PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND ~~SUBSIDIARY~~SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMMON STOCKHOLDER'S EQUITY

(Unaudited)

For the Nine Months Ended September 30,
(Thousands of Dollars) 2017 2016

Operating Activities:
Net Income $ 99,626
$ 105,829
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 95,266
86,524
Deferred Income Taxes 43,217
74,522
Regulatory Over/(Under) Recoveries, Net 8,910
(4,289 )
Amortization of Regulatory (Liabilities)/Assets, Net (10,658 ) 14,490
Other (7,792 ) (12,660 )
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (30,276 ) (28,754 )
Fuel, Materials, Supplies and Inventory 4,263
(4,014 )
Taxes Receivable/Accrued, Net 10,749
33,589
Accounts Payable 18,394
14,508
Other Current Assets and Liabilities, Net 32,296
26,207
Net Cash Flows Provided by Operating Activities 263,995
305,952

Investing Activities:
Investments in Property, Plant and Equipment (215,470 ) (215,804 )
Other Investing Activities 113
272
Net Cash Flows Used in Investing Activities (215,357 ) (215,532 )

Financing Activities:
Cash Dividends on Common Stock (23,900 ) (58,200 )
Capital Contributions from Eversource Parent —
94,500
Retirements of Long-Term Debt (70,000 ) —
Increase/(Decrease) in Notes Payable to Eversource Parent 41,400
(123,800 )
Other Financing Activities (187 ) (217 )
Net Cash Flows Used in Financing Activities (52,687 ) (87,717 )
Net (Decrease)/Increase in Cash (4,049 ) 2,703
Cash - Beginning of Period 4,646
1,733
Cash - End of Period $ 597
$ 4,436



	For the Six Months Ended June 30, 2019
	Common Stock			Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount		Capital Surplus, Paid In		Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2019	301	$	—	$	678,134	$	627,258		$	(2,851	)	$	1,302,541
Net Income						32,781						32,781
Dividends on Common Stock						(19,000		)				(19,000		)
Other Comprehensive Income									307			307
Balance as of March 31, 2019	301	—		678,134		641,039			(2,544		)	1,316,629
Net Income						26,852						26,852
Dividends on Common Stock						(214,000		)				(214,000		)
Other Comprehensive Income									296			296
Balance as of June 30, 2019	301	$	—	$	678,134	$	453,891		$	(2,248	)	$	1,129,777



	For the Six Months Ended June 30, 2018
	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		Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
Balance as of January 1, 2018	301	$	—	$	843,134		$	511,382		$	(3,922	)	$	1,350,594
Net Income							35,093						35,093
Other Comprehensive Income										269			269
Balance as of March 31, 2018	301	—		843,134			546,475			(3,653		)	1,385,956
Net Income							25,779						25,779
Capital Contributions from Eversource Parent				225,000									225,000
Return of Capital				(530,000		)							(530,000		)
Other							(1		)				(1		)
Other Comprehensive Income										269			269
Balance as of June 30, 2018	301	$	—	$	538,134		$	572,253		$	(3,384	)	$	1,107,003

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

~~WESTERN MASSACHUSETTS ELECTRIC~~

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED ~~BALANCE SHEETS~~CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Thousands of Dollars) As of September 30, 2017 As of December 31, 2016

ASSETS
Current Assets:
Receivables, Net $ 58,034
$ 54,940
Accounts Receivable from Affiliated Companies 23,440
14,425
Unbilled Revenues 15,000
15,329
Materials, Supplies and Inventory 6,221
8,618
Regulatory Assets 60,606
64,123
Prepayments and Other Current Assets 1,297
2,595
Total Current Assets 164,598
160,030

Property, Plant and Equipment, Net 1,769,566
1,678,262

Deferred Debits and Other Assets:
Regulatory Assets 121,796
127,291
Other Long-Term Assets 38,934
29,062
Total Deferred Debits and Other Assets 160,730
156,353

Total Assets $ 2,094,894
$ 1,994,645

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent $ 96,900
$ 51,000
Accounts Payable 58,518
56,036
Accounts Payable to Affiliated Companies 22,181
19,478
Obligations to Third Party Suppliers 9,736
10,508
Renewable Portfolio Standards Compliance Obligations 16,144
20,383
Regulatory Liabilities 10,236
14,888
Other Current Liabilities 13,020
14,984
Total Current Liabilities 226,735
187,277

Deferred Credits and Other Liabilities:

Accumulated Deferred Income Taxes 519,998
490,793
Regulatory Liabilities 22,726
17,227
Accrued Pension, SERP and PBOP 18,038
20,390
Other Long-Term Liabilities 45,831
41,308
Total Deferred Credits and Other Liabilities 606,593
569,718

Capitalization:

Long-Term Debt 566,172
566,536

Common Stockholder's Equity:

Common Stock 10,866
10,866
Capital Surplus, Paid In 444,398
444,398
Retained Earnings 242,157
218,212
Accumulated Other Comprehensive Loss (2,027 ) (2,362 )
Common Stockholder's Equity 695,394
671,114
Total Capitalization 1,261,566
1,237,650

Total Liabilities and Capitalization $ 2,094,894
$ 1,994,645



	For the Six Months Ended June 30,
(Thousands of Dollars)	2019			2018

Operating Activities:
Net Income	$	59,634		$	60,871
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	46,180			46,301
Deferred Income Taxes	12,030			41,981
Regulatory Underrecoveries, Net	(29,377		)	(29,816		)
Amortization of Regulatory Assets, Net	19,523			13,961
Other	(7,381		)	(3,428		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	7,658			(10,510		)
Materials, Supplies and Inventory	14,225			21,803
Taxes Receivable/Accrued, Net	18,029			(15,475		)
Accounts Payable	(1,159		)	(4,843		)
Other Current Assets and Liabilities, Net	(17,620		)	(8,050		)
Net Cash Flows Provided by Operating Activities	121,742			112,795

Investing Activities:
Investments in Property, Plant and Equipment	(132,791		)	(149,925		)
Proceeds from the Sale of Generation Assets	—			116,809
Other Investing Activities	743			243
Net Cash Flows Used in Investing Activities	(132,048		)	(32,873		)

Financing Activities:
Cash Dividends on Common Stock	(233,000		)	(150,000		)
Capital Contributions from Eversource Parent	—			225,000
Return of Capital	—			(530,000		)
Issuance of Long-Term Debt	300,000			—
Retirement of Long-Term Debt	—			(110,000		)
Issuance of Rate Reduction Bonds	—			635,663
Repayment of Rate Reduction Bonds	(30,727		)	—
Decrease in Notes Payable to Eversource Parent	(36,900		)	(144,200		)
Other Financing Activities	(2,703		)	(75		)
Net Cash Flows Used in Financing Activities	(3,330		)	(73,612		)
Net (Decrease)/Increase in Cash and Restricted Cash	(13,636		)	6,310
Cash and Restricted Cash - Beginning of Period	52,723			2,191
Cash and Restricted Cash - End of Period	$	39,087		$	8,501

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

~~WESTERN MASSACHUSETTS ELECTRIC COMPANY~~

~~CONDENSED STATEMENTS OF INCOME~~

~~(Unaudited)~~

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(Thousands of Dollars) 2017 2016 2017 2016

Operating Revenues $ 126,335
$ 124,042
$ 377,214
$ 368,533

Operating Expenses:
Purchased Power and Transmission 34,828
32,178
109,553
104,406
Operations and Maintenance 21,528
24,125
65,769
68,018
Depreciation 12,546
11,567
36,844
34,414
Amortization of Regulatory Assets/(Liabilities), Net 286
1,102
(563 ) 3,305
Energy Efficiency Programs 10,996
12,389
29,739
33,593
Taxes Other Than Income Taxes 10,779
10,609
31,403
30,440
Total Operating Expenses 90,963
91,970
272,745
274,176
Operating Income 35,372
32,072
104,469
94,357
Interest Expense 6,321
6,222
18,752
18,298
Other Income, Net 1,060
179
1,409
133
Income Before Income Tax Expense 30,111
26,029
87,126
76,192
Income Tax Expense 12,504
10,018
34,680
30,089
Net Income $ 17,607
$ 16,011
$ 52,446
$ 46,103

~~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) 2017 2016 2017 2016

Net Income $ 17,607
$ 16,011
$ 52,446
$ 46,103
Other Comprehensive Income, Net of Tax:

Qualified Cash Flow Hedging Instruments 109
109
328
328
Changes in Unrealized (Losses)/Gains on
Marketable Securities
(18 ) 9
7
22
Other Comprehensive Income, Net of Tax 91
118
335
350
Comprehensive Income $ 17,698
$ 16,129
$ 52,781
$ 46,453

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

~~WESTERN MASSACHUSETTS ELECTRIC COMPANY~~

~~CONDENSED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

For the Nine Months Ended September 30,
(Thousands of Dollars) 2017 2016

Operating Activities:
Net Income $ 52,446
$ 46,103
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 36,844
34,414
Deferred Income Taxes 29,008
15,587
Regulatory Overrecoveries, Net 10,291
323
Amortization of Regulatory (Liabilities)/Assets, Net (563 ) 3,305
Other (10,182 ) (2,532 )
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (16,818 ) 1,933
Taxes Receivable/Accrued, Net 4,203
36,658
Accounts Payable (5,777 ) (16,240 )
Other Current Assets and Liabilities, Net (7,482 ) 5,277
Net Cash Flows Provided by Operating Activities 91,970
124,828

Investing Activities:
Investments in Property, Plant and Equipment (109,233 ) (104,811 )
Proceeds from Sales of Marketable Securities 1,641
1,934
Purchases of Marketable Securities (1,590 ) (1,894 )
Net Cash Flows Used in Investing Activities (109,182 ) (104,771 )

Financing Activities:
Cash Dividends on Common Stock (28,500 ) (28,500 )
Capital Contributions from Eversource Parent —
53,000
Increase/(Decrease) in Notes Payable to Eversource Parent 45,900
(95,200 )
Issuance of Long-Term Debt —
50,000
Other Financing Activities (188 ) (191 )
Net Cash Flows Provided by/(Used in) Financing Activities 17,212
(20,891 )
Net Decrease in Cash —
(834 )
Cash - Beginning of Period —
834
Cash - End of Period $ —
$ —

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

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND ~~SUBSIDIARY~~SUBSIDIARIES

~~WESTERN MASSACHUSETTS ELECTRIC COMPANY~~

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 ~~WMECO,~~(electric utilities), Yankee Gas and NSTAR ~~Gas.~~Gas (natural gas utilities) and Aquarion (water utilities). Eversource provides energy delivery and/or water service to approximately ~~3.7~~four million electric, ~~and~~ natural gas and water customers through ~~these six~~eight regulated utilities in Connecticut, Massachusetts and New Hampshire.

On June 2, 2017, Eversource announced that it had entered into an agreement to acquire Aquarion from Macquarie Infrastructure Partners for $1.675 billion, consisting of approximately $880 million in cash and $795 million of assumed Aquarion debt. The transaction requires approval from PURA, the DPU, the NHPUC, the Maine PUC, and the Federal Communications Commission, and is also subject to a review under the Hart-Scott-Rodino Act. On June 29, 2017, Eversource and Aquarion filed joint applications with regulatory agencies in Connecticut, Massachusetts, New Hampshire and Maine requesting approval of the transaction. With the exception of Massachusetts, all state and federal regulatory agency approvals have been received and the related review period has expired. The transaction is expected to close by December 31, 2017.

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 ~~and WMECO~~ 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 ~~2016~~2018 Form 10-K, which was filed with the ~~SEC.~~SEC on February 26, 2019. 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 ~~PSNH's~~ and ~~WMECO's~~PSNH's financial position as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, and the results of operations, ~~and~~ comprehensive income and common shareholders' equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, and the cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~2018. The results of operations and comprehensive income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 and the cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 are not necessarily indicative of the results expected for a full year.

Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's ~~PSNH's~~ and ~~WMECO's~~PSNH's combined ownership ~~interest~~and voting interests in each of these entities is greater than 50 percent. Intercompany transactions between CL&P, NSTAR Electric, PSNH and ~~WMECO and~~ the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.

Eversource's utility subsidiaries' electric, natural gas and water distribution ~~(including generation assets)~~ 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.

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

B. Accounting Standards

Accounting Standards Issued but Not Yet Effective: In ~~May 2014, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") 2014-09,~~ ~~Revenue from Contracts with Customers~~, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period presented or cumulatively at the date of initial application). The Company will implement the standard in the first quarter of 2018 cumulatively at the date of initial application. Implementation of the ASU is not expected to have a material effect on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.

~~In January~~June 2016, the FASB issued ~~ASU 2016-01,~~ Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - ~~Overall: Recognition and Measurement~~Credit Losses (Topic 326), which provides a new model for recognizing credit losses on financial instruments based on an estimate of ~~Financial Assets and Liabilities, which is required to be implemented in~~current expected credit losses. Under the first quarter of 2018. The ASU will remove the available-for-sale designation for equity securities, whereby changes in fair value are recorded in accumulated other comprehensive income within shareholders' equity, and will require changes in fair valuenew guidance, immediate recognition of all ~~equity securities to be recorded in earnings beginning on~~credit losses expected over the life of a financial instrument is required. The new standard also revises the other-than-temporary impairment model for available-for-sale debt securities. The standard is effective January 1, ~~2018, with the unrealized gain or loss on available-for-sale equity securities as of that date reclassified~~2020, and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained ~~earnings as a cumulative effect~~earnings. The Company is assessing the impacts of ~~adoption. The fair value of available-for-sale equity securities subject to~~ this ~~guidance as of September 30, 2017 was approximately $51 million with an unrealized gain of $1.7 million. The remaining available-for-sale equity securities included in marketable securities~~standard on the ~~balance sheet are held in nuclear decommissioning trusts and are subject to regulatory~~ accounting ~~treatment and will not be impacted by this guidance. Implementation of the ASU~~ for ~~other~~credit losses on its financial instruments, ~~is not expected to have a material impact on~~including accounts receivable.

Accounting Standards Recently Adopted: On January 1, 2019, the ~~financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.~~

~~In February 2016, the FASB issued~~Company adopted ASU 2016-02, Leases (Topic 842), which ~~changes~~amended existing lease accounting ~~guidance and is required to be~~guidance. The Company applied in the ~~first quarter of 2019, with earlier application permitted. The ASU~~Topic 842 lease criteria ~~are required~~ to ~~be applied to~~new leases and lease renewals entered into effective on or after January 1, ~~2019, and leases entered into before that date are~~2019. The ASU required ~~to be recognized and measured using a modified retrospective approach. The Company is reviewing the requirements of ASU 2016-02, including~~ balance sheet recognition of leases ~~previously~~ deemed to be operating leases as well as additional disclosure requirements. The recognition, measurement and ~~expects~~presentation of expenses and cash flows were not significantly changed.

The Company also adopted the modified retrospective transition method allowed in ASU 2018-11, Leases (Topic 842) - Targeted Improvements, which allowed the Company to ~~implement~~adopt the ~~ASU~~new leases standard as of January 1, 2019, with prior periods presented in the ~~first quarter of 2019.~~

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation – Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, required~~financial statements continuing to ~~be implemented~~follow existing lease accounting guidance under Topic 840 (Leases) in the ~~first quarter~~accounting literature. Implementation of ~~2018.~~ ASU 2018-11 had no effect on retained earnings, and the requirements of the new lease standard (Topic 842) are reflected in the 2019 financial statements and footnotes.

The ~~ASU requires separate presentation~~Company elected the practical expedient package whereby it did not need to reassess whether or not an existing contract is or contains a lease or whether a lease is an operating or capital lease, and it did not need to reassess initial direct costs for leases. Election of ~~service cost from other components~~this practical expedient allowed us to carry forward our historical lease classifications. The Company elected the practical expedient to not reevaluate land easements existing at adoption if they were not previously accounted for as leases. The Company also elected to use the discount rate as of ~~net pension~~the January 1, 2019 implementation date to discount its operating lease liabilities. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases.

The Company determined the impact the ASUs had on its financial statements by reviewing its lease population and ~~PBOP costs,~~identifying lease data needed for the disclosure requirements. The Company implemented a new lease accounting system in 2019 to ensure ongoing compliance with the ~~other components presented as non-operating income and not subject to capitalization. The ASU is required to be applied retrospectively for~~ASU’s requirements. Adoption of the ~~separate presentation~~new standard resulted in the ~~income statement~~recording of ~~service costs~~operating lease liabilities and ~~other components and prospectively in~~right-of-use assets on the balance sheet ~~for the capitalization~~upon transition at January 1, 2019 of ~~only the service cost component. The implementation~~$58.0 million at Eversource, $25.3 million at NSTAR Electric, $0.6 million at CL&P, and $0.6 million at PSNH. Implementation of the ~~ASU will~~new guidance did not have an impact on each company’s results of operations or cash flows.

C. Impairment of Northern Pass Transmission

Northern Pass is Eversource's planned 1,090 MW HVDC transmission line that would interconnect from the ~~net~~Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire.

On March 30, 2018, the New Hampshire Site Evaluation Committee (“NHSEC”), one of the state regulatory agencies from which Northern Pass was required to obtain a siting permit, issued a written decision denying Northern Pass’ siting application. In the first quarter of 2018, Eversource conducted an impairment review of the Northern Pass project and concluded, at that time, that the recorded amount of project costs was recoverable. On July 12, 2018, the NHSEC issued a written decision denying Northern Pass’ April 2018 motion for rehearing, and on October 12, 2018, the New Hampshire Supreme Court accepted an appeal filed by Northern Pass that alleged that the NHSEC failed to follow applicable law in its review of the project. On July 19, 2019, the New Hampshire Supreme Court issued a decision denying Northern Pass’ appeal and affirming the NHSEC’s evaluation and decision that denied Northern Pass’ siting application.

Eversource evaluated the impact of the New Hampshire Supreme Court decision on the probability of construction and operation of Northern Pass. Eversource concluded that construction of the project was no longer probable and that substantially all of the capitalized project costs, which totaled $318 million, certain of which are subject to cost reimbursement agreements, were impaired. Eversource concluded that the New Hampshire Supreme Court decision is a subsequent event that required recognition in the financial statements as of and for the three and six months ended June 30, 2019.

Based on the conclusion that the construction of Northern Pass was not probable, Eversource recorded an impairment charge for all of the project costs associated with Northern Pass, which were primarily engineering design, siting, permitting and legal costs, along with appropriate allowances for funds used during construction, and recognized a receivable for certain cost reimbursement agreements. Additionally, Eversource recorded an impairment charge associated with the land acquired to construct Northern Pass in order to recognize the land at its estimated fair value based on assessed values and transaction costs. In total, this resulted in a pre-tax impairment charge of $239.6 million within Operating Income on the statement of income for the three and six months ended June 30, 2019, and was reflected in the Electric Transmission segment. The after-tax impact of the impairment charge was $204.4 million, or $0.64 per share, after giving effect to the estimated fair value of the related land, reimbursement agreements, and the impact of expected income tax benefits associated with the impairment charge. Eversource ~~CL&P, NSTAR Electric, PSNH or WMECO.~~does not expect any significant estimated future cash expenditures associated with this impairment charge.

C.D. Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO,~~PSNH, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts. This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category. The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers. Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience. Receivable balances are written off against the provision for uncollectible accounts when the customer accounts are terminated and these balances are deemed to be uncollectible.

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 ~~WMECO~~NSTAR Electric and NSTAR Gas ~~also~~ to recover in rates amounts associated with certain uncollectible hardship accounts receivable. ~~Certain of NSTAR Electric's~~These uncollectible hardship ~~accounts receivable are expected to be recovered in future rates, similar to WMECO and NSTAR Gas. These uncollectible~~ customer account balances are included in Regulatory Assets or Other Long-Term Assets on the balance sheets.

The total provision for uncollectible accounts ~~and for uncollectible hardship accounts, which is included in the total provision,~~ is included in Receivables, Net on the balance ~~sheets, and was~~sheets. The provision for uncollectible hardship accounts is included in the total uncollectible provision balance. The provision balances are as follows:



	Total Provision for Uncollectible Accounts				Provision for Uncollectible Hardship Accounts
(Millions of Dollars)	As of June 30, 2019		As of December 31, 2018		As of June 30, 2019		As of December 31, 2018
Eversource	$	226.4	$	212.7	$	137.9	$	131.5
CL&P	88.7		88.0		70.9		71.9
NSTAR Electric	81.8		74.5		47.7		42.5
PSNH	11.2		11.1		—		—

Total Provision for Uncollectible Accounts Uncollectible Hardship
(Millions of Dollars) As of September 30, 2017 As of December 31, 2016 As of September 30, 2017 As of December 31, 2016
Eversource $ 196.8
$ 200.6
$ 126.3
$ 119.9
CL&P 77.6
86.4
64.6
67.7
NSTAR Electric 55.7
54.8
32.3
26.2
PSNH 10.6
9.9
—
—
WMECO 17.0
15.5
11.3
9.9

Uncollectible expense associated with customers' accounts receivable included in Operations and Maintenance expense on the statements of income is as follows:



	For the Three Months Ended				For the Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Eversource	$	13.0	$	9.5	$	31.5	$	29.3
CL&P	3.5		3.8		7.6		7.7
NSTAR Electric	5.7		3.8		11.6		11.3
PSNH	1.4		1.5		3.1		3.2

E. 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 and AROs, and the estimated fair value of preferred stock, long-term debt and ~~long-term debt.~~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, and Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. The three levels of the fair value hierarchy are described below:

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

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

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

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

Determination of Fair Value: The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note ~~10,~~11, "Fair Value of Financial Instruments," to the financial statements.

F. Investments in Unconsolidated Affiliates

Investments in Offshore Wind Business: Eversource's offshore wind business includes ownership interests in North East Offshore and Bay State Wind, which collectively hold power purchase agreements for the Revolution Wind and South Fork Wind projects and are in process of negotiating a power purchase agreement for the Sunrise Wind project. Eversource's offshore wind projects are being developed in partnership with Ørsted.

On February 8, 2019, Eversource and Ørsted entered into a 50-50 partnership for key offshore wind assets in the Northeast. Eversource's initial payment and contribution under the terms of the partnership agreements totaled approximately $225 million for a 50 percent interest in North East Offshore, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257 square-mile lease off the coasts of Massachusetts and Rhode Island. Eversource also has a 50 percent ownership in Bay State Wind, which holds the Sunrise Wind power project. These equity investments are included in long-term assets on the balance sheet and earnings impacts are included in Other Income, Net on the statement of income. As of June 30, 2019, Eversource's total equity investment balance in its offshore wind business was $499.5 million. In July 2019, Eversource made an additional capital contribution of $54.9 million.

G. Other Income, Net

~~Items included within~~The components of Other Income, Net on the statements of income ~~primarily consist~~were as follows:



	For the Three Months Ended
	June 30, 2019												June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income/(Expense) Components	$	5.8		$	(0.9	)	$	5.4		$	1.5		$	14.6		$	2.4	$	9.5	$	2.1
AFUDC Equity	13.1			3.2			5.1			0.9			10.9			3.3		3.9		—
Equity in Earnings ⁽¹⁾	25.9			0.1			0.2			—			22.9			—		0.4		—
Investment Income/(Loss)	(0.6		)	(0.1		)	(0.3		)	(0.1		)	(0.3		)	0.4		0.3		—
Interest Income	1.3			0.5			0.2			0.7			1.9			1.0		0.2		1.3
Other	0.4			0.1			0.1			—			0.1			—		—		—
Total Other Income, Net	$	45.9		$	2.9		$	10.7		$	3.0		$	50.1		$	7.1	$	14.3	$	3.4


	For the Six Months Ended
	June 30, 2019												June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income/(Expense) Components	$	13.1		$	(1.6	)	$	12.4		$	2.0		$	29.8		$	5.3	$	17.9	$	4.4
AFUDC Equity	24.1			5.8			9.1			1.1			20.6			6.1		7.3		—
Equity in Earnings ⁽¹⁾	30.9			0.1			0.4			—			27.5			—		0.4		—
Investment Income/(Loss)	0.6			1.7			(0.6		)	0.2			0.4			0.2		0.9		0.1
Interest Income ⁽²⁾	7.8			0.8			0.4			6.6			5.4			2.0		0.4		3.7
Other	0.4			(0.1		)	—			0.1			0.2			—		—		—
Total Other Income, Net	$	76.9		$	6.7		$	21.7		$	10.0		$	83.9		$	13.6	$	26.9	$	8.2

⁽¹⁾Equity in earnings includes $20.4 million of ~~income/(loss) related to equity method investments,~~unrealized gains associated with an investment ~~income/(loss), interest income and AFUDC related to equity funds. For~~in a renewable energy fund for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, Eversource had equity in earnings of $5.1 million and $23.0 million, respectively, related to its equity method investments.~~2019. For both the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 Eversource had~~2018, unrealized gains on this investment totaled $17.6 million.

⁽²⁾See Note 2, "Regulatory Accounting" for interest income recognized in 2019 for the equity ~~in earnings~~return component of $0.9 million and losses of $2.0 million, respectively, related to its equity method investments. Investment income/(loss) primarily relates to debt and equity securities held in trust. For further information, see Note 5, "Marketable Securities," to the financial statements.carrying charges on storm costs at PSNH.

F.H. Other Taxes

~~Gross~~Eversource's companies that serve customers in Connecticut collect gross receipts taxes levied by the state of Connecticut ~~are collected by CL&P and Yankee Gas~~ from their ~~respective~~ customers. These gross receipts taxes are ~~shown~~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 Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Eversource	$	36.4	$	35.6	$	81.4	$	79.0
CL&P	31.8		31.5		68.0		67.1

For the Three Months Ended For the Nine Months Ended
(Millions of Dollars) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Eversource $ 40.3
$ 45.1
$ 118.2
$ 124.8
CL&P 37.8
42.6
103.5
112.2

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.

Separate from above are amounts recorded as Taxes Other than Income Taxes related to the future remittance to the State of Connecticut of energy efficiency funds collected from customers in Operating Revenues. These amounts are $10.7 million and $21.4 million for the three and six months ended June 30, 2019, respectively, and $12.7 million and $25.4 million for the three and six months ended June 30, 2018, respectively. These amounts are recorded separately, with collections in Operating Revenues and with payments in Taxes Other than Income Taxes on the Eversource and CL&P statements of income.

I. Supplemental Cash Flow Information

Non-cash investing activities include plant additions included in Accounts Payable as follows:



(Millions of Dollars)	As of June 30, 2019		As of June 30, 2018
Eversource	$	323.7	$	305.7
CL&P	114.0		110.9
NSTAR Electric	85.2		71.1
PSNH	29.9		46.6

(Millions of Dollars) As of September 30, 2017 As of September 30, 2016
Eversource $ 307.7
$ 203.6
CL&P 113.4
64.5
NSTAR Electric 55.4
39.4
PSNH 39.6
31.0
WMECO 37.1
17.6

Beginning in 2019, Eversource began issuing treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment 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.

The following table reconciles cash as reported on the balance sheets to the cash and restricted cash balance as reported on the statements of cash flows:



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Cash as reported on the Balance Sheets	$	20.6	$	2.2	$	0.2	$	0.3	$	108.1	$	87.7	$	1.6	$	1.4
Restricted cash included in:
Prepayments and Other Current Assets	54.1		4.6		6.1		35.0		72.1		3.5		13.0		47.5
Marketable Securities	20.5		0.3		0.1		0.6		25.9		0.4		0.1		0.6
Other Long-Term Assets	72.0		—		—		3.2		3.2		—		—		3.2
Cash and Restricted Cash reported on the Statements of Cash Flows	$	167.2	$	7.1	$	6.4	$	39.1	$	209.3	$	91.6	$	14.7	$	52.7

Restricted cash included in Prepayments and Other Current Assets primarily represents cash collections related to the PSNH RRB customer charges that are held in trust, and required ISO-NE cash deposits. 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 facilities obligations. Restricted cash included in Other Long-Term Assets at Eversource primarily relates to DOE Phase IV damages proceeds received at CYAPC and YAEC in the second quarter of 2019. See Note 9D, "Commitments and Contingencies - Spent Nuclear Fuel Obligations - Yankee Companies," for further information.

2. REGULATORY ACCOUNTING

Eversource's ~~Regulated~~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~~regulated companies' financial statements reflect the effects of the rate-making process. The rates charged to the customers of Eversource's ~~Regulated~~regulated companies are designed to collect each company's costs to provide service, including a return on investment.

Management believes it is probable that each of the ~~Regulated~~regulated companies will recover its respective investments in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the ~~Regulated~~regulated companies' operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

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



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Benefit Costs	$	1,870.5	$	407.4	$	554.8	$	151.1	$	1,914.8	$	424.7	$	544.4	$	169.6
Income Taxes, Net	702.6		456.5		104.1		10.1		728.6		454.4		105.9		8.3
Securitized Stranded Costs	586.9		—		—		586.9		608.4		—		—		608.4
Storm Restoration Costs, Net	536.7		279.6		191.2		65.9		576.0		302.6		212.9		60.5
Regulatory Tracker Mechanisms	289.0		60.3		138.2		70.6		316.0		33.2		169.1		67.3
Derivative Liabilities	347.9		345.4		—		—		356.5		356.5		—		—
Goodwill-related	340.0		—		291.9		—		348.4		—		299.1		—
Asset Retirement Obligations	97.1		33.3		48.3		3.5		89.2		32.3		42.2		3.3
Other Regulatory Assets	148.8		26.0		60.5		17.7		208.0		27.0		64.6		12.1
Total Regulatory Assets	4,919.5		1,608.5		1,389.0		905.8		5,145.9		1,630.7		1,438.2		929.5
Less: Current Portion	515.3		175.7		210.0		77.9		514.8		125.2		241.7		67.2
Total Long-Term Regulatory Assets	$	4,404.2	$	1,432.8	$	1,179.0	$	827.9	$	4,631.1	$	1,505.5	$	1,196.5	$	862.3

Eversource As of September 30, 2017 As of December 31, 2016
(Millions of Dollars)
Benefit Costs $ 1,793.8
$ 1,817.8
Derivative Liabilities 385.1
423.3
Income Taxes, Net 652.7
644.5
Storm Restoration Costs 330.1
385.3
Goodwill-related 449.0
464.4
Regulatory Tracker Mechanisms 470.7
576.6
Asset Retirement Obligations 104.8
99.3
Other Regulatory Assets 65.8
115.1
Total Regulatory Assets 4,252.0
4,526.3
Less: Current Portion 746.1
887.6
Total Long-Term Regulatory Assets $ 3,505.9
$ 3,638.7

As of September 30, 2017 As of December 31, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P
NSTAR
Electric
PSNH WMECO
Benefit Costs $ 415.8
$ 436.7
$ 183.2
$ 84.8
$ 429.3
$ 438.6
$ 184.2
$ 86.7
Derivative Liabilities 381.6
2.4
—
—
420.5
2.8
—
—
Income Taxes, Net 441.1
92.4
22.3
30.5
437.0
89.7
24.2
30.8
Storm Restoration Costs 195.7
112.4
9.2
12.8
239.8
112.5
17.1
15.9
Goodwill-related —
385.5
—
—
—
398.7
—
—
Regulatory Tracker Mechanisms 87.9
201.1
108.0
44.4
123.9
257.3
104.5
46.7
Asset Retirement Obligations 35.1
33.9
16.8
4.5
33.2
31.9
16.2
4.2
Other Regulatory Assets 30.0
15.5
17.6
5.4
43.4
15.6
16.5
7.1
Total Regulatory Assets 1,587.2

1,279.9

357.1

182.4

1,727.1

1,347.1

362.7

191.4
Less: Current Portion 275.0
230.6
112.5
60.6
335.5
289.4
117.2
64.1
Total Long-Term Regulatory Assets $ 1,312.2

$ 1,049.3

$ 244.6

$ 121.8

$ 1,391.6

$ 1,057.7

$ 245.5

$ 127.3

Storm Filings: On November 16, 2018, CL&P filed for recovery of $153 million of storm costs incurred from October 2017 through May 2018, with recovery over six years to begin May 1, 2019. Through the course of the proceeding, CL&P updated its request to $145.5 million to reflect final invoicing and capitalization amounts. On April 17, 2019, PURA authorized recovery of $141.0 million as part of storm cost recovery and the remainder to be recorded to plant or other balance sheet accounts. All approved amounts will be fully recoverable through specific mechanisms or through future rate cases.

On March 26, 2019, the NHPUC approved the recovery of $38.1 million, plus carrying charges, of storm costs incurred from December 2013 through April 2016 and the transfer of funding from PSNH’s major storm reserve to recover those costs. The costs of these storms (excluding the equity return component of the carrying charges) were deferred as regulatory assets, and the funding reserve collected from customers was accrued as a regulatory liability. As a result of the duration of time between incurring storm costs in December 2013 through April 2016 and final approval from the NHPUC in 2019, PSNH recognized $5.2 million (pre-tax) for the equity return component of the carrying charges within Other Income, Net on the statement of income in the first quarter of 2019, which has been collected from customers. Also included in the March 26, 2019 NHPUC approval is a prospective requirement for PSNH to annually net its storm funding reserve collected from customers against deferred storm costs.

In addition, on June 27, 2019, the NHPUC approved a temporary rate settlement that permits PSNH to recover approximately $68.5 million in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges.

Regulatory Costs in ~~Other~~ Long-Term Assets: Eversource's ~~Regulated~~regulated companies had ~~$108.7~~$142.0 million (including ~~$3.9~~$43.6 million for CL&P, ~~$42.3~~$61.4 million for NSTAR Electric ~~$18.5~~and $15.3 million for ~~PSNH,~~PSNH) and ~~$25.7 million for WMECO) and $86.3~~$122.9 million (including ~~$5.9~~$42.1 million for CL&P, ~~$35.0~~$49.3 million for NSTAR Electric ~~$8.2~~and $12.2 million for ~~PSNH, and $20.1 million for WMECO)~~PSNH) of additional regulatory costs as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively, that were included in ~~Other Long-Term Assets~~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.

