
Net Income						165,728				165,728
Dividends on Preferred Stock						(490)				(490)
Other Comprehensive Income								65		65
Balance as of September 30, 2020	200	$	—	$	1,813,442	$	2,511,742	$	355	$	4,325,539

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

12

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020
Operating Activities:
Net Income	$	382,287	$	363,585
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	251,530		238,232
Deferred Income Taxes	12,905		13,436
Uncollectible Expense	12,477		11,321
Pension, SERP and PBOP Income, Net	(19,627)		(13,714)
Pension Contributions	(10,000)		(650)
Regulatory Over/(Under) Recoveries, Net	86,111		(20,047)
Amortization of Regulatory Assets, Net	23,963		69,139
Other	(71,005)		(25,508)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(110,336)		(104,528)
Materials, Supplies and REC Inventory	50,227		27,709
Taxes Receivable/Accrued, Net	109,561		55,405
Accounts Payable	(85,431)		(57,300)
Other Current Assets and Liabilities, Net	(15,322)		(54,481)
Net Cash Flows Provided by Operating Activities	617,340		502,599
Investing Activities:
Investments in Property, Plant and Equipment	(675,245)		(655,039)
Other Investing Activities	70		138
Net Cash Flows Used in Investing Activities	(675,175)		(654,901)
Financing Activities:
Cash Dividends on Common Stock	(283,200)		(196,500)
Cash Dividends on Preferred Stock	(1,470)		(1,470)
Issuance of Long-Term Debt	600,000		400,000
Retirement of Long-Term Debt	(250,000)		(95,000)
Capital Contributions from Eversource Parent	60,000		—
Increase in Notes Payable to Eversource Parent	3,300		6,300
(Decrease)/Increase in Notes Payable	(57,000)		50,000
Other Financing Activities	(10,367)		(4,931)
Net Cash Flows Provided by Financing Activities	61,263		158,399
Net Increase in Cash and Restricted Cash	3,428		6,097
Cash and Restricted Cash - Beginning of Period	17,410		6,312
Cash and Restricted Cash - End of Period	$	20,838	$	12,409

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 BALANCE SHEETS

(Unaudited)

(Thousands of Dollars)	As of September 30, 2021		As of December 31, 2020
ASSETS
Current Assets:
Cash	$	3,869	$	141
Receivables, Net (net of allowance for uncollectible accounts of $16,996 and $17,157    as of September 30, 2021 and December 31, 2020, respectively)	136,481		119,899
Accounts Receivable from Affiliated Companies	13,866		10,925
Unbilled Revenues	46,854		46,041
Materials, Supplies and REC Inventory	24,789		26,829
Regulatory Assets	97,948		115,852
Special Deposits	18,605		36,767
Prepaid Property Taxes	5,987		26,257
Prepayments and Other Current Assets	2,851		10,788
Total Current Assets	351,250		393,499
Property, Plant and Equipment, Net	3,529,050		3,374,270
Deferred Debits and Other Assets:
Regulatory Assets	829,848		873,203
Other Long-Term Assets	22,684		23,733
Total Deferred Debits and Other Assets	852,532		896,936
Total Assets	$	4,732,832	$	4,664,705
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	66,500	$	46,300
Long-Term Debt – Current Portion	—		282,000
Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	108,243		132,635
Accounts Payable to Affiliated Companies	25,055		43,397
Regulatory Liabilities	96,817		58,756
Other Current Liabilities	61,883		58,487
Total Current Liabilities	401,708		664,785
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	535,656		537,627
Regulatory Liabilities	389,426		383,183
Accrued Pension, SERP and PBOP	162,115		184,715
Other Long-Term Liabilities	35,564		37,874
Total Deferred Credits and Other Liabilities	1,122,761		1,143,399
Long-Term Debt	1,163,630		817,070
Rate Reduction Bonds	453,702		496,912
Common Stockholder's Equity:
Common Stock	—		—
Capital Surplus, Paid In	1,088,134		928,134
Retained Earnings	502,870		615,018
Accumulated Other Comprehensive Income/(Loss)	27		(613)
Common Stockholder's Equity	1,591,031		1,542,539
Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	$	4,732,832	$	4,664,705

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 INCOME

(Unaudited)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Operating Revenues	$	314,893	$	283,669	$	887,177	$	815,261
Operating Expenses:
Purchased Power and Transmission	107,353		96,612		279,475		273,311
Operations and Maintenance	57,041		50,657		168,242		151,802
Depreciation	30,169		25,410		89,462		74,494
Amortization of Regulatory Assets, Net	17,922		7,360		62,744		39,034
Energy Efficiency Programs	10,762		11,081		30,475		29,231
Taxes Other Than Income Taxes	24,038		18,174		69,639		58,331
Total Operating Expenses	247,285		209,294		700,037		626,203
Operating Income	67,608		74,375		187,140		189,058
Interest Expense	14,321		14,942		42,774		44,029
Other Income, Net	3,171		4,065		11,598		10,882
Income Before Income Tax Expense	56,458		63,498		155,964		155,911
Income Tax Expense	12,315		16,347		32,512		37,527
Net Income	$	44,143	$	47,151	$	123,452	$	118,384

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 September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020		2021		2020
Net Income	$	44,143	$	47,151	$	123,452	$	118,384
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	109		268		673		806
Changes in Unrealized (Losses)/Gains on    Marketable Securities	(6)		(8)		(33)		17
Other Comprehensive Income, Net of Tax	103		260		640		823
Comprehensive Income	$	44,246	$	47,411	$	124,092	$	119,207

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 COMMON STOCKHOLDER'S EQUITY

(Unaudited)

	For the Nine Months Ended September 30, 2021
	Common Stock			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount
Balance as of January 1, 2021	301	$	—	$	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, 2021	301	—		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 Income								282		282
Balance as of June 30, 2021	301	—		1,088,134		483,927		(76)		1,571,985
Net Income						44,143				44,143
Dividends on Common Stock						(25,200)				(25,200)
Other Comprehensive Income								103		103
Balance as of September 30, 2021	301	$	—	$	1,088,134	$	502,870	$	27	$	1,591,031

	For the Nine Months Ended September 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, 2020	301	$	—	$	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, 2020	301	—		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, 2020	301	—		903,134		538,939		(1,144)		1,440,929
Net Income						47,151				47,151
Other Comprehensive Income								260		260
Balance as of September 30, 2020	301	$	—	$	903,134	$	586,090	$	(884)	$	1,488,340

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

16

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
(Thousands of Dollars)	2021		2020
Operating Activities:
Net Income	$	123,452	$	118,384
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	89,462		74,494
Deferred Income Taxes	(13,385)		13,959
Uncollectible Expense	4,381		2,058
Regulatory Over/(Under) Recoveries, Net	29,029		(22,203)
Amortization of Regulatory Assets, Net	62,744		39,034
Pension, SERP and PBOP Income, Net	(2,664)		(894)
Pension Contributions	—		(19,500)
Other	(22,738)		(7,545)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(25,607)		(24,562)
Materials, Supplies and REC Inventory	2,040		(301)
Taxes Receivable/Accrued, Net	22,286		1,313
Accounts Payable	(42,654)		(29,388)
Other Current Assets and Liabilities, Net	10,826		4,363
Net Cash Flows Provided by Operating Activities	237,172		149,212
Investing Activities:
Investments in Property, Plant and Equipment	(217,414)		(248,899)
Other Investing Activities	431		1,969
Net Cash Flows Used in Investing Activities	(216,983)		(246,930)
Financing Activities:
Cash Dividends on Common Stock	(235,600)		(22,300)
Capital Contributions from Eversource Parent	160,000		—
Issuance of Long-Term Debt	350,000		150,000
Retirement of Long-Term Debt	(282,000)		—
Repayment of Rate Reduction Bonds	(43,210)		(43,210)
Increase in Notes Payable to Eversource Parent	20,200		2,100
Other Financing Activities	(2,961)		(2,965)
Net Cash Flows (Used in)/Provided by Financing Activities	(33,571)		83,625
Net Decrease in Cash and Restricted Cash	(13,382)		(14,093)
Cash and Restricted Cash - Beginning of Period	39,555		36,688
Cash and Restricted Cash - End of Period	$	26,173	$	22,595

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

17

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, 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 4.3 million electric, natural gas and water customers through 9 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 2020 Form 10-K, which was filed with the SEC on February 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 September 30, 2021 and December 31, 2020, and the results of operations, comprehensive income and common shareholders' equity for the three and nine months ended September 30, 2021 and 2020 and the cash flows for the nine months ended September 30, 2021 and 2020. The results of operations and comprehensive income for the three and nine months ended September 30, 2021 and 2020 and the cash flows for the nine months ended September 30, 2021 and 2020 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 U.S. economy. We provide a critical service to our customers 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 the re-entry phase of our pandemic response plan, in which the majority of our employees under remote work arrangements have transitioned back to the workplace. We have not experienced significant impacts directly related to the pandemic that have materially affected our current operations, our workforce, or results of operations. The extent of the impact to us in the future will vary, and depend on the duration, scope and severity of the 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.

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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. See Note 1C, "Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts," for discussion of our evaluation of the allowance for doubtful accounts as of September 30, 2021 in light of the COVID-19 pandemic and Note 2, "Regulatory Accounting," for the amount of net incremental COVID-19 costs deferred on our balance sheets.

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 Recently Adopted: On January 1, 2021, the Company 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 ASU did not have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric and PSNH.

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. The current expected credit loss (CECL) model is 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 collectability from customers, including current conditions, reasonable forecasts, and expectations of future collectability and collection efforts. Management continuously assesses the collectability 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 September 30, 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, 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. In Connecticut, the moratorium on disconnections of commercial and non-hardship residential customers ended in June 2021 and September 2021, respectively, but is still in place for hardship 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 resumed after these moratoria have expired, which has resulted in recent improved collection experience and more customers applying for, and receiving, hardship status. 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. As a result of the order, in the first nine months 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 for hardship residential customers ended in May 2021 and PSNH has resumed disconnection activities, which has resulted in improved collection of outstanding customer receivable balances.

Based upon the evaluation performed, in the first nine months of 2021, management increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by $25.8 million for Eversource (increase of $16.3 million for CL&P and $12.5 million at our natural gas businesses, and decrease of $1.8 million at NSTAR Electric). In the third quarter of 2021, the COVID-19 related allowance for uncollectible accounts decreased by $6.5 million at Eversource (increased $4.0 million at CL&P, and decreased $8.3 million at NSTAR Electric and $2.2 million at our natural gas businesses). The 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 September 30, 2021, the total amount incurred as a result of COVID-19 included in the allowance for uncollectible accounts was $57.0 million at Eversource ($20.1 million at CL&P, $8.5 million at NSTAR Electric, and $27.4 million at our natural gas businesses).

