Eversource(ES) - 2022 Q3 - Quarterly Report

General Information Overview of the Form 10-Q filing and registrant details for Eversource Energy and its subsidiaries Form 10-Q Filing Details This document is a Quarterly Report on Form 10-Q for the period ended September 30, 2022, filed by Eversource Energy and its subsidiaries, including The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire - The report is a Quarterly Report on Form 10-Q for the period ended September 30, 2022[1] - 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[5] - Each registrant makes no representation as to information relating to the other registrants[5] Registrant Information and Securities Eversource Energy is a Massachusetts voluntary association, with its common shares listed on the New York Stock Exchange under the symbol ES, and its subsidiaries are also registrants - Eversource Energy is a Massachusetts voluntary association with its common shares (ES) registered on the New York Stock Exchange[2] Registrant Filing Status | Company | Filing Status | |:----------------------------------------|:----------------------| | Eversource Energy | Large accelerated filer | | The Connecticut Light and Power Company | Non-accelerated filer | | NSTAR Electric Company | Non-accelerated filer | | Public Service Company of New Hampshire | Non-accelerated filer | Outstanding Common Shares as of October 31, 2022 | Company | Outstanding Shares | |:----------------------------------------|:-------------------| | Eversource Energy Common Shares | 348,307,416 shares | | The Connecticut Light and Power Company Common Stock | 6,035,205 shares | | NSTAR Electric Company Common Stock | 200 shares | | Public Service Company of New Hampshire Common Stock | 301 shares | - Eversource Energy holds all outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire[3] Glossary of Terms This section defines abbreviations and acronyms used throughout the report for clarity Abbreviations and Acronyms This section provides a glossary of abbreviations and acronyms used throughout the report, covering company names, regulatory bodies, and financial/technical terms - The glossary defines key terms such as 'Eversource', 'CL&P', 'NSTAR Electric', 'PSNH', and 'Regulated companies'[7] - It also lists various regulatory and government agencies like BOEM, DEEP, DOE, DPU, EPA, FERC, ISO-NE, NHPUC, and PURA[7] - Financial and technical abbreviations like ADIT, AFUDC, AOCI, ARO, CWIP, EPS, GAAP, GWh, MW, MWh, OCI, ROE, and RRBs are included[7][8] PART I – FINANCIAL INFORMATION This part presents Eversource Energy's unaudited consolidated financial statements and management's discussion and analysis ITEM 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Eversource Energy and its subsidiaries, along with combined notes - The financial statements are unaudited and include all adjustments necessary to present fairly the financial position and results of operations[59] - Eversource Energy's utility subsidiaries are subject to rate-regulation based on cost recovery, impacting the timing of revenue and expense recognition[62] EVERSOURCE ENERGY AND SUBSIDIARIES This subsection provides the condensed consolidated financial statements for Eversource Energy and its subsidiaries for the periods ended September 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheets The consolidated balance sheet for Eversource Energy and subsidiaries shows a total asset increase from $48.49 billion at December 31, 2021, to $51.60 billion at September 30, 2022 Eversource Energy and Subsidiaries: Condensed Consolidated Balance Sheets (Thousands of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------------------------------------|:-------------------|:-------------------| | Assets | | | | Total Current Assets | $3,919,654 | $3,270,120 | | Property, Plant and Equipment, Net | $35,029,497 | $33,377,650 | | Total Deferred Debits and Other Assets | $12,650,274 | $11,844,374 | | Total Assets | $51,599,425 | $48,492,144 | | Liabilities and Capitalization | | | | Total Current Liabilities | $5,487,161 | $5,847,039 | | Total Deferred Credits and Other Liabilities | $10,435,062 | $10,412,412 | | Long-Term Debt | $19,831,967 | $17,023,577 | | Common Shareholders' Equity | $15,279,173 | $14,599,844 | | Total Liabilities and Capitalization | $51,599,425 | $48,492,144 | - Cash and Cash Equivalents increased significantly from $66.8 million at December 31, 2021, to $485.7 million at September 30, 2022, primarily due to a long-term debt issuance by NSTAR Electric[15][247] - Investments in Unconsolidated Affiliates increased from $1,436,293 thousand to $2,053,404 thousand, reflecting continued investment in the offshore wind business[15][280] Condensed Consolidated Statements of Income Eversource Energy and subsidiaries reported increased operating revenues and net income for both the three and nine months ended September 30, 2022, compared to the same periods in 2021 Eversource Energy and Subsidiaries: Condensed Consolidated Statements of Income (Thousands of Dollars, Except Share Information) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:---------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Operating Revenues | $3,215,645 | $2,432,794 | $9,259,596 | $7,381,172 | | Total Operating Expenses | $2,658,352 | $1,949,463 | $7,583,679 | $5,860,669 | | Operating Income | $557,293 | $483,331 | $1,675,917 | $1,520,503 | | Net Income | $351,289 | $285,046 | $1,090,356 | $919,468 | | Net Income Attributable to Common Shareholders | $349,409 | $283,166 | $1,084,717 | $913,829 | | Basic Earnings Per Common Share | $1.01 | $0.82 | $3.13 | $2.66 | | Diluted Earnings Per Common Share | $1.00 | $0.82 | $3.13 | $2.65 | - Operating Revenues increased by $782.8 million (32.2%) for the three months and $1,878.4 million (25.4%) for the nine months ended September 30, 2022, compared to the same periods in 2021[323] - Purchased Power, Fuel and Transmission expenses increased significantly by $507.4 million (57.6%) for the three months and $1,189.1 million (47.0%) for the nine months, primarily due to higher energy supply procurement costs and higher average prices[323][340][341] Condensed Consolidated Statements of Comprehensive Income Eversource Energy and subsidiaries reported an increase in comprehensive income attributable to common shareholders for both the three and nine months ended September 30, 2022, compared to the same periods in 2021 Eversource Energy and Subsidiaries: Condensed Consolidated Statements of Comprehensive Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Net Income | $351,289 | $285,046 | $1,090,356 | $919,468 | | Other Comprehensive Income, Net of Tax | $1,858 | $2,477 | $1,269 | $4,546 | | Comprehensive Income Attributable to Common Shareholders | $351,267 | $285,643 | $1,085,986 | $918,375 | - Changes in unrealized losses on marketable securities contributed to a decrease in other comprehensive income, with a loss of $667 thousand for the three months and $1,990 thousand for the nine months ended September 30, 2022[17] - Changes in funded status of pension, SERP, and PBOP benefit plans positively impacted other comprehensive income, with gains of $2,520 thousand for the three months and $3,244 thousand for the nine months ended September 30, 2022[17] Condensed Consolidated Statements of Common Shareholders' Equity Eversource Energy's common shareholders' equity increased from $14.60 billion at January 1, 2022, to $15.28 billion at September 30, 2022 Eversource Energy and Subsidiaries: Condensed Consolidated Statements of Common Shareholders' Equity (Thousands of Dollars) | Metric | As of Jan 1, 2022 | As of Sep 30, 2022 | |:-------------------------------------|:------------------|:-------------------| | Common Shares Amount | $1,789,092 | $1,799,920 | | Capital Surplus, Paid In | $8,098,514 | $8,327,477 | | Retained Earnings | $5,005,391 | $5,429,076 | | Accumulated Other Comprehensive Loss | $(42,275) | $(41,006) | | Treasury Stock | $(250,878) | $(236,294) | | Total Common Shareholders' Equity | $14,599,844 | $15,279,173 | - Net income contributed $1,090,356 thousand to retained earnings for the nine months ended September 30, 2022[19] - Dividends on common shares totaled $643,634 thousand for the nine months ended September 30, 2022[19][262] - Issuance of common shares, net of issuance costs, generated $197.1 million in proceeds for the first nine months of 2022[226][259] Condensed Consolidated Statements of Cash Flows Eversource Energy and subsidiaries reported a significant increase in net cash flows provided by operating activities and financing activities for the nine months ended September 30, 2022 Eversource Energy and Subsidiaries: Condensed Consolidated Statements of Cash Flows (Thousands of Dollars) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------| | Net Cash Flows Provided by Operating Activities | $1,688,904 | $1,520,273 | | Net Cash Flows Used in Investing Activities | $(2,928,140) | $(2,418,287) | | Net Cash Flows Provided by Financing Activities | $1,620,484 | $851,193 | | Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash | $381,248 | $(46,821) | | Cash, Cash Equivalents and Restricted Cash - End of Period | $602,256 | $218,129 | - Operating cash flows were favorably impacted by an increase in regulatory over-recoveries, timing of accounts payable, a $60.0 million decrease in pension contributions, and a $51.7 million decrease in income tax payments in 2022[261] - Investing activities saw increased outflows, primarily due to higher investments in property, plant and equipment ($2.35 billion in 2022 vs. $2.21 billion in 2021) and investments in unconsolidated affiliates ($617.6 million in 2022 vs. $245.2 million in 2021)[23][264] - Financing activities were significantly boosted by $4.045 billion in long-term debt issuances in 2022, compared to $3.150 billion in 2021[23] The Connecticut Light and Power Company (Unaudited) This section provides the unaudited condensed financial statements for The Connecticut Light and Power Company (CL&P) for the periods ended September 30, 2022, and December 31, 2021 Condensed Balance Sheets CL&P's total assets increased from $13.95 billion at December 31, 2021, to $14.46 billion at September 30, 2022, driven by receivables and property, plant and equipment CL&P: Condensed Balance Sheets (Thousands of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------------------------------------|:-------------------|:-------------------| | Assets | | | | Total Current Assets | $1,289,722 | $1,156,439 | | Property, Plant and Equipment, Net | $11,226,672 | $10,803,543 | | Total Deferred Debits and Other Assets | $1,943,142 | $1,989,674 | | Total Assets | $14,459,536 | $13,949,656 | | Liabilities and Capitalization | | | | Total Current Liabilities | $1,683,239 | $1,148,004 | | Total Deferred Credits and Other Liabilities | $3,145,823 | $3,170,572 | | Long-Term Debt | $3,816,229 | $4,215,379 | | Common Stockholder's Equity | $5,698,045 | $5,299,501 | | Total Liabilities and Capitalization | $14,459,536 | $13,949,656 | - Receivables, Net increased from $447,774 thousand to $645,489 thousand, reflecting higher uncollectible accounts[26] - Long-Term Debt decreased by $399,150 thousand, while Common Stockholder's Equity increased by $398,544 thousand, partly due to capital contributions from Eversource Parent[26][30] Condensed Statements of Income CL&P reported substantial increases in operating revenues and net income for both the three and nine months ended September 30, 2022, compared to the same periods in 2021 CL&P: Condensed Statements of Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Operating Revenues | $1,369,101 | $919,643 | $3,690,614 | $2,736,513 | | Total Operating Expenses | $1,168,441 | $779,957 | $3,078,316 | $2,245,099 | | Operating Income | $200,660 | $139,686 | $612,298 | $491,414 | | Net Income | $143,287 | $70,153 | $422,102 | $284,107 | - Operating Revenues increased by $449.5 million (48.9%) for the three months and $954.1 million (34.9%) for the nine months, largely due to the absence of a 2021 reserve for customer credits and a storm performance penalty[357][392][395] - Purchased Power and Transmission expenses increased by $248.8 million (63.4%) for the three months and $511.8 million (47.7%) for the nine months, driven by higher energy supply procurement costs and average prices[28][367][399] - Amortization of Regulatory Assets, Net increased significantly by $76.9 million for the three months and $241.7 million for the nine months, primarily due to deferral adjustments of energy supply and other tracked costs[28][373][403] Condensed Statements of Comprehensive Income CL&P's comprehensive income increased for both the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflecting the higher net income CL&P: Condensed Statements of Comprehensive Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Net Income | $143,287 | $70,153 | $422,102 | $284,107 | | Other Comprehensive Loss, Net of Tax | $(30) | $(9) | $(88) | $(38) | | Comprehensive Income | $143,257 | $70,144 | $422,014 | $284,069 | - Other comprehensive loss, net of tax, was primarily due to changes in unrealized losses on marketable securities, totaling $(23) thousand for the three months and $(68) thousand for the nine months ended September 30, 2022[28] Condensed Statements of Common Stockholder's Equity CL&P's common stockholder's equity increased from $5.299 billion at January 1, 2022, to $5.698 billion at September 30, 2022 CL&P: Condensed Statements of Common Stockholder's Equity (Thousands of Dollars) | Metric | As of Jan 1, 2022 | As of Sep 30, 2022 | |:-------------------------------------|:------------------|:-------------------| | Common Stock Amount | $60,352 | $60,352 | | Capital Surplus, Paid In | $3,010,765 | $3,210,765 | | Retained Earnings | $2,228,133 | $2,426,765 | | Accumulated Other Comprehensive Income | $251 | $163 | | Total Common Stockholder's Equity | $5,299,501 | $5,698,045 | - Net income contributed $422,102 thousand to retained earnings for the nine months ended September 30, 2022[30] - Capital contributions from Eversource Parent totaled $200,000 thousand for the nine months ended September 30, 2022[30] - Dividends on common stock amounted to $219,300 thousand for the nine months ended September 30, 2022[30][32] Condensed Statements of Cash Flows CL&P's net cash flows provided by operating activities increased for the nine months ended September 30, 2022, but increased investing activities led to a net decrease in cash CL&P: Condensed Statements of Cash Flows (Thousands of Dollars) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------| | Net Cash Flows Provided by Operating Activities | $554,254 | $450,569 | | Net Cash Flows Used in Investing Activities | $(608,453) | $(562,983) | | Net Cash Flows Provided by Financing Activities | $2,531 | $84,367 | | Net Decrease in Cash and Restricted Cash | $(51,668) | $(28,047) | | Cash and Restricted Cash - End of Period | $23,120 | $71,762 | - Operating cash flows benefited from an increase in regulatory over-recoveries and the absence of $78.9 million in pension contributions made in 2021[386] - Investing activities saw increased outflows for property, plant and equipment, totaling $608.9 million in 2022 compared to $563.2 million in 2021[32] - Financing activities decreased significantly, primarily due to lower capital contributions from Eversource Parent and no long-term debt issuances in 2022, compared to $425.0 million in 2021[32] NSTAR Electric Company and Subsidiary (Unaudited) This section provides the unaudited condensed consolidated financial statements for NSTAR Electric Company and its subsidiary for the periods ended September 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheets NSTAR Electric's total assets increased from $13.80 billion at December 31, 2021, to $14.86 billion at September 30, 2022, driven by cash, receivables, and property, plant and equipment NSTAR Electric Company and Subsidiary: Condensed Consolidated Balance Sheets (Thousands of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------------------------------------|:-------------------|:-------------------| | Assets | | | | Total Current Assets | $1,532,880 | $1,175,018 | | Property, Plant and Equipment, Net | $11,365,172 | $10,876,614 | | Total Deferred Debits and Other Assets | $1,963,879 | $1,748,314 | | Total Assets | $14,861,931 | $13,799,946 | | Liabilities and Capitalization | | | | Total Current Liabilities | $1,653,833 | $1,712,014 | | Total Deferred Credits and Other Liabilities | $3,534,360 | $3,486,514 | | Long-Term Debt | $4,424,765 | $3,585,399 | | Common Stockholder's Equity | $5,205,973 | $4,973,019 | | Total Liabilities and Capitalization | $14,861,931 | $13,799,946 | - Cash and Cash Equivalents increased significantly from $745 thousand to $453,581 thousand, primarily due to a $400 million long-term debt issuance in September 2022[35][247] - Long-Term Debt increased by $839,366 thousand, reflecting new debt issuances[35] Condensed Consolidated Statements of Income NSTAR Electric reported increased operating revenues and net income for both the three and nine months ended September 30, 2022, compared to the same periods in 2021 NSTAR Electric Company and Subsidiary: Condensed Consolidated Statements of Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Operating Revenues | $1,105,452 | $918,698 | $2,752,278 | $2,343,116 | | Total Operating Expenses | $860,914 | $670,441 | $2,223,694 | $1,798,381 | | Operating Income | $244,538 | $248,257 | $528,584 | $544,735 | | Net Income | $188,084 | $177,451 | $400,260 | $382,287 | - Operating Revenues increased by $186.7 million (20.3%) for the three months and $409.2 million (17.5%) for the nine months, primarily due to higher purchased power and transmission costs and a base distribution rate increase effective January 1, 2022[37][357][358] - Purchased Power and Transmission expenses increased by $127.2 million (43.3%) for the three months and $260.1 million (36.5%) for the nine months, driven by higher energy supply procurement costs and average prices[37][367][368] Condensed Consolidated Statements of Comprehensive Income NSTAR Electric's comprehensive income increased for both the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflecting the higher net income NSTAR Electric Company and Subsidiary: Condensed Consolidated Statements of Comprehensive Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Net Income | $188,084 | $177,451 | $400,260 | $382,287 | | Other Comprehensive (Loss)/Income, Net of Tax | $(62) | $(36) | $(136) | $166 | | Comprehensive Income | $188,022 | $177,415 | $400,124 | $382,453 | - Other comprehensive income/(loss) was impacted by changes in funded status of SERP benefit plan and qualified cash flow hedging instruments[38] Condensed Consolidated Statements of Common Stockholder's Equity NSTAR Electric's common stockholder's equity increased from $4.973 billion at January 1, 2022, to $5.206 billion at September 30, 2022 NSTAR Electric Company and Subsidiary: Condensed Consolidated Statements of Common Stockholder's Equity (Thousands of Dollars) | Metric | As of Jan 1, 2022 | As of Sep 30, 2022 | |:-------------------------------------|:------------------|:-------------------| | Common Stock Amount | $0 | $0 | | Capital Surplus, Paid In | $2,253,942 | $2,303,942 | | Retained Earnings | $2,718,576 | $2,901,666 | | Accumulated Other Comprehensive Income | $501 | $365 | | Total Common Stockholder's Equity | $4,973,019 | $5,205,973 | - Net income contributed $400,260 thousand to retained earnings for the nine months ended September 30, 2022[41] - Capital contributions from Eversource Parent totaled $50,000 thousand for the nine months ended September 30, 2022[41] - Dividends on common stock amounted to $215,700 thousand for the nine months ended September 30, 2022[41][43] Condensed Consolidated Statements of Cash Flows NSTAR Electric's net cash flows provided by operating activities increased for the nine months ended September 30, 2022, leading to a substantial net increase in cash, cash equivalents, and restricted cash NSTAR Electric Company and Subsidiary: Condensed Consolidated Statements of Cash Flows (Thousands of Dollars) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------| | Net Cash Flows Provided by Operating Activities | $634,624 | $617,340 | | Net Cash Flows Used in Investing Activities | $(691,797) | $(675,175) | | Net Cash Flows Provided by Financing Activities | $509,939 | $61,263 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $452,766 | $3,428 | | Cash, Cash Equivalents and Restricted Cash - End of Period | $470,945 | $20,838 | - Operating cash flows were favorably impacted by the timing of cash collections on accounts receivable and a $37.0 million increase in income tax refunds received in 2022[387] - Investing activities saw increased outflows for property, plant and equipment, totaling $691.9 million in 2022 compared to $675.2 million in 2021[43] - Financing activities