~~0000072741us-gaap:OperatingSegmentsMemberes:ResidentialMemberes:EversourceElectricDistributionMember2020-01-012020-06-30~~



	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
	FORM	10-Q
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	~~June 30, 2021~~March 31, 2022
	or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

Registrant; State of Incorporation; Address; Telephone Number;

Commission File Number; and I.R.S. Employer Identification No.

EVERSOURCE ENERGY

(a Massachusetts voluntary association)

300 Cadwell Drive, Springfield, Massachusetts 01104

Telephone: (800) 286-5000

Commission File Number: 001-05324

I.R.S. Employer Identification No. 04-2147929

THE CONNECTICUT LIGHT AND POWER COMPANY

(a Connecticut corporation)

107 Selden Street, Berlin, Connecticut 06037-1616

Telephone: (800) 286-5000

Commission File Number: 000-00404

I.R.S. Employer Identification No. 06-0303850

NSTAR ELECTRIC COMPANY

(a Massachusetts corporation)

800 Boylston Street, Boston, Massachusetts 02199

Telephone: (800) 286-5000

Commission File Number: 001-02301

I.R.S. Employer Identification No. 04-1278810

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

(a New Hampshire corporation)

Energy Park

780 North Commercial Street, Manchester, New Hampshire 03101-1134

Telephone: (800) 286-5000

Commission File Number: 001-06392

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, $5.00 par value per share

New York Stock Exchange

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


			Yes			No
			☒			☐

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


			Yes			No
			☒			☐

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

Eversource Energy

Large accelerated filer

☒

Accelerated
filer

☐

Non-accelerated
filer

☐

Smaller reporting company

☐

Emerging growth company

☐

The Connecticut Light and Power Company

Large accelerated filer

☐

Accelerated
filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

NSTAR Electric Company

Large accelerated filer

☐

Accelerated
filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Public Service Company of New Hampshire

Large accelerated filer

☐

Accelerated
filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):


	Yes	No

Eversource Energy	☐	☒
The Connecticut Light and Power Company	☐	☒
NSTAR Electric Company	☐	☒
Public Service Company of New Hampshire	☐	☒

Indicate the number of shares outstanding of each of the ~~issuer's~~registrant's classes of common stock, as of the latest practicable date.


Company - Class of Stock	Outstanding as of ~~July 31, 2021~~April 30, 2022

Eversource Energy Common Shares, $5.00 par value	~~343,643,255~~344,878,136	shares
The Connecticut Light and Power Company Common Stock, $10.00 par value	6,035,205	shares
NSTAR Electric Company Common Stock, $1.00 par value	200	shares
Public Service Company of New Hampshire Common Stock, $1.00 par value	301	shares

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

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

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

GLOSSARY OF TERMS

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


Current or former Eversource Energy companies, segments or investments:
Eversource, ES or the Company			Eversource Energy and subsidiaries
Eversource parent or ES parent			Eversource Energy, a public utility holding company
ES parent and other companies			ES parent and other companies are comprised of Eversource parent, Eversource Service, and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), the consolidated operations of CYAPC and YAEC, and Eversource parent's equity ownership interests that are not consolidated
CL&P			The Connecticut Light and Power Company
NSTAR Electric			NSTAR Electric Company
PSNH			Public Service Company of New Hampshire
PSNH Funding			PSNH Funding LLC 3, a bankruptcy remote, special purpose, wholly-owned subsidiary of PSNH
NSTAR Gas			NSTAR Gas Company
EGMA			Eversource Gas Company of Massachusetts
Yankee Gas			Yankee Gas Services Company
Aquarion			Aquarion Company and its subsidiaries
~~NPT~~			~~Northern Pass Transmission LLC~~
~~Northern Pass~~			~~The high-voltage direct current (HVDC) and associated alternating-current transmission line project from Canada into New Hampshire~~
HEEC			Harbor Electric Energy Company, a wholly-owned subsidiary of NSTAR Electric
Eversource Service			Eversource Energy Service Company
~~Bay State Wind~~			~~Bay State Wind LLC, an offshore wind business being developed jointly by Eversource and Denmark-based Ørsted~~
North East Offshore			North East Offshore, LLC, an offshore wind business ~~holding company~~ being developed jointly by Eversource and Denmark-based Ørsted
CYAPC			Connecticut Yankee Atomic Power Company
MYAPC			Maine Yankee Atomic Power Company
YAEC			Yankee Atomic Electric Company
Yankee Companies			CYAPC, YAEC and MYAPC
Regulated companies			The Eversource regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric and PSNH, the natural gas distribution businesses of Yankee Gas, NSTAR Gas and EGMA, ~~NPT, Aquarion,~~Aquarion’s water distribution businesses, and the solar power facilities of NSTAR Electric
Regulators and Government Agencies:
BOEM			U.S. Bureau of Ocean Energy Management
DEEP			Connecticut Department of Energy and Environmental Protection
DOE			U.S. Department of Energy
DOER			Massachusetts Department of Energy Resources
DPU			Massachusetts Department of Public Utilities
EPA			U.S. Environmental Protection Agency
FERC			Federal Energy Regulatory Commission
ISO-NE			ISO New England, Inc., the New England Independent System Operator
MA DEP			Massachusetts Department of Environmental Protection
NHPUC			New Hampshire Public Utilities Commission
PURA			Connecticut Public Utilities Regulatory Authority
SEC			U.S. Securities and Exchange Commission
Other Terms and Abbreviations:
ADIT			Accumulated Deferred Income Taxes
AFUDC			Allowance For Funds Used During Construction
AOCI			Accumulated Other Comprehensive Income
ARO			Asset Retirement Obligation
Bcf			Billion cubic feet
CfD			Contract for Differences
~~CTA~~			~~Competitive Transition Assessment~~
CWIP			Construction Work in Progress
EDC			Electric distribution company


EDIT			Excess Deferred Income Taxes
EPS			Earnings Per Share
ERISA			Employee Retirement Income Security Act of 1974
ESOP			Employee Stock Ownership Plan
Eversource ~~2020~~2021 Form 10-K			The Eversource Energy and Subsidiaries ~~2020~~2021 combined Annual Report on Form 10-K as filed with the SEC
Fitch			Fitch Ratings, Inc.


FMCC			Federally Mandated Congestion Charge
GAAP			Accounting principles generally accepted in the United States of America
~~GSC~~			~~Generation Service Charge~~
GWh			Gigawatt-Hours
IPP			Independent Power Producers
ISO-NE Tariff			ISO-NE FERC Transmission, Markets and Services Tariff
kV			Kilovolt
kVa			Kilovolt-ampere
kW			Kilowatt (equal to one thousand watts)
LNG			Liquefied natural gas
LRS			Supplier of last resort service
MG			Million gallons
MGP			Manufactured Gas Plant
MMBtu			One million British thermal units
MMcf			Million cubic feet
Moody's			Moody's Investors Services, Inc.
MW			Megawatt
MWh			Megawatt-Hours
NETOs			New England Transmission Owners (including Eversource, National Grid and Avangrid)
OCI			Other Comprehensive Income/(Loss)
PAM			Pension and PBOP Rate Adjustment Mechanism
PBOP			Postretirement Benefits Other Than Pension
PBOP Plan			Postretirement Benefits Other Than Pension Plan
Pension Plan			Single uniform noncontributory defined benefit retirement plan
PPA			Power purchase agreement
RECs			Renewable Energy Certificates
Regulatory ROE			The average cost of capital method for calculating the return on equity related to the distribution business segment excluding the wholesale transmission segment
ROE			Return on Equity
RRBs			Rate Reduction Bonds or Rate Reduction Certificates
RSUs			Restricted share units
S&P			Standard & Poor's Financial Services LLC
~~SBC~~			~~Systems Benefits Charge~~
~~SCRC~~			~~Stranded Cost Recovery Charge~~
SERP			Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans
SS			Standard service
UI			The United Illuminating Company
VIE			Variable Interest Entity