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Management concluded that the reserve balance as of September 30, 2021 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, 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. Management uses a higher credit risk profile for this pool of trade receivables as compared to non-hardship receivables. 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 as of September 30th is as follows:

	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
Three Months Ended 2021
Beginning Balance	$	210.7	$	215.1	$	425.8	$	145.6	$	43.2	$	188.8	$	35.9	$	62.1	$	98.0	$	17.2
Uncollectible Expense	—		12.0		12.0		—		3.6		3.6		—		5.1		5.1		1.2
Uncollectible Costs Deferred (1)	22.8		1.7		24.5		4.5		5.7		10.2		11.8		(3.5)		8.3		1.2
Write-Offs	(3.9)		(20.5)		(24.4)		(3.5)		(5.4)		(8.9)		(0.1)		(7.4)		(7.5)		(2.8)
Recoveries Collected	0.3		3.5		3.8		0.2		1.6		1.8		—		1.1		1.1		0.2
Ending Balance	$	229.9	$	211.8	$	441.7	$	146.8	$	48.7	$	195.5	$	47.6	$	57.4	$	105.0	$	17.0
Nine 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 Expense	—		39.7		39.7		—		10.2		10.2		—		12.5		12.5		4.4
Uncollectible Costs Deferred (1)	44.8		53.3		98.1		25.7		21.4		47.1		8.3		11.8		20.1		2.0
Write-Offs	(10.6)		(55.2)		(65.8)		(8.7)		(14.8)		(23.5)		(0.4)		(22.6)		(23.0)		(7.3)
Recoveries Collected	0.9		9.9		10.8		0.7		3.6		4.3		—		3.8		3.8		0.7
Ending Balance	$	229.9	$	211.8	$	441.7	$	146.8	$	48.7	$	195.5	$	47.6	$	57.4	$	105.0	$	17.0

	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
Three Months Ended 2020
Beginning Balance	$	175.5	$	94.5	$	270.0	$	116.3	$	20.4	$	136.7	$	34.6	$	34.1	$	68.7	$	11.8
Uncollectible Expense	—		10.5		10.5		—		3.8		3.8		—		4.5		4.5		0.8
Uncollectible Costs Deferred (1)	10.1		20.4		30.5		11.2		4.9		16.1		(1.3)		10.4		9.1		3.2
Write-Offs	(7.3)		(11.8)		(19.1)		(2.6)		(4.6)		(7.2)		(0.2)		(6.3)		(6.5)		(2.0)
Recoveries Collected	0.4		2.7		3.1		0.3		1.1		1.4		—		1.0		1.0		0.2
Ending Balance	$	178.7	$	116.3	$	295.0	$	125.2	$	25.6	$	150.8	$	33.1	$	43.7	$	76.8	$	14.0
Nine 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 Expense	—		31.1		31.1		—		10.0		10.0		—		11.3		11.3		2.1
Uncollectible Costs Deferred (1)	24.9		41.5		66.4		32.7		8.3		41.0		(8.4)		17.3		8.9		5.6
Write-Offs	(12.3)		(49.3)		(61.6)		(10.0)		(14.0)		(24.0)		(0.8)		(20.5)		(21.3)		(5.0)
Recoveries Collected	1.2		9.3		10.5		1.1		3.2		4.3		—		3.8		3.8		0.5
Ending Balance	$	178.7	$	116.3	$	295.0	$	125.2	$	25.6	$	150.8	$	33.1	$	43.7	$	76.8	$	14.0

(1) These expected credit losses are deferred as regulatory costs on the balance sheets, as these amounts are ultimately recovered in rates. Amounts include uncollectible costs for hardship accounts and other customer receivables, including uncollectible amounts related to COVID-19 and uncollectible energy supply costs.

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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 valuation 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 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
	September 30, 2021								September 30, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service    Income Components	$	21.7	$	4.2	$	10.1	$	2.5	$	11.0	$	0.9	$	7.2	$	1.8
AFUDC Equity	10.3		1.7		6.2		0.3		10.3		3.5		5.5		0.9
Equity in Earnings of Unconsolidated Affiliates (1)	4.9		—		0.1		—		3.9		—		0.1		—
Investment (Loss)/Income	(0.6)		(0.3)		(0.2)		(0.1)		1.0		1.3		(0.2)		0.2
Interest Income	7.3		1.3		3.9		0.4		1.5		0.2		0.1		1.2
Gain on Sale of Property	—		—		—		—		1.5		—		—		—
Other	0.2		—		0.1		0.1		—		—		0.1		—
Total Other Income, Net	$	43.8	$	6.9	$	20.2	$	3.2	$	29.2	$	5.9	$	12.8	$	4.1
	For the Nine Months Ended
	September 30, 2021								September 30, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service    Income Components	$	63.9	$	11.2	$	30.3	$	7.9	$	34.3	$	3.0	$	22.2	$	5.2
AFUDC Equity	28.7		5.1		18.6		1.2		31.8		11.4		15.8		3.5
Equity in Earnings of Unconsolidated Affiliates (1)	13.3		—		0.3		—		13.8		—		0.4		—
Investment Income/(Loss)	0.7		1.2		0.6		0.3		(1.5)		—		(1.5)		0.1
Interest Income	17.2		4.1		8.8		2.0		3.3		1.8		0.7		2.0
Gain on Sale of Property	0.1		—		—		0.1		1.8		—		0.3		—
Other	0.7		0.1		0.3		0.1		0.1		0.1		0.3		0.1
Total Other Income, Net	$	124.6	$	21.7	$	58.9	$	11.6	$	83.6	$	16.3	$	38.2	$	10.9

(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 nine months ended September 30, 2021. For the nine months ended September 30, 2020, equity in earnings of unconsolidated affiliates included $2.4 million of primarily realized gains associated with this investment.

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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 Ended				For the Nine Months Ended
(Millions of Dollars)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Eversource	$	49.4	$	48.4	$	137.9	$	129.1
CL&P	46.1		45.6		120.7		114.2

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 September 30, 2021		As of September 30, 2020
Eversource	$	359.6	$	357.4
CL&P	75.3		97.8
NSTAR Electric	94.2		92.6
PSNH	32.8		50.0

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 September 30, 2021								As of December 31, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Cash as reported on the Balance Sheets	$	88.2	$	62.8	$	3.5	$	3.9	$	106.6	$	90.8	$	0.1	$	0.1
Restricted cash included in:
Special Deposits	55.5		8.7		17.2		18.6		73.6		8.7		17.2		36.8
Marketable Securities	29.7		0.3		0.1		0.5		41.2		0.3		0.1		0.6
Other Long-Term Assets	44.7		—		—		3.2		43.6		—		—		2.1
Cash and Restricted Cash as reported on the     Statements of Cash Flows	$	218.1	$	71.8	$	20.8	$	26.2	$	265.0	$	99.8	$	17.4	$	39.6

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. Restricted cash included in Other Long-Term Assets includes $41.5 million related to an Energy Relief Fund for energy efficiency and clean energy measures in the Merrimack Valley, and an additional energy efficiency program established under the terms of the EGMA settlement agreement.

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 and the regulatory assets that have been recorded.  If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises, 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.

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Regulatory Assets:  The components of regulatory assets were as follows:

	As of September 30, 2021								As of December 31, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Benefit Costs	$	2,566.1	$	540.2	$	638.4	$	249.7	$	2,794.2	$	632.3	$	690.0	$	267.6
Income Taxes, Net	756.4		458.1		113.8		18.7		747.1		458.9		110.4		15.2
Securitized Stranded Costs	489.7		—		—		489.7		522.1		—		—		522.1
Storm Restoration Costs, Net	944.2		674.2		198.1		71.9		765.6		515.1		186.4		64.1
Regulatory Tracker Mechanisms	883.0		304.6		320.0		76.8		850.5		246.6		332.2		95.3
Derivative Liabilities	265.3		265.3		—		—		296.3		293.1		—		—
Goodwill-related	302.0		—		259.3		—		314.7		—		270.2		—
Asset Retirement Obligations	121.6		33.7		57.8		4.0		118.4		32.1		58.6		3.9
Other Regulatory Assets	146.9		31.0		48.7		16.9		161.0		33.7		56.1		20.9
Total Regulatory Assets	6,475.2		2,307.1		1,636.1		927.7		6,569.9		2,211.8		1,703.9		989.1
Less:  Current Portion	1,016.3		325.3		388.4		97.9		1,076.6		345.6		399.9		115.9
Total Long-Term Regulatory Assets	$	5,458.9	$	1,981.8	$	1,247.7	$	829.8	$	5,493.3	$	1,866.2	$	1,304.0	$	873.2

CL&P Deferred Storm Costs: In 2021 and 2020, multiple tropical and severe storms caused extensive damage to CL&P’s electric distribution systems and customer outages, along with significant pre-staging costs. These storms resulted in deferred pre-staging and storm restoration costs of $195 million for 2021 storms and $344 million for 2020 storms, including the catastrophic impact of Tropical Storm Isaias in August 2020, among others. Management believes all these storm costs were prudently incurred and meet the criteria for specific cost recovery.

Regulatory Costs in Long-Term Assets:  Eversource's regulated companies had $260.6 million (including $111.2 million for CL&P, $85.1 million for NSTAR Electric and $3.2 million for PSNH) and $196.9 million (including $84.1 million for CL&P, $69.8 million for NSTAR Electric and $4.3 million for PSNH) of additional regulatory costs as of September 30, 2021 and December 31, 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 September 30, 2021 and December 31, 2020, these regulatory costs included net incremental COVID-19 related costs deferred of $41.3 million and $24.0 million at Eversource, respectively, of which, $34.5 million and $15.8 million, respectively, related to non-tracked uncollectible expense and the remainder related to facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment. Net incremental COVID-19 related costs deferred at CL&P and NSTAR Electric totaled $15.9 million and $10.9 million, respectively, as of September 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 September 30, 2021								As of December 31, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
EDIT due to Tax Cuts and Jobs Act of 2017	$	2,737.1	$	1,001.5	$	1,025.6	$	363.9	$	2,778.6	$	1,010.7	$	1,044.0	$	371.5
Cost of Removal	676.7		117.0		384.1		19.0		624.8		98.4		363.6		12.9
Benefit Costs	65.9		—		56.5		—		83.6		—		72.5		—
Regulatory Tracker Mechanisms	484.5		208.9		180.6		87.5		366.5		148.9		139.7		47.8
AFUDC - Transmission	79.6		43.6		36.0		—		76.8		44.6		32.2		—
CL&P Settlement Agreement and Storm   Performance Penalty	103.4		103.4		—		—		—		—		—		—
Other Regulatory Liabilities	373.3		50.4		84.6		15.8		309.9		39.5		63.2		9.8
Total Regulatory Liabilities	4,520.5		1,524.8		1,767.4		486.2		4,240.2		1,342.1		1,715.2		442.0
Less:  Current Portion	612.9		311.3		205.8		96.8		389.4		137.2		164.8		58.8
Total Long-Term Regulatory Liabilities	$	3,907.6	$	1,213.5	$	1,561.6	$	389.4	$	3,850.8	$	1,204.9	$	1,550.4	$	383.2

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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 $234 million at CL&P and $251 million at Eversource as of September 30, 2021. The estimated cost of restoration may continue to change as additional cost information becomes available and final post-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. Eversource and CL&P continue 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.