increased significantly due to $850.0 million in long-term debt issuances in 2022, compared to $600.0 million in 2021[43] Public Service Company of New Hampshire and Subsidiaries (Unaudited) This section provides the unaudited condensed consolidated financial statements for Public Service Company of New Hampshire (PSNH) and its subsidiaries Condensed Consolidated Balance Sheets PSNH's total assets increased from $4.74 billion at December 31, 2021, to $4.99 billion at September 30, 2022, driven by cash, receivables, and property, plant and equipment PSNH and Subsidiaries: Condensed Consolidated Balance Sheets (Thousands of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------------------------------------|:-------------------|:-------------------| | Assets | | | | Total Current Assets | $427,756 | $381,938 | | Property, Plant and Equipment, Net | $3,917,559 | $3,656,462 | | Total Deferred Debits and Other Assets | $644,371 | $702,384 | | Total Assets | $4,989,686 | $4,740,784 | | Liabilities and Capitalization | | | | Total Current Liabilities | $627,478 | $546,928 | | Total Deferred Credits and Other Liabilities | $958,622 | $983,608 | | Long-Term Debt | $1,164,427 | $1,163,833 | | Common Stockholder's Equity | $1,828,667 | $1,592,713 | | Total Liabilities and Capitalization | $4,989,686 | $4,740,784 | - Cash increased significantly from $15 thousand to $2,171 thousand[46] - Common Stockholder's Equity increased by $235,954 thousand, primarily due to capital contributions from Eversource Parent[46][51] Condensed Consolidated Statements of Income PSNH reported increased operating revenues and net income for both the three and nine months ended September 30, 2022, compared to the same periods in 2021 PSNH and Subsidiaries: Condensed Consolidated Statements of Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Operating Revenues | $430,642 | $314,893 | $1,077,124 | $887,177 | | Total Operating Expenses | $359,229 | $247,285 | $886,622 | $700,037 | | Operating Income | $71,413 | $67,608 | $190,502 | $187,140 | | Net Income | $51,447 | $44,143 | $134,071 | $123,452 | - Operating Revenues increased by $115.7 million (36.8%) for the three months and $189.9 million (21.4%) for the nine months, primarily due to higher purchased power and transmission costs and a base distribution rate increase effective August 1, 2021[48][357][358] - Purchased Power and Transmission expenses increased by $108.0 million (100.6%) for the three months and $172.5 million (61.7%) for the nine months, driven by higher energy supply procurement costs and average prices[48][367][368] Condensed Consolidated Statements of Comprehensive Income PSNH's comprehensive income increased for both the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflecting the higher net income PSNH and Subsidiaries: Condensed Consolidated Statements of Comprehensive Income (Thousands of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Net Income | $51,447 | $44,143 | $134,071 | $123,452 | | Other Comprehensive (Loss)/Income, Net of Tax | $(39) | $103 | $(117) | $640 |\ | Comprehensive Income | $51,408 | $44,246 | $133,954 | $124,092 | - Other comprehensive loss, net of tax, was primarily due to changes in unrealized losses on marketable securities, totaling $(39) thousand for the three months and $(117) thousand for the nine months ended September 30, 2022[49] Condensed Consolidated Statements of Common Stockholder's Equity PSNH's common stockholder's equity increased from $1.593 billion at January 1, 2022, to $1.829 billion at September 30, 2022 PSNH and Subsidiaries: Condensed Consolidated Statements of Common Stockholder's Equity (Thousands of Dollars) | Metric | As of Jan 1, 2022 | As of Sep 30, 2022 | |:-----------------------------------------------|:------------------|:-------------------| | Common Stock Amount | $0 | $0 | | Capital Surplus, Paid In | $1,088,134 | $1,268,134 | | Retained Earnings | $504,556 | $560,627 |\ | Accumulated Other Comprehensive (Loss)/Income | $23 | $(94) | | Total Common Stockholder's Equity | $1,592,713 | $1,828,667 | - Net income contributed $134,071 thousand to retained earnings for the nine months ended September 30, 2022[51] - Capital contributions from Eversource Parent totaled $180,000 thousand for the nine months ended September 30, 2022[51] - Dividends on common stock amounted to $78,000 thousand for the nine months ended September 30, 2022[51][54] Condensed Consolidated Statements of Cash Flows PSNH's net cash flows provided by operating activities increased for the nine months ended September 30, 2022, but increased investing activities led to a net decrease in cash PSNH and Subsidiaries: Condensed Consolidated Statements of Cash Flows (Thousands of Dollars) | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------| | Net Cash Flows Provided by Operating Activities | $246,739 | $237,172 | | Net Cash Flows Used in Investing Activities | $(345,439) | $(216,983) | | Net Cash Flows Provided by/(Used in) Financing Activities | $87,820 | $(33,571) | | Net Decrease in Cash and Restricted Cash | $(10,880) | $(13,382) | | Cash and Restricted Cash - End of Period | $24,246 | $26,173 | - Operating cash flows were favorably impacted by the timing of accounts payable and an increase in regulatory