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)

	Eversource Energy and Subsidiaries (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Common Shareholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4

	The Connecticut Light and Power Company (Unaudited)
	Condensed Balance Sheets	5
	Condensed Statements of Income	6
	Condensed Statements of Comprehensive Income	6
	Condensed Statements of Common Stockholder's Equity	7
	Condensed Statements of Cash Flows	8

	NSTAR Electric Company and Subsidiary (Unaudited)
	Condensed Consolidated Balance Sheets	9
	Condensed Consolidated Statements of Income	10
	Condensed Consolidated Statements of Comprehensive Income	10
	Condensed Consolidated Statements of Common Stockholder's Equity	11
	Condensed Consolidated Statements of Cash Flows	12

	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 Common Stockholder's Equity	15
	Condensed Consolidated Statements of Cash Flows	16

	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	3936
	The Connecticut Light and Power Company, NSTAR Electric Company and Subsidiary, and Public Service Company of New Hampshire and Subsidiaries	5650

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6355

ITEM 4.	Controls and Procedures	6355

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	6456

ITEM 1A.	Risk Factors	6456

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6556

ITEM 6.	Exhibits	6657

SIGNATURES		6858

iii

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	(Thousands of Dollars)	As of June 30, 2021		As of December 31, 2020		(Thousands of Dollars)	As of March 31, 2022		As of December 31, 2021

ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash	Cash	$	217,397	$	106,599	Cash	$	46,175	$	66,773
Receivables, Net (net of allowance for uncollectible accounts of $425,769 and $358,851 as of June 30, 2021 and December 31, 2020, respectively)		1,224,092		1,195,925
Receivables, Net (net of allowance for uncollectible accounts of $432,174 and $417,406 as of March 31, 2022 and December 31, 2021, respectively)						Receivables, Net (net of allowance for uncollectible accounts of $432,174 and $417,406 as of March 31, 2022 and December 31, 2021, respectively)	1,468,558		1,226,069
Unbilled Revenues	Unbilled Revenues	188,356		233,025		Unbilled Revenues	192,913		210,879
Fuel, Materials, Supplies and REC Inventory	Fuel, Materials, Supplies and REC Inventory	187,692		265,599		Fuel, Materials, Supplies and REC Inventory	287,042		267,547
Regulatory Assets	Regulatory Assets	1,186,851		1,076,556		Regulatory Assets	1,128,088		1,129,093

Prepayments and Other Current Assets	Prepayments and Other Current Assets	264,451		252,439		Prepayments and Other Current Assets	350,907		369,759
Total Current Assets	Total Current Assets	3,268,839		3,130,143		Total Current Assets	3,473,683		3,270,120
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	31,878,551		30,882,523		Property, Plant and Equipment, Net	33,852,596		33,377,650
Deferred Debits and Other Assets:	Deferred Debits and Other Assets:					Deferred Debits and Other Assets:
Regulatory Assets	Regulatory Assets	5,246,381		5,493,330		Regulatory Assets	4,573,309		4,586,709
Goodwill	Goodwill	4,453,618		4,445,988		Goodwill	4,477,118		4,477,269
Investments in Unconsolidated Affiliates	Investments in Unconsolidated Affiliates	1,205,303		1,107,143		Investments in Unconsolidated Affiliates	1,545,433		1,436,293
Marketable Securities	Marketable Securities	462,953		456,617		Marketable Securities	423,216		460,347
Other Long-Term Assets	Other Long-Term Assets	718,995		583,854		Other Long-Term Assets	943,797		883,756
Total Deferred Debits and Other Assets	Total Deferred Debits and Other Assets	12,087,250		12,086,932		Total Deferred Debits and Other Assets	11,962,873		11,844,374
Total Assets	Total Assets	$	47,234,640	$	46,099,598	Total Assets	$	49,289,152	$	48,492,144

LIABILITIES AND CAPITALIZATION	LIABILITIES AND CAPITALIZATION					LIABILITIES AND CAPITALIZATION
Current Liabilities:	Current Liabilities:					Current Liabilities:
Notes Payable	Notes Payable	$	2,002,500	$	1,249,325	Notes Payable	$	1,668,800	$	1,505,450
Long-Term Debt – Current Portion	Long-Term Debt – Current Portion	799,858		1,053,186		Long-Term Debt – Current Portion	817,114		1,193,097
Rate Reduction Bonds – Current Portion	Rate Reduction Bonds – Current Portion	43,210		43,210		Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	Accounts Payable	1,061,111		1,370,647		Accounts Payable	1,494,360		1,672,230

Regulatory Liabilities	Regulatory Liabilities	532,467		389,430		Regulatory Liabilities	652,358		602,432
Other Current Liabilities	Other Current Liabilities	665,424		809,214		Other Current Liabilities	925,467		830,620
Total Current Liabilities	Total Current Liabilities	5,104,570		4,915,012		Total Current Liabilities	5,601,309		5,847,039
Deferred Credits and Other Liabilities:	Deferred Credits and Other Liabilities:					Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	Accumulated Deferred Income Taxes	4,258,986		4,095,339		Accumulated Deferred Income Taxes	4,683,105		4,597,120
Regulatory Liabilities	Regulatory Liabilities	3,880,131		3,850,781		Regulatory Liabilities	3,894,768		3,866,251
Derivative Liabilities	Derivative Liabilities	275,775		294,535		Derivative Liabilities	209,548		235,387
Asset Retirement Obligations	Asset Retirement Obligations	503,405		499,713		Asset Retirement Obligations	500,685		500,111
Accrued Pension, SERP and PBOP	Accrued Pension, SERP and PBOP	1,455,479		1,653,788		Accrued Pension, SERP and PBOP	200,614		242,463
Other Long-Term Liabilities	Other Long-Term Liabilities	962,166		948,506		Other Long-Term Liabilities	862,304		971,080
Total Deferred Credits and Other Liabilities	Total Deferred Credits and Other Liabilities	11,335,942		11,342,662		Total Deferred Credits and Other Liabilities	10,351,024		10,412,412
Long-Term Debt	Long-Term Debt	15,851,362		15,125,876		Long-Term Debt	17,912,462		17,023,577
Rate Reduction Bonds	Rate Reduction Bonds	475,307		496,912		Rate Reduction Bonds	432,097		453,702
Noncontrolling Interest – Preferred Stock of Subsidiaries	Noncontrolling Interest – Preferred Stock of Subsidiaries	155,570		155,570		Noncontrolling Interest – Preferred Stock of Subsidiaries	155,570		155,570
Common Shareholders' Equity:	Common Shareholders' Equity:					Common Shareholders' Equity:
Common Shares	Common Shares	1,789,092		1,789,092		Common Shares	1,789,092		1,789,092
Capital Surplus, Paid In	Capital Surplus, Paid In	8,032,959		8,015,663		Capital Surplus, Paid In	8,102,618		8,098,514
Retained Earnings	Retained Earnings	4,830,058		4,613,201		Retained Earnings	5,229,069		5,005,391
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss	(74,342)		(76,411)		Accumulated Other Comprehensive Loss	(41,571)		(42,275)
Treasury Stock	Treasury Stock	(265,878)		(277,979)		Treasury Stock	(242,518)		(250,878)
Common Shareholders' Equity	Common Shareholders' Equity	14,311,889		14,063,566		Common Shareholders' Equity	14,836,690		14,599,844
Commitments and Contingencies (Note 9)	Commitments and Contingencies (Note 9)	0		0		Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	Total Liabilities and Capitalization	$	47,234,640	$	46,099,598	Total Liabilities and Capitalization	$	49,289,152	$	48,492,144