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



	As of June 30, 2019								As of December 31, 2018
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
EDIT due to Tax Cuts and Jobs Act	$	2,860.7	$	1,028.7	$	1,090.0	$	395.4	$	2,883.0	$	1,031.0	$	1,103.7	$	396.4
Cost of Removal	544.9		51.0		319.4		21.4		521.0		39.9		307.1		22.1
Benefit Costs	83.8		—		70.9		—		91.2		—		76.9		—
Regulatory Tracker Mechanisms	333.3		110.0		141.9		31.2		309.0		89.5		163.7		48.3
AFUDC - Transmission	71.7		46.7		25.0		—		70.7		47.4		23.3		—
Revenue Subject to Refund due to Tax Cuts and Jobs Act	29.2		—		—		19.1		24.6		—		—		12.6
Other Regulatory Liabilities	96.1		29.4		38.6		4.1		80.2		24.0		29.2		4.2
Total Regulatory Liabilities	4,019.7		1,265.8		1,685.8		471.2		3,979.7		1,231.8		1,703.9		483.6
Less: Current Portion	379.9		112.4		171.0		54.2		370.2		109.6		190.6		55.5
Total Long-Term Regulatory Liabilities	$	3,639.8	$	1,153.4	$	1,514.8	$	417.0	$	3,609.5	$	1,122.2	$	1,513.3	$	428.1

Eversource As of September 30, 2017 As of December 31, 2016
(Millions of Dollars)
Cost of Removal $ 470.3
$ 459.7
Benefit Costs 125.5
136.2
Regulatory Tracker Mechanisms 175.8
145.3
AFUDC - Transmission 65.4
65.8
Other Regulatory Liabilities 33.4
42.1
Total Regulatory Liabilities 870.4
849.1
Less: Current Portion 170.2
146.8
Total Long-Term Regulatory Liabilities $ 700.2
$ 702.3

As of September 30, 2017 As of December 31, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P
NSTAR
Electric
PSNH WMECO
Cost of Removal $ 40.5
$ 278.8
$ 40.5
$ 11.7
$ 38.8
$ 271.6
$ 44.1
$ 8.6
Benefit Costs —
106.0
—
—
—
113.1
—
—
Regulatory Tracker Mechanisms 57.1
65.5
5.6
12.7
37.2
63.7
10.7
14.7
AFUDC - Transmission 49.2
7.7
—
8.5
50.2
6.9
—
8.7
Other Regulatory Liabilities 21.3
0.4
2.6
—
21.0
0.2
2.7
0.1
Total Regulatory Liabilities 168.1

458.4

48.7

32.9

147.2

455.5

57.5

32.1
Less: Current Portion 69.3
65.5
7.9
10.2
47.1
63.7
12.7
14.9
Total Long-Term Regulatory Liabilities $ 98.8

$ 392.9

$ 40.8

$ 22.7

$ 100.1

$ 391.8

$ 44.8

$ 17.2

3. PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

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



Eversource	As of June 30, 2019			As of December 31, 2018
(Millions of Dollars)	As of June 30, 2019			As of December 31, 2018
Distribution - Electric	$	15,472.1		$	15,071.1
Distribution - Natural Gas	3,632.9			3,546.2
Transmission - Electric	10,449.5			10,153.9
Distribution - Water	1,664.1			1,639.8
Solar	196.9			164.1
Utility	31,415.5			30,575.1
Other ⁽¹⁾	882.4			778.6
Property, Plant and Equipment, Gross	32,297.9			31,353.7
Less: Accumulated Depreciation
Utility	(7,357.9		)	(7,126.2		)
Other	(363.1		)	(336.7		)
Total Accumulated Depreciation	(7,721.0		)	(7,462.9		)
Property, Plant and Equipment, Net	24,576.9			23,890.8
Construction Work in Progress	1,727.5			1,719.6
Total Property, Plant and Equipment, Net	$	26,304.4		$	25,610.4

Eversource As of September 30, 2017 As of December 31, 2016
(Millions of Dollars)
Distribution - Electric $ 14,217.3
$ 13,716.9
Distribution - Natural Gas 3,158.1
3,010.4
Transmission - Electric 8,918.2
8,517.4
Generation 1,215.8
1,224.2
Electric and Natural Gas Utility 27,509.4
26,468.9
Other ⁽¹⁾
679.9
591.6
Property, Plant and Equipment, Gross 28,189.3
27,060.5
Less: Accumulated Depreciation
Electric and Natural Gas Utility (6,838.5 ) (6,480.4 )
Other (274.4 ) (242.0 )
Total Accumulated Depreciation (7,112.9 ) (6,722.4 )
Property, Plant and Equipment, Net 21,076.4
20,338.1
Construction Work in Progress ⁽²⁾
1,460.9
1,012.4
Total Property, Plant and Equipment, Net $ 22,537.3
$ 21,350.5

⁽¹⁾ ~~These assets are primarily comprised of building improvements, computer software, hardware and equipment at Eversource Service.~~

⁽²⁾ ~~As of September 30, 2017, the total CWIP related to NPT was approximately $201 million.~~



	As of June 30, 2019									As of December 31, 2018
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Distribution - Electric	$	6,352.8		$	6,921.3		$	2,238.3		$	6,176.4		$	6,756.4		$	2,178.6
Transmission - Electric	4,880.6			4,148.8			1,415.2			4,700.5			4,065.9			1,338.7
Solar	—			196.9			—			—			164.1			—
Property, Plant and Equipment, Gross	11,233.4			11,267.0			3,653.5			10,876.9			10,986.4			3,517.3
Less: Accumulated Depreciation	(2,352.2		)	(2,814.9		)	(806.4		)	(2,302.6		)	(2,702.0		)	(772.9		)
Property, Plant and Equipment, Net	8,881.2			8,452.1			2,847.1			8,574.3			8,284.4			2,744.4
Construction Work in Progress	404.4			623.7			122.2			335.4			510.3			135.7
Total Property, Plant and Equipment, Net	$	9,285.6		$	9,075.8		$	2,969.3		$	8,909.7		$	8,794.7		$	2,880.1

As of September 30, 2017 As of December 31, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P NSTAR Electric PSNH WMECO
Distribution $ 5,797.6
$ 5,543.1
$ 2,048.8
$ 868.1
$ 5,562.9
$ 5,402.3
$ 1,949.8
$ 841.9
Transmission 4,061.2
2,545.0
1,115.7
1,147.9
3,912.9
2,435.8
1,059.3
1,061.1
Generation —
—
1,179.8
36.0
—
—
1,188.2
36.0
Property, Plant and Equipment, Gross 9,858.8
8,088.1
4,344.3
2,052.0
9,475.8
7,838.1
4,197.3
1,939.0
Less: Accumulated Depreciation (2,207.0 ) (2,143.8 ) (1,315.7 ) (356.5 ) (2,082.4 ) (2,025.4 ) (1,254.7 ) (338.8 )
Property, Plant and Equipment, Net 7,651.8
5,944.3
3,028.6
1,695.5
7,393.4
5,812.7
2,942.6
1,600.2
Construction Work in Progress 456.2
324.4
139.3
74.1
239.0
239.1
96.7
78.1
Total Property, Plant and Equipment, Net $ 8,108.0
$ 6,268.7
$ 3,167.9
$ 1,769.6
$ 7,632.4
$ 6,051.8
$ 3,039.3
$ 1,678.3


⁽¹⁾	These assets are primarily comprised of building improvements, computer software, hardware and equipment at Eversource Service.

In the second quarter of 2019, Eversource recorded an impairment charge for the NPT project costs, which had been recorded within Construction Work in Progress and also the Transmission - Electric asset category. For further information regarding the impairment of NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the financial statements.

4. DERIVATIVE INSTRUMENTS

The ~~Regulated~~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. ~~The Regulated~~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 ~~or Operating Revenues~~ 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 ~~Regulated~~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, 2017 As of December 31, 2016
(Millions of Dollars)
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:
Level 2:
Eversource $ —
$ —
$ —
$ 6.0
$ —
$ 6.0
Level 3:
CL&P 10.4
(7.7 ) 2.7
13.9
(9.4 ) 4.5
Long-Term Derivative Assets:
Level 2:
Eversource $ —
$ —
$ —
$ 0.3
$ (0.1 ) $ 0.2
Level 3:
CL&P 74.3
(6.9 ) 67.4
77.3
(11.7 ) 65.6
Current Derivative Liabilities:
Level 2:
Eversource $ (1.5 ) $ 0.4
$ (1.1 ) $ —
$ —
$ —
Level 3:
Eversource (62.2 ) —
(62.2 ) (79.7 ) —
(79.7 )
CL&P (59.9 ) —
(59.9 ) (77.8 ) —
(77.8 )
NSTAR Electric (2.3 ) —
(2.3 ) (1.9 ) —
(1.9 )
Long-Term Derivative Liabilities:
Level 3:
Eversource $ (391.9 ) $ —
$ (391.9 ) $ (413.7 ) $ —
$ (413.7 )
CL&P (391.8 ) —
(391.8 ) (412.8 ) —
(412.8 )
NSTAR Electric (0.1 ) —
(0.1 ) (0.9 ) —
(0.9 )



		As of June 30, 2019									As of December 31, 2018
(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	$	11.1		$	(0.3	)	$	10.8		$	9.6		$	(3.4	)	$	6.2
Other	Level 2	—			—			—			1.5			(0.9		)	0.6
Long-Term Derivative Assets:
CL&P	Level 3	71.8			(2.2		)	69.6			74.2			(2.3		)	71.9
Current Derivative Liabilities:
CL&P	Level 3	(62.1		)	—			(62.1		)	(55.1		)	—			(55.1		)
Other	Level 2	(2.4		)	—			(2.4		)	—			—			—
Long-Term Derivative Liabilities:
CL&P	Level 3	(363.7		)	—			(363.7		)	(379.5		)	—			(379.5		)
Other	Level 2	(0.1		)	—			(0.1		)	—			—			—


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

For further information on the fair value of derivative contracts, see Note ~~1D,~~1E, "Summary of Significant Accounting Policies - Fair Value Measurements," to the financial statements.

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 ~~capacity~~capacities of these contracts isas of June 30, 2019 and December 31, 2018 are679 MW and 787 ~~MW.~~MW, respectively. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets. In addition, CL&P has a contract to purchase 0.1 million MWh of energy per year through 2020.

~~NSTAR Electric has a renewable energy contract to purchase 0.1 million MWh of energy per year through 2018 and a capacity-related contract to purchase up to 35 MW per year through 2019.~~

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, Eversource had New York Mercantile Exchange ("NYMEX") financial contracts for natural gas futures in order to reduce variability associated with the ~~purchase~~ price of ~~approximately 10.4~~7.1 million and ~~9.2~~12.5 million MMBtu of natural gas, respectively.

For the three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, there were losses of $5.1 million and gains of ~~$0.6 million and losses of $53.4~~$8.6 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016, these~~2018, there were losses ~~were $30.3~~of $10.3 million and ~~$127.8~~$27.5 million, respectively.

Fair Value Measurements of Derivative Instruments

Derivative contracts classified as Level 2 in the fair value hierarchy relate to the financial contracts for natural gas futures. Prices are obtained from broker quotes and are based on actual market activity. The contracts are valued using NYMEX natural gas prices. Valuations of these contracts also incorporate discount rates using the yield curve approach.

The fair value of derivative contracts classified as Level 3 utilizes significant unobservable inputs. The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions ~~relating~~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 power and capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full term of the contract.

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

The following is a summary of ~~Eversource's, including CL&P's and NSTAR Electric's,~~ Level 3 derivative contracts and the range of the significant unobservable inputs utilized in the valuations over the duration of the contracts:



	As of June 30, 2019						As of December 31, 2018
CL&P	Range					Period Covered	Range					Period Covered
Capacity Prices	$	4.30	—	7.34	per kW-Month	2023 - 2026	$	4.30	—	7.44	per kW-Month	2022 - 2026
Forward Reserve	0.75		—	1.78	per kW-Month	2019 - 2024	0.75		—	1.78	per kW-Month	2019 - 2024

As of September 30, 2017 As of December 31, 2016
Range Period Covered Range Period Covered
Capacity Prices:
CL&P $ 5.00
— 8.70
per kW-Month 2021 - 2026 $ 5.50
— 8.70
per kW-Month 2020 - 2026
Forward Reserve:
CL&P $ 1.00
— 2.00
per kW-Month 2017 - 2024 $ 1.40
— 2.00
per kW-Month 2017 - 2024
REC Prices:
NSTAR Electric $ 15.75
— 22.00 per REC 2017 - 2018 $ 24.00
— 29.00 per REC 2017 - 2018

Exit price premiums of 13.1 percent through 1814.6 percent are also applied onto 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.

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

Valuations using significant unobservable inputs: The following table presents changes in the Level 3 category of derivative assets and derivative liabilities measured at fair value on a recurring basis. The derivative assets and liabilities are presented on a net basis.



CL&P	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Millions of Dollars)	2019			2018			2019			2018
Derivatives, Net:
Fair Value as of Beginning of Period	$	(353.1	)	$	(386.5	)	$	(356.5	)	$	(362.3	)
Net Realized/Unrealized (Losses)/Gains Included in Regulatory Assets	(2.5		)	8.6			(7.8		)	(28.2		)
Settlements	10.2			8.6			18.9			21.2
Fair Value as of End of Period	$	(345.4	)	$	(369.3	)	$	(345.4	)	$	(369.3	)

For the Three Months Ended September 30,
2017 2016
(Millions of Dollars) Eversource CL&P
NSTAR
Electric
Eversource CL&P NSTAR
Electric
Derivatives, Net:
Fair Value as of Beginning of Period $ (397.1 ) $ (394.8 ) $ (2.3 ) $ (412.6 ) $ (411.3 ) $ (1.3 )
Net Realized/Unrealized Gains/Losses Included in Regulatory Assets and Liabilities 0.5
(0.7 ) 1.2
(52.3 ) (49.8 ) (2.5 )
Settlements 12.6
13.9
(1.3 ) 21.2
20.1
1.1
Fair Value as of End of Period $ (384.0 ) $ (381.6 ) $ (2.4 ) $ (443.7 ) $ (441.0 ) $ (2.7 )

For the Nine Months Ended September 30,
2017 2016
(Millions of Dollars) Eversource CL&P NSTAR
Electric Eversource CL&P NSTAR
Electric
Derivatives, Net:
Fair Value as of Beginning of Period $ (423.3 ) $ (420.5 ) $ (2.8 ) $ (380.9 ) $ (380.8 ) $ (0.1 )
Net Realized/Unrealized Losses Included in Regulatory Assets and Liabilities (17.9 ) (15.9 ) (2.0 ) (128.9 ) (122.0 ) (6.9 )
Settlements 57.2
54.8
2.4
66.1
61.8
4.3
Fair Value as of End of Period $ (384.0 ) $ (381.6 ) $ (2.4 ) $ (443.7 ) $ (441.0 ) $ (2.7 )

5. MARKETABLE SECURITIES

Eversource ~~maintains trusts that hold~~holds marketable securities that are primarily used to fund certain non-qualified executive benefits. ~~These~~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.

~~Trading~~Equity Securities: ~~Eversource has elected to record certain~~ Unrealized gains and losses on equity securities ~~as trading securities, with the changes~~held in ~~fair values~~Eversource's non-qualified executive benefit trust are recorded in Other Income, Net on the statements of income. AsThe fair value of these equity securities as of June 30, 2019 and December 31, ~~2016, these securities were classified as Level 1 in the fair value hierarchy~~2018 was $45.2 million and ~~totaled $9.6 million. These securities were sold during the first quarter of 2017 and were no longer held as of September 30, 2017.~~$44.0 million, respectively. For the three ~~and nine~~ months ended ~~September~~June 30, ~~2016, net~~2019 and 2018, there were unrealized gains ~~on these securities~~ of ~~$0.1~~$2.3 million and ~~$0.6~~$0.9 million, respectively, ~~were~~ recorded in Other Income, Net onrelated to these equity securities. For the ~~statements~~six months ended June 30, 2019 and 2018, there were unrealized gains of ~~income. Dividend income is recorded in Other Income, Net when dividends are declared.~~ $3.3 million and $0.2 million, respectively.

~~Available-for-Sale Securities:~~ ~~The following is a summary of available-for-sale 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, 2017 As of December 31, 2016
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 $ 286.5
$ 5.5
$ (0.5 ) $ 291.5
$ 296.2
$ 1.1
$ (2.1 ) $ 295.2
Equity Securities 210.7
81.5
—
292.2
203.3
62.3
(1.2 ) 264.4

Eversource's ~~debt and~~ equity securities also include CYAPC's and YAEC's marketable securities held in spent nuclear ~~decommissioning~~fuel trusts, ~~in the amounts~~which had fair values of ~~$489.1~~$158.5 million and ~~$466.7~~$200.0 million as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively. Unrealized gains and losses for these spent nuclear ~~decommissioning~~fuel trusts are subject to regulatory accounting treatment and are recorded in Marketable Securities with the corresponding offset to Other Long-Term Liabilities on the balance sheets, with no impact on the statements of income.

Available-for-Sale Debt Securities: The following is a summary of the available-for-sale debt securities, which are recorded at fair value and are included in current and long-term Marketable Securities on the balance sheets.



	As of June 30, 2019									As of December 31, 2018
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	$	204.3	$	5.4	$	(0.1	)	$	209.6	$	190.0	$	0.4	$	(4.0	)	$	186.4

Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of $172.4 million and $143.9 million as of June 30, 2019 and December 31, 2018, respectively.

Unrealized ~~Losses~~gains and ~~Other-than-Temporary Impairment:~~losses on available-for-sale debt securities held in Eversource's non-qualified benefit trust are recorded in Accumulated Other Comprehensive Income. There have been no significant unrealized losses, other-than-temporary impairments, or credit losses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~ 2018. Factors considered in determining whether a credit loss exists include the duration and severity of the impairment, adverse conditions specifically affecting the issuer, and the payment history, ratings and rating changes of the security. For asset-backed debt securities, underlying collateral and expected future cash flows are also evaluated.

As of June 30, 2019, 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⁾	$	26.9	$	26.9
One to five years	48.8		49.6
Six to ten years	38.4		40.0
Greater than ten years	90.2		93.1
Total Debt Securities	$	204.3	$	209.6


⁽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 ~~on available-for-sale securities~~ are recorded in Other Income, Net for Eversource's ~~non-qualified~~ 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 ~~decommissioning~~fuel trusts to compute the realized gains and losses on the sale of ~~available-for-sale~~marketable securities.

~~Contractual Maturities: As of September 30, 2017, 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⁾
$ 40.2
$ 40.2
One to five years 56.7
57.6
Six to ten years 52.6
54.1
Greater than ten years 137.0
139.6
Total Debt Securities $ 286.5
$ 291.5


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

Fair Value Measurements: The following table presents the marketable securities recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:



Eversource (Millions of Dollars)	As of June 30, 2019		As of December 31, 2018
Level 1:
Mutual Funds and Equities	$	203.7	$	244.0
Money Market Funds	20.5		25.9
Total Level 1	$	224.2	$	269.9
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	$	107.0	$	79.6
Corporate Debt Securities	46.1		39.5
Asset-Backed Debt Securities	13.4		14.0
Municipal Bonds	12.8		19.2
Other Fixed Income Securities	9.8		8.2
Total Level 2	$	189.1	$	160.5
Total Marketable Securities	$	413.3	$	430.4

Eversource
(Millions of Dollars)
As of September 30, 2017 As of December 31, 2016
Level 1:
Mutual Funds and Equities $ 292.2
$ 274.0
Money Market Funds 21.8
54.8
Total Level 1 $ 314.0
$ 328.8
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury) $ 69.0
$ 63.0
Corporate Debt Securities 56.1
41.1
Asset-Backed Debt Securities 20.4
18.5
Municipal Bonds 113.6
107.5
Other Fixed Income Securities 10.6
10.3
Total Level 2 $ 269.7
$ 240.4
Total Marketable Securities $ 583.7
$ 569.2

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

6. SHORT-TERM AND LONG-TERM DEBT

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $1.45 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. As of September 30, 2017 and December 31, 2016, Eversource parent had $917.0 million and approximately $1.0 billion, respectively, in short-term borrowings outstanding under the Eversource parent commercial paper program, leaving $533.0 million and $428.0 million of available borrowing capacity as of September 30, 2017 and December 31, 2016, respectively. The weighted-average interest rate on these borrowings as of September 30, 2017 and December 31, 2016 was 1.34 percent and 0.88 percent, respectively. As of September 30, 2017, there were intercompany loans from Eversource parent of $202.3 million to PSNH and $96.9 million to WMECO. As of December 31, 2016, there were intercompany loans from Eversource parent of $80.1 million to CL&P, $160.9 million to PSNH and $51.0 million to WMECO. Eversource parent, CL&P, PSNH, ~~WMECO,~~ NSTAR Gas and Yankee Gas are also parties to a five-year $1.45 billion revolving credit ~~facility. The revolving credit~~ facility, which terminates on ~~September 4, 2021.~~December 8, 2023. The revolving credit facility serves to backstop Eversource parent's $1.45 billion commercial paper program. ~~There were no borrowings outstanding on the revolving credit facility as of September 30, 2017 and December 31, 2016.~~

Except as described below, amounts outstanding under the commercial paper programs are included in Notes Payable for Eversource and NSTAR Electric and are classified in current liabilities on the balance sheets as all borrowings are outstanding for no more than 364 days at one time. Intercompany loans from Eversource parent to CL&P, PSNH and WMECO are included in Notes Payable to Eversource Parent and are classified in current liabilities on their respective balance sheets. Intercompany loans from Eversource parent to CL&P, PSNH and WMECO are eliminated in consolidation on Eversource's balance sheets.

As a result of the October 2017 Eversource parent long-term debt issuances, the net proceeds of which were used to repay short-term borrowings outstanding under the Eversource parent commercial paper program, $898.8 million of short-term debt was reclassified to Long-Term Debt as of September 30, 2017.

NSTAR Electric has a ~~$450~~$650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. As of September 30, 2017, NSTAR Electric had no short-term borrowings outstanding and as of December 31, 2016, NSTAR Electric had $126.5 million in short-term borrowings outstanding under its commercial paper program, leaving $450.0 million and $323.5 million of available borrowing capacity as of September 30, 2017 and December 31, 2016, respectively. The weighted-average interest rate on these borrowings as of December 31, 2016 was 0.71 percent. NSTAR Electric is also a party to a five-year ~~$450~~$650 million revolving credit ~~facility. The revolving credit~~ facility, which terminates on ~~September 4, 2021.~~December 8, 2023. The revolving credit facility serves to backstop NSTAR Electric's ~~$450~~$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
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
(Millions of Dollars)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Eversource Parent Commercial Paper Program	$	566.0	$	631.5	$	884.0	$	818.5	2.55	%	2.77	%
NSTAR Electric Commercial Paper Program	163.0		278.5		487.0		371.5		2.42	%	2.50	%

There were no borrowings outstanding on either the Eversource parent or NSTAR Electric revolving credit facilities as of June 30, 2019 or December 31, 2018. Eversource's water distribution segment has a $100 million revolving credit facility, which expires on August 19, 2019, and there were no borrowings outstanding as of ~~September~~June 30, ~~2017 and~~2019 or December 31, ~~2016.~~2018.

Amounts outstanding under the commercial paper programs and revolving credit facility are included in Notes Payable and are 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.

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.

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist them in meeting their short-term borrowing needs. In addition, growth in Eversource's key business initiatives requires cash infusion to those subsidiaries. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of June 30, 2019, there were intercompany loans from Eversource parent to CL&P of $259.4 million, to PSNH of $20.1 million, and to Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric ("HEEC"), of $40.3 million. As of December 31, 2018, there were intercompany loans from Eversource parent to PSNH of $57.0 million. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and are classified in current liabilities on the respective subsidiary's balance sheets.

Long-Term Debt ~~Issuances:~~ ~~In March 2017, Eversource parent issued~~Issuance Authorization: On April 26, 2019, the NHPUC approved PSNH’s request for authorization to issue up to $300 million ~~of 2.75 percent Series K Senior Notes due to mature~~ in ~~2022.~~ long-term debt through December 31, 2019.

Long-Term Debt:The ~~proceeds, net of issuance costs, were used to repay short-term borrowings under the Eversource parent commercial paper program.~~following table summarizes long-term debt issuances and repayments:

In March 2017, CL&P issued $300 million of 3.20 percent 2017 Series A First and Refunding Mortgage Bonds due to mature in 2027. The proceeds, net of issuance costs, were used to repay short-term borrowings.



(Millions of Dollars)	Issue Date	Issuance/(Repayment)			Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds ⁽¹⁾	April 2019	$	300.0		April 2048	Repaid short-term borrowings that were used to repay long-term debt that matured on February 1, 2019 and fund capital expenditures and working capital
5.50% 2009 Series A First Mortgage Bonds	February 2009	(250.0		)	February 2019	Repaid at maturity on February 1, 2019
NSTAR Electric:
3.25% 2019 Debentures	May 2019	400.0			May 2029	Repaid short-term borrowings that were used to fund investments in eligible green expenditures
PSNH:
3.60% 2019 Series T First Mortgage Bonds	June 2019	300.0			July 2049	Repay long-term debt due to mature in December 2019, repaid short-term borrowings and fund capital expenditures and working capital
Other:
NSTAR Gas 3.74% Series Q First Mortgage Bonds	July 2019	75.0			August 2049	Repaid short-term borrowings and fund capital expenditures and working capital

In May 2017, NSTAR Electric issued $350 million of 3.20 percent Debentures due to mature in 2027. The proceeds, net of issuance costs, were used to repay short-term borrowings and fund capital expenditures and working capital.

~~In August 2017, CL&P issued $225 million of 4.30 percent 2014 Series A First and Refunding Mortgage Bonds due to mature in 2044.~~


⁽¹⁾	These bonds are part of the same series issued by CL&P in March 2018. The aggregate outstanding principal amount of these bonds is now $800 million.

As a result of the ~~same series of CL&P’s existing 4.30 percent bonds that were initially issued~~NSTAR Gas debt issuance in 2014. The aggregate outstanding principal amount for these bonds is now $475 million. The proceeds, net of issuance costs, were used to refinance short-term debt and fund capital expenditures and working capital.

~~In September 2017, Yankee Gas issued~~July 2019, $75 million of ~~3.02 percent Series N First Mortgage Bonds due to mature in 2027. The proceeds, net~~current portion of ~~issuance costs, were used to repay short-term borrowings.~~

In October 2017, Eversource parent issued $450 million 2.75 percent Series K Senior Notes due to mature in 2022. These senior notes are part of the same series of Eversource parent’s existing 2.75 percent Series K Senior Notes that were initially issued in March 2017. The aggregate outstanding principal amount for the Series K Senior Notes is now $750 million. In addition, Eversource parent issued $450 million of 2.90 percent 2017 Series L Senior Notes due to mature in 2024. The proceeds, net of issuance costs, were used to repay short-term borrowings.

In October 2017, NSTAR Electric issued $350 million of 3.20 percent Debentures due to mature in 2027. The debentures are part of the same series of NSTAR Electric’s existing 3.20 percent Debentures that were initially issued in May 2017. The aggregate outstanding principal amount for the 3.20 percent Debentures is now $700 million. The proceeds, net of issuance costs, will be used to redeem long-term debt ~~due to mature on November 15, 2017. As the debt issuance refinanced short-term debt, the amount~~ was reclassified to Long-Term Debt on Eversource's ~~and NSTAR Electric's~~consolidated balance ~~sheets.~~sheet as of June 30, 2019.

~~Long-Term Debt Repayments:~~ ~~In March 2017, CL&P repaid at maturity the $150 million 5.375 percent 2007 Series A First and Refunding Mortgage Bonds.~~

~~In September 2017, CL&P repaid at maturity $100 million of 5.75 percent 2007 Series C First Mortgage Bonds and PSNH repaid at maturity $70 million of 6.15 percent 2007 Series N First Mortgage Bonds.~~

~~In October 2017, NSTAR Gas repaid at maturity $25 million of 7.04 percent Series M First Mortgage Bonds.~~

~~Long-Term Debt Issuance Authorizations:~~ On January 4, 2017, PURA approved CL&P's request for authorization to issue up to $1.325 billion in long-term debt through December 31, 2020. On March 30, 2017, the DPU approved NSTAR Electric's request for authorization to issue up to $700 million in long-term debt through December 31, 2018.

7. RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

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

PSNH Funding is considered a VIE primarily because the equity capitalization is insufficient to support its operations. PSNH has the power to direct the significant activities of the VIE and is most closely associated with the VIE as compared to other interest holders. Therefore, PSNH is considered the primary beneficiary and consolidates PSNH Funding in its consolidated financial statements. The following tables summarize the impact of PSNH Funding on PSNH's balance sheets and income statements:



(Millions of Dollars)
Balance Sheet:	As of June 30, 2019		As of December 31, 2018
Restricted Cash - Current Portion (included in Prepayments and Other Current Assets)	$	35.0	$	47.5
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		3.2
Securitized Stranded Costs (included in Regulatory Assets)	586.9		608.4
Other Regulatory Liabilities (included in Regulatory Liabilities)	7.9		5.8
Accrued Interest (included in Other Current Liabilities)	8.9		14.4
Rate Reduction Bonds - Current Portion	43.2		52.3
Rate Reduction Bonds - Long-Term Portion	561.7		583.3



(Millions of Dollars)	For the Three Months Ended				For the Six Months Ended
Income Statement:	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	$	10.8	$	6.8	$	21.5	$	6.8
Interest Expense on RRB Principal (included in Interest Expense)	5.3		2.8		10.7		2.8

8. PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN ~~PENSIONS~~PENSION

Eversource ~~Service sponsors a~~provides defined benefit retirement ~~plan~~plans ("Pension ~~Plan"~~Plans") that ~~covers~~cover eligible ~~participants.~~employees. In addition to the Pension ~~Plan,~~Plans, Eversource maintains non-qualified defined benefit retirement plans ~~sponsored by Eversource Service~~ ("SERP Plans"), which provide benefits in excess of Internal Revenue Code limitations to eligible ~~participants.~~participants consisting of current and retired employees. Eversource ~~Service~~ also ~~sponsors a~~provides defined benefit postretirement ~~plan~~plans ("PBOP Plans") that ~~provides~~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 ~~participants~~employees that meet certain age and service eligibility ~~requirements ("PBOP Plan").~~requirements.

In August 2016, the Company amended its PBOP Plan, which standardized separate benefit structures that existed within the plan and made other benefit changes. The remeasurement resulted in a prior service credit of $5.3 million and $16.1 million for the three and nine months ended September 30, 2017, respectively, which was reflected as a reduction to net periodic benefit expense for PBOP benefits. The majority of this amount will be deferred for future refund to customers.

The components of net periodic benefit ~~expense~~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 expense, ~~and the intercompany allocations,~~ less the capitalized ~~portions of pension, SERP and PBOP amounts, are~~portion, is included in Operations and Maintenance expense on the statements of income. ~~Capitalized amounts relate to employees working on capital projects and~~The remaining components of net periodic benefit expense/(income), less the deferred portion, are included in ~~Property, Plant and Equipment,~~Other Income, Net on the ~~balance sheets.~~statements of income. Pension, SERP and PBOP expense reflected in the statements of cash flows for CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~PSNH does not include the intercompany allocations or the corresponding capitalized and deferred portion, as these amounts are cash settled on a short-term basis.



	Pension and SERP
	For the Three Months Ended June 30, 2019												For the Three Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	16.1		$	4.4		$	3.6		$	1.5		$	20.7		$	5.2		$	4.3		$	2.7
Interest Cost	54.8			11.4			12.3			6.0			49.1			10.5			10.9			5.5
Expected Return on Pension Plan Assets	(91.7		)	(18.1		)	(24.2		)	(10.1		)	(97.9		)	(19.4		)	(26.6		)	(10.8		)
Actuarial Loss	35.6			6.3			11.8			2.3			35.7			7.1			10.1			3.3
Prior Service Cost	0.3			—			—			—			2.1			0.2			0.1			0.1
Total Net Periodic Benefit Expense/(Income)	$	15.1		$	4.0		$	3.5		$	(0.3	)	$	9.7		$	3.6		$	(1.2	)	$	0.8
Intercompany Allocations	N/A			$	5.8		$	5.3		$	—		N/A			$	1.5		$	1.6		$	0.5

	Pension and SERP
	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	35.4		$	9.2		$	7.5		$	4.1		$	43.1		$	11.0		$	9.0		$	5.7
Interest Cost	109.1			23.0			24.2			12.2			97.8			20.9			21.7			10.9
Expected Return on Pension Plan Assets	(183.8		)	(36.9		)	(48.6		)	(20.4		)	(195.8		)	(40.2		)	(51.8		)	(21.8		)
Actuarial Loss	72.1			14.3			21.2			5.9			71.8			14.8			20.7			6.5
Prior Service Cost	0.6			—			0.1			—			4.1			0.6			0.1			0.2
Total Net Periodic Benefit Expense/(Income)	$	33.4		$	9.6		$	4.4		$	1.8		$	21.0		$	7.1		$	(0.3	)	$	1.5
Intercompany Allocations	N/A			$	13.6		$	8.4		$	2.5		N/A			$	3.0		$	3.2		$	1.0

Pension and SERP
Eversource For the Three Months Ended For the Nine Months Ended
(Millions of Dollars) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Service Cost $ 17.4
$ 18.6
$ 53.8
$ 56.6
Interest Cost 47.2
46.4
140.7
139.2
Expected Return on Pension Plan Assets (83.5 ) (79.4 ) (250.5 ) (238.5 )
Actuarial Loss 33.9
31.4
101.3
94.2
Prior Service Cost 1.2
0.9
3.4
2.6
Total Net Periodic Benefit Expense $ 16.2
$ 17.9
$ 48.7
$ 54.1
Capitalized Pension Expense $ 5.5
$ 5.4
$ 16.5
$ 16.8

PBOP
Eversource For the Three Months Ended For the Nine Months Ended
(Millions of Dollars) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Service Cost $ 2.4
$ 3.0
$ 7.1
$ 9.2
Interest Cost 6.8
7.5
20.3
26.5
Expected Return on Plan Assets (16.0 ) (15.9 ) (47.8 ) (47.3 )
Actuarial Loss 2.2
3.0
6.9
5.0
Prior Service Credit (5.3 ) (3.6 ) (16.1 ) (3.7 )
Total Net Periodic Benefit Income $ (9.9 ) $ (6.0 ) $ (29.6 ) $ (10.3 )
Capitalized PBOP Income $ (4.8 ) $ (2.6 ) $ (14.3 ) $ (4.6 )

Pension and SERP
For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016
(Millions of Dollars) CL&P NSTAR Electric PSNH WMECO CL&P NSTAR Electric PSNH WMECO
Service Cost $ 4.6
$ 3.1
$ 2.4
$ 0.7
$ 4.6
$ 3.3
$ 2.5
$ 0.8
Interest Cost 10.5
8.6
5.3
2.1
10.2
8.5
5.1
2.1
Expected Return on Pension Plan Assets (17.8 ) (17.5 ) (10.0 ) (4.4 ) (18.0 ) (16.9 ) (9.6 ) (4.4 )
Actuarial Loss 6.8
8.9
3.0
1.5
6.3
8.7
2.5
1.3
Prior Service Cost 0.4
0.1
0.1
0.1
0.4
—
0.1
0.1
Total Net Periodic Benefit Expense/(Income) $ 4.5
$ 3.2
$ 0.8
$ —
$ 3.5
$ 3.6
$ 0.6
$ (0.1 )
Intercompany Allocations $ 2.4
$ 1.8
$ 0.8
$ 0.5
$ 3.5
$ 2.2
$ 1.0
$ 0.6
Capitalized Pension Expense $ 2.4
$ 1.9
$ 0.4
$ 0.1
$ 2.2
$ 2.0
$ 0.4
$ 0.1

Pension and SERP
For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P
NSTAR
Electric
PSNH WMECO
Service Cost $ 13.9
$ 9.4
$ 7.3
$ 2.3
$ 14.3
$ 9.9
$ 7.5
$ 2.4
Interest Cost 31.3
25.6
15.9
6.3
31.2
25.3
15.4
6.3
Expected Return on Pension Plan Assets (53.9 ) (52.5 ) (29.9 ) (13.3 ) (54.2 ) (50.7 ) (28.9 ) (13.1 )
Actuarial Loss 20.7
26.4
8.7
4.5
19.2
25.8
7.5
4.1
Prior Service Cost 1.1
0.2
0.4
0.2
1.1
—
0.3
0.2
Total Net Periodic Benefit Expense/(Income) $ 13.1
$ 9.1
$ 2.4
$ —
$ 11.6
$ 10.3
$ 1.8
$ (0.1 )
Intercompany Allocations $ 7.4
$ 5.5
$ 2.5
$ 1.4
$ 10.3
$ 6.7
$ 3.0
$ 1.9
Capitalized Pension Expense $ 7.3
$ 5.4
$ 1.1
$ 0.3
$ 7.1
$ 5.7
$ 1.0
$ 0.3



	PBOP
	For the Three Months Ended June 30, 2019												For the Three Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	1.8		$	0.3		$	0.4		$	0.1		$	2.5		$	0.4		$	0.5		$	0.3
Interest Cost	8.2			1.6			2.4			0.8			6.8			1.5			2.2			0.9
Expected Return on Plan Assets	(16.8		)	(2.3		)	(7.5		)	(1.3		)	(16.7		)	(2.6		)	(8.1		)	(1.5		)
Actuarial Loss	1.6			0.3			0.7			—			1.6			0.4			0.4			0.2
Prior Service Cost/(Credit)	(5.8		)	0.3			(4.2		)	0.1			(5.7		)	0.3			(4.3		)	0.1
Total Net Periodic Benefit Expense/(Income)	$	(11.0	)	$	0.2		$	(8.2	)	$	(0.3	)	$	(11.5	)	$	—		$	(9.3	)	$	—
Intercompany Allocations	N/A			$	(0.3	)	$	(0.4	)	$	(0.1	)	N/A			$	(0.2	)	$	(0.3	)	$	(0.1	)

	PBOP
	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
(Millions of Dollars)	Eversource			CL&P			NSTAR Electric			PSNH			Eversource			CL&P			NSTAR Electric			PSNH
Service Cost	$	3.9		$	0.7		$	0.9		$	0.4		$	5.0		$	0.9		$	1.0		$	0.6
Interest Cost	16.3			3.1			4.7			1.7			14.4			2.9			4.4			1.6
Expected Return on Plan Assets	(33.4		)	(4.5		)	(15.1		)	(2.8		)	(34.8		)	(5.2		)	(16.2		)	(3.0		)
Actuarial Loss	4.1			0.7			1.7			0.2			4.4			0.8			1.1			0.4
Prior Service Cost/(Credit)	(11.6		)	0.5			(8.5		)	0.2			(11.5		)	0.5			(8.5		)	0.3
Total Net Periodic Benefit Expense/(Income)	$	(20.7	)	$	0.5		$	(16.3	)	$	(0.3	)	$	(22.5	)	$	(0.1	)	$	(18.2	)	$	(0.1	)
Intercompany Allocations	N/A			$	(0.4	)	$	(0.6	)	$	(0.2	)	N/A			$	(0.5	)	$	(0.7	)	$	(0.2	)

PBOP
For the Three Months Ended September 30, 2017 For the Three Months Ended September 30, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P
NSTAR
Electric
PSNH WMECO
Service Cost $ 0.5
$ 0.3
$ 0.3
$ 0.1
$ 0.6
$ 0.6
$ 0.4
$ 0.1
Interest Cost 1.3
1.9
0.8
0.3
1.3
2.5
0.7
0.3
Expected Return on Plan Assets (2.4 ) (6.6 ) (1.4 ) (0.6 ) (2.5 ) (6.4 ) (1.4 ) (0.6 )
Actuarial Loss 0.2
0.9
0.1
—
0.5
1.2
0.2
—
Prior Service Cost/(Credit) 0.3
(4.3 ) 0.2
—
0.2
(2.9 ) 0.1
—
Total Net Periodic Benefit (Income)/Expense $ (0.1 ) $ (7.8 ) $ —
$ (0.2 ) $ 0.1
$ (5.0 ) $ —
$ (0.2 )
Intercompany Allocations $ (0.2 ) $ (0.2 ) $ (0.1 ) $ —
$ —
$ (0.1 ) $ —
$ —
Capitalized PBOP Income $ (0.1 ) $ (4.0 ) $ —
$ (0.1 ) $ —
$ (2.2 ) $ —
$ (0.1 )

PBOP
For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016
(Millions of Dollars) CL&P
NSTAR
Electric
PSNH WMECO CL&P NSTAR Electric PSNH WMECO
Service Cost $ 1.5
$ 1.1
$ 1.0
$ 0.3
$ 1.4
$ 2.5
$ 0.9
$ 0.3
Interest Cost 4.0
5.7
2.3
0.8
4.0
10.3
2.2
0.8
Expected Return on Plan Assets (7.3 ) (19.9 ) (4.1 ) (1.7 ) (7.6 ) (19.2 ) (4.2 ) (1.7 )
Actuarial Loss 0.7
2.6
0.4
—
0.9
1.7
0.5
—
Prior Service Cost/(Credit) 0.8
(12.9 ) 0.4
0.1
0.2
(2.9 ) 0.1
—
Total Net Periodic Benefit Income $ (0.3 ) $ (23.4 ) $ —
$ (0.5 ) $ (1.1 ) $ (7.6 ) $ (0.5 ) $ (0.6 )
Intercompany Allocations $ (0.5 ) $ (0.7 ) $ (0.3 ) $ (0.1 ) $ 0.3
$ —
$ —
$ —
Capitalized PBOP Income $ (0.4 ) $ (11.9 ) $ —
$ (0.2 ) $ (0.5 ) $ (3.3 ) $ —
$ (0.3 )

8.9. COMMITMENTS AND CONTINGENCIES

A. Environmental Matters

Eversource, CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~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 ~~PSNH~~ and ~~WMECO~~PSNH have an active environmental auditing and training program and each believes it is substantially in compliance with all enacted laws and regulations.