over-recoveries[388] - Investing activities saw increased outflows for property, plant and equipment, totaling $346.3 million in 2022 compared to $217.4 million in 2021[54] - Financing activities shifted from a net use of $33.6 million in 2021 to a net provision of $87.8 million in 2022, primarily due to increased capital contributions from Eversource Parent and an increase in notes payable[54] Combined Notes to Condensed Financial Statements (Unaudited) This section provides combined notes to the unaudited condensed financial statements for Eversource Energy and its subsidiaries, detailing accounting policies and financial disclosures - The notes are prepared in accordance with GAAP, with certain information and footnote disclosures omitted as permitted by SEC rules for quarterly reports[58] - Management believes it is probable that the regulated companies will recover their investments in long-lived assets and recorded regulatory assets[90] 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines Eversource Energy's basis of presentation, accounting for uncollectible accounts, fair value measurements, and components of other income, net - Eversource Energy is a public utility holding company primarily engaged in energy delivery through its regulated utility subsidiaries (electric, natural gas, and water utilities)[57] - Receivables are presented net of expected credit losses, with an allowance for uncollectible accounts determined using the CECL model, considering historical data, delinquency statistics, and future economic conditions[65][67] Eversource Energy and Subsidiaries: Total Allowance for Uncollectible Accounts (Millions of Dollars) | Company | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------|:-------------------|:-------------------| | Eversource | $457.6 | $417.4 | | CL&P | $198.6 | $181.3 | | NSTAR Electric | $99.5 | $97.0 | | PSNH | $28.8 | $24.3 | - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[74][75][76] Eversource Energy and Subsidiaries: Total Other Income, Net (Millions of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-----------------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Pension, SERP and PBOP Non-Service Income Components, Net of Deferred Portion | $55.3 | $21.7 | $164.5 | $63.9 | | AFUDC Equity | $12.6 | $10.3 | $33.7 | $28.7 | | Equity in Earnings of Unconsolidated Affiliates | $3.8 | $4.9 | $20.8 | $13.3 | | Investment Income/(Loss) | $1.3 | $(0.6) | $2.4 | $0.7 | | Interest Income | $14.1 | $7.3 | $30.3 | $17.2 | | Gain on Sale of Property | $2.5 | $0.0 | $2.7 | $0.1 | | Other | $0.2 | $0.2 | $0.9 | $0.7 | | Total Other Income, Net | $89.8 | $43.8 | $255.3 | $124.6 | 2. REGULATORY ACCOUNTING This note explains Eversource's application of regulatory accounting, deferring costs as regulatory assets and recording regulatory liabilities for future recovery or refunds - Eversource's utility companies are subject to rate regulation based on cost recovery, allowing for the deferral of certain revenues and expenses[87] - Regulatory assets represent incurred costs probable of future recovery, while regulatory liabilities represent revenues received for expected costs or probable future refunds[88] Eversource Energy and Subsidiaries: Total Regulatory Assets (Millions of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-------------------------------------|:-------------------|:-------------------| | Benefit Costs | $1,408.9 | $1,481.0 | | Storm Costs, Net | $1,243.9 | $1,102.7 | | Regulatory Tracking Mechanisms | $941.2 | $1,050.5 | | Income Taxes, Net | $808.5 | $790.7 | | Securitized Stranded Costs | $446.5 | $478.9 | | Goodwill-related | $285.2 | $297.8 | | Derivative Liabilities | $195.9 | $249.2 | | Asset Retirement Obligations | $124.3 | $115.0 | | Other Regulatory Assets | $248.0 | $150.0 | | Total Regulatory Assets | $5,702.4 | $5,715.8 | | Less: Current Portion | $1,143.6 | $1,129.1 | | Total Long-Term Regulatory Assets| $4,558.8 | $4,586.7 | Eversource Energy and Subsidiaries: Total Regulatory Liabilities (Millions of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-----------------------------------------------|:-------------------|:-------------------| | EDIT due to Tax Cuts and Jobs Act of 2017 | $2,629.0 | $2,685.2 | | Cost of Removal | $654.5 | $649.6 | | Regulatory Tracking Mechanisms | $957.4 | $448.4 | | Deferred Portion of Non-Service Income Components of Pension, SERP and PBOP Benefit Costs | $240.3 | $148.3 | | AFUDC - Transmission | $93.1 | $81.0 | | Other Regulatory Liabilities | $204.6 | $241.4 | | Total Regulatory Liabilities | $4,889.8 | $4,468.7 | | Less: Current Portion | $988.7 | $602.4 | | Total Long-Term Regulatory Liabilities | $3,901.1 | $3,866.3 | 3. PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION This note summarizes Eversource's property, plant and equipment by asset category, showing an increase in net property, plant and equipment to $35.03 billion Eversource Energy and Subsidiaries: Property, Plant and Equipment, Net (Millions of Dollars) | Asset Category | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-------------------------------|:-------------------|:-------------------| | Distribution - Electric | $18,132.2 | $17,679.1 | | Distribution - Natural Gas | $7,020.1 | $6,694.8 | | Transmission - Electric | $13,371.2 | $12,882.4 | | Distribution - Water | $1,971.1 | $1,900.9 | | Solar | $200.9 | $200.9 | | Other | $1,663.4 | $1,469.5 | | Property, Plant and Equipment, Gross | $42,358.9 | $40,827.6 | | Less: Total Accumulated Depreciation | $(9,742.9) | $(9,465.3) | | Property, Plant and Equipment, Net | $32,616.0 | $31,362.3 | | Construction Work in Progress | $2,413.5 | $2,015.4 | | Total Property, Plant and Equipment, Net | $35,029.5 | $33,377.7 | - Construction Work in Progress (CWIP) increased by $398.1 million, indicating significant ongoing capital projects[94] - Electric Transmission assets, gross, increased by $488.8 million, reflecting continued investment in transmission infrastructure[94][233] 4. DERIVATIVE INSTRUMENTS This note details Eversource's use of derivative contracts to manage commodity price risk for energy and energy-related products - Derivative contracts are used to manage price volatility of energy and energy-related products, with costs recoverable from customers in future rates[95] - Derivative contracts not designated as 'normal' are recorded at fair value on the balance sheets, with offsetting regulatory assets or liabilities[97] CL&P: Derivative Assets and Liabilities (Millions of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-------------------------------------|:-------------------|:-------------------| | Current Derivative Assets | $15.2 | $13.7 | | Long-Term Derivative Assets | $31.8 | $46.0 | | Current Derivative Liabilities | $(78.6) | $(73.5) | | Long-Term Derivative Liabilities | $(164.3) | $(235.4) | - Level 3 derivative valuations utilize significant unobservable inputs, including forward reserve prices (e.g., $0.47 per kW-Month for 2023-2024 as of Sep 30, 2022) and exit price premiums (weighted average of 6.6%)[103][104] - For the nine months ended September 30, 2022, there were gains of $11.2 million deferred as regulatory costs from derivative contracts, compared to losses of $9.5 million in 2021[102] 5. MARKETABLE SECURITIES This note describes Eversource's marketable securities, primarily held in trusts for non-qualified executive benefits and spent nuclear fuel obligations - Marketable securities are primarily held in non-qualified executive benefit trusts and legally restricted trusts for spent nuclear fuel obligations (CYAPC and YAEC)[108][111] - Fair value of equity securities in non-qualified executive benefit trusts was $23.3 million as of September 30, 2022, with unrealized losses of $10.6 million for the nine months ended September 30, 2022[110] Eversource Energy and Subsidiaries: Marketable Securities Fair Value (Millions of Dollars) | Fair Value Hierarchy | As of Sep 30, 2022 | As of Dec 31, 2021 | |:---------------------|:-------------------|:-------------------| | Level 1: | | | | Mutual Funds and Equities | $193.4 | $254.2 | | Money Market Funds | $20.8 | $31.3 | | Total Level 1 | $214.2 | $285.5 | | Level 2: | | | | U.S. Government Issued Debt Securities | $77.4 | $81.3 | | Corporate Debt Securities | $54.8 | $65.3 | | Asset-Backed Debt Securities | $9.5 | $12.6 | | Municipal Bonds | $13.0 | $12.3 | | Other Fixed Income Securities | $14.6 | $16.6 | | Total Level 2 | $169.3 | $188.1 | | Total Marketable Securities | $383.5 | $473.6 | - The total fair value of marketable securities decreased from $473.6 million at December 31, 2021, to $383.5 million at September 30, 2022[117] 6. SHORT-TERM AND LONG-TERM DEBT This note details Eversource's short-term and long-term debt, including commercial paper programs, revolving credit facilities, and intercompany borrowings - Eversource parent has a $2.00 billion commercial paper program backed by a $2.00 billion revolving credit facility, while NSTAR Electric has a $650 million commercial paper program backed by a $650 million revolving credit facility[118][119] Commercial Paper Program Borrowings and Availability (Millions of Dollars) | Program | Borrowings Outstanding as of Sep 30, 2022 | Borrowings Outstanding as of Dec 31, 2021 | Available Borrowing Capacity as of Sep 30, 2022 | Available Borrowing Capacity as of Dec 31, 2021 | Weighted-Average Interest Rate as of Sep 30, 2022 | Weighted-Average Interest Rate as of Dec 31, 2021 | |:--------------------------------------|:------------------------------------------|:------------------------------------------|:------------------------------------------------|:------------------------------------------------|:--------------------------------------------------|:--------------------------------------------------| | Eversource Parent Commercial Paper Program | $401.5 | $1,343.0 | $1,598.5 | $657.0 | 3.34 % | 0.31 % | | NSTAR Electric Commercial Paper Program | $0 | $162.5 | $650.0 | $487.5 | 0 % | 0.14 % | - Eversource parent issued $2.75 billion in new long-term debt and repaid $770 million in long-term debt during the first nine months of 2022[128] - Intercompany loans from Eversource parent to its subsidiaries totaled $26.0 million for CL&P, $139.7 million for PSNH, and $2.8 million for NSTAR Electric as of September 30, 2022[123] 7. RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES This note describes PSNH Funding LLC 3, which issued $635.7 million in securitized Rate Reduction