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. The $28.4 million performance penalty assessed by PURA was recorded within current regulatory liabilities on CL&P’s balance sheet. See Note 9G, “Commitments and Contingencies - CL&P Regulatory Matters,” for further information.

CL&P Settlement Agreement: On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel (OCC), Office of the Attorney General (AG) and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in pending regulatory proceedings initiated by the PURA. In the third quarter of 2021, CL&P recorded a current regulatory liability of $75 million on the balance sheet associated with the provisions of the settlement agreement. See Note 9G, “Commitments and Contingencies - CL&P Regulatory Matters,” for further information.

3.    PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

The following tables summarize property, plant and equipment by asset category:

Eversource	As of September 30, 2021		As of December 31, 2020
(Millions of Dollars)
Distribution - Electric	$	17,257.3	$	16,703.2
Distribution - Natural Gas	6,334.9		6,111.2
Transmission - Electric	12,396.2		11,954.0
Distribution - Water	1,771.1		1,743.1
Solar	200.4		201.5
Utility	37,959.9		36,713.0
Other (1)	1,430.5		1,269.0
Property, Plant and Equipment, Gross	39,390.4		37,982.0
Less:  Accumulated Depreciation
Utility	(8,830.2)		(8,476.3)
Other	(550.0)		(477.6)
Total Accumulated Depreciation	(9,380.2)		(8,953.9)
Property, Plant and Equipment, Net	30,010.2		29,028.1
Construction Work in Progress	2,456.9		1,854.4
Total Property, Plant and Equipment, Net	$	32,467.1	$	30,882.5

	As of September 30, 2021						As of December 31, 2020
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Distribution - Electric	$	7,028.9	$	7,798.8	$	2,469.9	$	6,820.7	$	7,544.4	$	2,378.4
Transmission - Electric	5,707.9		4,884.0		1,805.9		5,512.0		4,701.3		1,742.4
Solar	—		200.4		—		—		201.5		—
Property, Plant and Equipment, Gross	12,736.8		12,883.2		4,275.8		12,332.7		12,447.2		4,120.8
Less:  Accumulated Depreciation	(2,574.6)		(3,220.7)		(895.4)		(2,475.4)		(3,074.1)		(848.9)
Property, Plant and Equipment, Net	10,162.2		9,662.5		3,380.4		9,857.3		9,373.1		3,271.9
Construction Work in Progress	436.6		949.2		148.7		377.3		750.0		102.4
Total Property, Plant and Equipment, Net	$	10,598.8	$	10,611.7	$	3,529.1	$	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.

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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.

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 September 30, 2021						As of December 31, 2020
(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&P	Level 3	$	14.4	$	(0.4)	$	14.0	$	13.7	$	(0.4)	$	13.3
Long-Term Derivative Assets:
CL&P	Level 3	51.1		(1.6)		49.5		58.7		(1.8)		56.9
Current Derivative Liabilities:
CL&P	Level 3	(72.2)		—		(72.2)		(68.8)		—		(68.8)
Other	Level 2	—		—		—		(3.3)		0.1		(3.2)
Long-Term Derivative Liabilities:
CL&P	Level 3	(256.6)		—		(256.6)		(294.5)		—		(294.5)

    

(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.

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 September 30, 2021 and December 31, 2020 were 675 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. 

As of December 31, 2020, Eversource had New York Mercantile Exchange (NYMEX) financial contracts for natural gas futures in order to reduce variability associated with the price of 8.9 million MMBtu of natural 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 September 30, 2021 and 2020, there were gains of $0.7 million and losses of $2.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. For the nine months ended September 30, 2021 and 2020, there were losses of $9.5 million and $20.6 million, respectively.

Fair Value Measurements of Derivative Instruments

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.  

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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 September 30, 2021								As of December 31, 2020
CL&P	Range				Weighted Average (1)			Period Covered	Range				Weighted Average (1)			Period Covered
Capacity Prices	$2.61				$	2.61	per kW-Month	2025 - 2026	$	4.30	—	$5.30	$	4.63	per kW-Month	2024 - 2026
Forward Reserve Prices	$	0.50	—	$1.15	$	0.82	per kW-Month	2022 - 2024	$	0.54	—	$0.90	$	0.72	per kW-Month	2021 - 2024

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

Exit price premiums of 5.5 percent through 9.8 percent, or a weighted average of 8.7 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.  

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&P	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Millions of Dollars)	2021		2020		2021		2020
Derivatives, Net:
Fair Value as of Beginning of Period	$	(279.7)	$	(322.0)	$	(293.1)	$	(329.2)
Net Realized/Unrealized Gains/(Losses) Included in Regulatory Assets	0.7		(4.7)		(10.9)		(22.3)
Settlements	13.7		14.9		38.7		39.7
Fair Value as of End of Period	$	(265.3)	$	(311.8)	$	(265.3)	$	(311.8)

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 September 30, 2021 and December 31, 2020 was $39.2 million and $40.9 million, respectively.  For the three months ended September 30, 2021 and 2020, there were unrealized losses of $0.5 million and unrealized gains of $1.6 million, respectively, recorded in Other Income, Net related to these equity securities. For the nine months ended September 30, 2021 and 2020, there were unrealized gains of $2.5 million and unrealized losses of $1.0 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 $214.9 million and $205.1 million as of September 30, 2021 and December 31, 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 September 30, 2021								As of December 31, 2020
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	$	217.5	$	8.0	$	(0.2)	$	225.3	$	213.1	$	11.2	$	(0.1)	$	224.2

Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of $195.2 million and $192.5 million as of September 30, 2021 and December 31, 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 nine months ended September 30, 2021 and 2020, and no allowance for credit losses as of September 30, 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-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.

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As of September 30, 2021, the contractual maturities of available-for-sale debt securities were as follows:

 

Eversource (Millions of Dollars)	Amortized Cost		Fair Value
Less than one year (1)	$	30.9	$	30.9
One to five years	65.5		67.1
Six to ten years	41.8		43.9
Greater than ten years	79.3		83.4
Total Debt Securities	$	217.5	$	225.3

(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 September 30, 2021		As of December 31, 2020
Level 1:
Mutual Funds and Equities	$	254.1	$	246.0
Money Market Funds	29.7		41.2
Total Level 1	$	283.8	$	287.2
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	$	98.9	$	72.9
Corporate Debt Securities	63.4		63.8
Asset-Backed Debt Securities	13.4		11.9
Municipal Bonds	6.1		24.0
Other Fixed Income Securities	13.8		10.4
Total Level 2	$	195.6	$	183.0
Total Marketable Securities	$	479.4	$	470.2

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 $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, EGMA and Aquarion Water Company of Connecticut are parties to a five-year $2.00 billion revolving credit facility, which terminates on October 15, 2026. This revolving credit facility serves to backstop Eversource parent's $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 October 15, 2026. 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 of				Available Borrowing Capacity as of				Weighted-Average Interest Rate as of
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
(Millions of Dollars)
Eversource Parent Commercial Paper Program	$	653.0	$	1,054.3	$	1,347.0	$	945.7	0.18	%	0.25	%
NSTAR Electric Commercial Paper Program	138.0		195.0		512.0		455.0		0.10	%	0.16	%

There were no borrowings outstanding on the revolving credit facilities as of September 30, 2021 or December 31, 2020.

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CL&P and PSNH have uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire on May 12, 2022. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of September 30, 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. As a result of the NSTAR Gas long-term debt issuances in October 2021, $80.0 million of commercial paper borrowings under the Eversource parent commercial paper program were classified as Long-Term Debt as of September 30, 2021.

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.

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 September 30, 2021, there were intercompany loans from Eversource parent to PSNH of $66.5 million, and to a subsidiary of NSTAR Electric of $24.6 million. As of December 31, 2020, there were intercompany loans from Eversource parent to PSNH of $46.3 million, and to a subsidiary of NSTAR Electric of $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 Authorizations: On March 31, 2021, the DPU approved NSTAR Electric's request for authorization to issue up to $1.60 billion in long-term debt through December 31, 2023. On September 10, 2021, the DPU approved EGMA’s request for authorization to issue up to $725 million in long-term debt through December 31, 2023. The remaining Eversource operating companies, including CL&P and PSNH, have utilized the long-term debt authorizations in place with the respective regulatory commissions.

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Long-Term Debt Issuances and Repayments: The following table summarizes long-term debt issuances and repayments:

(Millions of Dollars)	Issuance/(Repayment)		Issue Date or Repayment Date	Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
2.05% Series A First Mortgage Bonds	$	425.0	June 2021	July 2031	Repaid short-term debt, paid capital expenditures and working capital
4.38% Series A PCRB	(120.5)		September 2021	September 2028	Paid on par call date in advance of maturity
NSTAR Electric:
3.10% 2021 Debentures	300.0		May 2021	June 2051	Refinanced investments in eligible green expenditures, which were previously financed in 2019 and 2020
3.50% Series F Senior Notes	(250.0)		June 2021	September 2021	Paid on par call date in advance of maturity date
1.95% 2021 Debentures	300.0		August 2021	August 2031	Repaid short-term debt, paid capital expenditures and working capital
PSNH:
4.05% Series Q First Mortgage Bonds	(122.0)		March 2021	June 2021	Paid on par call date in advance of maturity date
3.20% Series R First Mortgage Bonds	(160.0)		June 2021	September 2021	Paid on par call date in advance of maturity date
2.20% Series V First Mortgage Bonds	350.0		June 2021	June 2031	Repaid 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 2021	March 2021	Paid on par call date in advance of maturity date
Eversource Parent 2.55% Series S Senior Notes	350.0		March 2021	March 2031	Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes
Eversource Parent 1.40% Series U Senior Notes	300.0		August 2021	August 2026	Repaid short-term debt
Eversource Parent Variable Rate Series T Senior Notes (1)	350.0		August 2021	August 2023	Repaid short-term debt
Aquarion Water Company of Connecticut 3.31%    Senior Notes	100.0		April 2021	April 2051	Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital
Aquarion Water Company of Connecticut 5.50% Notes	(40.0)		April 2021	April 2021	Paid at maturity
Yankee Gas 1.38% Series S First Mortgage Bonds	90.0		August 2021	August 2026	(2)
Yankee Gas 2.88% Series T First Mortgage Bonds	35.0		August 2021	August 2051	(2)
EGMA 2.11% Series A First Mortgage Bonds	310.0		September 2021	October 2031	(2)
EGMA 2.92% Series B First Mortgage Bonds	240.0		September 2021	October 2051	(2)
NSTAR Gas 2.25% Series T First Mortgage Bonds	40.0		October 2021	November 2031	(2)
NSTAR Gas 3.03% Series U First Mortgage Bonds	40.0		October 2021	November 2051	(2)

(1)    On August 10, 2021, Eversource Parent issued $350 million of floating rate Series T Senior Notes with a maturity date of August 15, 2023. The notes have a coupon rate based on the Compounded SOFR plus 0.25%.