The number of environmental sites and related reserves for which remediation or long-term monitoring, preliminary site work or site assessment is being performed are as follows:



	As of June 30, 2019			As of December 31, 2018
	Number of Sites	Reserve (in millions)		Number of Sites	Reserve (in millions)
Eversource	58	$	71.6	60	$	64.7
CL&P	15	5.8		15	5.4
NSTAR Electric	15	10.5		16	10.9
PSNH	9	5.4		9	5.4

As of September 30, 2017 As of December 31, 2016
Number of Sites
Reserve
(in millions)
Number of Sites
Reserve
(in millions)
Eversource 58
$ 57.7
61
$ 65.8
CL&P 14
4.9
14
4.9
NSTAR Electric 10
2.0
13
3.2
PSNH 11
5.7
11
5.3
WMECO 4
0.8
4
0.6

Included in the ~~Eversource~~ number of sites and reserve amounts above are former MGP sites that were operated several decades ago and manufactured 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 ~~$51.9~~$57.1 million and ~~$59.0~~$50.1 million as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively, and related primarily to the natural gas business segment. The reduction in the reserve balance at the MGP sites in the first quarter of 2017 was primarily due to a change in cost estimates at one site where actual contamination was less than originally estimated.

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 ~~PSNH's,~~ and ~~WMECO's~~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 ~~related~~required environmental ~~matters.~~remediation. As this information becomes available, management will continue to assess the potential exposure and adjust the reserves accordingly.

B. Long-Term Contractual Arrangements

On December 28, 2018, under Public Act 17-3, "An Act Concerning Zero Carbon Procurement," DEEP selected the Millstone Nuclear Power Station generation facility, along with smaller generation facilities, in DEEP’s zero-carbon request for proposal. CL&P and UI were directed by DEEP to enter into ten-year contracts to purchase a combined total of approximately 9 million MWh annually from the Millstone generation facility. On March 15, 2019, CL&P and UI each signed a ten-year contract with the owner of Millstone Nuclear Power Station in order to purchase a combined amount of approximately 50 percent of the facility's output (approximately 40 percent by CL&P). The Millstone Nuclear Power Station has a 2,112 MW nameplate capacity. The parties filed the contract with PURA on March 29, 2019 for review and approval. A decision from PURA is expected in the third quarter of 2019.

The significant output of the generation facility, the contract period, and the pricing will result in a significant multi-billion dollar contractual commitment. We plan to sell the energy purchased under this contract into the market and use the proceeds from these energy sales to offset the contract costs. As the net costs under this contract will be recovered from customers in future rates, the contract will not have an impact on the net income of CL&P.

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 ~~PSNH~~ and ~~WMECO,~~PSNH, in the form of guarantees.

Eversource parent issued a guaranty on behalf of its subsidiary, NPT, under which, beginning at the time the Northern Pass Transmission line ~~goes~~would go into commercial operation, Eversource parent ~~will~~would guarantee the financial obligations of NPT under the TSA with HQ in an amount not to exceed $25 million. Eversource parent's obligations under the guaranty expire upon the full, final and indefeasible payment of the guaranteed obligations. Eversource parent ~~has~~ also entered into a guaranty on behalf of NPT under which Eversource parent ~~will~~would guarantee NPT's obligations under a facility with a financial institution pursuant to which NPT may request letters of credit in an aggregate amount of up to approximately $14 million.

In the second quarter of 2019, Eversource ~~parent has also guaranteed certain indemnification and other obligations as a result~~concluded that construction of the ~~sales~~NPT project was no longer probable. For further information regarding the impairment of ~~former unregulated subsidiaries and~~NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the ~~termination~~financial statements. While these guarantees are currently outstanding, it is expected that they will be extinguished pending the final dissolution of ~~an unregulated business, with maximum exposures either not specified or not material.~~ NPT.

Management does not anticipate a material impact to net income or cash flows as a result of these various guarantees and indemnifications.

The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries to external parties, as of ~~September~~June 30, ~~2017:~~2019:


Company	Description	Maximum Exposure (in millions)		Expiration Dates	Description	Maximum Exposure (in millions)		Expiration Dates
On behalf of subsidiaries:
Eversource Gas Transmission LLC	Access Northeast Project Capital Contributions Guaranty ⁽¹⁾	$	185.1	2021
Eversource Investment LLC					North East Offshore ⁽¹⁾	$	113.9	-
Various	Surety Bonds⁽²⁾	40.1		2017 - 2018	Surety Bonds⁽²⁾	34.0		2019 - 2021
Eversource Service and Rocky River Realty Company	Lease Payments for Vehicles and Real Estate	8.2		2019 - 2024
Rocky River Realty Company and Eversource Service					Lease Payments for Real Estate	7.1		2024
Bay State Wind					Real Estate Purchase	2.5		2020

⁽¹⁾

Eversource parent issued a declining balance guaranty on behalf of its subsidiary, Eversource ~~Gas Transmission~~Investment LLC, towhich holds an ownership interest in North East Offshore. Eversource parent will guarantee, as a primary obligor, the financial obligations, primarily all post-closing payment obligations of Eversource Investment LLC, under the Sale and Purchase Agreement and an Irrevocable Equity Commitment Letter with Ørsted. Eversource parent's obligations under the guaranty expire upon the full, final and indefeasible payment of the subsidiary's capital contributions for its investment in the Access Northeast project. The guaranty decreases as capital contributions are made. The guaranty will expire upon the earlier of the full performance of the guaranteed ~~obligations or December 31, 2021.~~obligations.


⁽²⁾	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.

C. D. Spent Nuclear Fuel Obligations - Yankee Companies

CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~PSNH have plant closure and fuel storage cost obligations to the Yankee Companies, which have each completed the physical decommissioning of their respective nuclear facilities and are now engaged in the long-term storage of their spent fuel. The Yankee Companies ~~collect~~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 ~~PSNH~~ and ~~WMECO. These companies~~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 ~~have collected or are currently collecting~~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 ~~and WMECO~~ 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 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 had previously awarded the Yankee Companies damages for Phase I, II and III of litigation resulting from the DOE's failure to meet its contractual obligations. These Phases covered damages incurred in the years 1998 through 2012, and the awarded damages have been received by the Yankee Companies with certain amounts of the damages refunded to their customers.

DOE Phase IV Damages - On May 22, 2017, each of the Yankee Companies filed subsequent lawsuits against the DOE in the Court of Federal ~~Claims seeking~~

Claims. The Yankee Companies sought monetary damages totaling ~~approximately $100~~$104.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2013 to 2016 (“DOE Phase IV”). On February 21, 2019, the Yankee Companies received a partial summary judgment and partial final judgment in their favor for the undisputed amount of monetary damages of $103.2 million. The court awarded CYAPC, YAEC and MYAPC damages of $40.7 million, $28.1 million and $34.4 million, respectively. The DOE did not appeal the court's judgment and the decision became final on April 23, 2019. On June 12, 2019, CYAPC and YAEC received damages of $40.7 million and $28.1 million, respectively, which were recorded as restricted cash within Other Long-Term Assets on the Eversource consolidated balance sheet as of June 30, 2019.

The Yankee Companies are in the process of preparing a required informational filing with FERC as to the use of proceeds. At this time, the damages are primarily expected to be used by the Yankee Companies to fund remaining fuel storage obligations, and management does not expect significant amounts to be refunded to Eversource utilities (CL&P, NSTAR Electric and PSNH). The utilities would then ultimately refund any amounts received to utility customers.

On June 12, 2019, the court accepted an offer of judgment in the amount of $0.5 million to settle the disputed amount of approximately $1 million in Phase IV ~~trial is expected to begin in 2018.~~

~~For further discussion, see Part I, Item 3, “Legal Proceedings -~~ contested damages. The Yankee Companies ~~v. U.S. Department of Energy” of our 2016 Form 10-K.~~received the $0.5 million payment in July 2019.

D.E. FERC ROE Complaints

Four separate complaints have been 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.

~~In response to appeals~~The ROE originally billed during the period October 1, 2011 (beginning of ~~the FERC decision in~~ the first complaint ~~filed by~~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 ~~NETOs~~FERC set the base ROE at 10.57 percent and the ~~Complainants,~~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") issued a decision on April 14, 2017 vacating and remanding the FERC's decision. The Court found that the FERC failed to make an explicit finding that the 11.14 percent base ROE was unjust and unreasonable, as required under Section 206 of the Federal Power Act, before it set a new base ROE. The Court also found that the FERC did not provide a rational connection between the record evidence and its decision to select the midpoint of the upper half of the zone of reasonableness for the new base ROE..

~~On May 26, 2017, the Chief Administrative Law Judge ("ALJ") issued an order that the fourth complaint will continue to trial in December 2017 with an ALJ initial decision expected in March of 2018.~~

~~A summary of the four separate complaints and the base ROEs pertinent to those complaints are as follows:~~

Complaint
15-Month Time Period
of Complaint
(Beginning as of Complaint Filing Date)
Original Base ROE Authorized by FERC at Time of Complaint
Filing Date ⁽¹⁾
Base ROE Subsequently Authorized by FERC for First Complaint Period and also Effective from
October 16, 2014 through April 14, 2017 ⁽¹⁾
Reserve
(Pre-Tax and Excluding Interest) as of September 30, 2017
(in millions)

FERC ALJ Recommendation of Base ROE on Second and
Third Complaints
(Issued March 22, 2016)
First 10/1/2011 - 12/31/2012 11.14% 10.57% $—
⁽²⁾
N/A
Second 12/27/2012 - 3/26/2014 11.14% N/A 39.1
⁽³⁾
9.59%
Third 7/31/2014 - 10/30/2015 11.14% 10.57% — 10.90%
Fourth 4/29/2016 - 7/28/2017 10.57% 10.57% — N/A

⁽¹⁾ The billed ROE (base plus incentives) between October 1, 2011 and October 15, 2014 was within a range of 11.14 percent to 13.1 percent. On October 16, 2014, the FERC set the incentive cap at 11.74 percent for the first complaint period and also effective from October 16, 2014 through April 14, 2017, the date on which the Court vacated this FERC order.

⁽²⁾ ~~CL&P, NSTAR Electric, PSNH and WMECO have refunded all~~All amounts associated with the first complaint period ~~totaling~~have been refunded, which totaled $38.9 million (pre-tax and excluding interest) at Eversource ~~(consisting of $22.4 million at CL&P, $8.4 million at NSTAR Electric, $2.8 million at PSNH,~~ and ~~$5.3 million at WMECO), reflecting~~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.

⁽³⁾ ~~The~~Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of June 30, 2019. This reserve represents the difference between the ~~ROEs~~ 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, ~~$8.5~~$14.6 million for NSTAR Electric and $3.1 million for PSNH ~~and $6.1 million for WMECO~~ as of ~~September~~June 30, ~~2017.~~2019.

On ~~June 5, 2017,~~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. The parties to these proceedings were directed to submit briefs on this new proposed framework and how they would apply the proposed framework in each of the four complaint proceedings. Initial briefs were filed by the NETOs, ~~including Eversource, submitted a filing to~~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 preliminary calculations indicated that for the first complaint period, for the NETOs that FERC concludes are of average financial risk, (1) a preliminary range of presumptively just and reasonable base ROEs is 9.60 percent to ~~reinstate~~10.99 percent; (2) the pre-existing base ROE of 11.14 percent ~~with an associated~~is therefore unjust and unreasonable; (3) the preliminary just and reasonable base ROE is 10.41 percent; and (4) the preliminary incentive cap on total ROE is 13.08 percent.

If the results of ~~13.5 percent effective June 8, 2017, as~~ these illustrative calculations were ~~the last ROEs lawfully~~included in ~~effect for transmission billing purposes prior to the~~a final FERC order ~~vacated by~~for each of the ~~Court on April 14, 2017. On October 6, 2017, the FERC did not accept the NETOs filing, temporarily leaving in place the ROEs (10.57~~complaint periods, then a 10.41 percent base ROE ~~with an 11.74~~and a 13.08 percent incentive cap ~~ROE) set~~would not have a significant impact on our financial statements for all of the complaint periods.

Although the order provided illustrative calculations, FERC stated that these calculations are merely preliminary. The FERC’s preliminary calculations are not binding and do not represent what we believe to be the most likely outcome of a final FERC order, as changes to the methodology by FERC are possible as a result of the parties’ arguments and calculations in the ~~first complaint proceeding until the~~briefing process. Until FERC ~~addresses the Court’s decision.~~

~~On October 5, 2017 the NETOs filed~~issues a ~~series~~final decision on each of ~~motions, requesting that the FERC dismiss the~~these four complaint proceedings. Alternatively, if the FERC does not dismiss the proceedings, the NETOs requested that the FERC consolidate all four complaint proceedings for expeditious resolution and/or stay the trial in the fourth complaint proceedingcomplaints, there is significant uncertainty, and ~~resolve it based on the standards set in the April 14, 2017 Court decision.~~

Atat this time, the Company cannot reasonably estimate a range of gain or loss for any of the four complaint proceedings. The ~~April 14, 2017 Court decision~~October 16, 2018 FERC order or the 2019 briefs did not provide a reasonable basis for a change to the reserve ~~balance of $39.1 million (pre-tax, excluding interest) for the second complaint period, and the Company has not changed its reserve~~ or recognized ROEs for any of the complaint periods.

Management cannot at this time predict the ultimate effect of the Court decision or future FERC action on any of the complaint periods or the estimated impacts on the financial position, results of operations or cash flows of Eversource, CL&P, NSTAR Electric and PSNH ~~or WMECO.~~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.

The average impact of a 10 basis point change to the base ROE for each of the 15-month complaint periods would affect Eversource's after-tax earnings by approximately $3 million.

E.F. Eversource and NSTAR Electric Boston Harbor Civil Action

On July 15, 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 under provisions of the Rivers and Harbors Act of 1899 and the Clean Water Act against NSTAR Electric, ~~Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric ("HEEC"),~~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 action sought an order to compel HEEC to comply with cable depth requirements in the United States Army Corps of Engineers' permit or alternatively to remove the electric distribution cable and cease unauthorized work in U.S. waterways. The action also sought civil penalties and other costs.

~~After substantial negotiations, the~~The parties reached a settlement ~~whereby~~pursuant to which HEEC ~~will~~agreed to install a new 115kV distribution cable across Boston Harbor to Deer Island, utilizing a different route, and ~~will~~ remove portions of the existing cable. Upon the installation and completion of the new cable and the removal of the portions of the existing cable, all issues surrounding the current permit from the United States Army Corps of Engineers are expected to be resolved, and such litigation is expected to be dismissed with prejudice.

In 2017, as a result of the settlement, NSTAR Electric expensed $4.9 million (pre-tax) of previously incurred capitalized costs associated with engineering work performed on the existing cable that will no longer be used. In addition, NSTAR Electric agreed to provide a rate base credit of $17.5 million to the Massachusetts Water Resources Authority for the new cable. This negotiated credit ~~will result~~resulted in the initial $17.5 million of construction costs on the new cable ~~to be~~being expensed as ~~incurred.~~incurred, all of which was fully expensed in 2018. Construction of the new cable is underway and is expected to be completed in 2019.

9.10. LEASES

Eversource, including CL&P, NSTAR Electric and PSNH, ~~GENERATION ASSET SALE~~has entered into lease agreements as a lessee for the use of land, office space, service centers, vehicles, information technology, and equipment. These lease agreements are classified as either finance or operating leases and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

~~On June 10, 2015,~~ Eversource determines whether or not a contract contains a lease based on whether or not it provides Eversource with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. Eversource has elected the practical expedient to not separate non-lease components from lease components and instead to account for both as a single lease component, with the exception of the information technology asset class where the lease and non-lease components are separated.

The provisions of Eversource, CL&P, NSTAR Electric and PSNH lease agreements contain renewal options. The renewal options range from one year to twenty years. The renewal period is included in the measurement of the lease liability if it is reasonably certain that Eversource will exercise these renewal options.

For leases entered into or modified after the January 1, 2019 implementation date, the discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on each company's collateralized incremental interest rate to borrow over a comparable term for an individual lease, as the rate implicit in the lease is not determinable.

CL&P and PSNH entered into certain contracts for the ~~2015 Public Service Company~~purchase of ~~New Hampshire Restructuring~~energy that qualify as leases. These contracts do not have minimum lease payments and ~~Rate Stabilization Agreement (the "Agreement") with~~therefore are not recognized as a lease liability on the ~~New Hampshire Office of Energy~~balance sheet and ~~Planning, certain members~~are not reflected in the future minimum lease payments table below. Expense related to these contracts are included as variable lease cost in the table below. The expense and long-term obligation for these contracts are included in the annually reported contractual obligations table in Note 12B, "Commitments and Contingencies - Long-Term Contractual Arrangements," of the ~~NHPUC staff,~~Eversource 2018 Form 10-K.

The components of lease cost, prior to amounts capitalized, are as follows:



	For the Three Months Ended June 30, 2019								For the Six Months Ended June 30, 2019
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Financing Lease Cost:
Amortization of Right-of-use-Assets	$	0.4	$	0.2	$	—	$	—	$	0.7	$	0.4	$	0.1	$	—
Interest on Lease Liabilities	0.3		0.1		0.2		—		0.7		0.3		0.3		—
Total Finance Lease Cost	0.7		0.3		0.2		—		1.4		0.7		0.4		—
Operating Lease Cost	2.9		0.1		0.5		—		5.9		0.1		0.9		—
Variable Lease Cost	15.7		3.1		—		12.6		31.1		6.5		—		24.6
Total Lease Cost	$	19.3	$	3.5	$	0.7	$	12.6	$	38.4	$	7.3	$	1.3	$	24.6

Operating lease cost, less the ~~Office~~capitalized portion, is included in Operations and Maintenance (or Purchased Power, Fuel and Transmission expense for transmission segment leases) on the statements of ~~Consumer Advocate, two State Senators, and several other parties. Under~~income. Amortization of finance lease assets is included in Depreciation on the ~~terms~~statements of income. Interest expense on finance leases is included in Interest Expense, Net on the statements of income.

Supplemental balance sheet information related to leases is as follows:



		As of June 30, 2019
(Millions of Dollars)	Balance Sheet Classification	Eversource		CL&P		NSTAR Electric		PSNH
Operating Leases:
Operating Lease Right-of-use-Assets, Net	Other Long-Term Assets	$	54.6	$	0.6	$	24.4	$	0.8
Operating Lease Liabilities
Operating Lease Liabilities - Current Portion	Other Current Liabilities	$	8.8	$	0.2	$	0.5	$	0.2
Operating Lease Liabilities - Long-Term	Other Long-Term Liabilities	45.8		0.4		23.9		0.6
Total Operating Lease Liabilities		$	54.6	$	0.6	$	24.4	$	0.8
Finance Leases:
Finance Lease Right-of-use-Assets, Net	Property, Plant and Equipment, Net	$	9.4	$	2.6	$	3.4	$	0.9
Finance Lease Liabilities
Finance Lease Liabilities - Current Portion	Other Current Liabilities	$	2.3	$	1.5	$	—	$	0.1
Finance Lease Liabilities - Long-Term	Other Long-Term Liabilities	9.3		2.3		4.4		0.8
Total Finance Lease Liabilities		$	11.6	$	3.8	$	4.4	$	0.9

The finance lease payments that NSTAR Electric will make over the next twelve months are entirely interest-related, due to escalating payments. As such, none of the Agreement, PSNH agreed to divest its generation assets, subject to NHPUC approval. The Agreement provided for a resolution of issues pertaining to PSNH's generation assets in pending regulatory proceedings beforefinance lease payments over the ~~NHPUC. The Agreement provided for~~next twelve months will reduce the Clean Air Project prudence proceeding to be resolved and all remaining Clean Air Project costs to be included in rates effective January 1, 2016. As part of the Agreement, PSNH agreed to forego recovery of $25 million of the equity returnfinance lease liability.

Other information related to ~~the Clean Air Project.~~ leases is as follows (in millions of dollars, unless otherwise noted):



	Eversource			CL&P			NSTAR Electric			PSNH
As of June 30, 2019
Weighted-Average Remaining Lease Term (Years):
Operating Leases	12			4			21			8
Financing Leases	11			2			23			9
Weighted-Average Discount Rate (Percentage):
Operating Leases	3.9		%	2.7		%	4.1		%	3.6		%
Financing Leases	4.3		%	10.5		%	2.9		%	3.5		%

For the Three Months Ended June 30, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	3.0		$	0.1		$	0.5		$	—
Operating Cash Flows from Finance Leases	0.3			0.1			0.1			—
Financing Cash Flows from Finance Leases	0.5			0.4			—			—
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	0.4			0.2			—			0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	1.3			—			—			—

~~On July 1, 2016, the NHPUC approved the Agreement in an order that, among other things, instructed PSNH to begin the process~~



	Eversource		CL&P		NSTAR Electric		PSNH
For the Six Months Ended June 30, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	5.9	$	0.1	$	0.8	$	—
Operating Cash Flows from Finance Leases	0.6		0.3		0.3		—
Financing Cash Flows from Finance Leases	0.9		0.7		—		—
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	1.7		0.2		—		0.2
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	1.3		—		—		—

Future minimum lease payments, excluding variable costs, under long-term leases, as of ~~divesting its generation assets. The NHPUC selected an auction adviser to assist with the divestiture,~~June 30, 2019 are as follows:



	Operating Leases								Finance Leases
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
July 1, 2019 through December 31, 2019	$	5.7	$	0.3	$	0.8	$	0.2	$	1.7	$	1.0	$	0.3	$	0.1
Year Ending December 31,
2020	10.3		0.2		1.6		0.2		3.4		2.0		0.5		0.1
2021	9.2		0.1		1.6		0.2		2.9		1.5		0.5		0.1
2022	7.5		—		1.6		0.1		1.5		—		0.6		0.1
2023	4.9		—		1.6		0.1		0.7		—		0.6		0.1
2024	2.9		—		1.7		—		0.7		—		0.6		0.1
Thereafter	29.2		0.1		28.9		0.2		13.2		—		12.8		0.4
Future lease payments	69.7		0.7		37.8		1.0		24.1		4.5		15.9		1.0
Less amount representing interest	15.1		0.1		13.4		0.2		12.5		0.7		11.5		0.1
Present value of future minimum lease payments	$	54.6	$	0.6	$	24.4	$	0.8	$	11.6	$	3.8	$	4.4	$	0.9

At December 31, 2018, future minimum rental payments, excluding executory costs, such as property taxes, state use taxes, insurance, and ~~the final plan and auction process were approved by the NHPUC in November 2016.~~

~~As of September 30, 2017, PSNH's generation assets~~maintenance were as follows:



Operating Leases (Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2019	$	11.5	$	1.5	$	7.2	$	0.5
2020	9.8		1.4		6.0		0.4
2021	8.7		1.2		5.3		0.4
2022	7.2		1.1		4.4		0.4
2023	4.7		0.5		3.1		0.2
Thereafter	32.7		0.2		29.5		0.3
Future minimum lease payments	$	74.6	$	5.9	$	55.5	$	2.2



Capital Leases (Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2019	$	3.4	$	2.0	$	0.5	$	0.1
2020	3.4		2.0		0.5		0.1
2021	2.9		1.5		0.5		0.1
2022	1.5		—		0.6		0.1
2023	0.7		—		0.6		0.1
Thereafter	13.9		—		13.4		0.5
Future minimum lease payments	25.8		5.5		16.1		1.0
Less amount representing interest	13.8		1.0		12.4		0.1
Present value of future minimum lease payments	$	12.0	$	4.5	$	3.7	$	0.9

(Millions of Dollars)
Gross Plant $ 1,184.1
Accumulated Depreciation (573.3 )
Net Plant 610.8
Fuel 92.9
Materials and Supplies 44.0
Emission Allowances 19.4
Total Generation Assets $ 767.1

On October 11, 2017, PSNH entered into two Purchase and Sale Agreements ("Agreements") to sell its thermal and hydroelectric generation assets to private investors at purchase prices of $175 million and $83 million, respectively, subject to adjustments as set forth in each Agreement.

On October 12, 2017, PSNH filed an application with the NHPUC requesting approval of the Agreements. We expect to receive approvals from the NHPUC and other necessary regulatory agencies by late December 2017 or early 2018, with the transactions to be completed shortly thereafter. The Company will classify these assets as held for sale upon NHPUC approval of the sale.

Upon completion, full recovery of PSNH's generation assets will occur through a combination of cash flows during the remaining operating period, sales proceeds, and recovery of stranded costs via bonds that will be secured by a non-bypassable charge or through recoveries in future rates billed to PSNH's customers.

~~10.~~11. 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 ~~Long-Term Debt:~~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 ~~tables~~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 June 30, 2019:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	161.0	$	116.2	$	117.4	$	43.0	$	43.6	$	—	$	—
Long-Term Debt	13,818.5		14,639.4		3,309.5		3,724.9		3,341.5		3,599.6		1,101.8		1,145.3
Rate Reduction Bonds	604.9		642.2		—		—		—		—		604.9		642.2

As of December 31, 2018:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	156.8	$	116.2	$	113.8	$	43.0	$	43.0	$	—	$	—
Long-Term Debt	13,086.1		13,154.9		3,254.0		3,429.2		2,944.8		3,024.1		805.2		819.5
Rate Reduction Bonds	635.7		645.8		—		—		—		—		635.7		645.8

As of September 30, 2017 As of December 31, 2016
Eversource
(Millions of Dollars)
Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value
Preferred Stock Not Subject to Mandatory Redemption $ 155.6
$ 160.3
$ 155.6
$ 158.3
Long-Term Debt 11,425.9
11,968.1
9,603.2
9,980.5

CL&P NSTAR Electric PSNH WMECO
(Millions of Dollars)
Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value
As of September 30, 2017:
Preferred Stock Not Subject to Mandatory Redemption $ 116.2
$ 115.9
$ 43.0
$ 44.4
$ —
$ —
$ —
$ —
Long-Term Debt 3,058.9
3,388.8
2,426.2
2,598.1
1,002.6
1,047.0
566.2
603.7

As of December 31, 2016:
Preferred Stock Not Subject to Mandatory Redemption $ 116.2
$ 114.7
$ 43.0
$ 43.6
$ —
$ —
$ —
$ —
Long-Term Debt 2,766.0
3,049.6
2,078.1
2,201.6
1,072.0
1,109.7
566.5
589.0

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

~~11.~~12. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

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



	For the Six Months Ended June 30, 2019												For the Six Months Ended June 30, 2018
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 Losses on Marketable Securities			Defined Benefit Plans			Total
Balance as of January 1st	$	(4.4	)	$	(0.5	)	$	(55.1	)	$	(60.0	)	$	(6.2	)	$	—		$	(60.2	)	$	(66.4	)

OCI Before Reclassifications	—			1.1			2.6			3.7			—			(0.6		)	2.6			2.0
Amounts Reclassified from AOCI	0.6			—			2.1			2.7			1.2			—			2.2			3.4
Net OCI	0.6			1.1			4.7			6.4			1.2			(0.6		)	4.8			5.4
Balance as of June 30th	$	(3.8	)	$	0.6		$	(50.4	)	$	(53.6	)	$	(5.0	)	$	(0.6	)	$	(55.4	)	$	(61.0	)

For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016
Qualified Unrealized Qualified Unrealized
Cash Flow Gains Cash Flow Gains/(Losses)
Eversource
(Millions of Dollars)
Hedging on Marketable Defined Hedging on Marketable Defined
Instruments Securities Benefit Plans Total Instruments Securities Benefit Plans Total
Balance as of Beginning of Period $ (8.2 ) $ 0.4
$ (57.5 ) $ (65.3 ) $ (10.3 ) $ (1.9 ) $ (54.6 ) $ (66.8 )

OCI Before Reclassifications —
0.7
(3.5 ) (2.8 ) —
2.3
(5.3 ) (3.0 )
Amounts Reclassified from AOCL 1.6
—
2.9
4.5
1.6
—
2.6
4.2
Net OCI 1.6
0.7
(0.6 ) 1.7
1.6
2.3
(2.7 ) 1.2
Balance as of End of Period $ (6.6 ) $ 1.1
$ (58.1 ) $ (63.6 ) $ (8.7 ) $ 0.4
$ (57.3 ) $ (65.6 )

Eversource's qualified cash flow hedging instruments represent interest rate swap agreements on debt issuances that were settled in prior years. The settlement amount was recorded in ~~AOCL~~AOCI and is being amortized into Net Income over the term of the underlying debt instrument. CL&P, ~~PSNH~~NSTAR Electric and ~~WMECO~~PSNH continue to amortize interest rate swaps settled in prior years from ~~AOCL~~AOCI into Interest Expense over the remaining life of the associated long-term debt. Such interest rate swaps are not material to their respective financial statements.

Defined benefit plan OCI amounts before reclassifications relate to actuarial gains and losses ~~and prior service costs~~ that arose during the year and were recognized in ~~AOCL.~~AOCI. The unamortized actuarial gains and losses and prior service costs on the defined benefit plans are amortized from ~~AOCL~~AOCI into ~~Operations and Maintenance expense~~Other Income, Net over the average future employee service period, and are reflected in amounts reclassified from ~~AOCL. For further information, see Note 7, "Pension Benefits~~AOCI.

Eversource did not elect to reclassify the income tax effects of the Tax Cuts and ~~Postretirement Benefits Other Than Pensions."~~Jobs Act from AOCI to Retained Earnings as permitted by ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220).

~~12.~~

13. COMMON SHARES

The following table sets forth the Eversource parent common shares and the shares of common stock of CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~PSNH that were authorized and issued, as well as the respective per share par values:



	Shares
			Authorized as of June 30, 2019 and December 31, 2018	Issued as of
	Par Value		Authorized as of June 30, 2019 and December 31, 2018	June 30, 2019	December 31, 2018
Eversource	$	5	380,000,000	339,858,402	333,878,402
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

Shares
Authorized as of September 30, 2017 and Issued as of
Par Value December 31, 2016 September 30, 2017 December 31, 2016
Eversource $ 5
380,000,000
333,878,402
333,878,402
CL&P $ 10
24,500,000
6,035,205
6,035,205
NSTAR Electric $ 1
100,000,000
100
100
PSNH $ 1
100,000,000
301
301
WMECO $ 25
1,072,471
434,653
434,653

Common Share Issuance and Forward Sale Agreement: On June 4, 2019, Eversource completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by the Company and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

Under the forward sale agreement, a total of 11,960,000 common shares were borrowed from third parties and sold to the underwriters. The forward sale agreement allows Eversource, at its election and prior to May 29, 2020, to physically settle the forward sale agreement by issuing common shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially, $71.48 per share) or, alternatively, to settle the forward sale agreement in whole or in part through the delivery or receipt of shares or cash. The forward sale price is subject to adjustment daily based on a floating interest rate factor and will decrease in respect of certain fixed amounts specified in the agreement, such as dividends.

Eversource’s intent is to physically settle the forward sale agreement by issuing common shares. As of ~~both September~~June 30, ~~2017~~2019, if Eversource had elected to net settle the forward sale agreement, Eversource would have been required to pay $50.2 million under a cash settlement or would have been required to deliver 662,694 common shares under a net share settlement.

Issuances of shares under the forward sale agreement are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreement have or will be recorded in the financial statements until settlements take place. Prior to any settlements, the only impact to the financial statements is the inclusion of incremental shares within the calculation of diluted EPS using the treasury stock method. See Note 15, "Earnings Per Share," for information on the forward sale agreement’s impact on the calculation of diluted EPS.

Treasury Shares: As of June 30, 2019 and December 31, ~~2016,~~2018, there were 16,283,963 and 16,992,594 Eversource common shares held as treasury ~~shares.~~shares, respectively. As of ~~both September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, Eversource common shares outstanding were ~~316,885,808.~~323,574,439 and 316,885,808, respectively.

~~13.~~14. COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $1.9 million for ~~both~~each of the three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018 and ~~$5.6~~$3.8 million for ~~both~~each of the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~2018. 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~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018. On the Eversource balance sheets, Common Shareholders' Equity was fully attributable to ~~the~~Eversource parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest.

~~14.~~15. EARNINGS PER SHARE

Basic EPS is computed based upon the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of common shares outstanding plus the potential dilutive effect of certain share-based compensation awards and the equity forward sale agreement, as if they were converted into outstanding common shares. The dilutive effect of unvested RSU and performance share awards, as well as the equity forward sale agreement, is calculated using the treasury stock method. RSU and performance share awards are included in basic weighted average common shares outstanding as of the date that all necessary vesting conditions have been satisfied. ~~For~~

As described in Note 13, "Common Shares," earnings per share dilution, if any, related to the ~~three and nine months ended September 30, 2017 and 2016, there were no antidilutive share awards excluded from~~forward sale agreement will be determined under the ~~computation~~treasury stock method until settlement of the forward sale agreement. Under this method, the number of Eversource common shares used in calculating diluted ~~EPS.~~EPS is deemed to be increased by the excess, if any, of the number of shares that would be issued upon physical settlement of the forward sale agreement less the number of shares that would be purchased by Eversource in the market (based on the average market price during the same reporting period) using the proceeds receivable upon settlement (based on the adjusted forward sale price at the end of that reporting period). Share dilution occurs when the average market price of Eversource's common shares is higher than the adjusted forward sale price.