Bonds (RRBs) and is consolidated as a Variable Interest Entity - PSNH Funding LLC 3, a wholly-owned subsidiary of PSNH, issued $635.7 million of securitized RRBs in May 2018[128] - The RRBs have a weighted average interest rate of 3.66 percent and final maturity dates ranging from 2026 to 2035, with expected repayment by February 1, 2033[128] - PSNH consolidates PSNH Funding as a VIE because its equity capitalization is insufficient to support operations, and PSNH is the primary beneficiary[128] PSNH Funding Impact on PSNH's Balance Sheets (Millions of Dollars) | Metric | As of Sep 30, 2022 | As of Dec 31, 2021 | |:-------------------------------------|:-------------------|:-------------------| | Restricted Cash - Current Portion | $18.0 | $31.1 | | Restricted Cash - Long-Term Portion | $3.2 | $3.2 | | Securitized Stranded Cost | $446.5 | $478.9 | | Other Regulatory Liabilities | $7.9 | $5.4 | | Accrued Interest | $2.8 | $7.5 | | Rate Reduction Bonds - Current Portion | $43.2 | $43.2 | | Rate Reduction Bonds - Long-Term Portion | $410.5 | $453.7 | PSNH Funding Impact on PSNH's Income Statements (Millions of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Amortization of RRB Principal | $10.8 | $10.8 | $32.4 | $32.4 | | Interest Expense on RRB Principal | $4.2 | $4.5 | $12.9 | $13.9 | 8. PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSION This note outlines Eversource's defined benefit retirement plans (Pension, SERP, PBOP Plans) and details the components of net periodic benefit plan expense/(income) - Eversource provides Pension Plans, SERP Plans, and PBOP Plans for eligible employees, covering retirement, executive benefits, and postretirement health/life insurance[131] Eversource Energy and Subsidiaries: Total Net Periodic Benefit Plan Income (Millions of Dollars) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | |:-------------------------------------|:----------------------------|:----------------------------|:----------------------------|:----------------------------| | Pension and SERP | | | | | | Service Cost | $17.5 | $21.5 | $52.7 | $64.3 | | Interest Cost | $38.6 | $32.5 | $115.8 | $97.5 | | Expected Return on Plan Assets | $(130.7) | $(109.5) | $(393.1) | $(328.0) | | Actuarial Losses, net | $28.4 | $60.7 | $87.5 | $183.1 | | Prior Service Cost/(Credit) | $0.4 | $0.3 | $1.1 | $1.1 | | Total Net Periodic Benefit Plan Income | $(45.8) | $5.5 | $(136.0) | $18.0 | | PBOP | | | | | | Service Cost | $2.9 | $3.3 | $8.7 | $10.1 | | Interest Cost | $5.0 | $4.3 | $15.1 | $12.9 | | Expected Return on Plan Assets | $(22.5) | $(19.8) | $(67.5) | $(59.3) | | Actuarial Loss | $0.0 | $2.0 | $0.0 | $5.9 | | Prior Service Cost/(Credit) | $(5.4) | $(5.3) | $(16.2) | $(15.9) | | Total Net Periodic Benefit Plan Income | $(20.0) | $(15.5) | $(59.9) | $(46.3) | - Eversource contributed $80 million to its Pension and PBOP Plans for the nine months ended September 30, 2022, with no minimum funding requirement for 2022[135] - Changes in pension plan expense are influenced by plan asset returns, market performance, and discount rates, with unamortized actuarial gains or losses amortized over an estimated average future employee service period of seven years[238] 9. COMMITMENTS AND CONTINGENCIES This note details Eversource's environmental liabilities, long-term contractual arrangements, guarantees, and legal proceedings, including offshore wind project guarantees - Eversource maintains reserves for environmental remediation, primarily for former Manufactured Gas Plant (MGP) sites, totaling $121.1 million as of September 30, 2022[137] NSTAR Electric: Renewable Energy Contract Commitments (Millions of Dollars) | Year | Renewable Energy | |:-----------|:-----------------| | 2022 | $27.1 | | 2023 | $78.3 | | 2024 | $269.4 | | 2025 | $315.8 | | 2026 | $322.1 | | Thereafter | $5,812.2 | | Total | $6,824.9 | - Eversource parent provides guarantees for its 50% owned offshore wind affiliates (North East Offshore, Sunrise Wind, Revolution Wind, South Fork Wind) for construction-related purchase agreements, with maximum exposures totaling over $1.6 billion[144][145][146][147] - A reserve of $39.1 million (pre-tax) is recorded for the second FERC ROE complaint period, representing the difference between billed rates and a 10.57% base ROE with an 11.74% incentive cap[161] - CL&P entered into a settlement agreement in October 2021, providing $65 million in customer credits and $10 million for customer assistance, resolving certain regulatory proceedings and freezing base distribution rates until at least January 1, 2024[174][176] 10. FAIR VALUE OF FINANCIAL INSTRUMENTS This note provides the fair value estimates for preferred stock, long-term debt, and Rate Reduction Bonds, classified as Level 2 within the fair value hierarchy - The fair value of preferred stock, long-term debt, and RRBs is estimated using pricing models that incorporate market factors, credit ratings, and treasury benchmark yields, classified as Level 2[180] Fair Value of Financial Instruments (Millions of Dollars) | Metric | Carrying Amount (Sep 30, 2022) | Fair Value (Sep 30, 2022) | Carrying Amount (Dec 31, 2021) | Fair Value (Dec 31, 2021) | |:-----------------------------------------------|:-------------------------------|:-