(2)    The use of proceeds from these various issuances refinanced existing indebtedness, funded capital expenditures and were for general corporate purposes. The EGMA indebtedness that was refinanced included $309.4 million of long-term debt.

7.    RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

Rate Reduction Bonds: In May 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 in January 2018 to recover remaining costs resulting from the divestiture of PSNH’s generation assets.

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.

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The following tables summarize the impact of PSNH Funding on PSNH's balance sheets and income statements:

(Millions of Dollars)
PSNH Balance Sheets:	As of September 30, 2021		As of December 31, 2020
Restricted Cash - Current Portion (included in Current Assets)	$	18.3	$	36.8
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		2.1
Securitized Stranded Cost (included in Regulatory Assets)	489.7		522.1
Other Regulatory Liabilities (included in Regulatory Liabilities)	8.0		9.1
Accrued Interest (included in Other Current Liabilities)	3.0		8.0
Rate Reduction Bonds - Current Portion	43.2		43.2
Rate Reduction Bonds - Long-Term Portion	453.7		496.9

(Millions of Dollars) PSNH Income Statements:	For the Three Months Ended				For the Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	$	10.8	$	10.8	$	32.4	$	32.4
Interest Expense on RRB Principal (included in Interest Expense)	4.5		4.9		13.9		14.9

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 intercompany allocations 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 September 30, 2021								For the Three Months Ended September 30, 2021
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	21.5	$	5.6	$	4.0	$	2.2	$	3.3	$	0.5	$	0.6	$	0.3
Interest Cost	32.5		6.7		6.7		3.7		4.3		0.8		1.1		0.4
Expected Return on Plan Assets	(109.5)		(21.7)		(27.1)		(11.9)		(19.8)		(2.5)		(9.2)		(1.6)
Actuarial Loss	60.7		10.8		15.3		5.3		2.0		0.4		0.5		0.1
Prior Service Cost/(Credit)	0.3		—		0.1		—		(5.3)		0.3		(4.3)		0.1
Total Net Periodic Benefit Plan Expense/(Income)	$	5.5	$	1.4	$	(1.0)	$	(0.7)	$	(15.5)	$	(0.5)	$	(11.3)	$	(0.7)
Intercompany Expense/(Income) Allocations	N/A		$	2.2	$	2.4	$	0.7	N/A		$	(0.4)	$	(0.5)	$	(0.2)
	Pension and SERP								PBOP
	For the Nine Months Ended September 30, 2021								For the Nine Months Ended September 30, 2021
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	64.3	$	17.4	$	11.9	$	6.6	$	10.1	$	1.7	$	1.8	$	0.9
Interest Cost	97.5		20.7		20.1		10.9		12.9		2.4		3.3		1.3
Expected Return on Plan Assets	(328.0)		(65.0)		(81.1)		(35.6)		(59.3)		(7.7)		(27.7)		(4.6)
Actuarial Loss	183.1		34.6		46.1		15.4		5.9		1.2		1.6		0.4
Prior Service Cost/(Credit)	1.1		—		0.3		—		(15.9)		0.8		(12.7)		0.3
Total Net Periodic Benefit Plan Expense/(Income)	$	18.0	$	7.7	$	(2.7)	$	(2.7)	$	(46.3)	$	(1.6)	$	(33.7)	$	(1.7)
Intercompany Expense/(Income) Allocations	N/A		$	5.8	$	6.4	$	1.9	N/A		$	(1.3)	$	(1.5)	$	(0.5)

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	Pension and SERP								PBOP
	For the Three Months Ended September 30, 2020								For the Three Months Ended September 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	$	2.4	$	0.4	$	0.5	$	0.2
Interest Cost	44.4		9.3		9.7		4.8		6.1		1.1		1.7		0.7
Expected Return on Plan Assets	(99.2)		(19.8)		(25.7)		(11.1)		(18.3)		(2.5)		(8.5)		(1.4)
Actuarial Loss	50.7		9.7		14.0		3.8		2.2		0.3		0.6		0.2
Prior Service Cost/(Credit)	0.2		—		—		—		(5.3)		0.3		(4.2)		0.1
Total Net Periodic Benefit Plan Expense/(Income)	$	14.8	$	4.6	$	1.8	$	(0.5)	$	(12.9)	$	(0.4)	$	(9.9)	$	(0.2)
Intercompany Expense/(Income) Allocations	N/A		$	2.4	$	2.3	$	0.8	N/A		$	(0.3)	$	(0.4)	$	(0.1)
	Pension and SERP								PBOP
	For the Nine Months Ended September 30, 2020								For the Nine Months Ended September 30, 2020
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	57.0	$	16.5	$	11.4	$	6.2	$	7.3	$	1.3	$	1.6	$	0.6
Interest Cost	133.0		28.1		29.0		14.5		18.3		3.3		5.0		2.1
Expected Return on Plan Assets	(298.8)		(59.6)		(77.2)		(33.5)		(55.1)		(7.4)		(25.5)		(4.2)
Actuarial Loss	150.7		29.4		41.3		11.8		6.3		0.9		1.8		0.6
Prior Service Cost/(Credit)	0.8		—		0.2		—		(15.9)		0.8		(12.7)		0.3
Total Net Periodic Benefit Plan Expense/(Income)	$	42.7	$	14.4	$	4.7	$	(1.0)	$	(39.1)	$	(1.1)	$	(29.8)	$	(0.6)
Intercompany Expense/(Income) Allocations	N/A		$	6.7	$	6.5	$	2.2	N/A		$	(0.9)	$	(1.0)	$	(0.4)

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 September 30, 2021			As of December 31, 2020
	Number of Sites	Reserve (in millions)		Number of Sites	Reserve (in millions)
Eversource	62	$	111.9	63	$	102.4
CL&P	14	12.5		15	12.3
NSTAR Electric	12	3.7		12	4.7
PSNH	9	6.4		9	7.1

The increase in the reserve balance was due primarily to a change in cost estimates 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 $102.4 million and $92.2 million as of September 30, 2021 and December 31, 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.

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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)	2021		2022		2023		2024		2025		Thereafter		Total
Renewable Energy	$	27.1	$	103.9	$	230.5	$	341.2	$	348.1	$	6,564.2	$	7,615.0

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 $5.7 million as of September 30, 2021.

The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries and affiliates to external parties:  

As of September 30, 2021
Company (Obligor)	Description	Maximum Exposure (in millions)		Expiration Dates
North East Offshore LLC	Construction-related purchase agreements with third-party contractors (1)	$	1,093.5	(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)
Sunrise Wind LLC	Construction-related purchase agreements with third-party contractors (4)	386.4		—
South Fork Wind, LLC	Transmission interconnection	1.2		—
South Fork Wind, LLC	Construction-related purchase agreements with third-party contractors (5)	40.6		2023
Bay State Wind LLC	Real estate purchase	2.5		2022
Various	Surety bonds (6)	67.5		2021 - 2023
Rocky River Realty Company and    Eversource Service	Lease payments for real estate	4.0		2024

(1)    Eversource parent issued guarantees on behalf of 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 aggregate 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 aggregate 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 aggregate 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.    

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(4)     Eversource parent issued a guaranty 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 aggregate amount not to exceed $420.6 million, in connection with a construction-related purchase agreement. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) April 14, 2026 and (ii) full performance of the guaranteed obligations.

(5)    Eversource parent issued two guarantees on behalf of its 50 percent-owned affiliate, South Fork Wind, LLC, whereby Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations in connection with two construction-related purchase agreements. Under one guarantee, Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations, in an aggregate amount not to exceed $25.8 million. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) October 4, 2023 and (ii) full performance of the guaranteed obligations. Under the second guaranty, Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations, in an aggregate amount not to exceed $14.8 million. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) October 18, 2023 and (ii) full performance of the guaranteed obligations.

(6)    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. 

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.

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 IV of litigation resulting from the DOE's failure to meet its contractual obligations. These Phases covered damages incurred in the years 1998 through 2016, and the awarded damages have been received by the Yankee Companies with certain amounts of the damages refunded to their customers.

DOE Phase V Damages - On March 25, 2021, each of the Yankee Companies filed a fifth set of lawsuits against the DOE in the Court of Federal Claims. The Yankee Companies are calculating and will be seeking monetary damages for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2017 to 2020 (DOE Phase V).

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 September 30, 2021 and December 31, 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 September 30, 2021 and December 31, 2020.

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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.

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 appealed the MISO transmission owners' opinion. On 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.

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 Regulatory Matters

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 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. The $28.4 million performance penalty is currently being credited to customers on electric bills beginning on September 1, 2021 over a one-year period. 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. The

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liability for the performance penalty was recorded as a current regulatory liability on CL&P’s balance sheet and as a reduction to Operating Revenues on the nine months ended September 30, 2021 income statement. The after-tax earnings impact of this charge was $0.07 per share.

CL&P Settlement Agreement: On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel (OCC), Office of the Attorney General (AG) and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in pending regulatory proceedings initiated by the PURA. PURA approved the settlement agreement on October 27, 2021. In the settlement agreement, CL&P agreed to provide a total of $65 million of customer credits to be distributed based on customer sales over a two-month period from December 1, 2021 to January 31, 2022. CL&P also agreed to irrevocably set aside $10 million to fund various customer assistance initiatives as directed by PURA for disbursement to state-designated purposes, with the objective of disbursing the funds prior to April 30, 2022, including providing credits to existing hardship and non-hardship customers carrying arrearages and other purposes. In the third quarter of 2021, CL&P recorded a current regulatory liability of $75 million on the balance sheet associated with the provisions of the settlement agreement, with a $65 million pre-tax charge as a reduction to Operating Revenues associated with the customer credits and a $10 million charge to Operations and Maintenance expense associated with the customer assistance initiatives on the three months ended September 30, 2021 income statement.

In exchange for the $75 million of customer credits and assistance, PURA’s interim rate reduction docket was resolved without findings. As a result of the settlement agreement, neither the 90 basis point reduction to CL&P’s return on equity introduced in PURA’s storm-related decision issued April 28, 2021, nor the 45 basis point reduction to CL&P’s return on equity included in PURA’s draft decision issued September 14, 2021 in the interim rate reduction docket, will be implemented.