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 Six Months Ended
Eversource (Millions of Dollars, except share information)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Net Income Attributable to Common Shareholders	$	31.5	$	242.8	$	340.1	$	512.3
Weighted Average Common Shares Outstanding:
Basic	319,664,998		317,344,596		318,644,796		317,370,825
Dilutive Effect of:
Share-Based Compensation Awards and Other	645,450		540,591		668,470		568,269
Equity Forward Sale Agreement	78,042		—		39,021		—
Total Dilutive Effect	723,492		540,591		707,491		568,269
Diluted	320,388,490		317,885,187		319,352,287		317,939,094
Basic and Diluted EPS	$	0.10	$	0.76	$	1.07	$	1.61

Eversource
(Millions of Dollars, except share information)
For the Three Months Ended For the Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net Income Attributable to Common Shareholders $ 260.4
$ 265.3
$ 750.6
$ 713.1
Weighted Average Common Shares Outstanding:
Basic 317,393,029
317,787,836
317,415,848
317,696,823
Dilutive Effect 556,367
789,243
591,194
814,786
Diluted 317,949,396
318,577,079
318,007,042
318,511,609
Basic and Diluted EPS $ 0.82
$ 0.83
$ 2.36
$ 2.24

~~15.~~16. REVENUES

The following tables present operating revenues disaggregated by revenue source:



	For the Three Months Ended June 30, 2019
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	$	805.0		$	100.2		$	—	$	33.6		$	—	$	—		$	938.8
Commercial	612.8			69.5			—		16.0			—		(0.9		)	697.4
Industrial	81.3			23.5			—		1.1			—		(2.8		)	103.1
Total Retail Tariff Sales Revenues	1,499.1			193.2			—		50.7			—		(3.7		)	1,739.3
Wholesale Transmission Revenues	—			—			281.2		—			14.7		(239.8		)	56.1
Wholesale Market Sales Revenues	39.4			14.4			—		0.9			—		—			54.7
Other Revenues from Contracts with Customers	15.1			0.4			3.7		1.8			236.1		(236.8		)	20.3
Reserve for Revenues Subject to Refund	(3.1		)	1.5			—		(0.6		)	—		—			(2.2		)
Total Revenues from Contracts with Customers	1,550.5			209.5			284.9		52.8			250.8		(480.3		)	1,868.2
Alternative Revenue Programs	6.3			(2.7		)	64.6		0.7			—		(58.8		)	10.1
Other Revenues ⁽¹⁾	5.0			0.9			0.1		0.2			—		—			6.2
Total Operating Revenues	$	1,561.8		$	207.7		$	349.6	$	53.7		$	250.8	$	(539.1	)	$	1,884.5


	For the Six Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission		Water Distribution			Other		Eliminations			Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	1,838.3		$	359.1		$	—	$	60.5		$	—	$	—		$	2,257.9
Commercial	1,265.3			213.3			—		30.3			—		(2.0		)	1,506.9
Industrial	163.4			54.4			—		2.2			—		(5.5		)	214.5
Total Retail Tariff Sales Revenues	3,267.0			626.8			—		93.0			—		(7.5		)	3,979.3
Wholesale Transmission Revenues	—			—			606.1		—			28.3		(510.7		)	123.7
Wholesale Market Sales Revenues	90.8			36.1			—		1.9			—		—			128.8
Other Revenues from Contracts with Customers	27.7			1.4			6.9		3.5			480.7		(482.2		)	38.0
Reserve for Revenues Subject to Refund	(6.1		)	3.1			—		(1.2		)	—		—			(4.2		)
Total Revenues from Contracts with Customers	3,379.4			667.4			613.0		97.2			509.0		(1,000.4		)	4,265.6
Alternative Revenue Programs	8.4			7.7			77.0		1.5			—		(69.8		)	24.8
Other Revenues ⁽¹⁾	7.8			1.5			0.1		0.5			—		—			9.9
Total Operating Revenues	$	3,395.6		$	676.6		$	690.1	$	99.2		$	509.0	$	(1,070.2	)	$	4,300.3



	For the Three Months Ended June 30, 2018
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	$	794.4		$	104.1		$	—		$	32.3		$	—	$	—		$	930.8
Commercial	622.0			70.0			—			15.7			—		(2.0		)	705.7
Industrial	88.4			23.5			—			1.1			—		(2.4		)	110.6
Total Retail Tariff Sales Revenues	1,504.8			197.6			—			49.1			—		(4.4		)	1,747.1
Wholesale Transmission Revenues	—			—			310.8			—			12.6		(268.0		)	55.4
Wholesale Market Sales Revenues	34.2			12.1			—			0.9			—		—			47.2
Other Revenues from Contracts with Customers	18.4			(0.6		)	3.2			1.9			224.4		(225.1		)	22.2
Reserve for Revenues Subject to Refund	(7.3		)	(3.5		)	—			(0.5		)	—		—			(11.3		)
Total Revenues from Contracts with Customers	1,550.1			205.6			314.0			51.4			237.0		(497.5		)	1,860.6
Alternative Revenue Programs	(14.4		)	0.1			3.4			1.9			—		(2.9		)	(11.9		)
Other Revenues	4.2			0.8			—			0.2			—		—			5.2
Total Operating Revenues	$	1,539.9		$	206.5		$	317.4		$	53.5		$	237.0	$	(500.4	)	$	1,853.9


	For the Six Months Ended June 30, 2018
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	$	1,788.7		$	352.9		$	—		$	59.7		$	—	$	—		$	2,201.3
Commercial	1,233.4			204.7			—			30.0			—		(2.1		)	1,466.0
Industrial	169.9			53.1			—			2.1			—		(5.0		)	220.1
Total Retail Tariff Sales Revenues	3,192.0			610.7			—			91.8			—		(7.1		)	3,887.4
Wholesale Transmission Revenues	—			—			624.5			—			22.7		(526.7		)	120.5
Wholesale Market Sales Revenues	92.7			29.9			—			1.7			—		—			124.3
Other Revenues from Contracts with Customers	35.3			(0.9		)	6.2			3.7			445.2		(446.3		)	43.2
Reserve for Revenues Subject to Refund	(26.5		)	(8.0		)	—			(2.0		)	—		—			(36.5		)
Total Revenues from Contracts with Customers	3,293.5			631.7			630.7			95.2			467.9		(980.1		)	4,138.9
Alternative Revenue Programs	(5.7		)	(1.7		)	(8.3		)	2.6			—		7.7			(5.4		)
Other Revenues	6.7			1.4			—			0.2			—		—			8.3
Total Operating Revenues	$	3,294.5		$	631.4		$	622.4		$	98.0		$	467.9	$	(972.4	)	$	4,141.8



	For the Three Months Ended June 30, 2019									For the Three Months Ended June 30, 2018
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Revenues from Contracts with Customers
Retail Tariff Sales																��
Residential	$	402.8		$	282.3		$	119.9		$	387.1		$	292.5		$	114.8
Commercial	224.7			315.8			72.7			220.7			325.5			76.2
Industrial	33.8			28.9			18.6			36.5			30.9			21.0
Total Retail Tariff Sales Revenues	661.3			627.0			211.2			644.3			648.9			212.0
Wholesale Transmission Revenues	115.9			127.5			37.8			139.9			120.9			50.1
Wholesale Market Sales Revenues	12.1			17.2			10.1			10.6			13.4			10.9
Other Revenues from Contracts with Customers	9.1			6.1			4.2			8.3			9.3			3.9
Reserve for Revenues Subject to Refund	—			—			(3.1		)	(4.2		)	—			(3.1		)
Total Revenues from Contracts with Customers	798.4			777.8			260.2			798.9			792.5			273.8
Alternative Revenue Programs	55.1			2.1			13.7			1.0			(6.9		)	(5.0		)
Other Revenues ⁽¹⁾	2.7			1.9			0.5			2.4			1.6			0.2
Eliminations	(115.4		)	(99.9		)	(33.5		)	(107.4		)	(96.5		)	(33.9		)
Total Operating Revenues	$	740.8		$	681.9		$	240.9		$	694.9		$	690.7		$	235.1

	For the Six Months Ended June 30, 2019									For the Six Months Ended June 30, 2018
(Millions of Dollars)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	913.4		$	653.2		$	271.7		$	870.4		$	656.7		$	261.6
Commercial	461.3			652.3			152.6			443.2			640.0			151.1
Industrial	68.4			57.8			37.2			72.3			59.0			38.6
Total Retail Tariff Sales Revenues	1,443.1			1,363.3			461.5			1,385.9			1,355.7			451.3
Wholesale Transmission Revenues	270.7			250.1			85.3			290.6			239.5			94.3
Wholesale Market Sales Revenues	25.8			41.6			23.4			21.0			38.2			34.9
Other Revenues from Contracts with Customers	18.0			10.1			7.8			16.2			18.3			7.5
Reserve for Revenues Subject to Refund	—			—			(6.1		)	(16.6		)	(3.7		)	(6.2		)
Total Revenues from Contracts with Customers	1,757.6			1,665.1			571.9			1,697.1			1,648.0			581.8
Alternative Revenue Programs	60.9			9.3			15.2			(4.1		)	(0.2		)	(9.6		)
Other Revenues ⁽¹⁾	3.7			3.4			0.8			3.3			2.7			0.6
Eliminations	(232.1		)	(198.3		)	(70.6		)	(216.4		)	(189.6		)	(70.3		)
Total Operating Revenues	$	1,590.1		$	1,479.5		$	517.3		$	1,479.9		$	1,460.9		$	502.5

⁽¹⁾

Other Revenues include certain fees charged to customers, which are not considered revenue from contracts with customers. Other revenues also includes lease revenues under lessor accounting guidance of $1.1 million at Eversource, $0.3 million at CL&P, and $0.7 million at NSTAR Electric for the three months ended June 30, 2019, and $2.2 million at Eversource, $0.5 million at CL&P, and $1.3 million at NSTAR Electric for the six months ended June 30, 2019, respectively.

17. SEGMENT INFORMATION

~~Presentation:~~Eversource is organized ~~among~~into the Electric Distribution, Electric Transmission, ~~and~~ 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, ~~and~~ 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 PSNH's generation ~~activities~~facilities prior to sales in January and August 2018, and 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 ~~NSTAR Electric, PSNH and WMECO.~~ company resources.

The remainder of Eversource's operations is presented as Other in the tables below and primarily consists of 1) the equity in earnings of Eversource parent from its subsidiaries and intercompany interest income, both of which are eliminated in consolidation, and interest expense related to the debt of Eversource parent, 2) the revenues and expenses of Eversource Service, most of which are eliminated in consolidation, 3) the operations of CYAPC and YAEC, 4) Eversource Water Ventures, Inc., parent company of Aquarion, and 4)5) the results of other unregulated subsidiaries, which are not part of its core business. In addition, Other in the tables below includes Eversource parent's equity ownership interests ~~in certain~~that are not consolidated, which include anatural gas pipeline ~~projects~~project owned by Enbridge, Inc., the ~~Bay State Wind project,~~offshore wind business, a renewable energy investment fund, and two companies that transmit hydroelectricity imported from the Hydro-Quebec system in Canada. In the ordinary course of business, Yankee Gas and NSTAR Gas purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline ~~projects~~project described above. These affiliate transaction costs total approximately $62.5 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 one reportable segment.

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

Eversource's 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. Each of Eversource's subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, has one reportable segment. Eversource's operating segments and reporting units are consistent with its reportable business segments.

Eversource's segment information is as follows:


	For the Three Months Ended September 30, 2017																		For the Three Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	1,547.1		$	109.2		$	328.5		$	224.2		$	(220.5	)	$	1,988.5		$	1,561.8		$	207.7		$	349.6		$	53.7		$	250.8		$	(539.1	)	$	1,884.5
Depreciation and Amortization	(159.6		)	(15.2		)	(52.6		)	(9.5		)	0.6			(236.3		)	(150.1		)	(19.5		)	(62.3		)	(12.0		)	(14.7		)	0.6			(258.0		)
Impairment of Northern Pass Transmission																			—			—			(239.6		)	—			—			—			(239.6		)
Other Operating Expenses	(1,088.7		)	(95.5		)	(95.5		)	(190.0		)	220.1			(1,249.6		)	(1,243.0		)	(179.8		)	(108.4		)	(25.0		)	(218.4		)	538.7			(1,235.9		)
Operating Income/(Loss)	$	298.8		$	(1.5	)	$	180.4		$	24.7		$	0.2		$	502.6		$	168.7		$	8.4		$	(60.7	)	$	16.7		$	17.7		$	0.2		$	151.0
Interest Expense	$	(51.3	)	$	(10.8	)	$	(29.2	)	$	(21.8	)	$	4.4		$	(108.7	)	$	(50.8	)	$	(11.9	)	$	(30.5	)	$	(8.6	)	$	(44.5	)	$	13.6		$	(132.7	)
Other Income, Net	7.7			0.3			8.5			267.5			(262.8		)	21.2
Other Income/(Loss), Net																			12.2			0.7			8.7			0.1			(114.9		)	139.1			45.9
Net Income/(Loss) Attributable to Common Shareholders	157.4			(6.2		)	99.0			268.4			(258.2		)	260.4			105.4			(1.8		)	(87.4		)	8.0			(145.6		)	152.9			31.5


	For the Nine Months Ended September 30, 2017																		For the Six Months Ended June 30, 2019
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	4,224.2		$	698.8		$	970.0		$	677.5		$	(714.0	)	$	5,856.5		$	3,395.6		$	676.6		$	690.1		$	99.2		$	509.0		$	(1,070.2	)	$	4,300.3
Depreciation and Amortization	(394.9		)	(54.8		)	(154.5		)	(26.7		)	1.7			(629.2		)	(329.3		)	(39.9		)	(123.7		)	(23.9		)	(28.3		)	1.1			(544.0		)
Impairment of Northern Pass Transmission																			—			—			(239.6		)	—			—			—			(239.6		)
Other Operating Expenses	(3,056.0		)	(535.2		)	(280.4		)	(602.4		)	714.0			(3,760.0		)	(2,718.6		)	(521.1		)	(207.2		)	(49.9		)	(444.0		)	1,069.8			(2,871.0		)
Operating Income	$	773.3		$	108.8		$	535.1		$	48.4		$	1.7		$	1,467.3		$	347.7		$	115.6		$	119.6		$	25.4		$	36.7		$	0.7		$	645.7
Interest Expense	$	(149.0	)	$	(32.3	)	$	(86.1	)	$	(63.1	)	$	11.0		$	(319.5	)	$	(100.0	)	$	(23.7	)	$	(61.0	)	$	(17.2	)	$	(88.6	)	$	26.1		$	(264.4	)
Other Income, Net	15.2			0.8			20.1			853.9			(833.7		)	56.3			30.4			1.0			16.8			0.4			316.8			(288.5		)	76.9
Net Income Attributable to Common Shareholders	393.4			49.1			289.6			839.5			(821.0		)	750.6			225.4			74.7			30.9			8.8			262.0			(261.7		)	340.1
Cash Flows Used for Investments in Plant	752.4			209.8			575.6			104.5			—			1,642.3			571.3			202.7			449.2			51.4			103.2			—			1,377.8


	For the Three Months Ended September 30, 2016
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Other			Eliminations			Total
Operating Revenues	$	1,623.4		$	99.2		$	306.8		$	211.5		$	(201.2	)	$	2,039.7
Depreciation and Amortization	(154.8		)	(15.2		)	(47.1		)	(8.6		)	0.5			(225.2		)
Other Operating Expenses	(1,146.8		)	(87.8		)	(90.2		)	(179.3		)	199.5			(1,304.6		)
Operating Income/(Loss)	$	321.8		$	(3.8	)	$	169.5		$	23.6		$	(1.2	)	$	509.9
Interest Expense	$	(49.0	)	$	(10.2	)	$	(26.9	)	$	(15.1	)	$	1.3		$	(99.9	)
Other Income, Net	5.3			0.6			6.3			256.9			(255.5		)	13.6
Net Income/(Loss) Attributable to Common Shareholders	170.1			(7.0		)	88.4			268.5			(254.7		)	265.3

	For the Nine Months Ended September 30, 2016																		For the Three Months Ended June 30, 2018
Eversource (Millions of Dollars)	Electric Distribution			Natural Gas Distribution			Electric Transmission			Other			Eliminations			Total			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues	$	4,362.6		$	622.3		$	892.5		$	636.8		$	(651.7	)	$	5,862.5		$	1,539.9		$	206.5		$	317.4		$	53.5		$	237.0		$	(500.4	)	$	1,853.9
Depreciation and Amortization	(380.9		)	(47.9		)	(137.7		)	(23.1		)	1.6			(588.0		)	(135.5		)	(19.3		)	(57.0		)	(12.2		)	(11.9		)	0.6			(235.3		)
Other Operating Expenses	(3,230.1		)	(462.4		)	(245.7		)	(564.7		)	650.2			(3,852.7		)	(1,233.0		)	(170.6		)	(88.8		)	(24.5		)	(211.7		)	501.4			(1,227.2		)
Operating Income	$	751.6		$	112.0		$	509.1		$	49.0		$	0.1		$	1,421.8		$	171.4		$	16.6		$	171.6		$	16.8		$	13.4		$	1.6		$	391.4
Interest Expense	$	(144.6	)	$	(30.8	)	$	(82.2	)	$	(45.8	)	$	4.8		$	(298.6	)	$	(52.1	)	$	(11.4	)	$	(30.0	)	$	(8.6	)	$	(32.3	)	$	8.0		$	(126.4	)
Other Income, Net	11.6			0.5			14.2			781.4			(784.0		)	23.7
Other Income/(Loss), Net																			19.0			1.6			9.9			(0.6		)	302.0			(281.8		)	50.1
Net Income Attributable to Common Shareholders																			101.3			5.0			112.7			7.2			288.8			(272.2		)	242.8

																			For the Six Months Ended June 30, 2018
Eversource (Millions of Dollars)																			Electric Distribution			Natural Gas Distribution			Electric Transmission			Water Distribution			Other			Eliminations			Total
Operating Revenues																			$	3,294.5		$	631.4		$	622.4		$	98.0		$	467.9		$	(972.4	)	$	4,141.8
Depreciation and Amortization																			(279.9		)	(45.7		)	(113.5		)	(22.9		)	(23.9		)	1.1			(484.8		)
Other Operating Expenses																			(2,676.5		)	(483.2		)	(172.0		)	(48.4		)	(416.3		)	973.3			(2,823.1		)
Operating Income																			$	338.1		$	102.5		$	336.9		$	26.7		$	27.7		$	2.0		$	833.9
Interest Expense																			$	(99.5	)	$	(22.5	)	$	(59.7	)	$	(16.9	)	$	(64.3	)	$	15.4		$	(247.5	)
Other Income/(Loss), Net																			38.6			3.5			17.8			(1.1		)	662.1			(637.0		)	83.9
Net Income Attributable to Common Shareholders	381.3			51.9			266.6			791.7			(778.4		)	713.1			205.5			62.8			220.1			8.7			634.8			(619.6		)	512.3
Cash Flows Used for Investments in Plant	570.9			170.3			536.2			81.8			—			1,359.2			475.6			150.3			508.5			40.2			77.1			—			1,251.7

The following table summarizes Eversource's segmented total assets:

Eversource
(Millions of Dollars)
Electric
Distribution

Natural Gas
Distribution
Electric
Transmission Other Eliminations Total
As of September 30, 2017 $ 18,826.0
$ 3,432.6
$ 9,290.3
$ 14,939.4
$ (13,324.7 ) $ 33,163.6
As of December 31, 2016 18,367.5
3,303.8
8,751.5
14,493.1
(12,862.7 ) 32,053.2



Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations			Total
As of June 30, 2019	$	21,628.8	$	4,031.3	$	10,499.7	$	2,290.5	$	18,550.4	$	(18,004.8	)	$	38,995.9
As of December 31, 2018	21,389.1		3,904.9		10,285.0		2,253.0		17,874.2		(17,464.9		)	38,241.3

For further information regarding the 2019 impairment of NPT, see Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the financial statements.

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 reports~~Quarterly Report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2017 and June 30, 2017,~~2019, as well as the Eversource ~~2016~~2018 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 ~~and WMECO~~ 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 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. ~~We use this~~Our earnings discussion also includes a non-GAAP financial measure referencing our 2019 earnings and EPS excluding the impairment charge for the NPT project.

We use these non-GAAP financial measures to evaluate and provide details of earnings results by ~~business.~~business and to more fully compare and explain our 2019 results without including the impact of the NPT impairment charge. We believe the NPT impairment charge is not indicative of our ongoing performance. Due to the nature and significance of the impairment charge on Net Income Attributable to Common Shareholders, we believe that the non-GAAP presentation is a more meaningful ~~representative~~representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance byof our business. ~~This~~These non-GAAP financial ~~measure~~measures should not be considered as an alternative to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as an indicator of operating performance.

From time to time, 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:

~~cyber~~cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers,

acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our transmission and distribution systems,

ability or inability to commence and complete our major strategic development projects and opportunities,

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 related to our current or future business model,

increased conservation measures of customers and development of alternative energy sources,

contamination of, or disruption in, our water supplies,

changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability,

~~fluctuations in weather patterns,~~

~~changes in laws, regulations or regulatory policy,~~

changes in levels or timing of capital expenditures,

disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly,

~~developments~~changes in ~~legal~~laws, regulations or ~~public~~regulatory policy, ~~doctrines,~~

~~technological developments,~~including compliance with environmental laws and regulations,

changes in accounting standards and financial reporting regulations,

actions of rating agencies, and

other presently unknown or unforeseen factors.

Other risk factors are detailed in our reports filed with the SEC and updated as necessary, and we encourage you to consult such disclosures.

All such factors are difficult to predict and contain uncertainties that may materially affect our actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business 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 ~~2016~~2018 combined Annual Report on Form 10-K. This combined Quarterly Report on Form 10-Q and Eversource's ~~2016~~2018 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

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

~~Results:~~Earnings Overview and Future Outlook:

•

We earned $31.5 million, or $0.10 per share, in the second quarter of 2019, and $340.1 million, or $1.07 per share, in the first half of 2019, compared with $242.8 million, or $0.76 per share, in the second quarter of 2018, and $512.3 million, or $1.61 per share, in the first half of 2018. Results for the second quarter and first half of 2019 include an after-tax impairment charge of $204.4 million, or $0.64 per share, related to our investment in the NPT project. Excluding that impairment charge, we earned $235.9 million, or $0.74 per share, in the second quarter of 2019, and $544.5 million, or $1.71 per share, in the first half of 2019.

WeOur electric distribution segment earned ~~$260.4~~$105.4 million, or ~~$0.82~~$0.33 per share, in the ~~third~~second quarter of ~~2017,~~2019, and ~~$750.6~~$225.4 million, or ~~$2.36~~$0.71 per share, in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$265.3~~$101.3 million, or ~~$0.83~~$0.32 per share, in the ~~third~~second quarter of ~~2016,~~2018, and ~~$713.1~~$205.5 million, or ~~$2.24~~$0.65 per share, in the first ~~nine months~~half of ~~2016.~~

Our electric distribution segment, which includes generation, earned $157.4 million, or $0.50 per share, in the third quarter of 2017, and $393.4 million, or $1.24 per share, in the first nine months of 2017, compared with $170.1 million, or $0.53 per share, in the third quarter of 2016, and $381.3 million, or $1.20 per share, in the first nine months of 2016.

Our electric transmission segment earned $99.0 million, or $0.31 per share, in the third quarter of 2017, and $289.6 million, or $0.91 per share, in the first nine months of 2017, compared with $88.4 million, or $0.28 per share, in the third quarter of 2016, and $266.6 million, or $0.84 per share, in the first nine months of 2016.

2018. Our natural gas distribution segment had a net loss of ~~$6.2~~$(1.8) million in the second quarter of 2019, and earnings of $74.7 million, or $0.23 per share, in the first half of 2019, compared with earnings of $5.0 million, or $0.02 per share, in the ~~third~~second quarter of ~~2017,~~2018, and ~~earnings of $49.1~~$62.8 million, or ~~$0.15~~$0.20 per share, in the first ~~nine months~~half of ~~2017, compared with a net loss of $7.0~~2018. Our water distribution segment earned $8.0 million, or $0.02 per share, in the ~~third~~second quarter of ~~2016,~~2019, and ~~earnings of $51.9~~$8.8 million, or ~~$0.16~~$0.03 per share, in the first ~~nine months~~half of ~~2016.~~ 2019, compared with $7.2 million, or $0.02 per share, in the second quarter of 2018, and $8.7 million, or $0.03 per share, in the first half of 2018.

•

Our electric transmission segment had a net loss of $(87.4) million, or $(0.27) per share, in the second quarter of 2019, and earnings of $30.9 million, or $0.10 per share, in the first half of 2019, compared with earnings of $112.7 million, or $0.35 per share, in the second quarter of 2018, and $220.1 million, or $0.69 per share, in the first half of 2018. Excluding the after-tax NPT impairment charge of $204.4 million, or $0.64 per share, our electric transmission segment earned $117.0 million, or $0.37 per share, in the second quarter of 2019, and $235.3 million, or $0.74 per share, in the first half of 2019.

Eversource parent and other companies earned ~~$10.2~~$7.3 million, or $0.02 per share, in the ~~third~~second quarter of ~~2017~~2019, and ~~$18.5~~$0.3 million in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$13.8~~$16.6 million, or $0.05 per share, in the ~~third~~second quarter of ~~2016~~2018, and ~~$13.3~~$15.2 million, or $0.04 per share, in the first ~~nine months~~half of ~~2016.~~2018.

Excluding the NPT impairment charge, we continue to project non-GAAP 2019 earnings of between $3.40 per share and $3.50 per share.

Liquidity:

Cash flows provided by operating activities totaled ~~$1.49 billion~~$924.6 million in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$1.65 billion~~$698.1 million in the first ~~nine months~~half of ~~2016.~~2018. Investments in property, plant and equipment totaled ~~$1.64~~$1.38 billion in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$1.36~~$1.25 billion in the first ~~nine months~~half of ~~2016.~~2018. Cash ~~and cash equivalents~~ totaled ~~$125.8~~$20.6 million as of ~~September~~June 30, ~~2017,~~2019, compared with ~~$30.3~~$108.1 million as of December 31, ~~2016.~~2018.

On June 4, 2019, we completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by us and 11,960,000 common shares issuable pursuant to a forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

In ~~2017,~~the second quarter of 2019, we issued ~~$2.5~~$1.0 billion of new long-term debt, consisting of ~~$1.2 billion~~$300 million by ~~Eversource parent, $700~~CL&P, $400 million by NSTAR Electric ~~$525~~and $300 million by ~~CL&P, and $75 million by Yankee Gas.~~PSNH. Proceeds from these new issuances were used primarily to ~~pay~~repay short-term borrowings and ~~redeem~~to repay long-term debt at maturity.

May 23, 2019.

~~Strategic, Legislative, Regulatory, Policy and Other Items:~~Strategic:

On ~~October 6, 2017,~~July 19, 2019, the FERC issued an order that did not accept the NETOs June 5, 2017 filing to reinstate the base ROE of 11.14 percent with an associated ROE incentive cap of 13.5 percent. Therefore, the Company will continue to recognize transmission revenues as billed utilizing a base ROE of 10.57 percent with an incentive cap of 11.74 percent.

~~On October 12, 2017, PSNH filed an application with the NHPUC requesting approval of the sale of PSNH's thermal and hydroelectric power generation assets in~~ New Hampshire ~~to private investors for~~Supreme Court issued a ~~combined purchase price totaling $258 million.~~

~~On October 29, 2017, a storm delivered high winds~~decision denying Northern Pass’ appeal and ~~rain, causing extensive damage to our electric distribution systems across all three states. We estimate~~affirming the NHSEC’s evaluation and decision in March 2018 that ~~more than 800,000 of our electric distribution customers were without power during or following the storm. Restoration costs cannot be estimated at this time.~~denied Northern Pass’ siting application. As a result of the ~~extent~~New Hampshire Supreme Court decision, Eversource concluded that construction of the ~~damages, we expect~~project was no longer probable and that substantially all of the ~~storm restoration~~capitalized project costs, which totaled $318 million, certain of which are subject to cost reimbursement agreements, were impaired. Eversource recorded a pre-tax impairment charge of $239.6 million (after-tax charge of $204.4 million, or $0.64 per share) for the three and six months ended June 30, 2019, which was reflected in the Electric Transmission segment.

On July 18, 2019, NYSERDA announced that Sunrise Wind, a joint project between Eversource and Ørsted, was selected to negotiate a 25-year power purchase agreement for an 880 MW offshore wind facility. Sunrise Wind will be ~~material~~developed 30 miles east of Montauk Point, Long Island. Subject to contract signing and ~~will exceed~~Eversource’s and Ørsted's final investment decisions, the ~~criteria~~project is expected to be ~~declared a major storm~~operational in ~~Connecticut, New Hampshire, and Massachusetts and, as a result, we do not expect the storm to have a material impact on our results of operations.~~2024.

Earnings Overview

Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial ~~measure~~measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP ~~measure~~measures of consolidated Net Income Attributable to Common Shareholders and diluted ~~EPS, for the third quarter and the first nine months of 2017 and 2016.~~ EPS.

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 2017 2016
(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)
$ 260.4
$ 0.82
$ 265.3
$ 0.83
$ 750.6
$ 2.36
$ 713.1
$ 2.24
Regulated Companies $ 250.2
$ 0.79
$ 251.5
$ 0.79
$ 732.1
$ 2.30
$ 699.8
$ 2.20
Eversource Parent and Other Companies 10.2
0.03
13.8
0.04
18.5
0.06
13.3
0.04
Net Income Attributable to Common Shareholders (GAAP) $ 260.4
$ 0.82
$ 265.3

$ 0.83
$ 750.6
$ 2.36
$ 713.1
$ 2.24



	For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2019						2018				2019						2018
(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)	$	31.5		$	0.10		$	242.8	$	0.76	$	340.1		$	1.07		$	512.3	$	1.61

Regulated Companies	$	228.6		$	0.72		$	226.2	$	0.71	$	544.2		$	1.71		$	497.1	$	1.57
Eversource Parent and Other Companies	7.3			0.02			16.6		0.05		0.3			—			15.2		0.04
Non-GAAP Earnings	$	235.9		$	0.74		$	242.8	$	0.76	$	544.5		$	1.71		$	512.3	$	1.61
Impairment of Northern Pass Transmission (after-tax)	(204.4		)	(0.64		)	—		—		(204.4		)	(0.64		)	—		—
Net Income Attributable to Common Shareholders (GAAP)	$	31.5		$	0.10		$	242.8	$	0.76	$	340.1		$	1.07		$	512.3	$	1.61

Regulated Companies: Our ~~Regulated~~regulated companies ~~consist of~~comprise the electric distribution, electric transmission, ~~and~~ natural gas distribution ~~segments. Generation activities of PSNH~~ and ~~WMECO are included in our electric~~water distribution ~~segment.~~segments. A summary of our segment earnings and EPS ~~for the third quarter and the first nine months of 2017 and 2016~~ is as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 2017 2016
(Millions of Dollars, Except Per-Share Amounts) Amount Per Share Amount Per Share Amount Per Share Amount Per Share
Electric Distribution $ 157.4
$ 0.50
$ 170.1
$ 0.53
$ 393.4
$ 1.24
$ 381.3
$ 1.20
Electric Transmission 99.0
0.31
88.4
0.28
289.6
0.91
266.6
0.84
Natural Gas Distribution (6.2 ) (0.02 ) (7.0 ) (0.02 ) 49.1
0.15
51.9
0.16
Net Income - Regulated Companies $ 250.2
$ 0.79
$ 251.5
$ 0.79
$ 732.1
$ 2.30
$ 699.8
$ 2.20



	For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2019						2018				2019						2018
(Millions of Dollars, Except Per Share Amounts)	Amount			Per Share			Amount		Per Share		Amount			Per Share			Amount		Per Share
Net Income - Regulated Companies (GAAP)	$	24.2		$	0.08		$	226.2	$	0.71	$	339.8		$	1.07		$	497.1	$	1.57

Electric Distribution	$	105.4		$	0.33		$	101.3	$	0.32	$	225.4		$	0.71		$	205.5	$	0.65
Electric Transmission, excluding Northern Pass Transmission impairment (Non-GAAP)	117.0			0.37			112.7		0.35		235.3			0.74			220.1		0.69
Natural Gas Distribution	(1.8		)	—			5.0		0.02		74.7			0.23			62.8		0.20
Water Distribution	8.0			0.02			7.2		0.02		8.8			0.03			8.7		0.03
Net Income - Regulated Companies (Non-GAAP)	$	228.6		$	0.72		$	226.2	$	0.71	$	544.2		$	1.71		$	497.1	$	1.57
Impairment of Northern Pass Transmission (after-tax)	(204.4		)	(0.64		)	—		—		(204.4		)	(0.64		)	—		—
Net Income - Regulated Companies (GAAP)	$	24.2		$	0.08		$	226.2	$	0.71	$	339.8		$	1.07		$	497.1	$	1.57

Our electric distribution segment earnings decreased $12.7 million in the third quarter of 2017, as compared to the third quarter of 2016, due primarily to lower sales volumes and demand revenues driven by the mild summer weather during the third quarter of 2017, primarily at NSTAR Electric, as well as higher property tax, depreciation and interest expense.

Our electric distribution segment earnings increased ~~$12.1~~$4.1 million in the second quarter of 2019, as compared to the second quarter of 2018, due primarily to CL&P base distribution rate increases effective May 1, 2019 and May 1, 2018, an NSTAR Electric base distribution rate increase effective January 1, 2019, and higher earnings from CL&P's capital tracker mechanism effective July 1, 2018 due to increased electric system improvements, partially offset by higher operations and maintenance expense, higher depreciation expense, lower non-service income from our benefit plans and the absence in 2019 of generation earnings at PSNH due to the sale of its generation assets in 2018.

Our electric distribution segment earnings increased $19.9 million in the first ~~nine months~~half of ~~2017,~~2019, as compared to the first ~~nine months~~half of ~~2016,~~2018, due primarily to ~~lower~~CL&P and NSTAR Electric base distribution rate increases, higher earnings from CL&P's capital tracker mechanism effective July 1, 2018 due to increased electric system improvements, and the recognition in the first quarter of 2019 of carrying charges on PSNH storm costs approved for recovery. The earnings increase was partially offset by higher depreciation expense, higher operations and maintenance expense, ~~partially offset by~~ lower ~~sales volumes driven by~~non-service income from our benefit plans, and the ~~mild summer weather during~~absence in 2019 of generation earnings at PSNH due to the ~~third quarter~~sale of ~~2017, primarily at NSTAR Electric, higher depreciation and interest expense, and lower~~its generation ~~earnings.~~assets in 2018.

Our electric transmission segment earnings ~~increased $10.6~~decreased $200.1 million and ~~$23.0~~$189.2 million in the ~~third~~second quarter and first ~~nine months~~half of ~~2017,~~2019, respectively, as compared to the ~~third~~second quarter and first ~~nine months~~half of ~~2016,~~2018, due primarily to the impairment of NPT, which resulted in an after-tax charge of $204.4 million, or $0.64 per share. Excluding the NPT impairment charge, earnings increased $4.3 million and $15.2 million in the second quarter and first half of 2019, respectively, as compared to the second quarter and first half of 2018, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure, partially offset by a lower benefit ~~in the second quarter of 2017 related to~~from the annual billing and cost reconciliation filing with FERC. For further information on the ~~FERC.~~impairment of NPT, see "Business Development and Capital Expenditures - Electric Transmission Business - Northern Pass" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Our natural gas distribution segment ~~results improved $0.8~~earnings decreased $6.8 million in the ~~third~~second quarter of ~~2017,~~2019, as compared to the ~~third~~second quarter of ~~2016,~~2018, due primarily to higher operations and maintenance expense, lower revenues due to the seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides lower earnings ~~decreased $2.8~~in non-heating months, and higher depreciation and property tax expense.

Our natural gas distribution segment earnings increased $11.9 million in the first ~~nine months~~half of ~~2017,~~2019, as compared to the first ~~nine months~~half of ~~2016. The decrease in the first nine months of 2017 was~~2018, due primarily to the impact of the Yankee Gas base distribution rate increase effective November 15, 2018 and higher ~~depreciation expense,~~earnings from capital tracker mechanisms due to continued investment in infrastructure. Yankee Gas' decoupled rate structure is seasonally structured and provides greater earnings in the winter heating months. The earnings increase was partially offset by higher operations and maintenance expense, higher property and ~~lower demand revenues~~other taxes expense, and higher depreciation expense.

Our water distribution segment earnings increased $0.8 million and $0.1 million in ~~Connecticut driven by lower peak usage in 2017,~~the second quarter and first half of 2019, respectively, as compared to ~~2016, as a result~~the second quarter and first half of ~~milder~~2018. Our water distribution business is seasonal, with lower earnings occurring during the winter ~~weather.~~months and higher earnings occurring during the summer months.

Eversource Parent and Other Companies: Eversource parent and other companies ~~earned $10.2~~had earnings of $7.3 million in the ~~third~~second quarter of ~~2017~~2019 and ~~$18.5~~$0.3 million in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$13.8~~$16.6 million in the ~~third~~second quarter of ~~2016~~2018 and ~~$13.3~~$15.2 million in the first ~~nine months~~half of ~~2016.~~2018. The ~~improved year-to-date results were largely~~decrease in earnings in both periods was due primarily to ~~increased gains on~~the absence in 2019 of an income tax benefit associated with our investments ~~recorded~~ in ~~2017,~~the second quarter of 2018, higher interest expense, and a higher effective tax rate, partially offset by higher ~~interest expense.~~return at Eversource Service as a result of increased investments in property, plant and equipment.

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

Fluctuations in retail electric sales volumes at ~~NSTAR Electric and~~ PSNH impact earnings ("Traditional" in the table below). For CL&P, NSTAR Electric, Yankee Gas, and ~~WMECO,~~NSTAR Gas, fluctuations in retail ~~electric~~ sales volumes do not impact earnings due to their respective regulatory ~~commission approved~~commission-approved distribution revenue decoupling mechanisms ("Decoupled" in the table below). These distribution revenues are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. CL&P and WMECO reconcile their annual base distribution rate recovery amounts to their respective pre-established levels of baseline distribution delivery service revenues of $1.059 billion and $132.4 million, respectively. Any difference between the allowed level of distribution revenue and the actual amount incurred during a 12-month period is adjusted through rates in the following period.

Fluctuations in ~~natural gas~~water sales volumes ~~in Connecticut impact earnings ("Traditional" in the table below). In Massachusetts, fluctuations in natural gas sales volumes~~largely do not impact earnings ~~due to the DPU-approved natural gas~~as our Connecticut water distribution revenue decoupling mechanism approved in the last rate case decision ("Decoupled" in the table below). These distribution revenues are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized.business is also decoupled.