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)	(Thousands of Dollars, Except Share Information)	2021		2020		2021		2020		(Thousands of Dollars, Except Share Information)		2022		2021

Operating Revenues	Operating Revenues	$	2,122,538	$	1,953,128	$	4,948,378	$	4,326,854	Operating Revenues		$	3,471,310	$	2,825,840

Operating Expenses:	Operating Expenses:									Operating Expenses:
Purchased Power, Fuel and Transmission	Purchased Power, Fuel and Transmission	650,087		630,132		1,648,578		1,506,703		Purchased Power, Fuel and Transmission		1,389,696		998,491
Operations and Maintenance	Operations and Maintenance	411,147		332,055		876,689		674,117		Operations and Maintenance		472,433		465,542
Depreciation	Depreciation	274,647		240,516		545,352		476,727		Depreciation		289,330		270,704
Amortization	Amortization	5,611		23,397		113,624		73,172		Amortization		236,948		108,013
Energy Efficiency Programs	Energy Efficiency Programs	128,955		115,354		317,018		263,747		Energy Efficiency Programs		199,484		188,063
Taxes Other Than Income Taxes	Taxes Other Than Income Taxes	200,486		178,019		409,944		359,613		Taxes Other Than Income Taxes		220,364		209,459
Total Operating Expenses	Total Operating Expenses	1,670,933		1,519,473		3,911,205		3,354,079		Total Operating Expenses		2,808,255		2,240,272
Operating Income	Operating Income	451,605		433,655		1,037,173		972,775		Operating Income		663,055		585,568
Interest Expense	Interest Expense	145,435		134,285		283,201		269,000		Interest Expense		153,245		137,766
Other Income, Net	Other Income, Net	46,619		30,243		80,820		54,347		Other Income, Net		71,561		34,201
Income Before Income Tax Expense	Income Before Income Tax Expense	352,789		329,613		834,792		758,122		Income Before Income Tax Expense		581,371		482,003
Income Tax Expense	Income Tax Expense	86,389		75,501		200,370		167,379		Income Tax Expense		136,045		113,980
Net Income	Net Income	266,400		254,112		634,422		590,743		Net Income		445,326		368,023
Net Income Attributable to Noncontrolling Interests	Net Income Attributable to Noncontrolling Interests	1,880		1,880		3,759		3,759		Net Income Attributable to Noncontrolling Interests		1,880		1,880
Net Income Attributable to Common Shareholders	Net Income Attributable to Common Shareholders	$	264,520	$	252,232	$	630,663	$	586,984	Net Income Attributable to Common Shareholders		$	443,446	$	366,143

Basic and Diluted Earnings Per Common Share		$	0.77	$	0.75	$	1.83	$	1.75
Basic Earnings Per Common Share										Basic Earnings Per Common Share		$	1.28	$	1.07

Diluted Earnings Per Common Share										Diluted Earnings Per Common Share		$	1.28	$	1.06

Weighted Average Common Shares Outstanding:	Weighted Average Common Shares Outstanding:									Weighted Average Common Shares Outstanding:
Basic	Basic	343,844,626		337,946,663		343,761,435		334,524,452		Basic		345,156,346		343,678,243
Diluted	Diluted	344,435,696		338,561,649		344,385,193		335,749,404		Diluted		345,661,133		344,334,689

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Net Income	Net Income	$	266,400	$	254,112	$	634,422	$	590,743	Net Income		$	445,326	$	368,023
Other Comprehensive Income, Net of Tax:	Other Comprehensive Income, Net of Tax:									Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	Qualified Cash Flow Hedging Instruments	445		387		852		616		Qualified Cash Flow Hedging Instruments		5		407
Changes in Unrealized Gains/(Losses) on Marketable Securities		273		269		(463)		429
Changes in Unrealized Losses on Marketable Securities										Changes in Unrealized Losses on Marketable Securities		(817)		(736)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	163		(103)		1,680		1,456		Changes in Funded Status of Pension, SERP and PBOP Benefit Plans		1,516		1,517
Other Comprehensive Income, Net of Tax	Other Comprehensive Income, Net of Tax	881		553		2,069		2,501		Other Comprehensive Income, Net of Tax		704		1,188
Comprehensive Income Attributable to Noncontrolling Interests	Comprehensive Income Attributable to Noncontrolling Interests	(1,880)		(1,880)		(3,759)		(3,759)		Comprehensive Income Attributable to Noncontrolling Interests		(1,880)		(1,880)
Comprehensive Income Attributable to Common Shareholders	Comprehensive Income Attributable to Common Shareholders	$	265,401	$	252,785	$	632,732	$	589,485	Comprehensive Income Attributable to Common Shareholders		$	444,150	$	367,331

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY

(Unaudited)


		For the Six Months Ended June 30, 2021														For the Three Months Ended March 31, 2022
		Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity			Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	(Thousands of Dollars, Except Share Information)	Shares	Amount												(Thousands of Dollars, Except Share Information)	Shares	Amount
Balance as of January 1, 2021		342,954,023	$	1,789,092	$	8,015,663	$	4,613,201	$	(76,411)	$	(277,979)	$	14,063,566
Balance as of January 1, 2022															Balance as of January 1, 2022	344,403,196	$	1,789,092	$	8,098,514	$	5,005,391	$	(42,275)	$	(250,878)	$	14,599,844
Net Income	Net Income						368,023						368,023		Net Income						445,326						445,326
Dividends on Common Shares - $0.6025 Per Share							(206,913)						(206,913)
Dividends on Common Shares - $0.6375 Per Share															Dividends on Common Shares - $0.6375 Per Share						(219,768)						(219,768)
Dividends on Preferred Stock	Dividends on Preferred Stock						(1,880)						(1,880)		Dividends on Preferred Stock						(1,880)						(1,880)
Long-Term Incentive Plan Activity	Long-Term Incentive Plan Activity				(15,727)								(15,727)		Long-Term Incentive Plan Activity				(16,538)								(16,538)
Issuance of Treasury Shares	Issuance of Treasury Shares	480,275			16,182						8,981		25,163		Issuance of Treasury Shares	447,076			20,642						8,360		29,002

Other Comprehensive Income	Other Comprehensive Income								1,188				1,188		Other Comprehensive Income								704				704
Balance as of March 31, 2021		343,434,298	1,789,092		8,016,118		4,772,431		(75,223)		(268,998)		14,233,420
Net Income							266,400						266,400
Dividends on Common Shares - $0.6025 Per Share							(206,893)						(206,893)
Dividends on Preferred Stock							(1,880)						(1,880)
Long-Term Incentive Plan Activity					6,162								6,162
Issuance of Treasury Shares		166,805			10,679						3,120		13,799

Other Comprehensive Income									881				881
Balance as of June 30, 2021		343,601,103	$	1,789,092	$	8,032,959	$	4,830,058	$	(74,342)	$	(265,878)	$	14,311,889
Balance as of March 31, 2022															Balance as of March 31, 2022	344,850,272	$	1,789,092	$	8,102,618	$	5,229,069	$	(41,571)	$	(242,518)	$	14,836,690