CL&P has also agreed that its current base distribution rates shall be frozen, subject to the customer credits described above, until no earlier than January 1, 2024. The rate freeze applies only to base distribution rates (including storm costs) and not to other rate mechanisms such as the retail rate components, rate reconciling mechanisms, formula rates and any other adjustment mechanisms. The rate freeze also does not apply to any cost recovery mechanism outside of the base distribution rates with regard to grid-modernization initiatives or any other proceedings, either currently pending or that may be initiated during the rate freeze period, that may place additional obligations on CL&P. The approval of the settlement agreement satisfies the Connecticut statute of rate review requirements that requires electric utilities to file a distribution rate case within four years of the last rate case.

As part of the settlement agreement, CL&P agreed to withdraw with prejudice its pending appeals of PURA’s April 28, 2021 and July 14, 2021 decisions related to Storm Isaias and agreed to waive its right to file an appeal and seek a judicial stay of the final decision in the interim rate reduction docket. The settlement agreement assures that CL&P will have the opportunity to petition for and demonstrate the prudence of the storm costs incurred to respond to customer outages associated with Storm Isaias in a future ratemaking proceeding.

The cumulative pre-tax impact of the settlement agreement and the Storm Isaias assessment imposed in PURA’s April 28, 2021 and July 14, 2021 decisions totaled $103.6 million, and the after-tax earnings impact was $85.8 million, or $0.25 per share, for the nine months ended September 30, 2021.

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:

	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 September 30, 2021:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	165.5	$	116.2	$	121.4	$	43.0	$	44.1	$	—	$	—
Long-Term Debt	18,219.2		19,810.9		4,215.1		4,865.2		3,984.7		4,494.3		1,163.6		1,228.9
Rate Reduction Bonds	496.9		555.8		—		—		—		—		496.9		555.8
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 Debt	16,179.1		18,420.1		3,914.8		4,800.9		3,643.2		4,294.0		1,099.1		1,207.0
Rate Reduction Bonds	540.1		603.4		—		—		—		—		540.1		603.4

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.

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11.    ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in accumulated other comprehensive income/(loss) by component, net of tax, are as follows:

	For the Nine Months Ended September 30, 2021								For the Nine Months Ended September 30, 2020
Eversource (Millions of Dollars)	Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total		Qualified Cash Flow Hedging Instruments		Unrealized Gains on Marketable Securities		Defined Benefit Plans		Total
Balance as of Beginning of Period	$	(1.4)	$	1.1	$	(76.1)	$	(76.4)	$	(3.0)	$	0.7	$	(62.8)	$	(65.1)
OCI Before Reclassifications	—		(0.6)		(2.4)		(3.0)		—		0.3		(1.6)		(1.3)
Amounts Reclassified from AOCI	1.0		—		6.5		7.5		1.2		—		4.8		6.0
Net OCI	1.0		(0.6)		4.1		4.5		1.2		0.3		3.2		4.7
Balance as of End of Period	$	(0.4)	$	0.5	$	(72.0)	$	(71.9)	$	(1.8)	$	1.0	$	(59.6)	$	(60.4)

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 September 30, 2021 and December 31, 2020	Issued as of
	Par Value			September 30, 2021	December 31, 2020
Eversource	$	5	380,000,000	357,818,402	357,818,402
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

Treasury Shares: As of September 30, 2021 and December 31, 2020, there were 14,044,078 and 14,864,379 Eversource common shares held as treasury shares, respectively. As of September 30, 2021 and December 31, 2020, Eversource common shares outstanding were 343,774,324 and 342,954,023, respectively.

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 September 30, 2021 and 2020 and $5.6 million for each of the nine months ended September 30, 2021 and 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 September 30, 2021 and December 31, 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 as if they were converted into outstanding common shares.  The dilutive effect of unvested RSU and performance share awards 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. There were no antidilutive share awards excluded from the computation of diluted EPS for the three and nine months ended September 30, 2021 and the three months ended September 30, 2020. For the nine months ended September 30, 2020, there were 52,747 antidilutive share awards excluded from the EPS computation, as their impact would have been antidilutive. Antidilutive shares pertained to a purchase option extended to underwriters in connection with Eversource’s common share issuance on June 15, 2020.

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The following table sets forth the components of basic and diluted EPS:

Eversource (Millions of Dollars, except share information)	For the Three Months Ended				For the Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Net Income Attributable to Common Shareholders	$	283.2	$	346.3	$	913.8	$	933.2
Weighted Average Common Shares Outstanding:
Basic	344,023,846		343,076,614		343,848,905		337,375,172
Dilutive Effect of:
Share-Based Compensation Awards and Other	645,936		696,988		631,151		686,403
Equity Forward Sale Agreement	—		—		—		362,525
Total Dilutive Effect	645,936		696,988		631,151		1,048,928
Diluted	344,669,782		343,773,602		344,480,056		338,424,100
Basic EPS	$	0.82	$	1.01	$	2.66	$	2.77
Diluted EPS	$	0.82	$	1.01	$	2.65	$	2.76

15.    REVENUES

The following tables present operating revenues disaggregated by revenue source:

	For the Three Months Ended September 30, 2021
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	$	1,146.8	$	81.7	$	—	$	39.1	$	—	$	—	$	1,267.6
Commercial	748.8		59.0		—		17.2		—		(1.4)		823.6
Industrial	96.2		28.6		—		1.1		—		(4.8)		121.1
Total Retail Tariff Sales Revenues	1,991.8		169.3		—		57.4		—		(6.2)		2,212.3
Wholesale Transmission Revenues	—		—		527.2		—		23.0		(408.5)		141.7
Wholesale Market Sales Revenues	133.8		12.2		—		1.1		—		—		147.1
Other Revenues from Contracts with Customers	29.6		1.2		3.5		1.8		303.1		(301.4)		37.8
Reserve for Revenues Subject to Refund (1)	(93.4)		—		—		(0.9)		—		—		(94.3)
Total Revenues from Contracts with Customers	2,061.8		182.7		530.7		59.4		326.1		(716.1)		2,444.6
Alternative Revenue Programs	(7.9)		2.7		(112.6)		2.3		—		102.0		(13.5)
Other Revenues (2)	1.3		0.1		0.2		0.1		—		—		1.7
Total Operating Revenues	$	2,055.2	$	185.5	$	418.3	$	61.8	$	326.1	$	(614.1)	$	2,432.8
	For the Nine Months Ended September 30, 2021
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	$	3,094.9	$	722.8	$	—	$	102.8	$	—	$	—	$	3,920.5
Commercial	1,902.9		356.4		—		47.0		—		(4.1)		2,302.2
Industrial	261.1		119.5		—		3.3		—		(12.8)		371.1
Total Retail Tariff Sales Revenues	5,258.9		1,198.7		—		153.1		—		(16.9)		6,593.8
Wholesale Transmission Revenues	—		—		1,338.4		—		62.5		(1,075.4)		325.5
Wholesale Market Sales Revenues	380.1		54.1		—		3.0		—		—		437.2
Other Revenues from Contracts with Customers	68.4		3.6		10.2		5.5		936.6		(929.6)		94.7
Reserve for Revenues Subject to Refund (1)	(93.4)		—		—		(2.2)		—		—		(95.6)
Total Revenues from Contracts with Customers	5,614.0		1,256.4		1,348.6		159.4		999.1		(2,021.9)		7,355.6
Alternative Revenue Programs	14.9		21.3		(119.2)		1.3		—		103.0		21.3
Other Revenues (2)	3.2		0.1		0.7		0.3		—		—		4.3
Total Operating Revenues	$	5,632.1	$	1,277.8	$	1,230.1	$	161.0	$	999.1	$	(1,918.9)	$	7,381.2

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	For the Three Months Ended September 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	$	1,183.9	$	45.5	$	—	$	45.8	$	—	$	—	$	1,275.2
Commercial	682.7		41.1		—		17.1		—		(1.4)		739.5
Industrial	91.0		17.5		—		1.3		—		(3.6)		106.2
Total Retail Tariff Sales Revenues	1,957.6		104.1		—		64.2		—		(5.0)		2,120.9
Wholesale Transmission Revenues	—		—		458.2		—		19.0		(365.6)		111.6
Wholesale Market Sales Revenues	79.6		8.7		—		1.1		—		—		89.4
Other Revenues from Contracts with Customers	20.7		1.3		3.2		0.7		303.3		(299.0)		30.2
Total Revenues from Contracts with Customers	2,057.9		114.1		461.4		66.0		322.3		(669.6)		2,352.1
Alternative Revenue Programs	1.7		(4.0)		(72.3)		(2.0)		—		67.0		(9.6)
Other Revenues (2)	0.7		0.1		0.2		0.1		—		—		1.1
Total Operating Revenues	$	2,060.3	$	110.2	$	389.3	$	64.1	$	322.3	$	(602.6)	$	2,343.6
	For the Nine Months Ended September 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	$	3,063.7	$	399.6	$	—	$	113.2	$	—	$	—	$	3,576.5
Commercial	1,815.7		243.5		—		47.7		—		(3.7)		2,103.2
Industrial	248.4		67.0		—		3.6		—		(10.1)		308.9
Total Retail Tariff Sales Revenues	5,127.8		710.1		—		164.5		—		(13.8)		5,988.6
Wholesale Transmission Revenues	—		—		1,177.9		—		55.6		(981.4)		252.1
Wholesale Market Sales Revenues	231.1		31.9		—		2.9		—		—		265.9
Other Revenues from Contracts with Customers	63.3		4.1		9.9		2.8		845.1		(838.0)		87.2
Total Revenues from Contracts with Customers	5,422.2		746.1		1,187.8		170.2		900.7		(1,833.2)		6,593.8
Alternative Revenue Programs	54.8		22.9		(52.7)		(4.1)		—		48.9		69.8
Other Revenues (2)	4.9		1.0		0.5		0.5		—		—		6.9
Total Operating Revenues	$	5,481.9	$	770.0	$	1,135.6	$	166.6	$	900.7	$	(1,784.3)	$	6,670.5

	For the Three Months Ended September 30, 2021						For the Three Months Ended September 30, 2020
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	572.0	$	401.9	$	172.9	$	608.7	$	415.4	$	159.8
Commercial	249.4		411.3		88.5		244.7		358.3		80.1
Industrial	35.0		35.9		25.3		38.0		30.6		22.4
Total Retail Tariff Sales Revenues	856.4		849.1		286.7		891.4		804.3		262.3
Wholesale Transmission Revenues	268.2		171.0		88.0		233.3		153.1		71.8
Wholesale Market Sales Revenues	100.3		21.3		12.2		60.0		12.1		7.5
Other Revenues from Contracts with Customers	12.1		14.3		7.3		8.1		10.5		3.7
(Reserve for)/Amortization of Revenues   Subject to Refund (1)	(93.4)		—		—		—		—		2.3
Total Revenues from Contracts with Customers	1,143.6		1,055.7		394.2		1,192.8		980.0		347.6
Alternative Revenue Programs	(82.0)		(14.4)		(24.1)		(65.0)		8.2		(13.8)
Other Revenues (2)	0.2		0.7		0.6		0.2		0.7		—
Eliminations	(142.2)		(123.3)		(55.8)		(133.7)		(113.5)		(50.1)
Total Operating Revenues	$	919.6	$	918.7	$	314.9	$	994.3	$	875.4	$	283.7