A summary of our retail electric GWh sales volumes, ~~and~~ our firm natural gas MMcf sales volumes, ~~as well as~~and our water MG sales volumes, and percentage changes, is as follows:

For the Three Months Ended September 30, 2017 Compared to 2016 For the Nine Months Ended September 30, 2017 Compared to 2016
Sales Volumes (GWh) Percentage Sales Volumes (GWh) Percentage
Electric 2017 2016 Decrease 2017 2016 Decrease
Traditional:
Residential 2,583
2,910
(11.2 )% 7,126
7,407
(3.8 )%
Commercial 4,291
4,525
(5.2 )% 12,058
12,376
(2.6 )%
Industrial 671
696
(3.6 )% 1,856
1,948
(4.7 )%
Total – Traditional 7,545
8,131
(7.2 )% 21,040
21,731
(3.2 )%

Decoupled:
Residential 2,972
3,398
(12.5 )% 8,334
8,750
(4.8 )%
Commercial 2,849
3,039
(6.3 )% 8,003
8,315
(3.8 )%
Industrial 730
776
(5.9 )% 2,054
2,170
(5.3 )%
Total – Decoupled 6,551
7,213
(9.2 )% 18,391
19,235
(4.4 )%
Total Sales Volumes 14,096
15,344
(8.1 )% 39,431
40,966
(3.7 )%



	Electric				Firm Natural Gas				Water
	Sales Volumes (GWh)		Percentage Decrease		Sales Volumes (MMcf)		Percentage Increase/ (Decrease)		Sales Volumes (MG)		Percentage Decrease
Three Months Ended June 30:	2019	2018 ⁽¹⁾	Percentage Decrease		2019	2018 ⁽²⁾	Percentage Increase/ (Decrease)		2019	2018	Percentage Decrease
Traditional	1,757	1,803	(2.6	)%	—	—	—	%	459	485	(5.4	)%
Decoupled and Special Contracts ⁽³⁾	9,853	10,330	(4.6	)%	18,191	18,932	(3.9	)%	4,834	5,016	(3.6	)%
Total Sales Volumes	11,610	12,133	(4.3	)%	18,191	18,932	(3.9	)%	5,293	5,501	(3.8	)%

Six Months Ended June 30:
Traditional	3,724	3,775	(1.4	)%	—	—	—	%	910	953	(4.5	)%
Decoupled and Special Contracts ⁽³⁾	21,037	21,579	(2.5	)%	63,358	61,983	2.2	%	9,212	9,373	(1.7	)%
Total Sales Volumes	24,761	25,354	(2.3	)%	63,358	61,983	2.2	%	10,122	10,326	(2.0	)%

For the Three Months Ended September 30, 2017 Compared to 2016 For the Nine Months Ended September 30, 2017 Compared to 2016
Sales Volumes (MMcf) Percentage Sales Volumes (MMcf) Percentage
Firm Natural Gas 2017 2016 Increase/(Decrease) 2017 2016 Increase/(Decrease)
Traditional:
Residential 1,036
956
8.4 % 10,138
10,109
0.3 %
Commercial 2,482
2,350
5.6 % 14,432
13,864
4.1 %
Industrial 2,032
1,964
3.5 % 7,663
7,597
0.9 %
Total – Traditional 5,550
5,270
5.3 % 32,233
31,570
2.1 %

Decoupled:
Residential 1,244
1,308
(4.9 )% 14,593
13,848
5.4 %
Commercial 2,314
2,147
7.8 % 15,072
15,019
0.4 %
Industrial 1,270
990
28.3 % 4,293
4,163
3.1 %
Total – Decoupled 4,828
4,445
8.6 % 33,958
33,030
2.8 %
Special Contracts ⁽¹⁾
1,147
1,208
(5.0 )% 3,495
3,507
(0.3 )%
Total – Decoupled and Special Contracts 5,975
5,653
5.7 % 37,453
36,537
2.5 %
Total Sales Volumes 11,525
10,923
5.5 % 69,686
68,107
2.3 %


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

For the third quarter and the first nine months of 2017, retail electric sales volumes at our electric utilities with a traditional rate structure (NSTAR Electric and PSNH) were lower, as compared to the third quarter and first nine months of 2016. Sales volumes were negatively impacted by the mild summer weather in the third quarter of 2017, as compared to the same period in 2016, and lower customer usage driven by the impact of increased customer energy conservation efforts. Cooling degree days for the first nine months of 2017 were 17.8 percent lower in the Boston metropolitan area and 24.8 percent lower in New Hampshire, as compared to the same period in 2016.

~~On January 28, 2016, Eversource received approval of a three-year energy efficiency plan in Massachusetts, which includes recovery of LBR at~~⁽¹⁾ Effective February 1, 2018, NSTAR Electric ~~until it is operating~~operated entirely under a decoupled rate structure. The 2018 sales volumes for NSTAR Electric ~~earns LBR related~~have been recast to ~~reductions in sales volume~~present January 2018 as decoupled to conform to the current year presentation.

⁽²⁾ Effective November 15, 2018, Yankee Gas operated under a result of successful energy efficiency programs. LBR is recovered from retail customers through current rates. NSTAR Electric recognized LBR of $18.8 million and $54.7 million in the third quarter and first nine months of 2017, respectively, compared to $17.4 million and $44.1 million in the third quarter and first nine months of 2016, respectively.

~~Our firm natural gas~~decoupled rate structure. The 2018 sales volumes for Yankee Gas have been recast to present 2018 as decoupled to conform to the current year presentation.

⁽³⁾ Special contracts are ~~subject~~unique to ~~many of the same influences as our retail electric sales volumes. In addition, they have benefited from customer growth in both of our~~Yankee Gas natural gas distribution ~~companies. Consolidated firm natural gas sales volumes were higher in~~customers who take service under such an arrangement and generally specify the ~~first nine months~~amount of ~~2017, as compared~~distribution revenue to ~~the first nine months of 2016, due primarily~~be paid to improved economic conditions across our service territories, partially offset by increased customer energy conservation efforts. The first quarter of 2017 mild winter weather was more than offset by colder than normal weather in the second quarter of 2017. Heating degree days for the first nine months of 2017 were 2.2 percent higher in Connecticut, as compared to the same period in 2016.

~~Major Storm:~~ On October 29, 2017, a storm delivered high winds and rain, causing extensive damage to our electric distribution systems across all three states. We estimate that more than 800,000 of our electric distribution customers were without power during or following the storm. Restoration costs cannot be estimated at this time. As a resultYankee Gas regardless of the extent of the damages, we expect the storm restoration costs will be material and will exceed the criteria to be declared a major storm in Connecticut, New Hampshire, and Massachusetts and that each operating company will seek recovery of these costs through its applicable regulatory recovery process. As a result, all qualifying expenses prudently incurred during the storm will be deferred and recovered from customers. We do not expect the storm to have a material impact to the results of operations of CL&P, NSTAR Electric, PSNH or WMECO.customers' usage.

Liquidity

~~Consolidated:~~ Cash ~~and cash equivalents~~ totaled ~~$125.8~~$20.6 million as of ~~September~~June 30, ~~2017,~~2019, compared with ~~$30.3~~$108.1 million as of December 31, ~~2016.~~2018.

~~Long-Term~~Short-Term Debt ~~Issuances:~~ In August 2017, CL&P issued $225 million of 4.30 percent 2014 Series A First and Refunding Mortgage Bonds due to mature in 2044. These bonds are part of the same series of CL&P’s existing 4.30 percent bonds that were initially issued in 2014. The aggregate outstanding principal amount for these bonds is now $475 million. The proceeds, net of issuance costs, were used to refinance short-term debt and fund capital expenditures and working capital.

~~In September 2017, Yankee Gas issued $75 million of 3.02 percent Series N First Mortgage Bonds due to mature in 2027. The proceeds, net of issuance costs, were used to repay short-term borrowings.~~

~~Long-Term Debt Repayments:~~ ~~In September 2017, CL&P repaid at maturity $100 million of 5.75 percent 2007 Series C First Mortgage Bonds and PSNH repaid at maturity $70 million of 6.15 percent 2007 Series N First Mortgage Bonds.~~

~~In October 2017, NSTAR Gas repaid at maturity $25 million of 7.04 percent Series M First Mortgage Bonds.~~

- Commercial Paper Programs and Credit Agreements: Eversource parent has a $1.45 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. As of September 30, 2017 and December 31, 2016, Eversource parent had $917.0 million and approximately $1.0 billion, respectively, in short-term borrowings outstanding under the Eversource parent commercial paper program, leaving $533.0 million and $428.0 million of available borrowing capacity as of September 30, 2017 and December 31, 2016, respectively. The weighted-average interest rate on these borrowings as of September 30, 2017 and December 31, 2016 was 1.34 percent and 0.88 percent, respectively. As of September 30, 2017, there were intercompany loans from Eversource parent of $202.3 million to PSNH, and $96.9 million to WMECO. As of December 31, 2016, there were intercompany loans from Eversource parent of $80.1 million to CL&P, $160.9 million to PSNH and $51.0 million to WMECO. Eversource parent, CL&P, PSNH, ~~WMECO,~~ NSTAR Gas and Yankee Gas are also parties to a five-year $1.45 billion revolving credit ~~facility. The revolving credit~~ facility, which terminates on ~~September 4, 2021.~~December 8, 2023. The revolving credit facility serves to backstop Eversource parent's $1.45 billion commercial paper program.

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit facility, which terminates on December 8, 2023. 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
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
(Millions of Dollars)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Eversource Parent Commercial Paper Program	$	566.0	$	631.5	$	884.0	$	818.5	2.55	%	2.77	%
NSTAR Electric Commercial Paper Program	163.0		278.5		487.0		371.5		2.42	%	2.50	%

~~Except as described below, amounts~~Amounts outstanding under the commercial paper programs and revolving credit facility are included in Notes Payable ~~for Eversource~~ and are 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.

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



(Millions of Dollars)	Issue Date	Issuance/(Repayment)			Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P:
4.00% 2018 Series A First Mortgage Bonds ⁽¹⁾	April 2019	$	300.0		April 2048	Repaid short-term borrowings that were used to repay long-term debt that matured on February 1, 2019 and fund capital expenditures and working capital
5.50% 2009 Series A First Mortgage Bonds	February 2009	(250.0		)	February 2019	Repaid at maturity on February 1, 2019
NSTAR Electric:
3.25% 2019 Debentures	May 2019	400.0			May 2029	Repaid short-term borrowings that were used to fund investments in eligible green expenditures
PSNH:
3.60% 2019 Series T First Mortgage Bonds	June 2019	300.0			July 2049	Repay long-term debt due to mature in December 2019, repaid short-term borrowings and fund capital expenditures and working capital
Other:
NSTAR Gas 3.74% Series Q First Mortgage Bonds	July 2019	75.0			August 2049	Repaid short-term borrowings and fund capital expenditures and working capital


⁽¹⁾	These bonds are part of the same series issued by CL&P in March 2018. The aggregate outstanding principal amount of these bonds is now $800 million.

As a result of the ~~October 2017 Eversource parent long-term~~NSTAR Gas debt ~~issuances, the net proceeds of which were used to repay short-term borrowings outstanding under the Eversource parent commercial paper program, $898.8~~issuance in July 2019, $75 million of ~~short-term~~current portion of long-term debt was reclassified to Long-Term Debt on Eversource's consolidated balance sheet as of ~~September~~June 30, ~~2017.~~2019.

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually, beginning on February 1, 2019. PSNH paid $30.7 million of RRB principal payments and $16.2 million of interest payments in the first half of 2019.

~~NSTAR Electric has~~

Common Share Issuance and Forward Sale Agreement: On June 4, 2019, Eversource completed an equity offering of 17,940,000 common shares, consisting of 5,980,000 common shares issued directly by us and 11,960,000 common shares issuable pursuant to a ~~$450~~forward sale agreement with an investment bank. The issuance of 5,980,000 common shares resulted in proceeds of $426.9 million, net of issuance costs, and was reflected in shareholders’ equity and as a financing activity on the statement of cash flows.

Eversource’s intent is to physically settle the forward sale agreement by issuing common shares. As of June 30, 2019, if Eversource had elected to net settle the forward sale agreement, Eversource would have been required to pay $50.2 million under a cash settlement or would have been required to deliver 662,694 common shares under a net share settlement.

Eversource intends to use the net proceeds received upon the direct issuance of common shares and the net proceeds expected to be received upon settlement of the forward sale agreement to repay short-term debt under the commercial paper program, ~~allowing NSTAR Electric~~ to ~~issue commercial paper as a form of short-term debt. As of September 30, 2017, NSTAR Electric had no short-term borrowings outstanding~~fund capital spending to enhance reliability and ~~as of December 31, 2016, NSTAR Electric had $126.5 million in short-term borrowings outstanding under its commercial paper program, leaving $450.0 million~~fund clean energy initiatives, and $323.5 million of available borrowing capacity as of September 30, 2017 and December 31, 2016, respectively. The weighted-average interest rate on these borrowings as of December 31, 2016 was 0.71 percent. NSTAR Electric is a party to a five-year $450 million revolving credit facility. The revolving credit facility terminates on September 4, 2021. The revolving credit facility serves to backstop NSTAR Electric's $450 million commercial paper program. There were no borrowings outstanding on the revolving credit facility as of September 30, 2017 and December 31, 2016.for general corporate purposes.

Cash Flows: Cash flows provided by operating activities totaled ~~$1.49 billion~~$924.6 million in the first ~~nine months~~half of ~~2017,~~2019, compared with ~~$1.65 billion~~$698.1 million in the first ~~nine months~~half of ~~2016.~~2018. The ~~decrease~~increase in operating cash flows was due primarily to ~~the $200.7~~a $172.4 million ~~net unfavorable impact as a result of the change~~decrease in income tax payments made, or refunds received, in 2017 when compared to 2016. This unfavorable impact was primarily the result of the December 2015 legislation, which extended the accelerated deduction of depreciation from 2015 to 2019. The legislation resulted in a significant refund of approximately $275 million, which we received in the first quarter of 2016. Additionally, there was an increase of $76.0 million in Pensionpension and PBOP ~~Plan~~ cash contributions made in the first ~~nine months~~half of ~~2017, as~~2019 compared to the ~~same period~~first half of 2018, approximately $172 million of storm restoration cost payments made in ~~2016. Partially offsetting these unfavorable impacts was~~ the ~~benefit related to the timing~~first half of ~~regulatory recoveries~~2018, and the timing of cash collections on our accounts receivable. Also contributing to the increase were lower income tax payments made in the first half of 2019 of $59.2 million and $68.8 million in DOE Phase IV proceeds received by CYAPC and YAEC in the second quarter of 2019. Partially offsetting these favorable impacts were the timing of collections for regulatory tracking mechanisms, and the timing of accounts payable cash payments ~~of our~~and other working capital ~~items, including accounts receivable and accounts payable.~~items.

On ~~September 6, 2017,~~May 1, 2019, our Board of Trustees approved a common share dividend payment of ~~$0.475~~$0.535 per share, which was paid on ~~September 29, 2017~~June 28, 2019 to shareholders of record as of ~~September 19, 2017.~~May 23, 2019. In the first half of 2019, we paid cash dividends of $323.3 million, compared with $320.1 million paid in the first half of 2018.

In the first ~~nine months~~half of ~~2017,~~2019, CL&P, NSTAR Electric and PSNH ~~and WMECO~~ paid ~~$205.2~~$275.4 million, ~~$186.0 million, $23.9~~$181.8 million, and ~~$28.5~~$233.0 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~~half of ~~2017,~~2019, investments for Eversource, CL&P, NSTAR Electric, and PSNH ~~and WMECO~~ were ~~$1.64~~$1.38 billion, ~~$621.9~~$466.1 million, ~~$358.0 million, $215.5~~$418.6 million, and ~~$109.2~~$132.8 million, respectively.

Credit Ratings: On June 5, 2019, Moody’s raised the credit ratings of NSTAR Electric from A2 positive to A1 stable. On July 25, 2019, S&P downgraded the ratings on Eversource and all of it's subsidiaries and revised the outlooks from negative to stable.

A summary of our corporate credit ratings and outlooks by Moody's, S&P and Fitch is as follows:



	Moody's		S&P		Fitch
	Current	Outlook	Current	Outlook	Current	Outlook
Eversource Parent	Baa1	Stable	A-	Stable	BBB+	Stable
CL&P	A3	Stable	A	Stable	A-	Stable
NSTAR Electric	A1	Stable	A	Stable	A	Stable
PSNH	A3	Stable	A	Stable	A-	Stable

A summary of the current credit ratings and outlooks by Moody's, S&P and Fitch for senior unsecured debt of Eversource parent and NSTAR Electric, and senior secured debt of CL&P and PSNH is as follows:



	Moody's		S&P		Fitch
	Current	Outlook	Current	Outlook	Current	Outlook
Eversource Parent	Baa1	Stable	BBB+	Stable	BBB+	Stable
CL&P	A1	Stable	A+	Stable	A+	Stable
NSTAR Electric	A1	Stable	A	Stable	A+	Stable
PSNH	A1	Stable	A+	Stable	A+	Stable

Business Development and Capital Expenditures

~~Aquarion~~: On June 2, 2017, Eversource announced that it had entered into an agreement to acquire Aquarion from Macquarie Infrastructure Partners for $1.675 billion, consisting of approximately $880 million in cash and $795 million of assumed Aquarion debt. The transaction requires approval from PURA, the DPU, the NHPUC, the Maine PUC, and the Federal Communications Commission, and is also subject to a review under the Hart-Scott-Rodino Act. On June 29, 2017, Eversource and Aquarion filed joint applications with regulatory agencies in Connecticut, Massachusetts, New Hampshire and Maine requesting approval of the transaction. With the exception of Massachusetts, all state and federal regulatory agency approvals have been received and the related review period has expired. The transaction is expected to close by December 31, 2017.

~~Bay State Wind~~: Bay State Wind is a proposed offshore wind project being jointly developed by Eversource and Denmark-based Ørsted (formerly known as DONG Energy). Bay State Wind will be located in a 300-square-mile area approximately 15 to 25 miles south of Martha's Vineyard that has the ultimate potential to generate more than 2,000 MW of energy. Both Eversource and Ørsted hold a 50 percent ownership interest in Bay State Wind. In August 2016, Massachusetts passed clean energy legislation that requires EDCs to jointly solicit RFPs and enter into long-term contracts for offshore wind, creating RFP opportunities for projects like Bay State Wind. On June 29, 2017, the Bureau of Ocean Energy Management ("BOEM") approved the project’s Site Assessment Plan ("SAP"), the first BOEM approval of an offshore wind SAP in the U.S.

On June 29, 2017, the Massachusetts RFP was issued, seeking bids for a minimum of 400 MW of offshore wind capacity. The RFP states that bids of up to 800 MW would be considered, provided they demonstrate significant net economic benefits to customers. Bay State Wind submitted a Notice of Intent to Bid on July 26, 2017, and will submit a proposal by the December 20, 2017 due date.

~~Consolidated Capital Expenditures:~~Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP expense (all of which are non-cash factors), totaled ~~$1.69~~$1.41 billion in the first ~~nine months~~half of ~~2017,~~2019, compared to ~~$1.43~~$1.18 billion in the first ~~nine months~~half of ~~2016.~~2018. These amounts included ~~$97.8~~$97.6 million and ~~$87.1~~$69.8 million in the first ~~nine months~~half of ~~2017~~2019 and ~~2016,~~2018, 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 ~~increased~~decreased by ~~$40.9~~$30.8 million in the first ~~nine months~~half of ~~2017,~~2019, as compared to the first ~~nine months~~half of ~~2016.~~2018. A summary of electric transmission capital expenditures by company is as follows:


	For the Nine Months Ended September 30,				For the Six Months Ended June 30,
(Millions of Dollars)	2017		2016		2019		2018
CL&P	$	300.7	$	211.8	$	220.6	$	240.4
NSTAR Electric	108.5		162.6		166.4		138.6
PSNH	87.4		80.2		59.6		88.7
WMECO	70.9		75.7
NPT	32.1		28.4		9.7		19.4
Total Electric Transmission Segment	$	599.6	$	558.7	$	456.3	$	487.1

Northern Pass: Northern Pass is aEversource's planned 1,090 MW HVDC transmission line that would interconnect from the Québec-New Hampshire border to Franklin, New Hampshire and an associated alternating current radial transmission line between Franklin and Deerfield, New Hampshire. ~~Northern Pass will interconnect at the Québec-New Hampshire border with a planned HQ HVDC transmission line.~~

On ~~April 13, 2017,~~March 30, 2018, the New Hampshire Site Evaluation Committee ~~("NH SEC"~~(“NHSEC”) ~~commenced final adjudicative hearings~~, one of the state regulatory agencies from which Northern Pass was required to obtain a siting permit, issued a written decision denying Northern Pass’ siting application. In the first quarter of 2018, Eversource conducted an impairment review of the Northern Pass project and concluded, at that time, that the recorded amount of project costs was recoverable. On July 12, 2018, the NHSEC issued a written decision denying Northern Pass’ April 2018 motion for rehearing, and on ~~August 31, 2017,~~October 12, 2018, the New Hampshire Supreme Court accepted an appeal filed by Northern Pass that alleged that the NHSEC failed to follow applicable law in its review of the project. On July 19, 2019, the New Hampshire Supreme Court issued a decision denying Northern Pass’ appeal and affirming the NHSEC’s evaluation and decision that denied Northern Pass’ siting application.

Eversource evaluated the impact of the New Hampshire Supreme Court decision on the probability of construction and operation of Northern Pass. Eversource concluded that construction of the project was no longer probable and that substantially all of the capitalized project costs, which totaled $318 million, certain of which are subject to cost reimbursement agreements, were ~~extended and will result~~impaired. Eversource concluded that the New Hampshire Supreme Court decision is a subsequent event that required recognition in the ~~issuance~~financial statements as of ~~a final order by March 31, 2018.~~and for the three and six months ended June 30, 2019.

~~On August 10, 2017,~~

Based on the ~~DOE issued~~conclusion that the ~~final Environmental Impact Statement for~~construction of Northern Pass ~~concluding that~~was not probable, Eversource recorded an impairment charge for all of the ~~proposed~~project costs associated with Northern Pass, ~~route is~~which were primarily engineering design, siting, permitting and legal costs, along with appropriate allowances for funds used during construction, and recognized a receivable for certain cost reimbursement agreements. Additionally, Eversource recorded an impairment charge associated with the ~~preferred alternative, providing substantial benefits with only minimal impacts. Siting~~land acquired to construct Northern Pass in order to recognize the land at its estimated fair value based on assessed values and ~~permitting at both~~transaction costs. In total, this resulted in a pre-tax impairment charge of $239.6 million within Operating Income on the ~~state~~statement of income for the three and ~~federal levels is well advanced~~six months ended June 30, 2019, and was reflected in the Electric Transmission segment. The after-tax impact of the impairment charge was $204.4 million, or $0.64 per share, after giving effect to the estimated fair value of the related land, reimbursement agreements, and the ~~DOE is~~impact of expected ~~to issue~~income tax benefits associated with the ~~Presidential Permit for Northern Pass during the fourth quarter of 2017. Northern Pass is expected to be placed in service in the second half of 2020.~~impairment charge. Eversource does not expect any significant estimated future cash expenditures associated with this impairment charge.

In August 2016, Massachusetts enacted clean energy legislation that requires EDCs to solicit proposals jointly and enter into long-term contracts for energy, such as hydropower. The RFP was issued on March 31, 2017 and on July 27, 2017, Eversource Energy Transmission Ventures, Inc. and HQ jointly submitted proposals for Northern Pass into the Massachusetts clean energy RFP.

Greater Boston Reliability ~~Solution: In February 2015, ISO-NE selected the~~Solution: The Greater Boston and New Hampshire ~~Solution (the "Solution"), proposed by Eversource and National Grid, to satisfy the requirements identified in the Greater Boston study. The~~ Solution consists of a portfolio of electric transmission upgrades ~~covering~~in southern New Hampshire and northern Massachusetts and continuing into the greater Boston metropolitan area, of which 28 upgrades are in Eversource's service ~~territory.~~territory (two in New Hampshire and 26 in Massachusetts). The ~~NH SEC issued its written order approving the~~two New Hampshire upgrades, ~~on October 4, 2016.~~including the Merrimack Valley Reliability Project, have been placed in service and 17 Massachusetts upgrades have been placed in service. Seven upgrades are under construction and one upgrade is expected to enter construction in the fourth quarter of 2019. We ~~are currently pursuing the necessary regulatory and siting application approvals in Massachusetts. To date, we have received~~anticipate approval ~~for two of these projects~~ from the Massachusetts Energy Facilities Siting ~~Board. Construction has also begun~~Board on ~~several smaller projects not requiring siting approval. All~~the remaining project in 2019. Most upgrades are expected to be completed by the end of 2019. Four projects are expected to be in service by the end of 2020 and another project by mid-2021. We estimate our portion of the investment in the Solution will be approximately $560 million, of which ~~$186.3~~$396.7 million has been spent and capitalized through ~~September~~June 30, ~~2017.~~2019.

GHCC: The Greater Hartford Central Connecticut ("GHCC") projects, which have been approved by ISO-NE, consist of 27 projects with an expected investment of approximately $350 ~~million that~~million. As of June 30, 2019, 24 projects have been placed in service, and three projects are in active construction and are expected to be placed in service through 2019. ~~Sixteen projects have been placed in service, and eight projects are in active construction.~~ As of ~~September~~June 30, ~~2017,~~2019, CL&P had spent and capitalized ~~$192.3~~$253.1 million in costs associated with GHCC.

Seacoast Reliability Project: ~~On April 12, 2016, PSNH filed a siting application with the NH SEC for the~~The Seacoast Reliability Project consists of a 13-mile, 115kV transmission line within several New Hampshire communities, ~~which proposes to use~~using a combination of overhead, underground and underwater line ~~design~~designs to help meet the growing demand for electricity in the Seacoast region. ~~In June 2016,~~On December 10, 2018, the ~~NH SEC accepted our application as complete. Due to delays~~NHSEC indicated its unanimous approval of the project, and subsequently issued its written decision on January 31, 2019. On April 11, 2019, the NHSEC issued its written decision denying motions for rehearing submitted by three entities that intervened in the proceeding. On May 13, 2019, two appeals of the NHSEC's approval orders were filed with the ~~siting hearings, we now expect~~New Hampshire Supreme Court. The court has not yet determined whether it will hear those appeals. On July 3, 2019, the ~~NH SEC decision~~U.S. Army Corps of Engineers issued its permit allowing construction in ~~mid-2018, and this~~wetlands to proceed. This project is ~~now expected~~scheduled to be completed by the end of 2019. We estimate ~~our~~the investment in this project to be approximately $84 million, of which ~~through September 30, 2017,~~ PSNH had spent and capitalized ~~$19.7~~$38.5 million in ~~costs.~~costs through June 30, 2019.

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 WMECO Total Electric Natural Gas Total Electric and Natural Gas Distribution Segment
2017
Basic Business $ 161.8
$ 110.3
$ 52.5
$ 16.4
$ 341.0
$ 51.3
$ 392.3
Aging Infrastructure 127.4
49.6
63.9
16.3
257.2
149.6
406.8
Load Growth ⁽¹⁾
41.0
53.2
14.1
(1.5 ) 106.8
30.6
137.4
Total Distribution 330.2
213.1
130.5
31.2
705.0
231.5
936.5
Generation ⁽²⁾
—
24.6
6.7
20.9
52.2
—
52.2
Total Electric and Natural Gas Distribution Segment $ 330.2
$ 237.7
$ 137.2
$ 52.1
$ 757.2
$ 231.5
$ 988.7

2016
Basic Business $ 127.0
$ 87.7
$ 46.8
$ 10.7
$ 272.2
$ 48.9
$ 321.1
Aging Infrastructure 97.4
57.8
61.9
17.6
234.7
103.0
337.7
Load Growth ⁽¹⁾
31.9
48.1
11.8
(2.5 ) 89.3
28.3
117.6
Total Distribution 256.3
193.6
120.5
25.8
596.2
180.2
776.4
Generation —
—
8.5
—
8.5
—
8.5
Total Electric and Natural Gas Distribution Segment $ 256.3
$ 193.6
$ 129.0
$ 25.8
$ 604.7
$ 180.2
$ 784.9



	For the Six Months Ended June 30,
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total
2019
Basic Business	$	142.9	$	142.4	$	19.1	$	304.4	$	29.4	$	5.6	$	339.4
Aging Infrastructure	96.0		96.6		52.7		245.3		125.8		42.9		414.0
Load Growth and Other	32.0		28.6		7.1		67.7		26.3		0.9		94.9
Total Distribution	270.9		267.6		78.9		617.4		181.5		49.4		848.3
Solar	—		4.8		—		4.8		—		—		4.8
Total	$	270.9	$	272.4	$	78.9	$	622.2	$	181.5	$	49.4	$	853.1
2018
Basic Business	$	87.2	$	92.6	$	37.5	$	217.3	$	29.0	$	7.5	$	253.8
Aging Infrastructure	54.2		45.3		41.0		140.5		87.6		27.8		255.9
Load Growth and Other	34.9		14.1		5.9		54.9		19.1		1.1		75.1
Total Distribution	176.3		152.0		84.4		412.7		135.7		36.4		584.8
Solar and Generation	—		38.5		0.8		39.3		—		—		39.3
Total	$	176.3	$	190.5	$	85.2	$	452.0	$	135.7	$	36.4	$	624.1

⁽¹⁾ For the nine months ended September 30, 2017 and September 30, 2016, WMECO had $11.0 million and $6.4 million, respectively, of total contributions in aid of construction, which were credits to capital expenditures for those periods.

⁽²⁾ ~~In 2017, NSTAR Electric and WMECO incurred capital expenditures related to the construction of solar generation facilities.~~

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

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

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

Offshore Wind Business: Our offshore wind business includes ownership interests in North East Offshore and Bay State Wind, which collectively hold power purchase agreements for the Revolution Wind and South Fork Wind projects and are in process of negotiating a power purchase agreement for the Sunrise Wind project. Our offshore wind projects are being developed in partnership with Ørsted. This business also participates in opportunities for future solicitations for offshore wind in the Northeast U.S.

On February 8, 2019, Eversource and Ørsted entered into a 50-50 partnership for key offshore wind assets in the Northeast. Eversource's initial payment and contribution under the terms of the partnership agreements totaled approximately $225 million for a 50 percent interest in North East Offshore, which holds the Revolution Wind and South Fork Wind power projects, as well as a 257 square-mile lease off the coasts of Massachusetts and Rhode Island. Eversource also has a 50 percent ownership in Bay State Wind, which holds the Sunrise Wind power project. Bay State Wind is located approximately 25 miles south of the coast of Massachusetts on a separate 300-square-mile ocean lease adjacent to the North East Offshore area and has the ultimate potential to generate at least 2,000 MW of clean, renewable energy. Together, the Bay State Wind and the North East Offshore lease sites jointly-owned by Eversource and Ørsted could eventually develop at least 4,000 MW of offshore wind generation. As of June 30, 2019, Eversource's total equity investment balance in its offshore wind business was $499.5 million. In July 2019, Eversource made an additional capital contribution of $54.9 million.

Revolution Wind and South Fork Wind Projects: Revolution Wind is a 704 MW offshore wind power project that will deliver power to Rhode Island (400 MW) and Connecticut (304 MW). The ~~natural gas distribution segment's capital spending program increased~~Revolution Wind project was selected under separate respective Connecticut and Rhode Island competitive RFPs based on each state's clean energy requirements. In Connecticut, two 20-year power purchase agreements for a total of 200 MW were executed and have been approved by ~~$51.3 million~~the PURA, and two 20-year power purchase agreements for a total of 104 MW were executed and are currently awaiting regulatory approval. In Rhode Island, a 20-year power purchase agreement for 400 MW was executed and has been approved by the Rhode Island Public Utilities Commission.

South Fork Wind is a 130 MW offshore wind power project that will interconnect into eastern Long Island where it will deliver power to the Long Island Power Authority. The South Fork Wind project was selected by the Long Island Power Authority, and a 20-year power purchase agreement for 90 MW was executed. Subsequently, the Long Island Power Authority agreed to expand the original power purchase agreement to 130 MW through an amendment to the original agreement. Negotiations are currently underway to finalize this amendment.

South Fork Wind is expected to be commissioned by the end of 2022, and Revolution Wind is expected to be commissioned in 2023. The completion dates are subject to permitting, engineering, siting and finalizing power purchase agreements, where applicable.

Sunrise Wind Project: On February 14, 2019, Eversource and Ørsted submitted joint proposals under the project name Sunrise Wind in response to a New York State Energy Research and Development Authority ("NYSERDA") RFP that was issued in November 2018. NYSERDA had the authority to award more than 800 MW in the first ~~nine months~~solicitation if sufficient attractive offers were received. On July 18, 2019, NYSERDA announced that Sunrise Wind was selected to negotiate a 25-year power purchase agreement for an 880 MW offshore wind facility. Sunrise Wind will be developed 30 miles east of ~~2017, as compared~~Montauk Point, Long Island. Subject to contract signing and Eversource’s and Ørsted's final investment decisions, the first nine months of 2016, primarily due to an increased investment in system replacement and reliability, as well as upgrades to our LNG facilities. We expect the LNG facility upgrades to cost approximately $200 million andproject is expected to be ~~placed~~operational in ~~service~~2024.

Future Solicitations for OffShore Wind: Eversource and Ørsted are considering participation in ~~late~~the following opportunities for future solicitations for offshore wind based on each state's clean energy requirements:

Massachusetts’ second offshore wind RFP for 400 MW to 800 MW was issued on May 23, 2019. Bids are due in August 2019 and contracts are expected to be awarded to selected bidders by the end of 2019. Eversource and Ørsted are evaluating participation in the RFP.

Connecticut’s offshore wind RFP for 400 MW (and up to 2,000 MW) is expected to be issued in August 2019, with bids due in September 2019 and contracts awarded to selected bidders by the end of 2019. Eversource and Ørsted are evaluating participation in the RFP.

FERC Regulatory Matters

FERC ROE Complaints: Four separate complaints have been 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.

~~A summary of the four separate complaints and the base ROEs pertinent to those complaints are as follows:~~

⁽²⁾ ~~CL&P, NSTAR Electric, PSNH and WMECO have refunded all~~All amounts associated with the first complaint period ~~totaling $38.9~~have been refunded. Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) ~~at Eversource (consisting~~for the second complaint period as of ~~$22.4 million at CL&P, $8.4 million at NSTAR Electric, $2.8 million at PSNH, and $5.3 million at WMECO), reflecting both the base ROE and incentive cap prescribed by the FERC order.~~

⁽³⁾ ~~The~~June 30, 2019. This reserve represents the difference between the ~~ROEs~~ 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, ~~$8.5~~$14.6 million for NSTAR Electric and $3.1 million for PSNH ~~and $6.1 million for WMECO~~ as of ~~September~~June 30, ~~2017.~~2019.

The average impact of a 10 basis point change to the base ROE for each of the 15-month complaint periods would affect Eversource's after-tax earnings by approximately $3 million.

FERC Notices of Inquiry: On March 21, 2019, FERC issued two Notices of Inquiry ("NOI") that may affect Eversource transmission ROEs and incentives. One NOI (the "FERC ROE NOI") seeks comments from all stakeholders on FERC's policies for evaluating ROEs for electric public utilities, and interstate natural gas and oil pipelines. The other NOI (the "FERC transmission incentives NOI") seeks comments on FERC's policies for implementing electric transmission incentives. On June 26, 2019, the NETOs jointly filed comments in the FERC ROE NOI, supporting the methodology established in the FERC’s October 16, 2018 order with minor enhancements going forward. Also on June 26, 2019, Eversource filed comments in the FERC transmission incentives NOI, requesting that FERC retain policies that have been effective in encouraging new transmission investment and remain flexible enough to attract investment in new and emerging transmission technologies. The NETOs jointly filed reply comments in the FERC ROE NOI on July 26, 2019. Reply comments in the FERC transmission incentives NOI are due August 26, 2019. At this time, Eversource cannot predict how these NOIs will affect its ROEs or incentives.

FERC Transmission Rate Settlement: On December 28, 2015, FERC initiated a proceeding to review the NETOs' regional and local transmission formula rates due to a lack of transparency, finding that the formula rates appeared to lack sufficient details to determine how costs are derived and recovered in rates. This proceeding was set for hearing but held in abeyance to provide time for settlement judge procedures. On August 17, 2018, a signed Settlement Agreement between twenty-eight parties, including all six New England state regulatory commissions, the NETOs (including CL&P, NSTAR Electric and ~~WMECO Merger FERC Filings:~~ OnPSNH) and other settling parties, was filed at the FERC. The Settlement Agreement included, among other things, a new formula rate template, to be effective on January ~~13, 2017, Eversource made two filings with FERC related to the proposed merger~~1, 2020, in which all regional and local transmission revenue requirements will be determined through a single formula rate. The Settlement Agreement was contested by a group of ~~WMECO into NSTAR Electric with an anticipated effective date of December 31, 2017. One filing requests FERC approval of the merger,~~municipal entities and the ~~other filing requests~~ FERC ~~approval of NSTAR Electric's assumption of WMECO's short-term debt obligations. The~~Trial Staff. On May 22, 2019, FERC ~~approved~~rejected the ~~merger on March 2, 2017~~Settlement Agreement and ~~will act on~~remanded the ~~assumption of debt filing~~proceeding for hearings. On July 29, 2019, in response to a request by the ~~end of 2017.~~NETOs to continue settlement discussions, the FERC Chief Judge suspended the procedural schedule for 45 days and set the date for hearings to begin on April 27, 2020, with the initial decision from the trial judge to be issued September 21, 2020.

Regulatory Developments and Rate Matters

Electric, ~~and~~ Natural Gas and Water Utility Base Distribution Rates:

The ~~Regulated~~regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first ~~nine months~~half of ~~2017,~~2019, changes made to the ~~Regulated~~regulated companies’ rates did not have a material impact on their earnings, financial position, or cash flows. For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource ~~2016~~2018 Form 10-K.