		For the Six Months Ended June 30, 2020														For the Three Months Ended March 31, 2021
		Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity			Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	(Thousands of Dollars, Except Share Information)	Shares	Amount												(Thousands of Dollars, Except Share Information)	Shares	Amount
Balance as of January 1, 2020		329,880,645	$	1,729,292	$	7,087,768	$	4,177,048	$	(65,059)	$	(299,055)	$	12,629,994
Balance as of January 1, 2021															Balance as of January 1, 2021	342,954,023	$	1,789,092	$	8,015,663	$	4,613,201	$	(76,411)	$	(277,979)	$	14,063,566
Net Income	Net Income						336,633						336,633		Net Income						368,023						368,023
Dividends on Common Shares - $0.5675 Per Share							(187,462)						(187,462)
Dividends on Common Shares - $0.6025 Per Share															Dividends on Common Shares - $0.6025 Per Share						(206,913)						(206,913)
Dividends on Preferred Stock	Dividends on Preferred Stock						(1,880)						(1,880)		Dividends on Preferred Stock						(1,880)						(1,880)
Issuance of Common Shares - $5 par value		5,960,000	29,800		402,300								432,100
Long-Term Incentive Plan Activity	Long-Term Incentive Plan Activity				(15,295)								(15,295)		Long-Term Incentive Plan Activity				(15,727)								(15,727)
Issuance of Treasury Shares	Issuance of Treasury Shares	570,542			17,230						10,516		27,746		Issuance of Treasury Shares	480,275			16,182						8,981		25,163
Capital Stock Expense					(12,314)								(12,314)
Adoption of Accounting Standards Update 2016-13							(1,514)						(1,514)
Other Comprehensive Income	Other Comprehensive Income								1,948				1,948		Other Comprehensive Income								1,188				1,188
Balance as of March 31, 2020		336,411,187	1,759,092		7,479,689		4,322,825		(63,111)		(288,539)		13,209,956
Net Income							254,112						254,112
Dividends on Common Shares - $0.5675 Per Share							(190,964)						(190,964)
Dividends on Preferred Stock							(1,880)						(1,880)
Issuance of Common Shares - $5 par value		6,000,000	30,000		487,560								517,560
Long-Term Incentive Plan Activity					7,694								7,694
Issuance of Treasury Shares		216,675			12,524						4,024		16,548
Capital Stock Expense					(8,321)								(8,321)
Other Comprehensive Income									553				553
Balance as of June 30, 2020		342,627,862	$	1,789,092	$	7,979,146	$	4,384,093	$	(62,558)	$	(284,515)	$	13,805,258
Balance as of March 31, 2021															Balance as of March 31, 2021	343,434,298	$	1,789,092	$	8,016,118	$	4,772,431	$	(75,223)	$	(268,998)	$	14,233,420

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		(Thousands of Dollars)	2022		2021

Operating Activities:	Operating Activities:					Operating Activities:
Net Income	Net Income	$	634,422	$	590,743	Net Income	$	445,326	$	368,023
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:					Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	Depreciation	545,352		476,727		Depreciation	289,330		270,704
Deferred Income Taxes	Deferred Income Taxes	120,390		86,550		Deferred Income Taxes	67,557		41,917
Uncollectible Expense	Uncollectible Expense	27,683		20,579		Uncollectible Expense	17,135		16,295
Pension, SERP and PBOP (Income)/Expense, Net		(6,391)		5,441
Pension, SERP and PBOP Income, Net						Pension, SERP and PBOP Income, Net	(40,642)		(2,341)
Pension and PBOP Contributions	Pension and PBOP Contributions	(72,400)		(1,323)		Pension and PBOP Contributions	(26,100)		(31,100)
Regulatory Over/(Under) Recoveries, Net		46,835		(58,501)
Regulatory (Under)/Over Recoveries, Net						Regulatory (Under)/Over Recoveries, Net	(107,767)		28,024
(Customer Credits)/Reserve at CL&P related to PURA Settlement Agreement and Storm Performance Penalty						(Customer Credits)/Reserve at CL&P related to PURA Settlement Agreement and Storm Performance Penalty	(58,412)		30,000
Amortization	Amortization	113,624		73,172		Amortization	236,948		108,013

Cost of Removal Expenditures						Cost of Removal Expenditures	(61,660)		(39,333)
Other	Other	(154,065)		(40,764)		Other	(21,409)		(51,913)
Changes in Current Assets and Liabilities:	Changes in Current Assets and Liabilities:					Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	Receivables and Unbilled Revenues, Net	(85,261)		(66,460)		Receivables and Unbilled Revenues, Net	(291,723)		(124,344)
Fuel, Materials, Supplies and REC Inventory	Fuel, Materials, Supplies and REC Inventory	77,907		59,332		Fuel, Materials, Supplies and REC Inventory	(19,495)		(42,494)
Taxes Receivable/Accrued, Net	Taxes Receivable/Accrued, Net	(9,113)		120,717		Taxes Receivable/Accrued, Net	56,519		64,076
Accounts Payable	Accounts Payable	(285,670)		(169,251)		Accounts Payable	(68,909)		(181,725)
Other Current Assets and Liabilities, Net	Other Current Assets and Liabilities, Net	(145,868)		(91,587)		Other Current Assets and Liabilities, Net	(44,758)		(42,386)
Net Cash Flows Provided by Operating Activities	Net Cash Flows Provided by Operating Activities	807,445		1,005,375		Net Cash Flows Provided by Operating Activities	371,940		411,416

Investing Activities:	Investing Activities:					Investing Activities:
Investments in Property, Plant and Equipment	Investments in Property, Plant and Equipment	(1,423,223)		(1,400,198)		Investments in Property, Plant and Equipment	(764,594)		(688,983)
Proceeds from Sales of Marketable Securities	Proceeds from Sales of Marketable Securities	253,842		250,589		Proceeds from Sales of Marketable Securities	90,409		79,818
Purchases of Marketable Securities	Purchases of Marketable Securities	(240,729)		(239,698)		Purchases of Marketable Securities	(76,182)		(68,360)

Investments in Unconsolidated Affiliates, Net	Investments in Unconsolidated Affiliates, Net	(100,527)		(12,324)		Investments in Unconsolidated Affiliates, Net	(113,856)		(34,127)
Other Investing Activities	Other Investing Activities	12,661		11,129		Other Investing Activities	5,976		7,135
Net Cash Flows Used in Investing Activities	Net Cash Flows Used in Investing Activities	(1,497,976)		(1,390,502)		Net Cash Flows Used in Investing Activities	(858,247)		(704,517)

Financing Activities:	Financing Activities:					Financing Activities:
Issuance of Common Shares, Net of Issuance Costs		0		929,025
Cash Dividends on Common Shares	Cash Dividends on Common Shares	(402,211)		(366,817)		Cash Dividends on Common Shares	(213,890)		(201,013)
Cash Dividends on Preferred Stock	Cash Dividends on Preferred Stock	(3,759)		(3,759)		Cash Dividends on Preferred Stock	(1,880)		(1,880)
Increase/(Decrease) in Notes Payable		753,175		(741,870)
Increase in Notes Payable						Increase in Notes Payable	163,350		669,919
Repayment of Rate Reduction Bonds	Repayment of Rate Reduction Bonds	(21,605)		(21,605)		Repayment of Rate Reduction Bonds	(21,605)		(21,605)
Issuance of Long-Term Debt	Issuance of Long-Term Debt	1,525,000		940,000		Issuance of Long-Term Debt	1,300,000		350,000
Retirement of Long-Term Debt	Retirement of Long-Term Debt	(1,022,000)		(270,456)		Retirement of Long-Term Debt	(770,000)		(572,000)
Other Financing Activities	Other Financing Activities	(35,008)		(19,534)		Other Financing Activities	(26,087)		(19,666)
Net Cash Flows Provided by Financing Activities	Net Cash Flows Provided by Financing Activities	793,592		444,984		Net Cash Flows Provided by Financing Activities	429,888		203,755
Net Increase in Cash and Restricted Cash		103,061		59,857
Net Decrease in Cash and Restricted Cash						Net Decrease in Cash and Restricted Cash	(56,419)		(89,346)
Cash and Restricted Cash - Beginning of Period	Cash and Restricted Cash - Beginning of Period	264,950		117,063		Cash and Restricted Cash - Beginning of Period	221,008		264,950
Cash and Restricted Cash - End of Period	Cash and Restricted Cash - End of Period	$	368,011	$	176,920	Cash and Restricted Cash - End of Period	$	164,589	$	175,604