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	For the Nine Months Ended September 30, 2021						For the Nine Months Ended September 30, 2020
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	1,558.6	$	1,069.0	$	467.3	$	1,567.9	$	1,057.9	$	437.9
Commercial	679.3		975.7		249.2		670.4		921.3		225.3
Industrial	100.2		89.5		71.4		105.3		82.1		61.0
Total Retail Tariff Sales Revenues	2,338.1		2,134.2		787.9		2,343.6		2,061.3		724.2
Wholesale Transmission Revenues	652.8		478.2		207.4		576.5		430.3		171.1
Wholesale Market Sales Revenues	278.1		64.7		37.3		163.9		39.8		27.4
Other Revenues from Contracts with Customers	28.8		36.8		14.9		25.1		32.4		10.9
(Reserve for)/Amortization of Revenues   Subject to Refund (1)	(93.4)		—		—		—		—		6.9
Total Revenues from Contracts with Customers	3,204.4		2,713.9		1,047.5		3,109.1		2,563.8		940.5
Alternative Revenue Programs	(74.2)		(11.3)		(18.8)		(27.8)		31.1		(1.2)
Other Revenues (2)	0.3		2.5		1.1		2.0		2.8		0.6
Eliminations	(394.0)		(362.0)		(142.6)		(371.9)		(327.5)		(124.6)
Total Operating Revenues	$	2,736.5	$	2,343.1	$	887.2	$	2,711.4	$	2,270.2	$	815.3

(1)    The Electric Distribution segment 2021 revenue subject to refund amount relates to an October 1, 2021 CL&P settlement agreement with the DEEP, OCC, AG and the Connecticut Industrial Energy Consumers, which resolved certain issues that arose in pending regulatory proceedings initiated by the PURA. In the third quarter of 2021, CL&P recorded a reduction to Operating Revenues of $65 million on the income statement for a reserve for customer credits associated with the provisions of the settlement agreement. Additionally, CL&P recorded a $28.4 million reserve in the first quarter of 2021 for a civil penalty for non-compliance with storm performance standards to be credited to customers. The penalty was reclassified from Operations and Maintenance expense to a reduction of Operating Revenues in the third quarter of 2021 in connection with the finalization of the settlement agreement. In total, the reserve for revenues subject to refund totaled $93.4 million and was recorded as a current regulatory liability on CL&P’s balance sheet and as a reduction to Operating Revenues on the nine months ended September 30, 2021 income statement. See Note 9G, “Commitments and Contingencies - CL&P Regulatory Matters,” for further information.

(2)    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 $1.1 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 September 30, 2021 and 2020, respectively, and $3.8 million (including $0.6 million at CL&P and $2.5 million at NSTAR Electric) and $3.2 million (including $0.6 million at CL&P and $2.1 million at NSTAR Electric) for the nine months ended September 30, 2021 and 2020, 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) the results of other unregulated subsidiaries, which are not part of its core business, and 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, NSTAR Gas and EGMA purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline project described above. These affiliate transaction costs total $77.7 million annually and are classified as Purchased Power, Fuel and Transmission on the Eversource statements of income.

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.   

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Eversource's segment information is as follows:

	For the Three Months Ended September 30, 2021
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	2,055.2	$	185.5	$	418.3	$	61.8	$	326.1	$	(614.1)	$	2,432.8
Depreciation and Amortization	(179.8)		(28.5)		(75.4)		(11.5)		(28.0)		1.1		(322.1)
Other Operating Expenses	(1,640.5)		(176.9)		(122.4)		(26.1)		(275.2)		613.7		(1,627.4)
Operating Income/(Loss)	$	234.9	$	(19.9)	$	220.5	$	24.2	$	22.9	$	0.7	$	483.3
Interest Expense	$	(61.0)	$	(15.7)	$	(33.5)	$	(8.0)	$	(42.5)	$	12.7	$	(148.0)
Other Income, Net	25.4		6.7		5.0		1.2		325.9		(320.4)		43.8
Net Income/(Loss) Attributable to Common    Shareholders	150.4		(22.0)		139.4		17.5		304.9		(307.0)		283.2
	For the Nine Months Ended September 30, 2021
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	5,632.1	$	1,277.8	$	1,230.1	$	161.0	$	999.1	$	(1,918.9)	$	7,381.2
Depreciation and Amortization	(534.1)		(108.7)		(223.4)		(34.3)		(83.7)		3.1		(981.1)
Other Operating Expenses	(4,531.3)		(970.6)		(359.6)		(76.7)		(860.3)		1,918.9		(4,879.6)
Operating Income	$	566.7	$	198.5	$	647.1	$	50.0	$	55.1	$	3.1	$	1,520.5
Interest Expense	$	(175.4)	$	(44.2)	$	(98.7)	$	(24.0)	$	(125.9)	$	37.0	$	(431.2)
Other Income, Net	76.0		15.2		17.3		3.1		1,059.2		(1,046.2)		124.6
Net Income Attributable to Common Shareholders	365.4		129.6		412.4		30.0		982.5		(1,006.1)		913.8
Cash Flows Used for Investments in Plant	764.9		506.4		691.0		91.2		157.6		—		2,211.1

	For the Three Months Ended September 30, 2020
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution (1)		Electric Transmission		Water Distribution		Other (1)		Eliminations (1)		Total
Operating Revenues	$	2,060.3	$	110.2	$	389.3	$	64.1	$	322.3	$	(602.6)	$	2,343.6
Depreciation and Amortization	(182.0)		(14.8)		(70.6)		(10.8)		(24.1)		0.3		(302.0)
Other Operating Expenses	(1,577.0)		(104.2)		(120.6)		(10.2)		(271.5)		603.1		(1,480.4)
Operating Income/(Loss)	$	301.3	$	(8.8)	$	198.1	$	43.1	$	26.7	$	0.8	$	561.2
Interest Expense	$	(53.3)	$	(10.1)	$	(31.1)	$	(8.0)	$	(38.7)	$	7.1	$	(134.1)
Other Income, Net	16.0		0.7		6.9		1.6		401.0		(397.0)		29.2
Net Income/(Loss) Attributable to Common    Shareholders	205.5		(15.4)		125.6		23.1		396.6		(389.1)		346.3
	For the Nine Months Ended September 30, 2020
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution (1)		Electric Transmission		Water Distribution		Other (1)		Eliminations (1)		Total
Operating Revenues	$	5,481.9	$	770.0	$	1,135.6	$	166.6	$	900.7	$	(1,784.3)	$	6,670.5
Depreciation and Amortization	(490.0)		(55.1)		(206.8)		(33.1)		(68.1)		1.2		(851.9)
Other Operating Expenses	(4,309.9)		(592.0)		(338.5)		(60.7)		(771.4)		1,787.9		(4,284.6)
Operating Income	$	682.0	$	122.9	$	590.3	$	72.8	$	61.2	$	4.8	$	1,534.0
Interest Expense	$	(160.7)	$	(32.1)	$	(93.8)	$	(25.1)	$	(119.0)	$	27.6	$	(403.1)
Other Income, Net	44.9		2.5		22.7		1.7		1,087.9		(1,076.1)		83.6
Net Income Attributable to Common Shareholders	450.6		73.3		381.8		35.6		1,035.6		(1,043.7)		933.2
Cash Flows Used for Investments in Plant	781.2		322.8		732.4		84.0		181.2		—		2,101.6

(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.

The following table summarizes Eversource's segmented total assets:

Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
As of September 30, 2021	$	25,604.2	$	6,865.6	$	12,123.5	$	2,444.9	$	21,624.5	$	(20,648.6)	$	48,014.1
As of December 31, 2020	24,981.9		6,450.5		11,695.0		2,375.2		22,089.4		(21,492.4)		46,099.6

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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 in 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 Cash	57
PP&E	1,184
Goodwill	50
Other Noncurrent Assets, excluding Goodwill	131
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 quarters ended March 31, 2021 and June 30, 2021, as well as the Eversource 2020 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 non-GAAP financial measures referencing our 2021 earnings and EPS excluding charges at CL&P related to a settlement agreement that included credits to customers and funding of various customer assistance initiatives and a storm performance penalty imposed on CL&P by PURA and our 2021 and 2020 earnings and EPS excluding certain acquisition and 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 2021 and 2020 results without including these items. This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods. We believe the impacts of the CL&P settlement agreement, the storm performance penalty imposed on CL&P by PURA, and acquisition and transition costs are not indicative of our ongoing costs and performance. We view these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating 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.

We 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 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,

•    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.

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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 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 2020 combined Annual Report on Form 10-K.  This combined Quarterly Report on Form 10-Q and Eversource's 2020 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 $283.2 million, or $0.82 per share, in the third quarter of 2021, and $913.8 million, or $2.65 per share, in the first nine months of 2021, compared with $346.3 million, or $1.01 per share, in the third quarter of 2020, and $933.2 million, or $2.76 per share, in the first nine months of 2020.

•Our third quarter and first nine months of 2021 results include after-tax costs resulting from a CL&P settlement agreement on October 1, 2021 recorded within the electric distribution segment. Our first nine months of 2021 results also include an after-tax charge at CL&P recorded within the electric distribution segment for a PURA assessment as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020. Our third quarter and first nine months of 2021 and 2020 results also include after-tax transition and acquisition costs recorded at Eversource parent. In total, these after-tax costs were $67.5 million, or $0.20 per share, in the third quarter of 2021, and $103.1 million, or $0.30 per share, in the first nine months of 2021. Our 2020 results include after-tax transition and acquisition costs recorded at Eversource parent of $5.3 million, or $0.01 per share, in the third quarter of 2020, and $12.8 million, or $0.04 per share, in the first nine months of 2020. Excluding those costs, our non-GAAP earnings were $350.7 million, or $1.02 per share, in the third quarter of 2021, and $1.02 billion, or $2.95 per share, in the first nine months of 2021, compared with $351.6 million, or $1.02 per share, in the third quarter of 2020, and $946.0 million, or $2.80 per share, in the first nine months of 2020.

•We reaffirmed our projection of our long-term EPS growth rate through 2025 from our regulated utility businesses in the upper half of the 5 to 7 percent range. We estimate to earn within the 2021 non-GAAP earnings guidance range of between $3.81 per share and $3.93 per share, which excludes the charges associated with the CL&P settlement agreement and the penalty for CL&P’s Tropical Storm Isaias response assessed by PURA, as well as transition costs related to our October 2020 purchase of the assets of CMA and acquisition costs.