~~Connecticut:~~

U.S. Federal Corporate Income Taxes: On ~~April 20,~~December 22, 2017, ~~PURA approved~~ the ~~joint request of CL&P,~~Tax Cuts and Jobs Act became law, which amended existing federal tax rules to reduce the ~~Connecticut Office of Consumer Counsel and the Connecticut Attorney General~~U.S. federal corporate income tax rate from 35 percent to ~~amend the deadline to establish new electric distribution rates in the 2012 Connecticut merger settlement agreemen~~t from "no later than December 1, 2017" to "no later than July 1, 2018." On October 27, 2017, CL&P filed a letter of intent with PURA to request a rate increase of $255.8 million, $45 million and $36 million effective May 1, 2018, 2019, and 2020, respectively.

~~Massachusetts:~~

~~Eversource and NSTAR Electric Boston Harbor Civil Action:~~ On July 15, 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 under provisions of the Rivers and Harbors Act of 1899 and the Clean Water Act against NSTAR Electric, Harbor Electric Energy Company, a wholly-owned subsidiary of 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 action sought an order to compel HEEC to comply with cable depth requirements in the United States Army Corps of Engineers' permit or alternatively to remove the electric distribution cable and cease unauthorized work in U.S. waterways. The action also sought civil penalties and other costs.

After substantial negotiations, the parties reached a settlement whereby HEEC will install a new 115kV distribution cable across Boston Harbor to Deer Island, utilizing a different route, and will remove portions of the existing cable. Upon the installation and completion of the new cable and the removal of the portions of the existing cable, all issues surrounding the current permit from the United States Army Corps of Engineers are expected to be resolved, and such litigation is expected to be dismissed with prejudice.

In 2017, as a result of the settlement, NSTAR Electric expensed $4.9 million (pre-tax) of previously incurred capitalized costs associated with engineering work performed on the existing cable that will no longer be used. In addition, NSTAR Electric agreed to provide a rate base credit of $17.5 million to the Massachusetts Water Resources Authority for the new cable. This negotiated credit will result in the initial $17.5 million of construction costs on the new cable to be expensed as incurred. Construction of the new cable is expected to be completed in 2019.

~~Massachusetts RFPs:~~ On March 31, 2017, pursuant to a comprehensive energy law enacted in 2016, "An Act to Promote Energy Diversity," (the "Act") the Massachusetts EDCs, including NSTAR Electric and WMECO, and the DOER issued a joint RFP for 9.45 terawatt hours of clean energy per year, such as hydropower, land-based wind or solar. The RFP seeks proposals for long-term contracts of 15 to 20 years to provide the state's electric distribution companies with clean energy generation. The proposal submission due date was July 27, 2017. Contracts will be selected in January 2018, with an expectation to submit executed long-term contracts to the DPU for final approval in April 2018. On July 27, 2017, Eversource Energy Transmission Ventures, Inc. and HQ jointly submitted proposals for Northern Pass into the Massachusetts clean energy RFP. Northern Pass is expected to be placed in service in the second half of 2020.

On June 29, 2017, pursuant to the Act, the Massachusetts EDCs, including NSTAR Electric and WMECO, and the DOER issued a joint RFP for long-term contracts for offshore wind energy projects, seeking bids for a minimum of 400 MW of offshore wind capacity. The Offshore Wind Energy RFP states that bids of up to 800 MW would be considered, provided they demonstrate significant net economic benefits to customers. Bay State Wind submitted a Notice of Intent to Bid on July 26, 2017 and will submit a proposal by the December 20, 2017 due date.

~~NSTAR Electric and WMECO Rate Case:~~ ~~On January 17, 2017, NSTAR Electric and WMECO jointly filed an application (the "Joint Applicants") with the DPU for approval of a combined $96 million increase in base distribution rates,~~21 percent effective January 1, 2018. ~~As part~~For our regulated companies, the most significant changes are (1) the benefit of ~~this filing,~~incurring a lower federal income tax expense and (2) the ~~Joint Applicants~~reduction in ADIT liabilities (now excess ADIT or EDIT), which are ~~presenting~~estimated to be approximately $2.9 billion and included in regulatory liabilities as of June 30, 2019. The refund of these EDIT regulatory liabilities to customers will generally be made over the same period as the remaining useful lives of the underlying assets that gave rise to the ADIT liabilities. The refund of EDIT has begun at several of our distribution companies and is reflected in rates. The refund to customers and resulting amortization of the EDIT regulatory liabilities results in lower Revenues on the statements of income and lower current tax expense. This is offset by the reduction to Income Tax Expense due to the amortization of the EDIT. The refund of EDIT results in a ~~grid-wise performance plan, including the implementation~~lower effective tax rate and no impact on net income.

Connecticut:

CL&P Storm Filing: CL&P's approved rate case settlement in 2018 incorporated $18.6 million of ~~a performance-based rate-making mechanism in conjunction with a grid modernization~~rate base commitment of $400 million in incremental capital investment over a period of five years, commencing January 1, 2018. In addition, the Joint Applicants proposed to streamline and align rate classifications between NSTAR Electric and WMECO, and requested a revenue decoupling rate mechanismrecovery for ~~NSTAR Electric. WMECO has a revenue decoupling mechanism in place. The DPU will also be reviewing the proposed~~catastrophic storms occurring after December 31, 2016, subject to a future storm filing. On November 16, 2018, CL&P filed for recovery of $153 million of storm costs incurred from October 2017 ~~merger~~through May 2018, with recovery over six years to begin May 1, 2019. Through the course of ~~NSTAR Electric~~the proceeding, CL&P updated its request to $145.5 million to reflect final invoicing and ~~WMECO~~capitalization amounts. On April 17, 2019, PURA authorized recovery of $141.0 million as part of storm cost recovery and the remainder to be recorded to plant or other balance sheet accounts. All approved amounts will be fully recoverable through specific mechanisms or through future rate ~~case. A final decision from~~cases.

Massachusetts:

Hingham Condemnation: On April 22, 2019, the ~~DPU~~town of Hingham, Massachusetts voted to acquire the water system and treatment plant that supply the towns of Hingham, Hull and North Cohasset with water. The acquisition price is currently estimated to be more than $100 million, subject to adjustment based on actual capital investments as legally required and other future closing adjustments. Aquarion will continue to operate the water system during the transition period until the sale occurs. The Company is evaluating the impact of the sale on its financial statements, which will be recorded when the sale transaction occurs. No loss is expected. The transaction is expected to close by the first quarter of 2020. As of June 30, 2019, these water distribution assets were included within Property, Plant and Equipment, Net and goodwill on the balance sheet and were also reflected in ~~late 2017, with new rates anticipated to be effective January 1, 2018.~~the Water Distribution segment and reporting unit.

New Hampshire:

~~Generation Divestiture~~: Distribution Rates:On June 10, 2015, Eversource and PSNH entered into the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement (the "Agreement") with the New Hampshire Office of Energy and Planning, certain members of the NHPUC staff, the Office of Consumer Advocate, two State Senators, and several other parties. Under the terms of the Agreement, PSNH agreed to divest its generation assets, subject to NHPUC approval. The Agreement provided for a resolution of issues pertaining to PSNH's generation assets in pending regulatory proceedings before the NHPUC. The Agreement provided for the Clean Air Project prudence proceeding to be resolved and all remaining Clean Air Project costs to be included in rates effective January 1, 2016. As part of the Agreement, PSNH agreed to forego recovery of $25 million of the equity return related to the Clean Air Project.

On July 1, 2016, the NHPUC approved the Agreement in an order that, among other things, instructed PSNH to begin the process of divesting its generation assets. The NHPUC selected an auction adviser to assist with the divestiture, and the final plan and auction process were approved by the NHPUC in November 2016.

~~On October 12, 2017,~~April 26, 2019, PSNH filed an application with the NHPUC ~~requesting~~for approval of ~~the Agreements. We expect to receive approvals from~~a temporary annual base distribution rate increase of approximately $33 million, effective July 1, 2019. On June 27, 2019, the NHPUC approved a settlement agreement that was reached by PSNH, the NHPUC Staff, the Office of the Consumer Advocate, and ~~other necessary regulatory agencies by late December 2017 or early 2018,~~another settling party, to implement a temporary annual base distribution rate increase of $28.3 million. Although new rates were implemented on August 1, 2019 to customers, the provisions of the temporary base distribution rate increase were effective July 1, 2019. The settlement agreement also permits PSNH to recover approximately $68.5 million in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges, which is included in the temporary rate increase.

On May 28, 2019, PSNH filed an application with the ~~transactions to be completed shortly thereafter. Upon completion, full recovery~~NHPUC for a permanent increase in base distribution rates of ~~PSNH's generation assets will occur through a combination of cash flows during~~approximately $70 million, effective July 1, 2020, which includes the ~~remaining operating period, sales proceeds, and recovery of stranded costs via bonds that will be secured by a non-bypassable charge or through recoveries in future~~temporary rate increase request. The temporary rates ~~billed to PSNH's customers.~~

~~As of September 30, 2017, PSNH's energy service rate base balance was approximately $594 million, and the carrying value of PSNH's total generation assets~~are subject to ~~divestiture was approximately $767 million.~~reconciliation based on the outcome of the permanent rate case now before the NHPUC.

Legislative and Policy Matters

New Hampshire: On ~~August 11, 2017, Massachusetts issued final legislation, pursuant~~July 8, 2019, the New Hampshire Superior Court approved a settlement between PSNH and the Town of Bow, New Hampshire, where the town had over-assessed the value of the property owned by PSNH for the 2014 through 2018 property tax years. The result of this settlement was $10.0 million in over-paid property taxes that will be refundable to ~~Executive Order 569, which established volumetric limits on multiple greenhouse emission sources~~PSNH, with $4.3 million payable in 2019, and the remainder to ~~ensure reductions are realized by deadlines established in~~be received over the Massachusetts Global Warming Solutions Act enacted in 2008. Under this legislation, the initial target date for reduction in greenhouse gas emissions has been established in the year 2020. The legislation is not expected to have a material impact on the financial statements of Eversource, NSTAR Electric or WMECO.following 4 years.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and, at times, difficult, subjective or complex judgments. Changes in these estimates, assumptions and judgments, in and of themselves, could materially impact our financial position, results of operations or cash flows. Our management communicates to and discusses with the Audit Committee of our Board of Trustees significant matters relating to critical accounting policies. Our critical accounting policies that we believed were the most critical in nature were reported in the Eversource ~~2016~~2018 Form 10-K. There have been no material changes with regard to these critical accounting policies.

Refer to Note 1C, "Summary of Significant Accounting Policies - Impairment of Northern Pass Transmission," to the financial statements for further discussion of critical accounting estimates surrounding impairment analysis.

Other Matters

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

Contractual Obligations and Commercial Commitments: ~~There have been no material contractual obligations identified~~Refer to Note 9B, "Commitments and noContingencies – Long-Term Contractual

Arrangements," for discussion of material changes ~~with regard~~ to ~~the~~ contractual ~~obligations and commercial commitments previously disclosed in the Eversource 2016 Form 10-K.~~obligations.

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

RESULTS OF OPERATIONS – EVERSOURCE ENERGY AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for Eversource for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 included in this combined Quarterly Report on Form 10-Q:


	For the Three Months Ended September 30,									For the Nine Months Ended September 30,									For the Three Months Ended June 30,							For the Six Months Ended June 30,
(Millions of Dollars)	2017		2016		Increase/ (Decrease)			Percent		2017		2016		Increase/ (Decrease)			Percent		2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)
Operating Revenues	$	1,988.5	$	2,039.7	$	(51.2	)	(2.5	)%	$	5,856.5	$	5,862.5	$	(6.0	)	(0.1	)%	$	1,884.5	$	1,853.9	$	30.6		$	4,300.3	$	4,141.8	$	158.5
Operating Expenses:
Purchased Power, Fuel and Transmission	651.8		665.8		(14.0		)	(2.1	)	1,955.1		2,001.9		(46.8		)	(2.3	)	620.9		653.9		(33.0		)	1,595.8		1,600.7		(4.9		)
Operations and Maintenance	300.4		324.7		(24.3		)	(7.5	)	933.4		965.6		(32.2		)	(3.3	)	328.0		293.9		34.1			663.6		626.4		37.2
Depreciation	194.5		181.3		13.2			7.3		571.2		531.8		39.4			7.4		219.1		199.1		20.0			434.0		403.4		30.6
Amortization of Regulatory Assets, Net	41.8		43.9		(2.1		)	(4.8	)	58.1		56.2		1.9			3.4
Amortization																			38.9		36.2		2.7			109.9		81.4		28.5
Energy Efficiency Programs	129.2		149.1		(19.9		)	(13.3	)	391.8		406.0		(14.2		)	(3.5	)	105.8		102.0		3.8			246.0		236.2		9.8
Taxes Other Than Income Taxes	168.2		165.0		3.2			1.9		479.6		479.2		0.4			0.1		181.2		177.5		3.7			365.7		359.8		5.9
Impairment of Northern Pass Transmission																			239.6		—		239.6			239.6		—		239.6
Total Operating Expenses	1,485.9		1,529.8		(43.9		)	(2.9	)	4,389.2		4,440.7		(51.5		)	(1.2	)	1,733.5		1,462.6		270.9			3,654.6		3,307.9		346.7
Operating Income	502.6		509.9		(7.3		)	(1.4	)	1,467.3		1,421.8		45.5			3.2		151.0		391.3		(240.3		)	645.7		833.9		(188.2		)
Interest Expense	108.7		99.9		8.8			8.8		319.5		298.6		20.9			7.0		132.7		126.4		6.3			264.5		247.5		17.0
Other Income, Net	21.2		13.6		7.6			55.9		56.3		23.7		32.6			(a)		45.9		50.1		(4.2		)	76.9		83.9		(7.0		)
Income Before Income Tax Expense	415.1		423.6		(8.5		)	(2.0	)	1,204.1		1,146.9		57.2			5.0		64.2		315.0		(250.8		)	458.1		670.3		(212.2		)
Income Tax Expense	152.8		156.4		(3.6		)	(2.3	)	447.9		428.2		19.7			4.6		30.8		70.4		(39.6		)	114.2		154.2		(40.0		)
Net Income	262.3		267.2		(4.9		)	(1.8	)	756.2		718.7		37.5			5.2		33.4		244.6		(211.2		)	343.9		516.1		(172.2		)
Net Income Attributable to Noncontrolling Interests	1.9		1.9		—			—		5.6		5.6		—			—		1.9		1.9		—			3.8		3.8		—
Net Income Attributable to Common Shareholders	$	260.4	$	265.3	$	(4.9	)	(1.8	)%	$	750.6	$	713.1	$	37.5		5.3	%	$	31.5	$	242.7	$	(211.2	)	$	340.1	$	512.3	$	(172.2	)

~~(a) Percent greater than 100 not shown as it is not meaningful.~~

Operating Revenues

~~A summary of our Operating Revenues by segment is as follows:~~

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(Millions of Dollars) 2017 2016 Increase/
(Decrease) Percent 2017 2016 Increase/
(Decrease) Percent
Electric Distribution $ 1,547.1
$ 1,623.4
$ (76.3 ) (4.7 )% $ 4,224.2
$ 4,362.6
$ (138.4 ) (3.2 )%
Natural Gas Distribution 109.2
99.2
10.0
10.1
698.8
622.3
76.5
12.3
Electric Transmission 328.5
306.8
21.7
7.1
970.0
892.5
77.5
8.7
Other and Eliminations 3.7
10.3
(6.6 ) (64.1 ) (36.5 ) (14.9 ) (21.6 ) (a)
Total Operating Revenues $ 1,988.5
$ 2,039.7
$ (51.2 ) (2.5 )% $ 5,856.5
$ 5,862.5
$ (6.0 ) (0.1 )%

~~(a) Percent greater than 100 not shown as it is not meaningful.~~

Sales Volumes:A summary of our retail electric GWh sales volumes, ~~and~~ our firm natural gas MMcf sales volumes, ~~in MMcf were~~and our water MG sales volumes, and percentage changes, is as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016
Increase/
(Decrease)
Percent 2017 2016
Increase/
(Decrease)
Percent
Electric
Traditional 7,545
8,131
(586 ) (7.2 )% 21,040
21,731
(691 ) (3.2 )%
Decoupled 6,551
7,213
(662 ) (9.2 ) 18,391
19,235
(844 ) (4.4 )
Total Electric 14,096
15,344
(1,248 ) (8.1 ) 39,431
40,966
(1,535 ) (3.7 )

Firm Natural Gas

Traditional 5,550
5,270
280
5.3
32,233
31,570
663
2.1
Decoupled and Special Contracts 5,975
5,653
322
5.7
37,453
36,537
916
2.5
Total Firm Natural Gas 11,525
10,923
602
5.5 % 69,686
68,107
1,579
2.3 %



	Electric				Firm Natural Gas				Water
	Sales Volumes (GWh)		Percentage Decrease		Sales Volumes (MMcf)		Percentage Increase/ (Decrease)		Sales Volumes (MG)		Percentage Decrease
Three Months Ended June 30:	2019	2018 ⁽¹⁾	Percentage Decrease		2019	2018 ⁽²⁾	Percentage Increase/ (Decrease)		2019	2018	Percentage Decrease
Traditional	1,757	1,803	(2.6	)%	—	—	—	%	459	485	(5.4	)%
Decoupled and Special Contracts ⁽³⁾	9,853	10,330	(4.6	)%	18,191	18,932	(3.9	)%	4,834	5,016	(3.6	)%
Total Sales Volumes	11,610	12,133	(4.3	)%	18,191	18,932	(3.9	)%	5,293	5,501	(3.8	)%

Six Months Ended June 30:
Traditional	3,724	3,775	(1.4	)%	—	—	—	%	910	953	(4.5	)%
Decoupled and Special Contracts ⁽³⁾	21,037	21,579	(2.5	)%	63,358	61,983	2.2	%	9,212	9,373	(1.7	)%
Total Sales Volumes	24,761	25,354	(2.3	)%	63,358	61,983	2.2	%	10,122	10,326	(2.0	)%

⁽¹⁾ Effective February 1, 2018, NSTAR Electric operated entirely under a decoupled rate structure. The 2018 sales volumes for NSTAR Electric have been recast to present January 2018 as decoupled to conform to the current year presentation.

~~Three Months Ended:~~⁽²⁾ Effective November 15, 2018, Yankee Gas operated under a decoupled rate structure. The 2018 sales volumes for Yankee Gas have been recast to present 2018 as decoupled to conform to the current year presentation.

~~Operating Revenues, which primarily consist of base electric and~~

⁽³⁾ Special contracts are unique to Yankee Gas natural gas distribution ~~revenues~~customers who take service under such an arrangement and ~~tracked revenues further described below, decreased by $51.2 million for~~generally specify the ~~three months ended September 30, 2017, as compared~~amount of distribution revenue to be paid to Yankee Gas regardless of the ~~same period in 2016.~~ customers' usage.

~~Base electric and natural gas distribution revenues~~: Base electric distribution segment revenues, excluding LBR, decreased $21.0 million for the three months ended September 30, 2017, as compared to the same period in 2016, due primarily to a decrease in sales volumes and lower demand revenues driven by the mild summer weather during the third quarter of 2017 at NSTAR Electric and PSNH. LBR increased $1.5 million for the three months ended September 30, 2017, as compared to the same period in 2016.

~~Base natural gas distribution revenues remained relatively unchanged for the three months ended September 30, 2017, as compared to the same period in 2016.~~

Fluctuations in retail electric sales volumes at PSNH impact earnings ("Traditional" in the table above). For CL~~&P's, WMECO's~~&P, NSTAR Electric, Yankee Gas, and NSTAR ~~Gas'~~Gas, fluctuations in retail sales volumes do not impact ~~the level of base distribution revenue realized or~~ earnings due to their respective regulatory ~~commission approved revenue decoupling mechanisms. The~~commission-approved distribution revenue decoupling mechanisms ~~permit recovery of a base amount of~~("Decoupled" in the table above). These distribution revenues ~~and break~~are decoupled from their customer sales volumes, which breaks the relationship between sales volumes and revenues recognized. ~~Revenue decoupling mechanisms result~~Fluctuations in water sales volumes largely do not impact earnings as our Connecticut water distribution business is also decoupled.

Operating Revenues: Operating Revenues by segment increased for the three and six months ended June 30, 2019, as compared to the same periods in 2018, as follows:



(Millions of Dollars)	Three Months Ended			Six Months Ended
Electric Distribution	$	21.9		$	101.1
Natural Gas Distribution	1.2			45.2
Electric Transmission	32.2			67.7
Water Distribution	0.2			1.2
Other	13.8			41.1
Eliminations	(38.7		)	(97.8		)
Total Operating Revenues	$	30.6		$	158.5

Three Months Ended:

Electric Distribution Revenues:

Base electric distribution revenues increased $20.9 million due primarily to the impact of CL&P base distribution rate increases effective May 1, 2019 and May 1, 2018, which includes recovery of ~~our approved~~storm costs and certain other items that do not impact earnings, and an NSTAR Electric base distribution ~~revenue requirements.~~ rate increase effective January 1, 2019.

~~Tracked distribution revenues:~~Tracked revenues consist of certain costs that are recovered from customers in retail rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs have no impact on earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement ~~costs~~ and other energy-related costs, ~~for our electric and natural gas customers,~~ retail transmission charges, energy efficiency program costs, ~~and~~ restructuring and stranded cost recovery ~~revenues.~~revenues (including securitized RRB charges), and additionally for NSTAR Electric, pension and PBOP benefits and net metering for distributed generation. In addition, ~~certain~~ tracked revenues include certain incentives earned, certain return on rate base, and carrying charges that are billed in rates to customers. Tracked ~~natural gas distribution segment revenues increased as a result of an increase in natural gas supply costs ($7.6 million) and an increase in energy efficiency program revenues ($2.2 million). Tracked~~retail electric distribution revenues decreased as a result of a decrease in retail electric transmission charges ($~~39.8~~41.4 million) and a decrease in other distribution tracking mechanisms ($1.1 million), partially offset by an increase in electric energy supply costs ($37.5 million). Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties, which increased $5.2 million.

Natural Gas Distribution Revenues:

Base natural gas distribution revenues decreased $3.5 million due primarily to the seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides lower revenues in non-heating months.

Tracked natural gas distribution revenues increased as a ~~decrease~~result of an increase in wholesale sales of natural gas to third party suppliers ($2.3 million), an increase in capital tracker and other distribution tracking mechanisms ($1.2 million), and an increase in natural gas supply costs ($0.9 million).

Electric Transmission Revenues: Electric transmission revenues increased $32.2 million due primarily to ongoing investments in our transmission infrastructure.

Other Revenues and Eliminations: Other revenues primarily include the revenues of Eversource's service company, most of which are eliminated in consolidation. Eliminations are primarily related to the Eversource electric transmission revenues that are derived

from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the

wholesale transmission business, and revenues from Eversource's service company.

Six Months Ended:

Electric Distribution Revenues:

Base electric distribution revenues increased $39.2 million due primarily to the impact of CL&P base distribution rate increases effective May 1, 2019 and May 1, 2018, which includes recovery of storm costs and certain other items that do not impact earnings, and an NSTAR Electric base distribution rate increase effective January 1, 2019.

Tracked retail electric distribution revenues increased as a result of an increase in electric energy supply costs ($93.6 million), an increase in stranded cost recovery revenues ($~~16.9~~13.9 million), and an increase in other distribution tracking mechanisms ($26.8 million), partially offset by a decrease in ~~energy efficiency program revenues~~retail electric transmission charges ($~~13.9 million) and a decrease in pension rate adjustment mechanisms ($7.1~~73.2 million). ~~Partially offsetting these decreases were increases in tracked electric distribution~~Tracked revenues ~~related to electric~~also include wholesale market sales transactions, such as sales of energy ~~supply costs ($7.3 million), revenues related to renewable energy requirements ($10.8 million), net metering revenues ($7.0 million)~~ and ~~federally-mandated congestion charges ($2.8 million).~~

~~Electric transmission revenues:~~ ~~The electric transmission segment revenues increased by $21.7 million due primarily to~~energy-related products into the ~~recovery of higher revenue requirements associated with ongoing investments in our transmission infrastructure.~~

~~Other:~~ ~~Other revenues decreased due primarily to~~ISO-NE wholesale electricity market and the sale of ~~Eversource's unregulated telecommunication business on December 31, 2016 ($5.0 million).~~RECs to various counterparties, which decreased $1.9 million.

~~Nine Months Ended:~~

~~Operating Revenues decreased by $6.0 million for the nine months ended September 30, 2017, as compared to the same period in 2016.~~

~~Base electric and natural gas distribution revenues~~: Base electric distribution segment revenues, excluding LBR, decreased $13.2 million for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to a decrease in sales volumes driven by the mild summer weather during the third quarter of 2017 at NSTAR Electric and PSNH. LBR increased $10.6 million for the nine months ended September 30, 2017, as compared to the same period in 2016.

Natural Gas Distribution Revenues:

Base natural gas distribution revenues ~~remained relatively unchanged for the nine months ended September 30, 2017, as compared~~increased $16.7 million due primarily to the ~~same period in 2016. The impact~~seasonality of the decoupled rate structure arising from the Yankee Gas base distribution rate case, which provides higher ~~firm natural gas sales volumes was offset by lower demand~~ revenues in ~~Connecticut driven by lower peak usage in 2017, as compared to 2016.~~the winter heating months.

~~Tracked distribution revenues:~~Tracked natural gas distribution ~~segment~~ revenues increased as a result of an increase in natural gas supply costs ($~~57.8~~22.1 million), an increase in wholesale sales of natural gas to third party suppliers ($6.2 million) and an increase in ~~energy efficiency program revenues ($17.1 million). Tracked electric~~capital tracker and other distribution revenues decreased as a result of a decrease in electric energy supply costs ($81.0 million), driven by decreased average retail prices and lower sales volumes, a decrease in retail electric transmission charges ($45.9 million), a decrease in transition and stranded cost recovery revenues ($33.1 million), a decrease in pension rate adjustmenttracking mechanisms ($~~16.2~~3.9 million)~~, and a decrease in energy efficiency program revenues ($8.8 million)~~. Partially offsetting these decreases were increases in tracked electric distribution revenues related to federally-mandated congestion charges ($23.0 million), net metering revenues ($22.4 million) and revenues related to renewable energy requirements and the sale of PSNH's RECs ($14.7 million).

Electric Transmission Revenues:Electric transmission ~~revenues:~~ ~~The electric transmission segment~~ revenues increased ~~by $77.5~~$67.7 million due primarily to ~~the recovery of higher revenue requirements associated with~~ ongoing investments in our transmission infrastructure.

~~Other:~~ Other Revenues and Eliminations:Other revenues ~~decreased due~~ primarily include the revenues of Eversource's service company, most of which are eliminated in consolidation. Eliminations are primarily related to the ~~sale~~Eversource electric transmission revenues that are derived

from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the

wholesale transmission business, and revenues from Eversource's ~~unregulated telecommunication business on December 31, 2016 ($15.0 million).~~service company.

Purchased Power, Fuel and Transmissionexpense includes costs associated with purchasing electricity and natural gas on behalf of our customers. These ~~energy~~electric and natural gas supply costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). ~~Total~~ Purchased Power, Fuel and Transmission expense ~~decreased~~increased/(decreased) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to the following:


(Millions of Dollars)	Three Months Ended Increase/(Decrease)			Nine Months Ended Increase/(Decrease)			Three Months Ended			Six Months Ended
Electric Distribution	$	(0.4	)	$	(109.1	)	$	23.9		$	84.3
Natural Gas Distribution	7.0			50.1			3.6			29.1
Transmission	(20.6		)	12.2			(37.1		)	(64.5		)
Eliminations							(23.4		)	(53.8		)
Total Purchased Power, Fuel and Transmission	$	(14.0	)	$	(46.8	)	$	(33.0	)	$	(4.9	)

The ~~decrease~~increase in purchased power expense at the electric distribution business for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same ~~period~~periods in ~~2016,~~2018, was driven primarily by ~~lower~~higher prices associated with the procurement of energy ~~supply and lower sales volumes.~~supply. The increase in ~~purchased power expense~~natural gas supply costs at ~~the~~our natural gas distribution business ~~for each of the periods presented~~ was due primarily to higher average ~~natural gas prices and higher~~ sales volumes.

The decrease in transmission costs for the three and six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same ~~period~~periods in ~~2016,~~2018, was primarily the result of a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to ~~customers. The increase in transmission costs for the nine months ended September 30, 2017, as compared to the same period in 2016, was primarily the result of an increase~~customers, a decrease in costs billed by ISO-NE that support regional grid ~~investment,~~investments and a decrease in Local Network Service charges, which reflect the cost of transmission service provided by Eversource over our local transmission network. ~~This was partially offset by a decrease in the retail transmission cost deferral.~~

Operations and Maintenance expense includes tracked costs and costs that are part of base electric, ~~and~~ natural gas and water distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense ~~decreased~~increased/(decreased) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to the following:

(Millions of Dollars) Three Months Ended Increase/(Decrease)
Nine Months Ended
Increase/(Decrease)
Base Electric Distribution:
Employee-related expenses, including labor and benefits $ (15.0 ) $ (46.2 )
Bad debt expense (2.6 ) (15.3 )
Shared corporate costs (including computer software depreciation at Eversource Service) 5.4
15.0
Storm restoration costs (4.0 ) 3.1
Boston Harbor civil action settlement charge recorded in the second quarter of 2017 —
4.9
Other operations and maintenance 9.1
15.7
Total Base Electric Distribution (7.1 ) (22.8 )
Total Base Natural Gas Distribution:
Shared corporate costs (including computer software depreciation at Eversource Service) 1.2
3.6
Other operations and maintenance (4.1 ) (1.5 )
Total Base Natural Gas Distribution (2.9 ) 2.1
Total Tracked costs (Electric Distribution, Electric Transmission and Natural Gas Distribution) (5.5 ) 7.2
Other and eliminations:
Eversource Parent and Other Companies (1.1 ) 0.8
Eliminations (7.7 ) (19.5 )
Total Operations and Maintenance $ (24.3 ) $ (32.2 )



(Millions of Dollars)	Three Months Ended			Six Months Ended
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	0.4		$	(12.0	)
Operations-related expenses, including vegetation management, vehicles, and outside services	7.8			17.9
Storm Restoration Costs	5.1			4.0
Other non-tracked operations and maintenance	1.0			2.4
Total Base Electric Distribution (Non-Tracked Costs)	14.3			12.3
Base Natural Gas Distribution (Non-Tracked Costs)	4.8			7.9
Water Distribution	0.4			1.1
Tracked Costs (Electric Distribution, Electric Transmission and Natural Gas Distribution) - Increase due primarily to higher electric transmission expenses, partially offset by the absence in 2019 of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets	21.5			30.9
Other and eliminations:
Eversource Parent and Other Companies - other operations and maintenance	6.6			27.3
Eliminations	(13.5		)	(42.3		)
Total Operations and Maintenance	$	34.1		$	37.2

Depreciation expense increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to higher utility plant in service ~~balances.~~balances and new depreciation rates effective with the CL&P distribution rate case settlement agreement.

Amortization ~~of Regulatory Assets, Net~~ expense includes the deferral of energy supply and energy-related costs included in certain ~~regulatory-approved~~regulatory commission-approved cost tracking mechanisms, and the amortization of certain costs. ~~The~~This deferral adjusts expense to match the corresponding revenues. Amortization ~~of Regulatory Assets, Net, decreased~~increased for the three and six months ended ~~September~~June 30, ~~2017 and increased for the nine months ended September 30, 2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to the deferral of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and the related rate changes to recover these costs. Energy supply and energy-related costs ~~at CL&P, NSTAR Electric, PSNH and WMECO, which are the primary drivers in amortization,~~ are recovered from customers in rates and have no impact on earnings.

~~Energy Efficiency Programs~~ ~~expense decreased~~ The increase for the three and ~~nine~~six month periods is also due to higher amortization of PSNH's securitized regulatory asset related to the 2018 RRB issuance of $4.0 million and $14.7 million, respectively.

Energy Efficiency Programs expense increased for the three and six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to ~~deferral adjustments at~~higher spending for CL~~&P,~~&P's, NSTAR ~~Electric~~Electric's and ~~WMECO, partially offset by deferral adjustments at the natural gas businesses, which reflect the actual costs of~~PSNH's energy efficiency programs compared to the estimated amounts billed to customers. The deferral adjusts costs incurred to match energy efficiency revenue billed to customers and the timing of the recovery of energy efficiency costs.programs. The costs for ~~various~~the majority of the state energy policy initiatives and expanded energy efficiency programs are recovered from customers in rates and have no impact on earnings.

~~Interest Expense~~Taxes Other Than Income Taxes expense increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to higher property taxes as a result of higher utility plant in service balances and higher gross earnings taxes (the costs of which are tracked), partially offset by a decrease related to CL&P's remittance of energy efficiency funds to the State of Connecticut of $2.0 million and $4.0 million for the three and six month periods, respectively, and a decrease in NSTAR Electric's property taxes due to a decrease in tax rates.

Impairment of Northern Pass Transmission reflects an impairment charge of $239.6 million that was recorded in the second quarter of 2019 as a result of the July 19, 2019 New Hampshire Supreme Court decision. The after-tax impact of this impairment charge was $204.4 million. For further information on the impairment of NPT, see "Business Development and Capital Expenditures - Electric Transmission Business - Northern Pass" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Expense increased for the three and six months ended June 30, 2019, as compared to the same periods in 2018, due primarily to an increase in interest on long-term debt ($~~5.8~~7.1 million and ~~$15.9~~$11.3 million, respectively) as a result of new debt issuances, ~~and higher~~an increase in interest on ~~short-term debt~~the 2018 PSNH RRB issuance ($~~2.4~~2.5 million and ~~$4.8~~$7.9 million, respectively) and an increase in interest on notes payable ($2.9 million and $7.1 million, respectively). Partially offsetting these increases was an increase in AFUDC related to debt funds and other capitalized interest ($5.4 million and $10.9 million, respectively).

Other Income, Net ~~increased~~ decreased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same periods in ~~2016,~~2018, due primarily to ~~increased gains on investments~~a decrease related to pension, SERP and PBOP non-service income components ($~~4.2~~8.8 million and ~~$24.9~~$16.7 million, respectively), ~~primarily~~partially offset by an increase in equity in earnings related to Eversource's ~~investment in a renewable energy fund, market value changes related to the deferred compensation plans~~equity method investments ($~~2.9~~3.0 million and ~~$5.1~~$3.4 million, respectively) ~~and higher~~, an increase in AFUDC related to equity funds ($~~1.2~~2.2 million and ~~$5.0~~$3.5 million, respectively). and the recognition in the first quarter of 2019 of $5.2 million of the equity return component of the carrying charges related to storm costs incurred from December 2013 through April 2016 recorded in interest income at PSNH.

Income Tax Expense decreased for the three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in 2018, due primarily to the impairment of NPT ($35.2 million), the amortization of EDIT ($8.8 million), and lower pre-tax earnings ($2.4 million), partially offset by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($6.8 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $12.1 million offset by current tax benefit of $3.4 million and amortization of EDIT of $8.8 million, for the three months ended June 30, 2019, which results in no impact on net income.

Income Tax Expense decreased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the impairment of NPT ($35.2 million), and the amortization of EDIT ($17 million), partially offset by higher pre-tax earnings ($5.8 million), higher state taxes ($1.3 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($5.1 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $23.3 million offset by current tax benefit of $6.3 million and amortization of EDIT of $17 million, for the six months ended June 30, 2019, which results in no impact on net income.

RESULTS OF OPERATIONS –

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P, NSTAR Electric and PSNH for the six months ended June 30, 2019 and 2018 included in this combined Quarterly Report on Form 10-Q:



	For the Six Months Ended June 30,
	CL&P							NSTAR Electric							PSNH
(Millions of Dollars)	2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)			2019		2018		Increase/ (Decrease)
Operating Revenues	$	1,590.1	$	1,479.9	$	110.2		$	1,479.5	$	1,460.9	$	18.6		$	517.3	$	502.5	$	14.8
Operating Expenses:
Purchased Power, Fuel and Transmission	566.4		536.2		30.2			558.5		598.7		(40.2		)	199.3		193.2		6.1
Operations and Maintenance	264.0		227.0		37.0			221.9		220.8		1.1			105.4		97.9		7.5
Depreciation	147.8		136.9		10.9			145.6		134.6		11.0			46.2		46.3		(0.1		)
Amortization of Regulatory Assets, Net	48.0		43.4		4.6			45.8		18.3		27.5			19.5		14.0		5.5
Energy Efficiency Programs	46.8		41.4		5.4			142.6		140.0		2.6			12.9		9.8		3.1
Taxes Other Than Income Taxes	178.5		174.7		3.8			93.1		95.9		(2.8		)	38.0		38.7		(0.7		)
Total Operating Expenses	1,251.5		1,159.6		91.9			1,207.5		1,208.3		(0.8		)	421.3		399.9		21.4
Operating Income	338.6		320.3		18.3			272.0		252.6		19.4			96.0		102.6		(6.6		)
Interest Expense	72.7		75.5		(2.8		)	56.1		53.8		2.3			28.3		27.4		0.9
Other Income, Net	6.7		13.7		(7.0		)	21.7		26.9		(5.2		)	10.0		8.2		1.8
Income Before Income Tax Expense	272.6		258.5		14.1			237.6		225.7		11.9			77.7		83.4		(5.7		)
Income Tax Expense	57.3		60.2		(2.9		)	53.9		60.6		(6.7		)	18.1		22.5		(4.4		)
Net Income	$	215.3	$	198.3	$	17.0		$	183.7	$	165.1	$	18.6		$	59.6	$	60.9	$	(1.3	)

Operating Revenues

Sales Volumes: A summary of our retail electric GWh sales volumes was as follows:



	For the Six Months Ended June 30,
	2019	2018	Decrease		Percentage Decrease
CL&P	9,953	10,222	(269	)	(2.6	)%
NSTAR Electric	11,084	11,357	(273	)	(2.4	)%
PSNH	3,724	3,775	(51	)	(1.4	)%

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

Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased $110.2 million at CL&P, $18.6 million at NSTAR Electric and $14.8 million at PSNH for the six months ended June 30, 2019, as compared to the same period in 2018.