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	(Thousands of Dollars)	As of June 30, 2021		As of December 31, 2020		(Thousands of Dollars)	As of March 31, 2022		As of December 31, 2021

ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash	Cash	$	198,390	$	90,801	Cash	$	21,628	$	55,804
Receivables, Net (net of allowance for uncollectible accounts of $188,760 and $157,447 as of June 30, 2021 and December 31, 2020, respectively)		496,612		459,214
Receivables, Net (net of allowance for uncollectible accounts of $180,524 and $181,319 as of March 31, 2022 and December 31, 2021, respectively)						Receivables, Net (net of allowance for uncollectible accounts of $180,524 and $181,319 as of March 31, 2022 and December 31, 2021, respectively)	567,718		447,774
Accounts Receivable from Affiliated Companies	Accounts Receivable from Affiliated Companies	38,840		17,486		Accounts Receivable from Affiliated Companies	46,852		43,944
Unbilled Revenues	Unbilled Revenues	58,191		57,407		Unbilled Revenues	50,515		56,787
Materials and Supplies	Materials and Supplies	51,947		57,924		Materials and Supplies	65,196		60,264
Regulatory Assets	Regulatory Assets	458,609		345,622		Regulatory Assets	382,112		371,609

Prepayments and Other Current Assets	Prepayments and Other Current Assets	44,357		83,950		Prepayments and Other Current Assets	95,710		120,257
Total Current Assets	Total Current Assets	1,346,946		1,112,404		Total Current Assets	1,229,731		1,156,439
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	10,479,192		10,234,556		Property, Plant and Equipment, Net	10,941,005		10,803,543
Deferred Debits and Other Assets:	Deferred Debits and Other Assets:					Deferred Debits and Other Assets:
Regulatory Assets	Regulatory Assets	1,745,793		1,866,152		Regulatory Assets	1,681,057		1,713,161
Other Long-Term Assets	Other Long-Term Assets	273,279		242,862		Other Long-Term Assets	287,028		276,513
Total Deferred Debits and Other Assets	Total Deferred Debits and Other Assets	2,019,072		2,109,014		Total Deferred Debits and Other Assets	1,968,085		1,989,674
Total Assets	Total Assets	$	13,845,210	$	13,455,974	Total Assets	$	14,138,821	$	13,949,656

LIABILITIES AND CAPITALIZATION	LIABILITIES AND CAPITALIZATION					LIABILITIES AND CAPITALIZATION
Current Liabilities:	Current Liabilities:					Current Liabilities:

Long-Term Debt – Current Portion						Long-Term Debt – Current Portion	$	400,000	$	—
Accounts Payable	Accounts Payable	$	290,413	$	451,240	Accounts Payable	514,385		533,454
Accounts Payable to Affiliated Companies	Accounts Payable to Affiliated Companies	97,558		51,118		Accounts Payable to Affiliated Companies	126,363		132,578
Obligations to Third Party Suppliers		46,898		49,967

Regulatory Liabilities	Regulatory Liabilities	219,813		137,166		Regulatory Liabilities	251,555		266,489

Derivative Liabilities	Derivative Liabilities	70,935		68,767		Derivative Liabilities	74,428		73,528
Other Current Liabilities	Other Current Liabilities	104,670		102,060		Other Current Liabilities	174,210		141,955
Total Current Liabilities	Total Current Liabilities	830,287		860,318		Total Current Liabilities	1,540,941		1,148,004
Deferred Credits and Other Liabilities:	Deferred Credits and Other Liabilities:					Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	Accumulated Deferred Income Taxes	1,460,962		1,408,343		Accumulated Deferred Income Taxes	1,588,370		1,562,102
Regulatory Liabilities	Regulatory Liabilities	1,207,289		1,204,942		Regulatory Liabilities	1,208,297		1,193,259
Derivative Liabilities	Derivative Liabilities	275,775		294,535		Derivative Liabilities	209,548		235,387
Accrued Pension, SERP and PBOP		364,990		478,325

Other Long-Term Liabilities	Other Long-Term Liabilities	138,337		133,690		Other Long-Term Liabilities	181,850		179,824
Total Deferred Credits and Other Liabilities	Total Deferred Credits and Other Liabilities	3,447,353		3,519,835		Total Deferred Credits and Other Liabilities	3,188,065		3,170,572
Long-Term Debt	Long-Term Debt	4,335,639		3,914,835		Long-Term Debt	3,815,662		4,215,379
Preferred Stock Not Subject to Mandatory Redemption	Preferred Stock Not Subject to Mandatory Redemption	116,200		116,200		Preferred Stock Not Subject to Mandatory Redemption	116,200		116,200
Common Stockholder's Equity:	Common Stockholder's Equity:					Common Stockholder's Equity:
Common Stock	Common Stock	60,352		60,352		Common Stock	60,352		60,352
Capital Surplus, Paid In	Capital Surplus, Paid In	2,810,765		2,810,765		Capital Surplus, Paid In	3,110,765		3,010,765
Retained Earnings	Retained Earnings	2,244,341		2,173,367		Retained Earnings	2,306,620		2,228,133
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income	273		302		Accumulated Other Comprehensive Income	216		251
Common Stockholder's Equity	Common Stockholder's Equity	5,115,731		5,044,786		Common Stockholder's Equity	5,477,953		5,299,501
Commitments and Contingencies (Note 9)	Commitments and Contingencies (Note 9)	0		0		Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	Total Liabilities and Capitalization	$	13,845,210	$	13,455,974	Total Liabilities and Capitalization	$	14,138,821	$	13,949,656

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Operating Revenues	Operating Revenues	$	829,597	$	817,421	$	1,816,871	$	1,717,124	Operating Revenues		$	1,285,831	$	987,274

Operating Expenses:	Operating Expenses:									Operating Expenses:
Purchased Power and Transmission	Purchased Power and Transmission	308,137		315,398		681,411		690,115		Purchased Power and Transmission		523,463		373,274
Operations and Maintenance	Operations and Maintenance	152,394		134,633		327,814		270,230		Operations and Maintenance		157,061		175,420
Depreciation	Depreciation	84,423		79,718		167,828		158,152		Depreciation		87,265		83,405
Amortization of Regulatory (Liabilities)/Assets, Net		(15,059)		(5,698)		47,716		850
Amortization of Regulatory Assets, Net										Amortization of Regulatory Assets, Net		169,749		62,775
Energy Efficiency Programs	Energy Efficiency Programs	29,524		32,347		65,097		67,826		Energy Efficiency Programs		35,397		35,573
Taxes Other Than Income Taxes	Taxes Other Than Income Taxes	83,886		79,867		175,278		162,855		Taxes Other Than Income Taxes		90,373		91,392
Total Operating Expenses	Total Operating Expenses	643,305		636,265		1,465,144		1,350,028		Total Operating Expenses		1,063,308		821,839
Operating Income	Operating Income	186,292		181,156		351,727		367,096		Operating Income		222,523		165,435
Interest Expense	Interest Expense	42,614		38,722		81,592		76,605		Interest Expense		40,586		38,979
Other Income, Net	Other Income, Net	9,879		8,459		14,787		10,357		Other Income, Net		19,564		4,908
Income Before Income Tax Expense	Income Before Income Tax Expense	153,557		150,893		284,922		300,848		Income Before Income Tax Expense		201,501		131,364
Income Tax Expense	Income Tax Expense	38,001		33,622		70,967		64,839		Income Tax Expense		48,524		32,966
Net Income	Net Income	$	115,556	$	117,271	$	213,955	$	236,009	Net Income		$	152,977	$	98,398