Liquidity:

•Cash flows provided by operating activities totaled $1.52 billion in the first nine months of 2021, compared with $1.50 billion in the first nine months of 2020. Investments in property, plant and equipment totaled $2.21 billion in the first nine months of 2021, compared with $2.10 billion in the first nine months of 2020.  Cash totaled $88.2 million as of September 30, 2021, compared with $106.6 million as of December 31, 2020. Our available borrowing capacity under our commercial paper programs totaled $1.86 billion as of September 30, 2021.

•In the first nine months of 2021, we issued $3.15 billion of new long-term debt, consisting of $1.00 billion at Eversource parent, $425 million at CL&P, $600 million at NSTAR Electric, $350 million at PSNH, $125 million at Yankee Gas, $550 million at EGMA, and $100 million at Aquarion Water Company of Connecticut. In the first nine months of 2021, we repaid $1.14 billion of long-term debt, consisting of $450 million at Eversource parent, $120.5 million at CL&P, $250 million at NSTAR Electric, $282 million at PSNH, and $40 million at Aquarion Water Company of Connecticut.

•On September 1, 2021, our Board of Trustees approved a common share dividend payment of $0.6025 per share, paid on September 30, 2021 to shareholders of record as of September 16, 2021.

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Regulatory and Strategic Items:

•On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel (OCC), Office of the Attorney General (AG) and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in pending regulatory proceedings initiated by the PURA. PURA approved the settlement agreement on October 27, 2021. In the settlement agreement, CL&P agreed to provide a total of $65 million of customer credits to be distributed based on customer sales over a two-month period from December 1, 2021 to January 31, 2022. CL&P also agreed to irrevocably set aside $10 million to fund various customer assistance initiatives as directed by PURA. In the third quarter of 2021, CL&P recorded a liability of $75 million associated with the provisions of the settlement agreement, with a $65 million pre-tax charge as a reduction to Operating Revenues associated with the customer credits and a $10 million charge to Operations and Maintenance expense associated with the customer assistance initiatives on the three months ended September 30, 2021 income statement. In exchange for the $75 million of customer credits and assistance, PURA’s interim rate reduction docket was resolved without findings. As a result of the settlement agreement, neither the 90 basis point reduction to CL&P’s return on equity introduced in PURA’s storm-related decision issued April 28, 2021, nor the 45 basis point reduction to CL&P’s return on equity included in PURA’s draft decision issued September 14, 2021 in the interim rate reduction docket, will be implemented. Additionally, CL&P agreed to withdraw its pending appeals related to the storm performance penalty imposed in PURA’s April 28, 2021 and July 14, 2021 decisions. CL&P has also agreed to freeze its current base distribution rates until no earlier than January 1, 2024. The cumulative pre-tax impact of the October 1, 2021 settlement agreement and the Storm Isaias assessment imposed in PURA’s April 28, 2021 and July 14, 2021 decisions totaled $103.6 million, and the after-tax earnings impact was $85.8 million, or $0.25 per share, for the nine months ended September 30, 2021.

•In August of 2021, BOEM released its Final Environmental Impact Statement (EIS) for the South Fork Wind project, which assessed the environmental, social, and economic impacts of constructing the project. In August of 2021, Sunrise Wind received BOEM’s Notice of Intent (NOI) to prepare an EIS for the review of the Construction Operations Plan (COP) application submitted by Sunrise Wind.

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 September 30,								For the Nine Months Ended September 30,
	2021				2020				2021				2020
(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)	$	283.2	$	0.82	$	346.3	$	1.01	$	913.8	$	2.65	$	933.2	$	2.76
Regulated Companies (non-GAAP) (1)	$	348.5	$	1.01	$	338.8	$	0.99	$	1,023.2	$	2.97	$	941.3	$	2.79
Eversource Parent and Other Companies (non-GAAP) (1)	2.2		0.01		12.8		0.03		(6.3)		(0.02)		4.7		0.01
Non-GAAP Earnings	$	350.7	$	1.02	$	351.6	$	1.02	$	1,016.9	$	2.95	$	946.0	$	2.80
CL&P Settlement Impacts (after-tax) (2)	(63.2)		(0.19)		—		—		(85.8)		(0.25)		—		—
Transition and Acquisition Costs (after-tax) (3)	(4.3)		(0.01)		(5.3)		(0.01)		(17.3)		(0.05)		(12.8)		(0.04)
Net Income Attributable to Common Shareholders (GAAP)	$	283.2	$	0.82	$	346.3	$	1.01	$	913.8	$	2.65	$	933.2	$	2.76

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

(2) The 2021 after-tax costs are associated with the CL&P settlement agreement on October 1, 2021, which included a pre-tax $65 million charge to earnings for customer credits and a $10 million charge to earnings to fund various customer assistance initiatives recorded in the third quarter of 2021. The nine months ended 2021 after-tax costs also include charges recorded at CL&P as a result of the April 28, 2021 and July 14, 2021 PURA decisions, which included a $28.4 million civil penalty for non-compliance with storm performance standards currently being provided as credits to customer bills and a $0.2 million fine to the State of Connecticut’s general fund. As a result of the October 1, 2021 settlement agreement, CL&P agreed to withdraw its pending appeals related to the storm performance penalty imposed in PURA’s April 28, 2021 and July 14, 2021 decisions. Management views these collective charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance.

(3) The 2020 acquisition costs are associated with our purchase of the assets of CMA on October 9, 2020. The 2021 costs are for the transition of systems as a result of the CMA acquisition and costs associated with our pending water business acquisition.

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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 September 30,								For the Nine Months Ended September 30,
	2021				2020				2021				2020
(Millions of Dollars, Except Per Share Amounts)	Amount		Per Share		Amount		Per Share		Amount		Per Share		Amount		Per Share
Net Income - Regulated Companies (GAAP)	$	285.3	$	0.82	$	338.8	$	0.99	$	937.4	$	2.72	$	941.3	$	2.79
Electric Distribution (non-GAAP)	$	213.6	$	0.62	$	205.5	$	0.60	$	451.2	$	1.31	$	450.6	$	1.33
Electric Transmission	139.4		0.40		125.6		0.36		412.4		1.20		381.8		1.13
Natural Gas Distribution (1)	(22.0)		(0.06)		(15.4)		(0.04)		129.6		0.37		73.3		0.22
Water Distribution	17.5		0.05		23.1		0.07		30.0		0.09		35.6		0.11
Net Income - Regulated Companies (Non-GAAP)	$	348.5	$	1.01	$	338.8	$	0.99	$	1,023.2	$	2.97	$	941.3	$	2.79
CL&P Settlement Impacts (after-tax)	(63.2)		(0.19)		—		—		(85.8)		(0.25)		—		—
Net Income - Regulated Companies (GAAP)	$	285.3	$	0.82	$	338.8	$	0.99	$	937.4	$	2.72	$	941.3	$	2.79

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

Our electric distribution segment earnings decreased $55.1 million in the third quarter of 2021, as compared to the third quarter of 2020, due primarily to CL&P’s settlement agreement on October 1, 2021, which included a pre-tax $65 million charge to earnings for customer credits and a $10 million charge to earnings to fund various customer assistance initiatives recorded in the third quarter of 2021. The after-tax impact of the CL&P settlement agreement was $63.2 million, or $0.19 per share. Excluding those charges, electric distribution segment earnings increased $8.1 million due primarily to base distribution rate increases at NSTAR Electric effective January 1, 2021 and at PSNH effective January 1, 2021 and August 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, higher interest expense, and higher property tax expense.

Our electric distribution segment earnings decreased $85.2 million in the first nine months of 2021, as compared to the first nine months of 2020, due primarily to CL&P’s settlement agreement on October 1, 2021 resulting in a total $75 million pre-tax charge to earnings and a $28.6 million pre-tax charge at CL&P for an assessment by PURA as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020 recorded in the first quarter of 2021. The after-tax impact of the CL&P settlement agreement and CL&P storm performance assessment imposed by PURA was $85.8 million, or $0.25 per share. For further information, see "Regulatory Developments and Rate Matters - Connecticut" included in this Management’s Discussion and Analysis. Excluding those charges, electric distribution segment earnings increased $0.6 million due primarily to base distribution rate increases at NSTAR Electric effective January 1, 2021, at PSNH effective January 1, 2021 and August 1, 2021, and at CL&P effective May 1, 2020, and higher earnings from CL&P's capital tracker mechanism due to increased electric system improvements. Those earnings increases were partially offset 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.

Our electric transmission segment earnings increased $13.8 million and $30.6 million in the third quarter and the first nine months of 2021, respectively, as compared to the third quarter and the first nine months of 2020, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure. The earnings increase for the nine-month period was partially offset by a lower benefit from the annual billing and cost reconciliation filing with FERC.

Our natural gas distribution segment had an increased loss of $6.6 million in the third quarter of 2021, as compared to the third quarter of 2020, due primarily to a loss from the addition of Eversource Gas Company of Massachusetts (EGMA) operations of $8.4 million due to the seasonality of the natural gas business. The increased loss was partially offset by the base distribution rate increase at Yankee Gas effective January 1, 2021 (with changes to customer rates beginning March 1, 2021).

Our natural gas distribution segment earnings increased $56.3 million in the first nine months of 2021, as compared to the first nine months of 2020, due primarily to the addition of EGMA earnings of $33.2 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. The earnings increase was partially offset by higher depreciation expense, higher operations and maintenance expense, and higher property tax expense.

Our water distribution segment earnings decreased $5.6 million in both the third quarter and the first nine months of 2021, as compared to the third quarter and the first nine months of 2020. The earnings decrease in both periods was due primarily to the absence in 2021 of a third quarter 2020 after-tax gain of $3.5 million and lower revenues as a result of the sale of the water system and treatment plant in Hingham, Massachusetts.

Eversource Parent and Other Companies:  Eversource parent and other companies had increased losses of $9.6 million and $15.5 million in the third quarter and the first nine months of 2021, respectively, as compared to the third quarter and the first nine months of 2020, due primarily to a higher effective tax rate. The increased loss for the nine-month period was also due to an increase in the transition and integration costs of EGMA of $4.5 million.

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Impact of COVID-19

COVID-19 has adversely affected customers, workers and the U.S. economy. We provide a critical service to our customers 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 the re-entry phase of our pandemic response plan, in which the majority of our employees under remote work arrangements have transitioned back to the workplace. We have not experienced significant impacts directly related to the pandemic that have materially affected our current operations, our workforce, or results of operations. The extent of the impact to us in the future will vary, and depend on the duration, scope and severity of the 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 September 30, 2021, our allowance for uncollectible customer receivable balance of $441.7 million, of which $229.9 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. In Connecticut, the moratorium on disconnections of commercial and non-hardship residential customers ended in June 2021 and September 2021, respectively, but is still in place for hardship 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 resumed after these moratoria have expired, which has resulted in recent improved collection experience and more customers applying for, and receiving, hardship status. 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. As a result of the order, in the first nine months 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 for hardship residential customers ended in May 2021 and PSNH has resumed disconnection activities, which has resulted in improved collection of outstanding customer receivable balances.