Base Distribution Revenues:

CL&P's distribution revenues increased $34.1 million due primarily to the impact of its base distribution rate increases effective May 1, 2019 and May 1, 2018 as a result of the PURA-approved rate case settlement agreement, which includes recovery of storm costs and certain other items that do not impact earnings.

NSTAR Electric's distribution revenues increased $7.0 million due primarily to the impact of its base distribution rate increase effective January 1, 2019.

PSNH's distribution revenues decreased $1.9 million due primarily to lower demand revenues in the first half of 2019, as compared to the same period in 2018.

Tracked Revenues: Tracked revenues consist of certain costs that are recovered from customers in rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs have no impact on earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, restructuring and stranded cost recovery revenues (including securitized RRB charges), and additionally for NSTAR Electric, pension and PBOP benefits and net metering for distributed generation. Tracked revenues also include wholesale market sales transactions, such as sales of energy and energy-related products into the ISO-NE wholesale electricity market and the sale of RECs to various counterparties. In addition, tracked revenues include certain incentives earned, certain return on rate base, and carrying charges that are billed in rates to customers, which do impact earnings. Tracked revenues increased/(decreased) for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:



(Millions of Dollars)	CL&P			NSTAR Electric			PSNH
Retail Tariff Tracked Revenues
Energy supply procurement	$	60.2		$	25.3		$	8.1
Retail transmission	(17.5		)	(37.7		)	(18.0		)
Stranded cost recovery	(6.3		)	2.4			17.8
Other distribution tracking mechanisms	8.5			14.0			4.3
Wholesale Market Sales Revenue	4.8			3.4			(11.5		)

PSNH's energy supply procurement revenues includes the absence in 2019 of the recovery of generation rate base return due to the sales of its thermal and hydroelectric generation assets in 2018. Revenues from CL&P's other distribution tracking mechanisms include higher earnings in 2019 from its capital tracker mechanism effective July 1, 2018 due to increased electric system improvements.

Transmission Revenues: Transmission revenues increased $38.6 million at CL&P, $13.4 million at NSTAR Electric, and $15.7 million at PSNH due primarily to ongoing investments in our transmission infrastructure.

Eliminations: Eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business. The impact of eliminations decreased revenues by $15.7 million at CL&P, $8.7 million at NSTAR Electric and $0.3 million at PSNH.

Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P, NSTAR Electric and PSNH's customers. These energy supply costs are recovered from customers in commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power, Fuel and Transmission expense increased/(decreased) for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:



(Millions of Dollars)	CL&P			NSTAR Electric			PSNH
Purchased Power Costs	$	60.5		$	5.3		$	18.5
Transmission Costs	(15.3		)	(37.0		)	(12.2		)
Eliminations	(15.0		)	(8.5		)	(0.2		)
Total Purchased Power, Fuel and Transmission	$	30.2		$	(40.2	)	$	6.1

Purchased Power Costs: Included in purchased power costs are the costs associated with providing electric generation service supply to all customers who have not migrated to third party suppliers.

The increase at CL&P was due primarily to an increase in the price and volume of power procured on behalf of our customers.

The increase at NSTAR Electric was due primarily to an increase in the price of power procured on behalf of our customers.

The increase at PSNH was due primarily to higher purchased power energy expenses that are recovered as a component of the Energy Service tracking mechanism.

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

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

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

The decrease in transmission costs at PSNH was primarily a result of a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers, a decrease in costs billed by ISO-NE that support regional grid investments and a decrease in Local Network Service charges, which reflect the cost of transmission service provided by Eversource over our local transmission network.



(Millions of Dollars)	CL&P			NSTAR Electric			PSNH
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	(4.2	)	$	(7.1	)	$	(0.7	)
Operations-related expenses, including vegetation management, vehicles, and outside services	11.0			2.1			4.8
Storm restoration costs	(3.3		)	5.9			1.4
Other non-tracked operations and maintenance	6.8			(5.2		)	0.8
Total Base Electric Distribution (Non-Tracked Costs)	10.3			(4.3		)	6.3
Tracked Costs:
Absence in 2019 of PSNH generation operations expenses due to the 2018 sales of thermal and hydroelectric generation assets	—			—			(7.0		)
Transmission expenses	24.6			0.4			3.0
Other tracked operations and maintenance	2.1			5.0			5.2
Total Tracked Costs	26.7			5.4			1.2
Total Operations and Maintenance	$	37.0		$	1.1		$	7.5

Depreciation increased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The increase at CL&P was due primarily to higher net plant in service balances and the implementation of new depreciation rates effective with the CL&P distribution rate case settlement agreement.

The increase at NSTAR Electric was due to higher net plant in service balances.

Amortization of Regulatory Assets, Net expense includes the deferral of energy supply and energy-related costs included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain costs. This deferral adjusts expense to match the corresponding revenues. Amortization of Regulatory Assets, Net increased at CL&P for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to higher recovery of deferred storm restoration costs approved in distribution rates, and at NSTAR Electric and PSNH due primarily to the deferral adjustment of energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. The increase at PSNH is also due to higher amortization of its securitized regulatory asset related to the 2018 RRB issuance of $14.7 million.

Energy Efficiency Programs expenseincludes costs for various state energy policy initiatives and expanded energy efficiency programs, the majority of which are recovered from customers in rates and have no impact on earnings. Energy Efficiency Programs expenseincreased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to higher spending for CL&P's, NSTAR Electric's and PSNH's energy efficiency programs.

Taxes Other Than Income Taxes increased/(decreased) for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The increase at CL&P was due primarily to higher property taxes as a result of higher utility plant balances and higher gross earnings taxes (the costs of which are tracked), partially offset by a decrease related to CL&P's remittance of energy efficiency funds to the State of Connecticut of $4.0 million.

The decrease at NSTAR Electric was due primarily to lower property taxes as a result of a decrease in tax rates.

Interest Expense (decreased)/increased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The decrease at CL&P was due primarily to lower interest on long-term debt ($3.5 million) and an increase in AFUDC related to debt funds ($0.4 million), partially offset by an increase in interest expense on regulatory deferrals ($1.4 million).


•	Theincrease at NSTAR Electric was due primarily to higher interest on long-term debt ($1.6 million).

The increase at PSNH was due primarily to an increase in interest on the 2018 PSNH RRB issuance ($7.9 million), partially offset by lower interest on long-term debt ($3.3 million), a decrease in interest on notes payable ($1.5 million) and an increase in AFUDC related to debt funds ($0.9 million).

Other Income, Net (decreased)/increased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The decrease at CL&P was due primarily to a decrease related to pension, SERP and PBOP non-service income components ($6.9 million).

The decrease at NSTAR Electric was due primarily to a decrease related to pension, SERP and PBOP non-service income components ($5.5 million).

The increase at PSNH was due primarily to the recognition in the first quarter of 2019 of $5.2 million of the equity return component of the carrying charges related to storm costs incurred from December 2013 through April 2016 recorded in interest income, and an increase in AFUDC related to equity funds ($1.1 million), partially offset by a decrease related to pension, SERP and PBOP non-service income components ($2.4 million).

Income Tax Expense decreased for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the following:

The decrease at CL&P was due primarily to amortization of EDIT ($1.5 million), lower state taxes ($1.2 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($3.2 million) offset by higher pre-tax earnings ($3 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.0 million offset by a current tax benefit of $0.5 million and amortization of EDIT of $1.5 million, for the six months ended June 30, 2019, which results in no impact on net income.

The decrease at NSTAR Electric was due primarily to amortization of EDIT ($9.6 million), partially offset by higher pre-tax earnings ($2.5 million), and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.4 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $13.3 million offset by a current tax benefit of $3.7 million and amortization of EDIT of $9.6 million, for the six months ended June 30, 2019, which results in no impact on net income.

The decrease at PSNH was due primarily to lower pre-tax earnings ($~~2.4~~1.2 million), amortization of EDIT ($2.1 million), and items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~1.2~~1.1 million).

~~Income Tax Expense increased~~ The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.8 million offset by a current tax benefit of $0.7 million and amortization of EDIT of $2.1 million, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019,which results in no impact on net income.

EARNINGS SUMMARY

CL&P's earnings increased $17.0 millionfor the six months ended June 30, 2019, as compared to the same period in ~~2016,~~2018, due primarily to base distribution rate increases effective May 1, 2019 and May 1, 2018, higher ~~pre-tax~~ earnings ~~($20.6 million), the absence of~~from its capital tracker mechanism, and an increase in transmission earnings driven by a ~~tax credit in 2017 ($2.4 million), and~~ higher ~~state taxes ($1.3 million),~~transmission rate base. The earnings increase was partially offset by ~~flow-through items~~higher operations and ~~permanent differences ($4.6 million).~~maintenance expense, lower non-service income from our benefit plans, higher depreciation expense and higher property and other tax expense.

NSTAR Electric's earnings increased $18.6 million for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to an increase in transmission earnings driven by a higher transmission rate base, the NSTAR Electric base distribution rate increase effective January 1, 2019, lower operations and maintenance expense, and lower property and other tax expense. The earnings increase was partially offset by higher depreciation expense.

PSNH's earnings decreased $1.3 million for the six months ended June 30, 2019, as compared to the same period in 2018, due primarily to the absence in 2019 of generation earnings as a result of the sale of its generation assets in 2018, higher operations and maintenance expense and lower demand revenues. The earnings decrease was partially offset by an increase in transmission earnings driven by a higher transmission rate base and the recognition in 2019 of carrying charges on storm costs approved for recovery.

LIQUIDITY

Cash Flows: CL&P had cash flows provided by operating activities of $345.6 million for the six months ended June 30, 2019, as compared to $268.1 million in the same period of 2018. The increase in operating cash flows was due primarily to the absence in 2019 of approximately $71 million of storm restoration cost payments and $41.2 million in pension contributions made in the first half of 2018, and the timing of accounts payable cash payments. Partially offsetting these favorable impacts were the timing of collections for regulatory tracking mechanisms and other working capital items.

NSTAR Electric had cash flows provided by operating activities of $251.5 million for the six months ended June 30, 2019, as compared to $202.7 million in the same period of 2018. The increase in operating cash flows was due primarily to the absence in 2019 of approximately $85 million of storm restoration cost payments made in the first half of 2018, a decrease of $56.1 million in pension and PBOP cash contributions, lower income tax payments made in the first half of 2019 of $47 million, and the timing of cash collections on our accounts receivables. Partially offsetting these favorable impacts were the timing of accounts payable cash payments, the timing of collections for regulatory tracking mechanisms, and the timing of other working capital items.

PSNH had cash flows provided by operating activities of $121.7 million for the six months ended June 30, 2019, as compared to $112.8 million in the same period of 2018. The increase in operating cash flows was due primarily to income tax refunds of $11.8 million in the first half of 2019, as compared to income tax payments of $9.0 million in the same period in 2018, the timing of cash collections on accounts receivable, and the timing of accounts payable cash payments. Partially offsetting these favorable impacts was the timing of collections and payments of our other working capital items.

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

RESULTS OF OPERATIONS – THE CONNECTICUT LIGHT AND POWER COMPANY

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for CL&P for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 included in this combined Quarterly Report on Form 10-Q:


	For the Three Months Ended September 30,									For the Nine Months Ended September 30,									For the Three Months Ended June 30,
(Millions of Dollars)	2017		2016		Increase/ (Decrease)			Percent		2017		2016		Increase/ (Decrease)			Percent		2019		2018		Increase/(Decrease)
Operating Revenues	$	774.8	$	760.0	$	14.8		1.9	%	$	2,173.6	$	2,175.1	$	(1.5	)	(0.1	)%	$	740.8	$	694.9	$	45.9
Operating Expenses:
Purchased Power and Transmission	259.0		253.5		5.5			2.2		711.2		760.6		(49.4		)	(6.5	)	246.5		234.3		12.2
Operations and Maintenance	123.1		123.0		0.1			0.1		359.8		356.4		3.4			1.0		133.4		109.7		23.7
Depreciation	63.7		57.7		6.0			10.4		184.3		172.2		12.1			7.0		74.6		69.4		5.2
Amortization of Regulatory Assets, Net	34.6		23.4		11.2			47.9		58.8		30.3		28.5			94.1		12.4		15.4		(3.0		)
Energy Efficiency Programs	37.7		44.4		(6.7		)	(15.1	)	106.5		118.0		(11.5		)	(9.7	)	20.8		18.6		2.2
Taxes Other Than Income Taxes	79.2		81.9		(2.7		)	(3.3	)	223.4		227.9		(4.5		)	(2.0	)	86.4		84.4		2.0
Total Operating Expenses	597.3		583.9		13.4			2.3		1,644.0		1,665.4		(21.4		)	(1.3	)	574.1		531.8		42.3
Operating Income	177.5		176.1		1.4			0.8		529.6		509.7		19.9			3.9		166.7		163.1		3.6
Interest Expense	36.3		36.1		0.2			0.6		106.6		108.6		(2.0		)	(1.8	)	36.9		38.7		(1.8		)
Other Income, Net	7.5		3.7		3.8			(a)		14.1		10.9		3.2			29.4		2.9		7.1		(4.2		)
Income Before Income Tax Expense	148.7		143.7		5.0			3.5		437.1		412.0		25.1			6.1		132.7		131.5		1.2
Income Tax Expense	52.6		57.1		(4.5		)	(7.9	)	159.5		155.4		4.1			2.6		27.9		31.8		(3.9		)
Net Income	$	96.1	$	86.6	$	9.5		11.0	%	$	277.6	$	256.6	$	21.0		8.2	%	$	104.8	$	99.7	$	5.1

~~(a) Percent greater than 100 not shown as it is not meaningful.~~

Operating Revenues

Sales Volumes:CL&P's retail electric GWh sales volumes were ~~as follows:~~4,602 and 4,846 for the three months ended June 30, 2019 and 2018, respectively, resulting in a decrease of 5.0 percent. Fluctuations in retail electric sales volumes do not impact earnings due to its PURA-approved distribution revenue decoupling mechanism.

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 Decrease Percent 2017 2016 Decrease Percent
Retail Sales Volumes in GWh 5,644
6,225
(581 ) (9.3 )% 15,812
16,541
(729 ) (4.4 )%

~~Three Months Ended:~~

~~CL&P's~~Operating Revenues: Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased ~~by $14.8~~$45.9 million for the three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016.~~2018.

~~Fluctuations in~~ Base Distribution Revenues: CL&P's sales volumes do not impact the level of base distribution revenue realized or earnings due to the PURA-approved revenue decoupling mechanism. CL&P's revenue decoupling mechanism permits recovery of a base amount of distribution revenues ($1.059 billion annually) and breaks the relationship between sales volumes and revenues recognized. The revenue decoupling mechanism results in the recovery of approved base distribution revenue requirements.

Fluctuations in the overall level of operating revenues are primarily related to tracked revenues. Tracked revenues consist of certain costs that are recovered from customers in rates through PURA-approved cost tracking mechanisms and therefore, have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs and restructuring and stranded cost recovery revenues. In addition, certain tracked revenues include incentives earned and carrying charges that are billed in rates to customers. Tracked distribution revenues increased primarily as a result of an increase in energy supply costs ($27.1 million) driven by increased average retail prices. Partially offsetting this increase was a decrease in stranded cost recovery revenues ($7.6 million) and a decrease in retail transmission charges ($7.6 million).

~~Transmission revenues increased by $6.3~~$14.5 million due primarily to the impact of its base distribution rate increases effective May 1, 2019 and May 1, 2018 as a result of the PURA-approved rate case settlement agreement, which includes recovery of ~~higher revenue requirements associated with ongoing investments in our transmission infrastructure.~~storm costs and certain other items that do not impact earnings.

~~Nine Months Ended:~~

~~CL&P's Operating Revenues decreased by $1.5 million~~Tracked Revenues: Tracked revenues increased/(decreased) for the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016.~~2018, due primarily to the following:

~~Tracked~~



(Millions of Dollars)
Retail Tariff Tracked Revenues
Energy supply procurement	$	23.9
Retail transmission	(8.1		)
Other distribution tracking mechanisms	0.2
Wholesale Market Sales Revenue	1.5

Revenues from CL&P's other distribution revenues decreased primarily as a result of a decrease in energy supply costs ($25.0 million) driven by decreased average retail prices and lower sales volumes. In addition, there was a $17.8 million decrease in stranded cost recovery revenues. Partially offsetting these decreases was an increase in federally-mandated congestion charges ($23.0 million).tracking mechanisms include higher earnings from its capital tracker mechanism effective July 1, 2018 due to increased electric system improvements.

Transmission Revenues: Transmission revenues increased ~~by $27.2~~$21.2 million due primarily to ~~higher revenue requirements associated with~~ ongoing investments in our transmission infrastructure.

Eliminations: Eliminations are primarily related to transmission revenues derived from ISO-NE regional transmission charges to the distribution business that recovers the costs of the wholesale transmission business. The impact of eliminations decreased revenues by $8.0 million.

Purchased Power and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P's customers. These energy supply costs are recovered from customers in ~~rates through~~ PURA-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). ~~Total~~ Purchased Power and Transmission expense ~~increased~~increased/(decreased) for the three months ended ~~September~~June 30, ~~2017, and decreased for the nine months ended September 30, 2017, as compared to the same periods in 2016, due primarily to the following:~~

(Millions of Dollars) Three Months Ended Increase/(Decrease)
Nine Months Ended
Increase/(Decrease)
Purchased Power Costs $ 5.7
$ (68.1 )
Transmission Costs (0.2 ) 18.7
Total Purchased Power and Transmission $ 5.5
$ (49.4 )

Included in purchased power costs are the costs associated with CL&P's GSC, CTA and FMCC tracking mechanisms and deferred energy supply costs. The increase in purchased power costs for the three months ended September 30, 2017,2019, as compared to the same period in ~~2016,~~2018, due primarily to the following:



(Millions of Dollars)
Purchased Power Costs	$	26.3
Transmission Costs	(6.8		)
Eliminations	(7.3		)
Total Purchased Power and Transmission	$	12.2

The increase in purchased power costs was due primarily to ~~GSC-related purchased~~an increase in both the price and volume of power ~~expenses.~~procured on behalf of our customers. The ~~GSC recovers energy-related~~decrease in transmission costs ~~incurred as~~was primarily a result of providing electric generation service supply to all customers who have not migrated to third party suppliers. The decrease in purchased power costs for the nine months ended September 30, 2017, as compared to the same period in 2016, was due primarily to a decrease in the price of standard offer supply also associated with the GSC, and lower sales volumes. The increase in transmission costs for the nine months ended September 30, 2017, as compared to the same period in 2016, was primarily the result of an increase in costs billed by ISO-NE that support regional grid investment, and Local Network Service charges, which reflect the cost of transmission ~~service.~~service provided over the local transmission network, and a decrease in costs billed by ISO-NE that support regional grid investments. This was partially offset by ~~a decrease~~an increase in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to ~~customers.~~customers network.

Operations and Maintenance expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense ~~increased~~increased/(decreased) for the three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016, driven by a $0.4 million increase in non-tracked costs, which was~~2018, due primarily ~~attributable~~ to higher shared corporate costs, partially offset by lower employee-related expenses, lower storm restoration costs and lower vegetation management costs. The increase in non-tracked costs was partially offset by a $0.3 million decrease in tracked costs, which was primarily attributable to lower tracked system resiliency, lower bad debt expense and lower employee-related costs, partially offset by higher transmission expenses.the following:

~~Operations and Maintenance~~



(Millions of Dollars)
Base Electric Distribution (Non-Tracked Costs):
Employee-related expenses, including labor and benefits	$	(2.0	)
Operations-related expenses, including vegetation management, vehicles, and outside services	5.8
Other non-tracked operations and maintenance	4.1
Total Base Electric Distribution (Non-Tracked Costs)	7.9
Total Tracked Costs	15.8
Total Operations and Maintenance	$	23.7

Depreciation expense increased for the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in 2016, driven by a $6.5 million increase in tracked costs, which was primarily attributable to higher transmission expenses, partially offset by lower tracked bad debt expense. Non-tracked costs decreased $3.0 million, which was primarily attributable to lower employee-related expenses, lower bad debt expense and lower vegetation management costs, partially offset by higher shared corporate costs, higher storm restoration costs, and higher system resiliency project costs.

~~Depreciation~~ ~~expense increased for the three and nine months ended September 30, 2017, as compared to the same periods in 2016,~~2018, due primarily to higher ~~utility~~net plant in service ~~balances.~~ balances and the implementation of new depreciation rates effective with the CL&P distribution rate case settlement agreement.

Amortization of Regulatory Assets, Net expense includes the deferral of energy supply and energy-related costs included in certain regulatory-approved cost tracking mechanisms, and the amortization of certain ~~costs, which are recovered from customers in rates and have no impact on earnings. The~~costs. This deferral adjusts ~~expense~~expenses to match the corresponding revenues. ~~The increase~~Amortization of Regulatory Assets, Net decreased at CL&P for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same ~~periods~~period in ~~2016, was~~2018, due primarily to the ~~fluctuation~~deferral adjustment of ~~the deferral,~~energy supply and energy-related costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

Energy ~~Efficiency Programs~~ ~~expense decreased for~~supply and energy-related costs, which are the ~~three and nine months ended September 30, 2017, as compared to the same periods in 2016, due primarily to the deferral adjustment, which reflects the actual cost~~primary drivers of energy efficiency programs compared to the estimated amounts billed to customers and the timing of the recovery of energy efficiency costs. The deferral adjusts costs incurred to match energy efficiency revenue billed to customers. The costs for various state policy initiativesamortization, are recovered from customers in rates and have no impact on earnings.

~~Taxes Other Than Income Taxes~~ ~~expense~~decreased for the three and nine months ended September 30, 2017, as compared to the same periods in 2016, due primarily to a decrease in gross earnings taxes, partially offset by an increase in property taxes due to higher plant balances. Gross earnings taxes are tracked costs and have no impact on earnings.

~~Income Tax Expense~~ decreased for the three months ended September 30, 2017, as compared to the same period in 2016, due primarily to the true-up of the return to provision impacts ($4.7 million) and items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.5 million), partially offset by higher pre-tax earnings ($1.7 million).

Income Tax Expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to higher pre-tax earnings ($8.8 million) and higher state taxes ($2.6 million), partially offset by the true-up of the return to provision impacts ($4.7 million) and flow-through items and permanent differences ($2.6 million).

~~EARNINGS SUMMARY~~

~~CL&P's earnings increased $9.5 million~~for the three months ended September 30, 2017, as compared to the same period in 2016, due primarily to a lower effective tax rate, an increase in transmission earnings driven by a higher transmission rate base, and higher distribution revenues due in part to a higher rate base for the system resiliency program, partially offset by higher depreciation expense.

CL&P's earnings increased $21.0 million for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to an increase in transmission earnings driven by a higher transmission rate base, higher distribution revenues due in part to a higher rate base for the system resiliency program, and lower non-tracked operations and maintenance expense. These favorable earnings impacts were partially offset by higher depreciation expense.

~~LIQUIDITY~~

~~Cash totaled $9.4 million as of September 30, 2017, compared with $6.6 million as of December 31, 2016.~~

CL&P had cash flows provided by operating activities of $623.3 million for the nine months ended September 30, 2017, as compared to $614.4 million in the same period of 2016. The increase in operating cash flows was due primarily to the favorable impact of the timing of regulatory recoveries and the timing of collections and payments of our working capital items, including accounts receivable and accounts payable. Partially offsetting these favorable impacts were the income tax payments of $19.8 million made in 2017, compared to the income tax refunds of $128.5 million received in 2016.

Eversource parent has a $1.45 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt, with intercompany loans to certain subsidiaries, including CL&P. The weighted-average interest rate on the commercial paper borrowings as of September 30, 2017 and December 31, 2016 was 1.34 percent and 0.88 percent, respectively. There were no intercompany loans from Eversource parent to CL&P as of September 30, 2017. As of December 31, 2016, there were intercompany loans from Eversource parent to CL&P of $80.1 million. Eversource parent, and certain of its subsidiaries, including CL&P, are parties to a five-year $1.45 billion revolving credit facility. The revolving credit facility terminates on September 4, 2021. The revolving credit facility serves to backstop Eversource parent's $1.45 billion commercial paper program. There were no borrowings outstanding on the revolving credit facility as of September 30, 2017 and December 31, 2016.

In August 2017, CL&P issued $225 million of 4.30 percent 2014 Series A First and Refunding Mortgage Bonds due to mature in 2044. These bonds are part of the same series of CL&P’s existing 4.30 percent bonds that were initially issued in 2014. The aggregate outstanding principal amount for these bonds is now $475 million. The proceeds, net of issuance costs, were used to refinance short-term debt and fund capital expenditures and working capital.

~~In September 2017, CL&P repaid at maturity $100 million of 5.75 percent 2007 Series C First Mortgage Bonds.~~

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 portions of pension expense. CL&P's investments in property, plant and equipment totaled $621.9 million for the nine months ended September 30, 2017.

~~RESULTS OF OPERATIONS – NSTAR ELECTRIC COMPANY AND SUBSIDIARY~~

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for NSTAR Electric for the nine months ended September 30, 2017 and 2016 included in this combined Quarterly Report on Form 10-Q:

For the Nine Months Ended September 30,
(Millions of Dollars) 2017 2016 Increase/
(Decrease) Percent
Operating Revenues $ 1,913.5
$ 1,986.0
$ (72.5 ) (3.7 )%
Operating Expenses:

Purchased Power and Transmission 689.8
764.9
(75.1 ) (9.8 )
Operations and Maintenance 266.2
279.9
(13.7 ) (4.9 )
Depreciation 167.6
159.2
8.4
5.3
Amortization of Regulatory Assets, Net 17.8
18.3
(0.5 ) (2.7 )
Energy Efficiency Programs 198.8
212.9
(14.1 ) (6.6 )
Taxes Other Than Income Taxes 99.0
101.8
(2.8 ) (2.8 )
Total Operating Expenses 1,439.2
1,537.0
(97.8 ) (6.4 )
Operating Income 474.3
449.0
25.3
5.6
Interest Expense 70.0
62.2
7.8
12.5
Other Income, Net 8.7
7.6
1.1
14.5
Income Before Income Tax Expense 413.0
394.4
18.6
4.7
Income Tax Expense 161.3
154.5
6.8
4.4
Net Income $ 251.7
$ 239.9
$ 11.8
4.9 %

~~Operating Revenues~~

~~NSTAR Electric's retail sales volumes were as follows:~~

For the Nine Months Ended September 30,
2017 2016 Decrease Percent
Retail Sales Volumes in GWh 15,204
15,746
(542 ) (3.4 )%

NSTAR Electric's Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, decreased by $72.5 million for the nine months ended September 30, 2017, as compared to the same period in 2016.

~~Base distribution revenues~~: Base distribution revenues, excluding LBR, decreased $11.2 million for the nine months ended September 30, 2017, as compared to the same period in 2016, as a result of lower sales volumes in 2017, as compared to 2016 driven by the mild summer weather during the third quarter of 2017. LBR increased $10.6 million for the nine months ended September 30, 2017, as compared to the same period in 2016.

~~Tracked revenues:~~ Tracked revenues consist of certain costs that are recovered from customers in rates through DPU-approved cost tracking mechanisms and therefore, have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, net metering for distributed generation and transition cost recovery revenues. In addition, certain tracked revenues include incentives earned and carrying charges that are billed in rates to customers. Tracked distribution revenues decreased primarily as a result of a decrease in energy supply costs ($44.1 million) driven by decreased average retail prices and lower sales volumes, a decrease in retail transmission charges ($53.9 million), a decrease in the pension rate adjustment mechanism ($14.7 million), and a decrease in transition cost recovery revenues ($11.9 million). Partially offsetting these decreases were an increase in net metering revenues ($20.2 million) and an increase in revenues related to renewable energy requirements ($23.4 million).

~~Transmission revenues increased by $20.6 million due primarily to the recovery of higher revenue requirements associated with ongoing investments in our transmission infrastructure.~~

~~Purchased Power and Transmission~~ expense includes costs associated with purchasing electricity on behalf of NSTAR Electric's customers. These energy supply costs are recovered from customers in rates through DPU-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Total Purchased Power and Transmission expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to the following:

(Millions of Dollars) Decrease
Purchased Power Costs $ (42.3 )
Transmission Costs (32.8 )
Total Purchased Power and Transmission $ (75.1 )

Included in purchased power costs are the costs associated with NSTAR Electric's basic service charge and deferred energy supply costs. The basic service charge recovers energy-related costs incurred as a result of providing electric generation service supply to all customers who have not migrated to third party suppliers. The decrease in purchased power costs was due primarily to lower prices associated with the procurement of energy supply and lower sales volumes. The decrease in transmission costs was primarily the result of a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers.

~~Operations and Maintenance~~ expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, driven by a $13.0 million decrease in non-tracked costs, which was primarily attributable to lower employee-related expenses, lower bad debt expense and lower storm restoration costs, partially offset by higher shared corporate costs, a $4.9 million charge recorded in the second quarter of 2017 related to the Boston Harbor civil action settlement, and higher vegetation management costs. Tracked costs decreased $0.7 million, which was primarily attributable to lower tracked employee-related expenses, partially offset by higher transmission expenses and higher tracked bad debt expense.

~~Depreciation~~ ~~expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to higher utility plant in service balances.~~

Energy Efficiency Programs expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to the deferral adjustment, which reflects the actual cost of energy efficiency programs compared to the estimated amounts billed to customers and the timing of the recovery of energy efficiency costs. The deferral adjusts costs incurred to match energy efficiency revenue billed to customers. Theincludes costs for various state energy policy initiatives and expanded energy efficiency programs, the majority of which are recovered from customers in rates and have no impact on earnings.

~~Taxes Other Than Income Taxes~~ Energy Efficiency Programs expense ~~decreased~~increased for the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016,~~2018, due primarily to ~~a decrease in property tax rates and lower employment-related taxes.~~higher spending for energy efficiency programs.

~~Interest Expense~~ Taxes Other Than Income Taxes increasedfor the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016,~~2018, due primarily to ~~new debt issuances.~~higher property taxes as a result of higher utility plant balances and higher gross earnings taxes (the costs of which are tracked), partially offset by a decrease related to CL&P's remittance of energy efficiency funds to the State of Connecticut of $2.0 million.

~~Income Tax~~Interest Expense ~~increased~~ decreased at CL&P for the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016,~~2018, due primarily to ~~higher pre-tax earnings~~lower interest on long-term debt ($~~6.9~~1.9 million) and an increase in AFUDC related to debt funds ($0.3 million), partially offset by an increase in interest expense on regulatory deferrals ($0.4 million).

Other Income, Net decreased for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to a decrease related to pension, SERP and PBOP non-service income components ($3.3 million).

Income Tax Expense decreased for the three months ended June 30, 2019, as compared to the same period in 2018, due primarily to amortization of EDIT ($1.5 million), lower state taxes ($1.9 million) and by items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~0.1~~0.5 million). The impact of the amortization of the EDIT regulatory liability, including the tax gross up portion, that reduced revenue is $2.0 million offset by a current tax benefit of $0.5 million and amortization of EDIT of $1.5 million, for the three months ended June 30, 2019, which results in no impact on net income.

EARNINGS SUMMARY

~~NSTAR Electric's~~CL&P's earnings increased ~~$11.8~~$5.1 millionfor the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to the same period in ~~2016,~~2018, due primarily to ~~lower~~base distribution rate increases effective May 1, 2019 and May 1, 2018 and higher earnings from its capital tracker mechanism. The earnings increase was partially offset by higher operations and maintenance expense, ~~and~~ lower ~~property tax~~non-service income from our benefit plans, higher depreciation expense ~~partially offset by lower sales volumes driven by the mild summer weather during the third quarter of 2017,~~ and higher ~~interest~~property and ~~depreciation~~other tax expense.

~~LIQUIDITY~~

NSTAR Electric had cash flows provided by operating activities of $413.0 million for the nine months ended September 30, 2017, as compared to $564.3 million in the same period of 2016. The decrease in operating cash flows was due primarily to a decrease in regulatory recoveries, which were significantly impacted by the timing of collections of purchased power and transmission costs, an increase of $56.3 million in Pension and PBOP Plan cash contributions, and the income tax payments of $23.9 million made in 2017, compared to the income tax refunds of $28.1 million received in 2016. Partially offsetting these decreases was a favorable impact related to the timing of collections of accounts receivable.

NSTAR Electric has a $450 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. As of September 30, 2017, NSTAR Electric had no short-term borrowings outstanding and as of December 31, 2016, NSTAR Electric had $126.5 million in short-term borrowings outstanding under its commercial paper program, leaving $450.0 million and $323.5 million of available borrowing capacity as of September 30, 2017 and December 31, 2016, respectively. The weighted-average interest rate on these borrowings as of December 31, 2016 was 0.71 percent. NSTAR Electric is a party to a five-year $450 million revolving credit facility. The revolving credit facility terminates on September 4, 2021. The revolving credit facility serves to backstop NSTAR Electric's $450 million commercial paper program. There were no borrowings outstanding on the revolving credit facility as of September 30, 2017 and December 31, 2016.

~~RESULTS OF OPERATIONS – PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY~~

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for PSNH for the nine months ended September 30, 2017 and 2016 included in this combined Quarterly Report on Form 10-Q:

For the Nine Months Ended September 30,
(Millions of Dollars) 2017 2016 Increase/
(Decrease) Percent
Operating Revenues $ 733.6
$ 727.8
$ 5.8
0.8 %
Operating Expenses:

Purchased Power, Fuel and Transmission 179.3
155.7
23.6
15.2
Operations and Maintenance 191.2
187.2
4.0
2.1
Depreciation 95.3
86.5
8.8
10.2
Amortization of Regulatory (Liabilities)/Assets, Net (10.7 ) 14.5
(25.2 ) (a)
Energy Efficiency Programs 11.0
10.9
0.1
0.9
Taxes Other Than Income Taxes 67.0
64.5
2.5
3.9
Total Operating Expenses 533.1
519.3
13.8
2.7
Operating Income 200.5
208.5
(8.0 ) (3.8 )
Interest Expense 38.7
37.4
1.3
3.5
Other Income, Net 2.9
1.0
1.9
(a)
Income Before Income Tax Expense 164.7
172.1
(7.4 ) (4.3 )
Income Tax Expense 65.1
66.3
(1.2 ) (1.8 )
Net Income $ 99.6
$ 105.8
$ (6.2 ) (5.9 )%

~~(a) Percent greater than 100 not shown as it is not meaningful.~~

~~Operating Revenues~~

~~PSNH's retail sales volumes were as follows:~~

For the Nine Months Ended September 30,
2017 2016 Decrease Percent
Retail Sales Volumes in GWh 5,835
5,985
(150 ) (2.5 )%

PSNH's Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased by $5.8 million for the nine months ended September 30, 2017, as compared to the same period in 2016.

~~Base distribution revenues~~: Base distribution revenues decreased $2.0 million for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to a 2.5 percent decrease in sales volumes driven by the mild summer weather during the third quarter of 2017.

~~Tracked revenues:~~ Tracked revenues consist of certain costs that are recovered from customers in rates through NHPUC-approved cost tracking mechanisms and therefore, have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and energy-related costs, costs associated with the generation of electricity for customers, retail transmission charges, energy efficiency program costs and stranded cost recovery revenues. In addition, certain tracked revenues include incentives earned and carrying charges that are billed in rates to customers. Tracked distribution revenues decreased primarily as a result of a decrease in revenues related to the timing of the sale of RECs ($15.3 million) and a decrease in the energy service rate ($5.1 million). Partially offsetting these decreases was an increase in retail transmission charges ($7.2 million) and an increase in wholesale generation revenues ($4.0 million).

~~Transmission revenues increased by $17.6 million due primarily to the recovery of higher revenue requirements associated with ongoing investments in our transmission infrastructure.~~

~~Purchased Power, Fuel and Transmission~~ expense includes costs associated with PSNH's generation of electricity, as well as purchasing electricity on behalf of its customers. These generation and energy supply costs are recovered from customers in rates through NHPUC-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Total Purchased Power, Fuel and Transmission expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to the following:

(Millions of Dollars) Increase
Purchased Power and Generation Fuel Costs $ 5.1
Transmission Costs 18.5
Total Purchased Power, Fuel and Transmission $ 23.6

In order to meet the demand of customers who have not migrated to third party suppliers, PSNH procures power through power supply contracts and spot purchases in the competitive New England wholesale power market and/or produces power through its own generation. The increase in purchased power and generation fuel costs was due primarily to higher purchased power energy expenses that are recovered as a component of the Energy Service rate, and Regional Greenhouse Gas Initiative related expenses recovered in the SCRC. The increase in transmission costs was primarily the result of an increase in costs billed by ISO-NE that support regional grid investment, and Local Network Service charges, which reflect the cost of transmission service, as well as the retail transmission cost deferral, which reflects actual costs of transmission service compared to estimated amounts billed to customers.