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

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Net Income	Net Income	$	115,556	$	117,271	$	213,955	$	236,009	Net Income		$	152,977	$	98,398
Other Comprehensive Income/(Loss), Net of Tax:
Other Comprehensive Loss, Net of Tax:										Other Comprehensive Loss, Net of Tax:
Qualified Cash Flow Hedging Instruments	Qualified Cash Flow Hedging Instruments	(6)		(6)		(13)		(13)		Qualified Cash Flow Hedging Instruments		(7)		(7)
Changes in Unrealized Gains/(Losses) on Marketable Securities		9		9		(16)		15
Other Comprehensive Income/(Loss), Net of Tax		3		3		(29)		2
Changes in Unrealized Losses on Marketable Securities										Changes in Unrealized Losses on Marketable Securities		(28)		(25)
Other Comprehensive Loss, Net of Tax										Other Comprehensive Loss, Net of Tax		(35)		(32)
Comprehensive Income	Comprehensive Income	$	115,559	$	117,274	$	213,926	$	236,011	Comprehensive Income		$	152,942	$	98,366

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)


		For the Six Months Ended June 30, 2021																			For the Three Months Ended March 31, 2022
		Common Stock			Capital Surplus, Paid In				Retained Earnings				Accumulated Other Comprehensive Income				Total Common Stockholder's Equity				Common Stock					Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Income			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	(Thousands of Dollars, Except Stock Information)	Stock	Amount								(Thousands of Dollars, Except Stock Information)	Stock								Amount
Balance as of January 1, 2021		6,035,205	$	60,352			$	2,810,765							$	2,173,367			$	302		$	5,044,786
Balance as of January 1, 2022																				Balance as of January 1, 2022	6,035,205			$	60,352		$	3,010,765		$	2,228,133		$	251		$	5,299,501
Net Income	Net Income								98,398								98,398			Net Income									152,977						152,977
Dividends on Preferred Stock	Dividends on Preferred Stock								(1,390)								(1,390)			Dividends on Preferred Stock									(1,390)						(1,390)
Dividends on Common Stock	Dividends on Common Stock								(70,100)								(70,100)			Dividends on Common Stock									(73,100)						(73,100)
Capital Contributions from Eversource Parent																				Capital Contributions from Eversource Parent						100,000									100,000

Other Comprehensive Loss	Other Comprehensive Loss												(32)				(32)			Other Comprehensive Loss												(35)			(35)
Balance as of March 31, 2021		6,035,205	60,352		2,810,765				2,200,275				270				5,071,662
Net Income									115,556								115,556
Dividends on Preferred Stock									(1,390)								(1,390)
Dividends on Common Stock									(70,100)								(70,100)
Other Comprehensive Income													3				3
Balance as of June 30, 2021		6,035,205	$	60,352	$	2,810,765			$	2,244,341			$	273			$	5,115,731
Balance as of March 31, 2022																				Balance as of March 31, 2022	6,035,205			$	60,352	$	3,110,765		$	2,306,620		$	216		$	5,477,953


		For the Six Months Ended June 30, 2020																			For the Three Months Ended March 31, 2021
		Common Stock			Capital Surplus, Paid In				Retained Earnings				Accumulated Other Comprehensive Income				Total Common Stockholder's Equity				Common Stock					Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Income			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	(Thousands of Dollars, Except Stock Information)	Stock	Amount								(Thousands of Dollars, Except Stock Information)	Stock								Amount
Balance as of January 1, 2020		6,035,205	$	60,352			$	2,535,765							$	1,791,392			$	316		$	4,387,825
Balance as of January 1, 2021																				Balance as of January 1, 2021	6,035,205			$	60,352		$	2,810,765		$	2,173,367		$	302		$	5,044,786
Net Income	Net Income								118,738								118,738			Net Income									98,398						98,398
Dividends on Preferred Stock	Dividends on Preferred Stock								(1,390)								(1,390)			Dividends on Preferred Stock									(1,390)						(1,390)
Dividends on Common Stock	Dividends on Common Stock								(69,500)								(69,500)			Dividends on Common Stock									(70,100)						(70,100)
Adoption of Accounting Standards Update 2016-13									(900)								(900)
Other Comprehensive Loss	Other Comprehensive Loss												(1)				(1)			Other Comprehensive Loss												(32)			(32)
Balance as of March 31, 2020		6,035,205	60,352		2,535,765				1,838,340				315				4,434,772
Net Income									117,271								117,271
Dividends on Preferred Stock									(1,390)								(1,390)
Other Comprehensive Income													3				3
Balance as of June 30, 2020		6,035,205	$	60,352	$	2,535,765			$	1,954,221			$	318			$	4,550,656
Balance as of March 31, 2021																				Balance as of March 31, 2021	6,035,205			$	60,352	$	2,810,765		$	2,200,275		$	270		$	5,071,662

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

THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		(Thousands of Dollars)	2022		2021

Operating Activities:	Operating Activities:					Operating Activities:
Net Income	Net Income	$	213,955	$	236,009	Net Income	$	152,977	$	98,398
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:					Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	Depreciation	167,828		158,152		Depreciation	87,265		83,405
Deferred Income Taxes	Deferred Income Taxes	41,886		33,275		Deferred Income Taxes	19,627		25,354
Uncollectible Expense	Uncollectible Expense	6,614		6,187		Uncollectible Expense	3,776		3,797
Pension, SERP, and PBOP Expense, Net		3,803		5,886
Pension, SERP, and PBOP (Income)/Expense, Net						Pension, SERP, and PBOP (Income)/Expense, Net	(7,330)		3,088
Pension Contributions	Pension Contributions	(37,880)		0		Pension Contributions	—		(18,940)
Regulatory Underrecoveries, Net	Regulatory Underrecoveries, Net	(22,121)		(45,886)		Regulatory Underrecoveries, Net	(162,474)		(59,971)
(Customer Credits)/Reserve related to PURA Settlement Agreement and Storm Performance Penalty						(Customer Credits)/Reserve related to PURA Settlement Agreement and Storm Performance Penalty	(58,412)		30,000
Amortization of Regulatory Assets, Net	Amortization of Regulatory Assets, Net	47,716		850		Amortization of Regulatory Assets, Net	169,749		62,775
Cost of Removal Expenditures						Cost of Removal Expenditures	(16,684)		(17,293)
Other	Other	(62,137)		(43,064)		Other	(9,357)		(12,777)
Changes in Current Assets and Liabilities:	Changes in Current Assets and Liabilities:					Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	Receivables and Unbilled Revenues, Net	(104,262)		(49,800)		Receivables and Unbilled Revenues, Net	(125,429)		(66,930)
Taxes Receivable/Accrued, Net	Taxes Receivable/Accrued, Net	33,049		31,139		Taxes Receivable/Accrued, Net	67,708		29,596
Accounts Payable	Accounts Payable	(80,007)		(49,574)		Accounts Payable	38,010		17,124
Other Current Assets and Liabilities, Net	Other Current Assets and Liabilities, Net	15,513		(244)		Other Current Assets and Liabilities, Net	(24,143)		(21,433)
Net Cash Flows Provided by Operating Activities	Net Cash Flows Provided by Operating Activities	223,957		282,930		Net Cash Flows Provided by Operating Activities	135,283		156,193