Based upon the evaluation performed, in the first nine months of 2021, management increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by $25.8 million for Eversource (increase of $16.3 million for CL&P and $12.5 million at our natural gas businesses, and decrease of $1.8 million at NSTAR Electric). In the third quarter of 2021, the COVID-19 related allowance for uncollectible accounts decreased by $6.5 million at Eversource (increased $4.0 million at CL&P, and decreased $8.3 million at NSTAR Electric and $2.2 million at our natural gas businesses). The 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 September 30, 2021, the total amount incurred as a result of COVID-19 included in the allowance for uncollectible accounts was $57.0 million at Eversource ($20.1 million at CL&P, $8.5 million at NSTAR Electric, and $27.4 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.

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 nine months of 2021, net incremental costs incurred as a result of COVID-19 totaled $21.2 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 benefits under the CARES Act. In the first nine months of 2021, we deferred $17.3 million of these net incremental COVID-19 costs on the balance sheet. Net incremental COVID-19 expenses that reduced pre-tax earnings totaled $3.9 million on the statement of income in the first nine months of 2021.

As of September 30, 2021, a total of $41.3 million of net deferred incremental COVID-19 costs were recorded on the balance sheet, of which $34.5 million of that deferral related to uncollectible expense that impacts earnings and $6.8 million related to cleaning and supplies for personal protective equipment.

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Liquidity

Cash totaled $88.2 million as of September 30, 2021, compared with $106.6 million as of December 31, 2020.

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $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, EGMA and Aquarion Water Company of Connecticut are parties to a five-year $2.00 billion revolving credit facility, which terminates on October 15, 2026. This revolving credit facility serves to backstop Eversource parent's $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 October 15, 2026. 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 of				Available Borrowing Capacity as of				Weighted-Average Interest Rate as of
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
(Millions of Dollars)
Eversource Parent Commercial Paper Program	$	653.0	$	1,054.3	$	1,347.0	$	945.7	0.18	%	0.25	%
NSTAR Electric Commercial Paper Program	138.0		195.0		512.0		455.0		0.10	%	0.16	%

There were no borrowings outstanding on the revolving credit facilities as of September 30, 2021 or December 31, 2020.

CL&P and PSNH have uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire on May 12, 2022. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of September 30, 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. As a result of the NSTAR Gas long-term debt issuances in October 2021, $80.0 million of commercial paper borrowings under the Eversource parent commercial paper program were classified as Long-Term Debt as of September 30, 2021.

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 September 30, 2021, there were intercompany loans from Eversource parent to PSNH of $66.5 million, and to a subsidiary of NSTAR Electric of $24.6 million. As of December 31, 2020, there were intercompany loans from Eversource parent to PSNH of $46.3 million, and to a subsidiary of NSTAR Electric of $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 Authorizations: On March 31, 2021, the DPU approved NSTAR Electric's request for authorization to issue up to $1.60 billion in long-term debt through December 31, 2023. On September 10, 2021, the DPU approved EGMA’s request for authorization to issue up to $725 million in long-term debt through December 31, 2023. The remaining Eversource operating companies, including CL&P and PSNH, have utilized the long-term debt authorizations in place with the respective regulatory commissions.

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Long-Term Debt Issuances and Repayments: The following table summarizes long-term debt issuances and repayments:

(Millions of Dollars)	Issuance/(Repayment)		Issue Date or Repayment Date	Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
2.05% Series A First Mortgage Bonds	$	425.0	June 2021	July 2031	Repaid short-term debt, paid capital expenditures and working capital
4.38% Series A PCRB	(120.5)		September 2021	September 2028	Paid on par call date in advance of maturity
NSTAR Electric:
3.10% 2021 Debentures	300.0		May 2021	June 2051	Refinanced investments in eligible green expenditures, which were previously financed in 2019 and 2020
3.50% Series F Senior Notes	(250.0)		June 2021	September 2021	Paid on par call date in advance of maturity date
1.95% 2021 Debentures	300.0		August 2021	August 2031	Repaid short-term debt, paid capital expenditures and working capital
PSNH:
4.05% Series Q First Mortgage Bonds	(122.0)		March 2021	June 2021	Paid on par call date in advance of maturity date
3.20% Series R First Mortgage Bonds	(160.0)		June 2021	September 2021	Paid on par call date in advance of maturity date
2.20% Series V First Mortgage Bonds	350.0		June 2021	June 2031	Repaid 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 2021	March 2021	Paid on par call date in advance of maturity date
Eversource Parent 2.55% Series S Senior Notes	350.0		March 2021	March 2031	Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes
Eversource Parent 1.40% Series U Senior Notes	300.0		August 2021	August 2026	Repaid short-term debt
Eversource Parent Variable Rate Series T Senior Notes (1)	350.0		August 2021	August 2023	Repaid short-term debt
Aquarion Water Company of Connecticut 3.31%    Senior Notes	100.0		April 2021	April 2051	Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital
Aquarion Water Company of Connecticut 5.50% Notes	(40.0)		April 2021	April 2021	Paid at maturity
Yankee Gas 1.38% Series S First Mortgage Bonds	90.0		August 2021	August 2026	(2)
Yankee Gas 2.88% Series T First Mortgage Bonds	35.0		August 2021	August 2051	(2)
EGMA 2.11% Series A First Mortgage Bonds	310.0		September 2021	October 2031	(2)
EGMA 2.92% Series B First Mortgage Bonds	240.0		September 2021	October 2051	(2)
NSTAR Gas 2.25% Series T First Mortgage Bonds	40.0		October 2021	November 2031	(2)
NSTAR Gas 3.03% Series U First Mortgage Bonds	40.0		October 2021	November 2051	(2)

(1)    On August 10, 2021, Eversource Parent issued $350 million of floating rate Series T Senior Notes with a maturity date of August 15, 2023. The notes have a coupon rate based on the Compounded SOFR plus 0.25%.

(2)    The use of proceeds from these various issuances refinanced existing indebtedness, funded capital expenditures and were for general corporate purposes. The EGMA indebtedness that was refinanced included $309.4 million of long-term debt.

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $43.2 million of RRB principal payments and $18.9 million of interest payments in the first nine months of 2021, and paid $43.2 million of RRB principal payments and $20.2 million of interest payments in the first nine months of 2020.

Cash Flows:  Cash flows provided by operating activities totaled $1.52 billion in the first nine months of 2021, compared with $1.50 billion in the first nine months of 2020. Operating cash flows were favorably impacted by improvements in the timing of collections for regulatory tracking mechanisms, the addition of cash flows of EGMA, the timing of cash collections on our accounts receivable, and the timing of other working capital items. These favorable impacts were partially offset by the timing of cash payments made on our accounts payable, cash payments made in 2021 for storm restoration costs of approximately $52 million related to Tropical Storm Isaias at CL&P, a $39.5 million increase in income tax payments made in 2021, as compared to 2020, a $32.0 million increase in Pension and PBOP contributions made in 2021, as compared to 2020, and an increase in cost of removal expenditures.

On September 1, 2021, our Board of Trustees approved a common share dividend payment of $0.6025 per share, paid on September 30, 2021 to shareholders of record as of September 16, 2021. In the first nine months of 2021, we paid cash dividends of $603.6 million and issued non-cash dividends of $17.3 million in the form of treasury shares, totaling dividends of $620.9 million. In the first nine months of 2020, we paid cash dividends of $555.7 million and issued non-cash dividends of $17.2 million in the form of treasury shares, totaling dividends of $572.9 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.

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In the first nine months of 2021, CL&P, NSTAR Electric and PSNH paid $210.3 million, $283.2 million, and $235.6 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 nine months of 2021, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $2.21 billion, $563.2 million, $675.2 million, and $217.4 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.

Credit Ratings: On September 21, 2021, Fitch changed CL&P’s outlook from stable to negative. On October 29, 2021, S&P changed CL&P’s outlook from negative to stable.

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 $2.29 billion in the first nine months of 2021, compared to $2.19 billion in the first nine months of 2020.  These amounts included $161.2 million and $178.3 million in the first nine months of 2021 and 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 decreased by $22.6 million in the first nine months of 2021, as compared to the first nine months of 2020.  A summary of electric transmission capital expenditures by company is as follows:  

	For the Nine Months Ended September 30,
(Millions of Dollars)	2021		2020
CL&P	$	242.4	$	296.4
NSTAR Electric	316.1		253.6
PSNH	123.7		154.8
Total Electric Transmission Segment	$	682.2	$	704.8

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 23 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 rejected the Town’s appeal, affirming all aspects of the Siting Board’s final decision. On March 11, 2021, Protect Sudbury filed a petition with the Surface 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 Land Court. MBTA filed its response on April 30, 2021 and a decision is anticipated by the end of the year. Additionally, Eversource must reach agreement on a Memorandum of Agreement (MOA) with the Army Corps of Engineers and consulting parties, including the Massachusetts Historical Commission and the Narragansett tribe, to establish measures to be performed by the Company to mitigate project impacts. The Army Corps of Engineers initiated the MOA consultation process with the consulting parties in late September. Although there is no mandated timeframe for resolution, the Company anticipates achieving resolution by the end of 2021. The two remaining upgrades, the Mystic-Woburn and the Wakefield-Woburn reliability projects, are under construction and are expected to be placed in service by the second quarter of 2023. We estimate our portion of the investment will be approximately $750 million, of which, $564 million has been spent and capitalized through September 30, 2021.

Southeastern Massachusetts Transmission Projects: These projects consist of a 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 under construction, two have completed hearings and are awaiting orders and one, a joint project with National Grid, has yet to be filed. Of the remaining eight projects, two projects are under construction, and six projects have been placed in-service. We estimate our portion of the investment will be approximately $190 million, of which, $42 million has been spent and capitalized through September 30, 2021.

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

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Distribution Business:  A summary of distribution capital expenditures is as follows:

	For the Nine Months Ended September 30,
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total
2021
Basic Business	$	160.2	$	111.7	$	39.5	$	311.4	$	140.8	$	11.0	$	463.2
Aging Infrastructure	110.5		162.7		44.3		317.5		358.3		77.7		753.5
Load Growth and Other	51.2		108.5		15.2		174.9		59.0		0.5		234.4
Total Distribution	321.9		382.9		99.0		803.8		558.1		89.2		1,451.1
Solar	—		(0.7)		—		(0.7)		—		—		(0.7)
Total	$	321.9	$	382.2	$	99.0	$	803.1	$	558.1	$	89.2	$	1,450.4
2020