~~Operations and Maintenance~~ expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, driven by a $2.1 million increase in tracked costs, which was primarily attributable to higher transmission expenses, partially offset by lower employee-related expenses. Non-tracked costs increased by $1.9 million, which was primarily attributable to higher shared corporate costs and higher vegetation management costs, partially offset by lower employee-related expenses.

~~Depreciation~~ ~~expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to higher utility plant in service balances.~~

~~Amortization of Regulatory (Liabilities)/Assets, Net~~ expense includes the deferral of energy supply and energy-related costs and the amortization of certain costs, which are recovered from customers in rates and have no impact on earnings. The deferral adjusts expense to match the corresponding revenues. The decrease for the nine months ended September 30, 2017, as compared to the same period in 2016, was due primarily to the fluctuation of the deferral, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

~~Taxes Other Than Income Taxes~~ ~~expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to an increase in property taxes due to higher plant balances.~~

~~Income Tax Expense~~ decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to lower pre-tax earnings ($2.6 million) and items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.0 million), partially offset by the absence of a tax credit in 2017 ($2.4 million).

~~EARNINGS SUMMARY~~

PSNH's earnings decreased $6.2 million for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to lower generation earnings, higher property tax and depreciation expense and lower sales volumes driven by the mild summer weather during the third quarter of 2017. These unfavorable earnings impacts were partially offset by an increase in transmission earnings driven by a higher transmission rate base.

~~LIQUIDITY~~

PSNH had cash flows provided by operating activities of $264.0 million for the nine months ended September 30, 2017, as compared to $306.0 million in the same period of 2016. The decrease in operating cash flows was due primarily to the income tax payments of $11.8 million made in 2017, compared to the income tax refunds of $41.3 million received in 2016. Partially offsetting this decrease was $16.2 million of lower Pension Plan contributions made in 2017, as compared to 2016, and the favorable impacts related to the timing of regulatory recoveries.

~~RESULTS OF OPERATIONS – WESTERN MASSACHUSETTS ELECTRIC COMPANY~~

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for WMECO for the nine months ended September 30, 2017 and 2016 included in this combined Quarterly Report on Form 10-Q:

For the Nine Months Ended September 30,
(Millions of Dollars) 2017 2016
Increase/
(Decrease)
Percent
Operating Revenues $ 377.2
$ 368.5
$ 8.7
2.4 %
Operating Expenses:

Purchased Power and Transmission 109.6
104.4
5.2
5.0
Operations and Maintenance 65.8
68.0
(2.2 ) (3.2 )
Depreciation 36.8
34.4
2.4
7.0
Amortization of Regulatory Assets/(Liabilities), Net (0.6 ) 3.3
(3.9 ) (a)
Energy Efficiency Programs 29.7
33.6
(3.9 ) (11.6 )
Taxes Other Than Income Taxes 31.4
30.4
1.0
3.3
Total Operating Expenses 272.7
274.1
(1.4 ) (0.5 )
Operating Income 104.5
94.4
10.1
10.7
Interest Expense 18.8
18.3
0.5
2.7
Other Income, Net 1.4
0.1
1.3
(a)
Income Before Income Tax Expense 87.1
76.2
10.9
14.3
Income Tax Expense 34.7
30.1
4.6
15.3
Net Income $ 52.4
$ 46.1
$ 6.3
13.7 %

~~(a) Percent greater than 100 not shown as it is not meaningful.~~

~~Operating Revenues~~

~~WMECO's retail sales volumes were as follows:~~

For the Nine Months Ended September 30,
2017 2016 Decrease Percent
Retail Sales Volumes in GWh 2,579
2,695
(116 ) (4.3 )%

WMECO's Operating Revenues, which consist of base distribution revenues and tracked revenues further described below, increased by $8.7 million for the nine months ended September 30, 2017, as compared to the same period in 2016.

Fluctuations in WMECO's sales volumes do not impact the level of base distribution revenue realized or earnings due to the DPU-approved revenue decoupling mechanism. WMECO's revenue decoupling mechanism permits recovery of a base amount of distribution revenues ($132.4 million annually) and breaks the relationship between sales volumes and revenues recognized. The revenue decoupling mechanism results in the recovery of approved base distribution revenue requirements.

Fluctuations in the overall level of operating revenues are primarily related to tracked revenues. Tracked revenues consist of certain costs that are recovered from customers in rates through DPU-approved cost tracking mechanisms and therefore, have no impact on earnings. Costs recovered through cost tracking mechanisms include energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, low income assistance programs, and restructuring and stranded cost recovery revenues. In addition, certain tracked revenues include incentives earned and carrying charges that are billed in rates to customers. Tracked distribution revenues decreased due primarily to a decrease in energy supply costs ($10.8 million) driven by decreased average retail prices and lower sales volumes, partially offset by increases in revenues related to renewable energy requirements ($6.6 million).

~~Transmission revenues increased by $12.0 million due primarily to the recovery of higher revenue requirements associated with ongoing investments in our transmission infrastructure.~~

~~Purchased Power and Transmission~~ expense includes costs associated with purchasing electricity on behalf of WMECO's customers. These energy supply costs are recovered from customers in rates through DPU-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Total Purchased Power and Transmission expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to the following:

(Millions of Dollars) Increase/(Decrease)
Purchased Power Costs $ (2.6 )
Transmission Costs 7.8
Total Purchased Power and Transmission $ 5.2

Included in purchased power costs are the costs associated with WMECO's basic service charge and deferred energy supply costs. The basic service charge recovers energy-related costs incurred as a result of providing electric generation service supply to all customers who have not migrated to third party suppliers. The decrease in purchased power costs for the nine months ended September 30, 2017, as compared to the same period in 2016, was due primarily to lower prices associated with the procurement of energy supply and lower sales volumes. The increase in transmission costs for the nine months ended September 30, 2017, as compared to the same period in 2016, was primarily the result of an increase in costs billed by ISO-NE that support regional grid investment, and Local Network Service charges, which reflect the cost of transmission service, as well as the retail transmission cost deferral, which reflects actual costs of transmission service compared to estimated amounts billed to customers.

~~Operations and Maintenance~~ expense includes tracked costs and costs that are part of base distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, driven by a decrease in non-tracked costs of $1.9 million, which was primarily attributable to lower employee-related expenses, partially offset by higher shared corporate costs. Tracked costs also decreased by $0.3 million, which was primarily attributable to lower tracked employee-related expenses, and a lower deferral adjustment for RECs generated and sold by the WMECO solar program, partially offset by higher transmission expenses.

~~Depreciation~~ ~~expense increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to higher utility plant in service balances.~~

~~Amortization of Regulatory Assets/(Liabilities), Net~~ expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, due to the timing of refunds or recovery of tracked costs to/from customers in rates. These costs have no impact on earnings.

~~Energy Efficiency Programs~~ expense decreased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to the deferral adjustment, which reflects the actual cost of energy efficiency programs compared to the estimated amounts billed to customers and the timing of the recovery of energy efficiency costs. The deferral adjusts costs incurred to match energy efficiency revenue billed to customers. The costs for various state policy initiatives are recovered from customers in rates and have no impact on earnings.

~~Income Tax Expense~~ increased for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to higher pre-tax earnings ($3.8 million) and items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.8 million).

~~EARNINGS SUMMARY~~

WMECO's earnings increased $6.3 million for the nine months ended September 30, 2017, as compared to the same period in 2016, due primarily to an increase in transmission earnings driven by a higher transmission rate base, and lower operations and maintenance expense.

~~LIQUIDITY~~

WMECO had cash flows provided by operating activities of $92.0 million for the nine months ended September 30, 2017, as compared to $124.8 million in the same period of 2016. The decrease in operating cash flows was due primarily to the income tax payments of $2.0 million made in 2017, compared to the income tax refunds of $21.6 million received in 2016, and the unfavorable impacts related to the timing of collections and payments of our working capital items, including accounts receivable. Partially offsetting these unfavorable impacts was the benefit related to the timing of regulatory recoveries.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

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

Other Risk Management Activities

Interest Rate Risk Management: We manage our interest rate risk exposure in accordance with our written policies and ~~procedures by maintaining a mix of fixed and variable rate long-term debt.~~ procedures.

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

Our ~~Regulated~~regulated companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies. Our ~~Regulated~~regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor ~~contracting~~contracting risks, including credit risk. As of ~~September~~June 30, ~~2017,~~2019, our ~~Regulated~~regulated companies ~~did not hold~~held collateral ~~(letters~~in the form of ~~credit)~~letters of credit of $8.0 million from counterparties related to our standard service contracts. As of ~~September~~June 30, ~~2017,~~2019, Eversource had ~~$24.5~~$19.1 million of cash ~~posted~~posted with ISO-NE related to energy transactions.

We have provided additional disclosures regarding interest rate risk management and credit risk management in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," in Eversource's ~~2016~~2018 Form 10-K, which is incorporated herein by reference. There have been no additional risks identified and no material changes with regard to the items previously disclosed in the Eversource ~~2016~~2018 Form 10-K.


ITEM 4.	CONTROLS AND PROCEDURES

Management, on behalf of Eversource, CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO,~~PSNH, evaluated the design and operation of the disclosure controls and procedures as of ~~September~~June 30, ~~2017~~2019 to determine whether they are effective in ensuring that the disclosure of required information is made timely and in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the SEC. This evaluation was made under management's supervision and with management's participation, including the principal executive officer and principal financial officer as of the end of the period covered by this Quarterly Report on Form 10-Q. There are inherent limitations of disclosure controls and procedures, including the possibility of human error and the circumventing or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The principal executive officer and principal financial officer have concluded, based on their review, that the disclosure controls and procedures of Eversource, CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~PSNH are effective to ensure that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and regulations and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

During the third quarter of 2017, Eversource implemented a new supply chain management system resulting in a material change in internal controls over financial reporting. This new supply chain system consisted of both modern software tools and revised processes that consolidated and standardized all supply chain processes and practices across all of Eversource, including CL&P, NSTAR Electric, PSNH, and WMECO. Pre-implementation testing and post-implementation reviews were conducted by management to ensure that internal controls surrounding the system implementation process, the applications, and the closing process were properly designed to prevent material financial statement errors. Such procedures included the review of required documents, user acceptance testing, change management procedures, access controls, data migration strategies and reconciliations, application interface testing and other standard application controls.

~~Except as described above, there~~There have been no changes in internal controls over financial reporting for Eversource, CL&P, NSTAR Electric ~~PSNH~~ and ~~WMECO~~PSNH during the quarter ended ~~September~~June 30, ~~2017~~2019 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II. OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

We are parties to various legal proceedings. We have disclosed these legal proceedings in Part I, Item 3, "Legal Proceedings," and elsewhere in our ~~2016~~2018 Form 10-K. These disclosures are incorporated herein by reference.

OnAs previously disclosed, on May 22, 2017, each of the Yankee Companies filed subsequent lawsuits against the DOE in the Court of Federal ~~Claims seeking~~Claims. The Yankee Companies sought monetary damages totaling ~~approximately $100~~$104.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2013 to 2016 (“DOE Phase IV”). On February 21, 2019, the Yankee Companies received a partial summary judgment and partial final judgment in their favor for the undisputed amount of monetary damages of $103.2 million. The court awarded CYAPC, YAEC and MYAPC damages of $40.7 million, $28.1 million and $34.4 million, respectively. The DOE did not appeal the court's judgment and the decision became final on April 23, 2019. On June 12, 2019, the court accepted an offer of judgment in the amount of $0.5 million to settle the disputed amount of approximately $1 million in Phase IV ~~trial is expected to begin~~contested damages. The Yankee Companies received the $0.5 million payment in ~~2018.~~July 2019. For a further discussion of the Yankee Companies v. U.S. Department of Energy, see Part I, Item 3, “Legal Proceedings” of our ~~2016~~2018 Form 10-K.

Other than as set forth above, there have been no additional material legal proceedings identified and no further material changes with regard to the legal proceedings previously disclosed in our ~~2016~~2018 Form 10-K.


ITEM 1A.	RISK FACTORS

We are subject to a variety of significant risks in addition to the matters set forth under ~~"Forward-Looking Statements,"~~our forward-looking statements section in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report on Form 10-Q. We have identified a number of these risk factors in Part I, Item 1A, "Risk Factors," in our ~~2016~~2018 Form 10-K, which risk factors are incorporated herein by reference. These risk factors should be considered carefully in evaluating our risk profile. There have been no additional risk factors identified and no material changes with regard to the risk factors previously disclosed in our ~~2016~~2018 Form 10-K.


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

The following table discloses purchases of our common shares made by us or on our behalf for the periods shown below. The common shares purchased consist of open market purchases made by the Company or an independent agent. These share transactions related to ~~shares awarded under the Company's Incentive Plan and Dividend Reinvestment Plan and~~ matching contributions under the Eversource 401k Plan.

Period
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
July 1 - July 31, 2017 99,090
$ 60.76
—
—
August 1 - August 31, 2017 4,802
62.08
—
—
September 1 - September 30, 2017 74,148
60.77
—
—
Total 178,040
$ 60.80
—
—



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans and Programs (at month end)
April 1 - April 30, 2019	—	$	—	—	—
May 1 - May 31, 2019	—	—		—	—
June 1 - June 30, 2019	2,709	75.76		—	—
Total	2,709	$	75.76	—	—


ITEM 6.	EXHIBITS

Each document described below is filed herewith, unless designated with an asterisk (*), which exhibits are incorporated by reference by the registrant under whose name the exhibit appears.



	Exhibit No.	Description

	Listing of Exhibits (Eversource)
*
	10.1	~~Thirteen Supplemental Indenture of Mortgage~~Forward Sale Agreement between Eversource Energy and Deed of Trust between Yankee Gas Services Company and The Bank of New York Mellon Trust Company, N.A., successor as Trustee to The Bank of New York, as successor to Fleet National Bank (formerly known as The Connecticut National Bank),Goldman Sachs & Co. LLC, dated as of ~~September 1, 2017~~ May 30, 2019 (Exhibit 10.1, Eversource Energy Current Report on Form 8-K filed on June 5, 2019, File No. 001-05324)

	12 31	~~Ratio of Earnings to Fixed Charges~~

	31	Certification by the Chief Executive Officer of Eversource Energy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of Eversource Energy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chief Executive Officer and Chief Financial Officer of Eversource Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (CL&P)

*	~~4.2~~ 31	Supplemental Indenture (2017 Series A Bonds) between CL&P and Deutsche Bank Trust Company Americas, as Trustee dated as of August 1, 2017 (incorporated by reference to Exhibit 4.1, CL&P Current Report on Form 8-K filed August 23, 2017, File No. 000-00404)

	12	~~Ratio of Earnings to Fixed Charges~~

	31	Certification by the Chairman of The Connecticut Light and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of The Connecticut Light and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chairman and the Chief Financial Officer of The Connecticut Light and Power Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (NSTAR Electric Company)
*	4.1
	12	~~Ratio~~Form of ~~Earnings to Fixed Charges~~3.25% Debenture due May 15, 2029 (Exhibit 4, NSTAR Electric Company Current Report on Form 8-K filed on May 23, 2019, File No. 001-02301)

	31	Certification by the Chairman of NSTAR Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of NSTAR Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification by the Chairman and the Chief Financial Officer of NSTAR Electric Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (PSNH)
*	4.1
	12	~~Ratio~~Twenty-Second Supplemental Indenture, between PSNH and U.S. Bank National Association, as Trustee dated as of ~~Earnings to Fixed Charges~~June 1, 2019 (Exhibit 4.1, PSNH Current Report on Form 8-K filed July 3, 2019, File No. 001-06392)

	31	Certification by the Chairman of Public Service Company of New Hampshire pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.1	Certification by the Chief Financial Officer of Public Service Company of New Hampshire pursuant to Section 302 of the Sarbanes-Oxley Act of 2002




	32		Certification by the Chairman and the Chief Financial Officer of Public Service Company of New Hampshire pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	~~Listing of Exhibits (WMECO)~~

	12		~~Ratio of Earnings to Fixed Charges~~

	31		~~Certification by the Chairman of Western Massachusetts Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

	~~31.1~~		~~Certification by the Chief Financial Officer of Western Massachusetts Electric Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

	32		Certification by the Chairman and the Chief Financial Officer of Western Massachusetts Electric Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Listing of Exhibits (Eversource, CL&P, NSTAR Electric, ~~PSNH, WMECO)~~
			PSNH)
	101.INS		Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

	101.SCH		Inline XBRL Taxonomy Extension Schema

	101.CAL		Inline XBRL Taxonomy Extension Calculation



	101.DEF		Inline XBRL Taxonomy Extension Definition

	101.LAB		Inline XBRL Taxonomy Extension Labels

	101.PRE		Inline XBRL Taxonomy Extension Presentation

	104		The cover page from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in Inline XBRL

SIGNATURE

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



	EVERSOURCE ENERGY

~~November 3, 2017~~August 6, 2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	THE CONNECTICUT LIGHT AND POWER COMPANY

~~November 3, 2017~~August 6, 2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	NSTAR ELECTRIC COMPANY

~~November 3, 2017~~August 6, 2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE



	PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

~~November 3, 2017~~August 6, 2019	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

~~SIGNATURE~~



	~~WESTERN MASSACHUSETTS ELECTRIC COMPANY~~

~~November 3, 2017~~	~~By:~~	~~/s/ Jay S. Buth~~
		~~Jay S. Buth~~
		~~Vice President, Controller and Chief Accounting Officer~~




	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ~~FORM 10-Q~~
x	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~~	June 30, ~~2017~~2019
	or
¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________



~~Commission~~ ~~File Number~~			~~Registrant; State~~Securities registered pursuant to Section 12(b) of ~~Incorporation;~~ ~~Address; and Telephone Number~~	~~I.R.S. Employer~~ ~~Identification No.~~ the Act:

~~1-5324~~	~~EVERSOURCE ENERGY~~ ~~(a Massachusetts voluntary association)~~ ~~300 Cadwell Drive~~ ~~Springfield, Massachusetts 01104~~ ~~Telephone: (800) 286-5000~~	~~04-2147929~~

~~0-00404~~	~~THE CONNECTICUT LIGHT AND POWER COMPANY~~ ~~(a Connecticut corporation)~~ ~~107 Selden Street~~ ~~Berlin, Connecticut 06037-1616~~ ~~Telephone: (800) 286-5000~~	~~06-0303850~~
Title of each class
~~1-02301~~	~~NSTAR ELECTRIC COMPANY~~ ~~(a Massachusetts corporation)~~ ~~800 Boylston Street~~ ~~Boston, Massachusetts 02199~~ ~~Telephone: (800) 286-5000~~	~~04-1278810~~
Trading Symbol(s)		Name of each exchange on which registered
~~1-6392~~	~~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~~	~~02-0181050~~
Common Shares, $5.00 par value per share
~~0-7624~~	~~WESTERN MASSACHUSETTS ELECTRIC COMPANY~~ ~~(a Massachusetts corporation)~~ ~~300 Cadwell Drive~~ ~~Springfield, Massachusetts 01104~~ ~~Telephone: (800) 286-5000~~	~~04-1961130~~
ES
		New York Stock Exchange



	Yes	No
	x☒	¨☐



	Yes	No
	x☒	¨☐



Eversource Energy	Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company

~~Eversource Energy~~	x		¨		¨		¨		¨☐
The Connecticut Light and Power Company	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨Emerging growth company	☐
NSTAR Electric Company	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨Emerging growth company	☐
Public Service Company of New Hampshire	¨Large accelerated filer	☐	¨ Accelerated filer	☐	xNon-accelerated filer	☒	¨Smaller reporting company	☐	¨
~~Western Massachusetts Electric Company~~Emerging growth company	¨		¨		x		¨		¨☐



Company - Class of Stock	Outstanding as of ~~October~~July 31, ~~2017~~2019

Eversource Energy Common Shares, $5.00 par value	~~316,885,808~~ 323,602,045		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	~~100~~ 200		shares
Public Service Company of New Hampshire Common Stock, $1.00 par value	301 ~~shares~~
~~Western Massachusetts Electric Company Common Stock, $25.00 par value~~	~~434,653~~	shares



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, Eversource Water Ventures, Inc. (parent company of Aquarion), and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), ~~and~~ 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
~~WMECO~~PSNH Funding	~~Western Massachusetts Electric Company~~PSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR Gas	NSTAR Gas Company
Yankee Gas	Yankee Gas Services Company
Aquarion	Eversource Aquarion Holdings, Inc. and its subsidiaries
NPT	Northern Pass Transmission LLC
Northern Pass	The HVDC and associated alternating-current transmission line project from Canada into New Hampshire
Eversource Service	Eversource Energy Service Company
Bay State Wind	~~A project~~Bay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted, ~~(formerly known as DONG Energy) to construct~~which holds the Sunrise Wind project
North East Offshore	North East Offshore, LLC, an offshore wind ~~farm off~~business being developed jointly by Eversource and Denmark-based Ørsted, which holds the ~~coast of Massachusetts~~Revolution Wind and South Fork Wind projects
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~~regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric ~~PSNH,~~ and ~~WMECO,~~PSNH, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, NPT, Aquarion, and the ~~generation activities~~solar power facilities of ~~PSNH and WMECO~~
	NSTAR Electric
Regulators:
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
SJC	Supreme Judicial Court of Massachusetts

Other Terms and Abbreviations:
~~Access Northeast~~	A project being developed jointly by Eversource, Enbridge, Inc. ("Enbridge"), and National Grid plc ("National Grid") through Algonquin Gas Transmission, LLC to bring needed additional natural gas pipeline and storage capacity to New England.
ADIT	Accumulated Deferred Income Taxes
AFUDC	Allowance For Funds Used During Construction
~~AOCL~~AOCI	Accumulated Other Comprehensive ~~Loss~~
~~Aquarion~~	~~Aquarion Water Company~~Income
ARO	Asset Retirement Obligation
Bcf	Billion cubic feet
C&LM	Conservation and Load Management
CfD	Contract for Differences
~~Clean Air Project~~	~~The construction of a wet flue gas desulphurization system, known as "scrubber technology," to reduce mercury emissions of the Merrimack coal-fired generation station in Bow, New Hampshire~~
CO₂	~~Carbon dioxide~~
~~CPSL~~	~~Capital Projects Scheduling List~~
CTA	Competitive Transition Assessment
CWIP	Construction Work in Progress
EDC	Electric distribution company
EDIT	Excess Deferred Income Taxes
EPS	Earnings Per Share



ESOP	Employee Stock Ownership Plan
~~ESPP~~	~~Employee Share Purchase Plan~~
Eversource ~~2016~~2018 Form 10-K	The Eversource Energy and Subsidiaries ~~2016~~2018 combined Annual Report on Form 10-K as filed with the SEC
~~FERC ALJ~~	~~FERC Administrative Law Judge~~
Fitch	Fitch Ratings
FMCC	Federally Mandated Congestion Charge
FTR	Financial Transmission Rights
GAAP	Accounting principles generally accepted in the United States of America
GSC	Generation Service Charge
GSRP	Greater Springfield Reliability Project
GWh	Gigawatt-Hours
HQ	Hydro-Québec, a corporation wholly-owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDC	High-voltage direct current
Hydro Renewable Energy	Hydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec
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)
kWh	Kilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour)
LBR	Lost Base Revenue
LNG	Liquefied natural gas
LRS	Supplier of last resort service
~~MMcf~~MG	Million ~~cubic feet~~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
NEEWS	New England East-West Solution
NETOs	New England Transmission Owners (including Eversource, National Grid and Avangrid)
NOx	~~Nitrogen oxides~~
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 ~~that provides certain retiree benefits, primarily medical, dental and life insurance~~
PCRBs	Pollution Control Revenue Bonds
Pension Plan	Single uniform noncontributory defined benefit retirement plan
PPA	Pension Protection Act
RECs	Renewable Energy Certificates
Regulatory ROE	The average cost of capital method for calculating the return on equity related to the distribution ~~and generation~~ business segment excluding the wholesale transmission segment
RNS	Regional Network Service
ROE	Return on Equity
~~RRB~~RRBs	Rate Reduction ~~Bond~~Bonds or Rate Reduction ~~Certificate~~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
~~SIP~~	~~Simplified Incentive Plan~~
SO₂	~~Sulfur dioxide~~
SS	Standard service
TCAM	Transmission Cost Adjustment Mechanism
TSA	Transmission Service Agreement
UI	The United Illuminating Company
VIE	Variable Interest Entity



		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	34

	The Connecticut Light and Power Company (Unaudited)
	Condensed Balance Sheets	4
	~~Condensed Statements of Income~~	5
	Condensed Statements of ~~Comprehensive~~ Income	56
	Condensed Statements of Comprehensive Income	6
	Condensed Statements of Common Stockholder's Equity	7
	Condensed Statements of Cash Flows	68

	NSTAR Electric Company and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	7
	~~Condensed Consolidated Statements of Income~~	8
	~~Condensed Consolidated Statements of Comprehensive Income~~	8
	~~Condensed Consolidated Statements of Cash Flows~~	9

	~~Public Service Company of New Hampshire and Subsidiary (Unaudited)~~
	Condensed Consolidated ~~Balance Sheets~~Statements of Income	10
	Condensed Consolidated Statements of Comprehensive Income	10
	Condensed Consolidated Statements of Common Stockholder's Equity	11
	~~Condensed Consolidated Statements of Comprehensive Income~~	11
	Condensed Consolidated Statements of Cash Flows	12

	~~Western Massachusetts Electric~~Public Service Company of New Hampshire and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	13
	Condensed Consolidated Statements of Income	14
	Condensed Consolidated Statements of Comprehensive Income	14
	Condensed Consolidated Statements of ~~Cash Flows~~ Common Stockholder's Equity	15

	~~Combined Notes to~~ Condensed ~~Financial~~Consolidated Statements ~~(Unaudited)~~of Cash Flows	16

	~~ITEM 2.~~Combined Notes to Condensed Financial Statements (Unaudited)	17

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Eversource Energy and Subsidiaries	3542
	The Connecticut Light and Power Company	, 50
	NSTAR Electric Company and Subsidiary, and	53
	Public Service Company of New Hampshire and ~~Subsidiary~~Subsidiaries	55
	~~Western Massachusetts Electric Company~~	5758

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	5965

ITEM 4.	Controls and Procedures	5965

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	6066

ITEM 1A.	Risk Factors	6066

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6066

ITEM 6.	Exhibits	6167

SIGNATURES		6369


(Thousands of Dollars)	As of September 30, 2017			As of December 31, 2016			As of June 30, 2019			As of December 31, 2018

ASSETS
Current Assets:
Cash and Cash Equivalents	$	125,761		$	30,251
Cash							$	20,578		$	108,068
Receivables, Net	919,959			847,301			964,314			994,055
Unbilled Revenues	146,634			168,490			154,920			176,285
Fuel, Materials, Supplies and Inventory	305,035			328,721			174,124			238,042
Regulatory Assets	746,142			887,625			515,265			514,779
Prepayments and Other Current Assets	159,939			215,284			302,496			260,995
Total Current Assets	2,403,470			2,477,672			2,131,697			2,292,224

Property, Plant and Equipment, Net	22,537,304			21,350,510			26,304,446			25,610,428

Deferred Debits and Other Assets:
Regulatory Assets	3,505,901			3,638,688			4,404,176			4,631,137
Goodwill	3,519,401			3,519,401			4,427,266			4,427,266
Investments in Unconsolidated Affiliates							748,705			464,286
Marketable Securities	570,255			544,642			401,231			417,508
Other Long-Term Assets	627,289			522,260			578,385			398,407
Total Deferred Debits and Other Assets	8,222,846			8,224,991			10,559,763			10,338,604

Total Assets	$	33,163,620		$	32,053,173		$	38,995,906		$	38,241,256

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	18,238		$	1,148,500		$	729,000		$	910,000
Long-Term Debt – Current Portion	957,697			773,883			779,289			837,319
Rate Reduction Bonds – Current Portion							43,210			52,332
Accounts Payable	794,195			884,521			903,431			1,119,995
Obligations to Third Party Suppliers	149,789			122,806
Regulatory Liabilities	170,215			146,787			379,850			370,230
Other Current Liabilities	530,297			562,108			677,341			823,006
Total Current Liabilities	2,620,431			3,638,605			3,512,121			4,112,882

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	6,001,589			5,607,207			3,549,922			3,506,030
Regulatory Liabilities	700,207			702,255			3,639,792			3,609,475
Derivative Liabilities	391,910			413,676			363,848			379,562
Accrued Pension and SERP	946,629			1,141,514
Accrued Pension, SERP and PBOP							955,092			962,510
Other Long-Term Liabilities	881,056			853,260			1,264,061			1,196,336
Total Deferred Credits and Other Liabilities	8,921,391			8,717,912			9,772,715			9,653,913

Capitalization:
Long-Term Debt	10,468,193			8,829,354			13,039,180			12,248,743

Rate Reduction Bonds							561,727			583,331

Noncontrolling Interest – Preferred Stock of Subsidiaries	155,568			155,568			155,570			155,570

Equity:
Common Shareholders' Equity:
Common Shares	1,669,392			1,669,392			1,699,292			1,669,392
Capital Surplus, Paid In	6,235,846			6,250,224			6,659,009			6,241,222
Retained Earnings	3,474,185			3,175,171			3,954,492			3,953,974
Accumulated Other Comprehensive Loss	(63,615		)	(65,282		)	(53,641		)	(60,000		)
Treasury Stock	(317,771		)	(317,771		)	(304,559		)	(317,771		)
Common Shareholders' Equity	10,998,037			10,711,734			11,954,593			11,486,817
Total Capitalization	21,621,798			19,696,656

Commitments and Contingencies (Note 9)

Total Liabilities and Capitalization	$	33,163,620		$	32,053,173		$	38,995,906		$	38,241,256



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)	2017		2016		2017		2016

Operating Revenues	$	1,988,512	$	2,039,706	$	5,856,458	$	5,862,525

Operating Expenses:
Purchased Power, Fuel and Transmission	651,776		665,810		1,955,129		2,001,929
Operations and Maintenance	300,421		324,734		933,400		965,584
Depreciation	194,466		181,288		571,152		531,781
Amortization of Regulatory Assets, Net	41,848		43,942		58,058		56,223
Energy Efficiency Programs	129,205		149,121		391,761		405,962
Taxes Other Than Income Taxes	168,193		164,942		479,648		479,219
Total Operating Expenses	1,485,909		1,529,837		4,389,148		4,440,698
Operating Income	502,603		509,869		1,467,310		1,421,827
Interest Expense	108,719		99,865		319,477		298,568
Other Income, Net	21,184		13,641		56,304		23,689
Income Before Income Tax Expense	415,068		423,645		1,204,137		1,146,948
Income Tax Expense	152,818		156,446		447,921		428,186
Net Income	262,250		267,199		756,216		718,762
Net Income Attributable to Noncontrolling Interests	1,880		1,880		5,639		5,639
Net Income Attributable to Common Shareholders	$	260,370	$	265,319	$	750,577	$	713,123

Basic and Diluted Earnings Per Common Share	$	0.82	$	0.83	$	2.36	$	2.24

Dividends Declared Per Common Share	$	0.48	$	0.45	$	1.43	$	1.34

Weighted Average Common Shares Outstanding:
Basic	317,393,029		317,787,836		317,415,848		317,696,823
Diluted	317,949,396		318,577,079		318,007,042		318,511,609



	Total Provision for Uncollectible Accounts				Uncollectible Hardship
(Millions of Dollars)	As of September 30, 2017		As of December 31, 2016		As of September 30, 2017		As of December 31, 2016
Eversource	$	196.8	$	200.6	$	126.3	$	119.9
CL&P	77.6		86.4		64.6		67.7
NSTAR Electric	55.7		54.8		32.3		26.2
PSNH	10.6		9.9		—		—
WMECO	17.0		15.5		11.3		9.9



	For the Three Months Ended				For the Nine Months Ended
(Millions of Dollars)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Eversource	$	40.3	$	45.1	$	118.2	$	124.8
CL&P	37.8		42.6		103.5		112.2



(Millions of Dollars)	As of September 30, 2017		As of September 30, 2016
Eversource	$	307.7	$	203.6
CL&P	113.4		64.5
NSTAR Electric	55.4		39.4
PSNH	39.6		31.0
WMECO	37.1		17.6



Complaint	15-Month Time Period of Complaint (Beginning as of Complaint Filing Date)	Original Base ROE Authorized by FERC at Time of Complaint Filing Date ⁽¹⁾	Base ROE Subsequently Authorized by FERC for First Complaint Period and also Effective from October 16, 2014 through April 14, 2017 ⁽¹⁾	Reserve (Pre-Tax and Excluding Interest) as of September 30, 2017 (in millions)		FERC ALJ Recommendation of Base ROE on Second and Third Complaints (Issued March 22, 2016)
First	10/1/2011 - 12/31/2012	11.14%	10.57%	$—	⁽²⁾	N/A
Second	12/27/2012 - 3/26/2014	11.14%	N/A	39.1	⁽³⁾	9.59%
Third	7/31/2014 - 10/30/2015	11.14%	10.57%	—		10.90%
Fourth	4/29/2016 - 7/28/2017	10.57%	10.57%	—		N/A


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Thousands of Dollars)	2017		2016		2017		2016		2019		2018		2019		2018

Operating Revenues	$	725,701	$	780,462	$	1,913,548	$	1,985,979	$	681,893	$	690,737	$	1,479,505	$	1,460,865

Operating Expenses:
Purchased Power and Transmission	259,400		291,382		689,784		764,907		228,397		266,108		558,501		598,687
Operations and Maintenance	92,571		96,282		266,203		279,932		108,924		102,163		221,887		220,844
Depreciation	56,200		54,695		167,598		159,151		73,055		64,051		145,639		134,593
Amortization of Regulatory Assets, Net	9,845		9,621		17,806		18,275		23,184		11,954		45,768		18,318
Energy Efficiency Programs	71,615		84,717		198,803		212,882		65,904		65,184		142,633		139,978
Taxes Other Than Income Taxes	37,052		35,050		99,090		101,800		48,226		47,627		93,047		95,815
Total Operating Expenses	526,683		571,747		1,439,284		1,536,947		547,690		557,087		1,207,475		1,208,235
Operating Income	199,018		208,715		474,264		449,032		134,203		133,650		272,030		252,630
Interest Expense	24,488		21,101		69,962		62,206		28,238		27,359		56,120		53,822
Other Income, Net	3,426		5,022		8,703		7,524		10,657		14,269		21,743		26,870
Income Before Income Tax Expense	177,956		192,636		413,005		394,350		116,622		120,560		237,653		225,678
Income Tax Expense	69,796		75,440		161,320		154,493		26,888		32,639		53,906		60,607
Net Income	$	108,160	$	117,196	$	251,685	$	239,857	$	89,734	$	87,921	$	183,747	$	165,071



(Millions of Dollars)
Gross Plant	$	1,184.1
Accumulated Depreciation	(573.3		)
Net Plant	610.8
Fuel	92.9
Materials and Supplies	44.0
Emission Allowances	19.4
Total Generation Assets	$	767.1



	For the Nine Months Ended September 30, 2017											For the Nine Months Ended September 30, 2016
	Qualified			Unrealized								Qualified			Unrealized
	Cash Flow			Gains								Cash Flow			Gains/(Losses)
Eversource (Millions of Dollars)	Hedging			on Marketable		Defined						Hedging			on Marketable			Defined
Eversource (Millions of Dollars)	Instruments			Securities		Benefit Plans			Total			Instruments			Securities			Benefit Plans			Total
Balance as of Beginning of Period	$	(8.2	)	$	0.4	$	(57.5	)	$	(65.3	)	$	(10.3	)	$	(1.9	)	$	(54.6	)	$	(66.8	)

OCI Before Reclassifications	—			0.7		(3.5		)	(2.8		)	—			2.3			(5.3		)	(3.0		)
Amounts Reclassified from AOCL	1.6			—		2.9			4.5			1.6			—			2.6			4.2
Net OCI	1.6			0.7		(0.6		)	1.7			1.6			2.3			(2.7		)	1.2
Balance as of End of Period	$	(6.6	)	$	1.1	$	(58.1	)	$	(63.6	)	$	(8.7	)	$	0.4		$	(57.3	)	$	(65.6	)



	Shares
			Authorized as of September 30, 2017 and	Issued as of
	Par Value		December 31, 2016	September 30, 2017	December 31, 2016
Eversource	$	5	380,000,000	333,878,402	333,878,402
CL&P	$	10	24,500,000	6,035,205	6,035,205
NSTAR Electric	$	1	100,000,000	100	100
PSNH	$	1	100,000,000	301	301
WMECO	$	25	1,072,471	434,653	434,653



(Millions of Dollars)	Increase
Purchased Power and Generation Fuel Costs	$	5.1
Transmission Costs	18.5
Total Purchased Power, Fuel and Transmission	$	23.6