Investing Activities:	Investing Activities:					Investing Activities:
Investments in Property, Plant and Equipment	Investments in Property, Plant and Equipment	(393,323)		(407,175)		Investments in Property, Plant and Equipment	(205,343)		(197,954)
Other Investing Activities	Other Investing Activities	157		146		Other Investing Activities	346		80
Net Cash Flows Used in Investing Activities	Net Cash Flows Used in Investing Activities	(393,166)		(407,029)		Net Cash Flows Used in Investing Activities	(204,997)		(197,874)

Financing Activities:	Financing Activities:					Financing Activities:
Cash Dividends on Common Stock	Cash Dividends on Common Stock	(140,200)		(69,500)		Cash Dividends on Common Stock	(73,100)		(70,100)
Cash Dividends on Preferred Stock	Cash Dividends on Preferred Stock	(2,779)		(2,779)		Cash Dividends on Preferred Stock	(1,390)		(1,390)
Capital Contributions from Eversource Parent						Capital Contributions from Eversource Parent	100,000		—

Issuance of Long-Term Debt		425,000		0

Increase in Notes Payable to Eversource Parent	Increase in Notes Payable to Eversource Parent	0		208,200		Increase in Notes Payable to Eversource Parent	—		32,100
Other Financing Activities	Other Financing Activities	(5,180)		(795)		Other Financing Activities	—		(450)
Net Cash Flows Provided by Financing Activities		276,841		135,126
Net Increase in Cash and Restricted Cash		107,632		11,027
Net Cash Flows Provided by/(Used in) Financing Activities						Net Cash Flows Provided by/(Used in) Financing Activities	25,510		(39,840)
Net Decrease in Cash and Restricted Cash						Net Decrease in Cash and Restricted Cash	(44,204)		(81,521)
Cash and Restricted Cash - Beginning of Period	Cash and Restricted Cash - Beginning of Period	99,809		4,971		Cash and Restricted Cash - Beginning of Period	74,788		99,809
Cash and Restricted Cash - End of Period	Cash and Restricted Cash - End of Period	$	207,441	$	15,998	Cash and Restricted Cash - End of Period	$	30,584	$	18,288

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	(Thousands of Dollars)	As of June 30, 2021		As of December 31, 2020		(Thousands of Dollars)	As of March 31, 2022		As of December 31, 2021

ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash	Cash	$	577	$	102	Cash	$	721	$	745
Receivables, Net (net of allowance for uncollectible accounts of $98,031 and $91,583 as of June 30, 2021 and December 31, 2020, respectively)		445,853		403,045
Receivables, Net (net of allowance for uncollectible accounts of $94,775 and $97,005 as of March 31, 2022 and December 31, 2021, respectively)						Receivables, Net (net of allowance for uncollectible accounts of $94,775 and $97,005 as of March 31, 2022 and December 31, 2021, respectively)	417,048		405,674
Accounts Receivable from Affiliated Companies	Accounts Receivable from Affiliated Companies	21,455		30,095		Accounts Receivable from Affiliated Companies	45,121		67,420
Unbilled Revenues	Unbilled Revenues	47,689		38,342		Unbilled Revenues	36,618		37,497
Materials, Supplies and REC Inventory	Materials, Supplies and REC Inventory	74,638		133,894		Materials, Supplies and REC Inventory	148,084		116,712
Taxes Receivable	Taxes Receivable	6,814		65,051		Taxes Receivable	35,318		80,617
Regulatory Assets	Regulatory Assets	448,030		399,882		Regulatory Assets	433,653		443,956
Prepayments and Other Current Assets	Prepayments and Other Current Assets	24,494		21,833		Prepayments and Other Current Assets	25,465		22,397
Total Current Assets	Total Current Assets	1,069,550		1,092,244		Total Current Assets	1,142,028		1,175,018
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	10,437,198		10,123,062		Property, Plant and Equipment, Net	11,008,899		10,876,614
Deferred Debits and Other Assets:	Deferred Debits and Other Assets:					Deferred Debits and Other Assets:
Regulatory Assets	Regulatory Assets	1,236,379		1,304,019		Regulatory Assets	1,239,773		1,135,231
Prepaid PBOP		216,692		204,138
Prepaid Pension and PBOP						Prepaid Pension and PBOP	475,602		441,426
Other Long-Term Assets	Other Long-Term Assets	173,815		162,836		Other Long-Term Assets	171,421		171,657
Total Deferred Debits and Other Assets	Total Deferred Debits and Other Assets	1,626,886		1,670,993		Total Deferred Debits and Other Assets	1,886,796		1,748,314
Total Assets	Total Assets	$	13,133,634	$	12,886,299	Total Assets	$	14,037,723	$	13,799,946

LIABILITIES AND CAPITALIZATION	LIABILITIES AND CAPITALIZATION					LIABILITIES AND CAPITALIZATION
Current Liabilities:	Current Liabilities:					Current Liabilities:
Notes Payable	Notes Payable	$	555,500	$	195,000	Notes Payable	$	275,000	$	162,500
Notes Payable to Eversource Parent	Notes Payable to Eversource Parent	21,500		21,300		Notes Payable to Eversource Parent	4,000		—
Long-Term Debt – Current Portion	Long-Term Debt – Current Portion	0		250,000		Long-Term Debt – Current Portion	400,000		400,000
Accounts Payable	Accounts Payable	308,106		383,558		Accounts Payable	437,896		490,915
Accounts Payable to Affiliated Companies	Accounts Payable to Affiliated Companies	90,385		95,703		Accounts Payable to Affiliated Companies	139,762		129,575
Obligations to Third Party Suppliers	Obligations to Third Party Suppliers	122,760		98,572		Obligations to Third Party Suppliers	127,342		116,273
Renewable Portfolio Standards Compliance Obligations	Renewable Portfolio Standards Compliance Obligations	47,041		127,536		Renewable Portfolio Standards Compliance Obligations	129,759		100,200
Regulatory Liabilities	Regulatory Liabilities	172,988		164,761		Regulatory Liabilities	279,299		228,248
Other Current Liabilities	Other Current Liabilities	49,826		72,118		Other Current Liabilities	157,567		84,303
Total Current Liabilities	Total Current Liabilities	1,368,106		1,408,548		Total Current Liabilities	1,950,625		1,712,014
Deferred Credits and Other Liabilities:	Deferred Credits and Other Liabilities:					Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	Accumulated Deferred Income Taxes	1,504,188		1,459,906		Accumulated Deferred Income Taxes	1,617,909		1,579,508
Regulatory Liabilities	Regulatory Liabilities	1,552,053		1,550,390		Regulatory Liabilities	1,570,969		1,559,072
Accrued Pension and SERP		127,248		172,571

Other Long-Term Liabilities	Other Long-Term Liabilities	348,504		337,245		Other Long-Term Liabilities	275,573		347,934
Total Deferred Credits and Other Liabilities	Total Deferred Credits and Other Liabilities	3,531,993		3,520,112		Total Deferred Credits and Other Liabilities	3,464,451		3,486,514
Long-Term Debt	Long-Term Debt	3,688,259		3,393,221		Long-Term Debt	3,586,326		3,585,399
Preferred Stock Not Subject to Mandatory Redemption	Preferred Stock Not Subject to Mandatory Redemption	43,000		43,000		Preferred Stock Not Subject to Mandatory Redemption	43,000		43,000
Common Stockholder's Equity:	Common Stockholder's Equity:					Common Stockholder's Equity:
Common Stock	Common Stock	0		0		Common Stock	—		—
Capital Surplus, Paid In	Capital Surplus, Paid In	2,053,942		1,993,942		Capital Surplus, Paid In	2,253,942		2,253,942
Retained Earnings	Retained Earnings	2,447,823		2,527,167		Retained Earnings	2,738,925		2,718,576
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income	511		309		Accumulated Other Comprehensive Income	454		501
Common Stockholder's Equity	Common Stockholder's Equity	4,502,276		4,521,418		Common Stockholder's Equity	4,993,321		4,973,019
Commitments and Contingencies (Note 9)	Commitments and Contingencies (Note 9)	0		0		Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	Total Liabilities and Capitalization	$	13,133,634	$	12,886,299	Total Liabilities and Capitalization	$	14,037,723	$	13,799,946

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Operating Revenues	Operating Revenues	$	687,375	$	660,971	$	1,424,418	$	1,394,804	Operating Revenues		$	863,176	$	737,043

Operating Expenses:	Operating Expenses:									Operating Expenses:
Purchased Power and Transmission	Purchased Power and Transmission	191,137		192,304		417,615		434,742		Purchased Power and Transmission		313,748		226,478
Operations and Maintenance	Operations and Maintenance	136,356		115,831		279,576		238,149		Operations and Maintenance		164,862		143,219
Depreciation	Depreciation	83,917		79,520		166,710		157,865		Depreciation		89,033		82,793
Amortization of Regulatory (Liabilities)/Assets, Net		(2,528)		19,604		15,890		46,612
Amortization of Regulatory Assets, Net										Amortization of Regulatory Assets, Net		29,345		18,418
Energy Efficiency Programs	Energy Efficiency Programs	64,273		56,756		139,373		125,423		Energy Efficiency Programs		80,232		75,099
Taxes Other Than Income Taxes	Taxes Other Than Income Taxes	54,126		50,583		108,776		99,306		Taxes Other Than Income Taxes		59,774		54,652
Total Operating Expenses	Total Operating Expenses	527,281		514,598		1,127,940		1,102,097		Total Operating Expenses		736,994		600,659
Operating Income	Operating Income	160,094		146,373		296,478		292,707		Operating Income		126,182		136,384
Interest Expense	Interest Expense	37,195		32,955		69,501		63,972		Interest Expense		38,222		32,306
Other Income, Net	Other Income, Net	21,915		13,112		38,727		25,350		Other Income, Net		29,231		16,812
Income Before Income Tax Expense	Income Before Income Tax Expense	144,814		126,530		265,704		254,085		Income Before Income Tax Expense		117,191		120,890
Income Tax Expense	Income Tax Expense	33,902		29,062		60,868		56,228		Income Tax Expense		24,452		26,966
Net Income	Net Income	$	110,912	$	97,468	$	204,836	$	197,857	Net Income		$	92,739	$	93,924

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Net Income	Net Income	$	110,912	$	97,468	$	204,836	$	197,857	Net Income		$	92,739	$	93,924
Other Comprehensive Income, Net of Tax:
Other Comprehensive (Loss)/Income, Net of Tax:										Other Comprehensive (Loss)/Income, Net of Tax:
Changes in Funded Status of SERP Benefit Plan	Changes in Funded Status of SERP Benefit Plan	(40)		(43)		(81)		(86)		Changes in Funded Status of SERP Benefit Plan		(44)		(41)
Qualified Cash Flow Hedging Instruments	Qualified Cash Flow Hedging Instruments	179		109		288		218		Qualified Cash Flow Hedging Instruments		5		109
Changes in Unrealized Gains/(Losses) on Marketable Securities		2		2		(5)		3
Other Comprehensive Income, Net of Tax		141		68		202		135
Changes in Unrealized Losses on Marketable Securities										Changes in Unrealized Losses on Marketable Securities		(8)		(7)
Other Comprehensive (Loss)/Income, Net of Tax										Other Comprehensive (Loss)/Income, Net of Tax		(47)		61
Comprehensive Income	Comprehensive Income	$	111,053	$	97,536	$	205,038	$	197,992	Comprehensive Income		$	92,692	$	93,985

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)


		For the Six Months Ended June 30, 2021																			For the Three Months Ended March 31, 2022
		Common Stock			Capital Surplus, Paid In				Retained Earnings				Accumulated Other Comprehensive Income				Total Common Stockholder's Equity				Common Stock					Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Income			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	(Thousands of Dollars, Except Stock Information)	Stock	Amount								(Thousands of Dollars, Except Stock Information)	Stock								Amount
Balance as of January 1, 2021		200	$	0			$	1,993,942							$	2,527,167			$	309		$	4,521,418
Balance as of January 1, 2022																				Balance as of January 1, 2022	200			$	—		$	2,253,942		$	2,718,576		$	501		$	4,973,019
Net Income	Net Income								93,924								93,924			Net Income									92,739						92,739
Dividends on Preferred Stock	Dividends on Preferred Stock								(490)								(490)			Dividends on Preferred Stock									(490)						(490)
Dividends on Common Stock	Dividends on Common Stock								(206,400)								(206,400)			Dividends on Common Stock									(71,900)						(71,900)

Other Comprehensive Income													61				61
Balance as of March 31, 2021		200	0		1,993,942				2,414,201				370				4,408,513
Net Income									110,912								110,912
Dividends on Preferred Stock									(490)								(490)
Dividends on Common Stock									(76,800)								(76,800)
Capital Contributions from Eversource Parent					60,000												60,000
Other Comprehensive Income													141				141
Balance as of June 30, 2021		200	$	0	$	2,053,942			$	2,447,823			$	511			$	4,502,276
Other Comprehensive Loss																				Other Comprehensive Loss												(47)			(47)
Balance as of March 31, 2022																				Balance as of March 31, 2022	200			$	—	$	2,253,942		$	2,738,925		$	454		$	4,993,321


		For the Six Months Ended June 30, 2020																			For the Three Months Ended March 31, 2021
		Common Stock			Capital Surplus, Paid In				Retained Earnings				Accumulated Other Comprehensive Income				Total Common Stockholder's Equity				Common Stock					Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Income			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	(Thousands of Dollars, Except Stock Information)	Stock	Amount								(Thousands of Dollars, Except Stock Information)	Stock								Amount
Balance as of January 1, 2020		200	$	0			$	1,813,442							$	2,346,287			$	155		$	4,159,884
Balance as of January 1, 2021																				Balance as of January 1, 2021	200			$	—		$	1,993,942		$	2,527,167		$	309		$	4,521,418
Net Income	Net Income								100,390								100,390			Net Income									93,924						93,924
Dividends on Preferred Stock	Dividends on Preferred Stock								(490)								(490)			Dividends on Preferred Stock									(490)						(490)
Dividends on Common Stock	Dividends on Common Stock								(196,500)								(196,500)			Dividends on Common Stock									(206,400)						(206,400)
Adoption of Accounting Standards Update 2016-13									(161)								(161)
Other Comprehensive Income	Other Comprehensive Income												67				67			Other Comprehensive Income												61			61
Balance as of March 31, 2020		200	0		1,813,442				2,249,526				222				4,063,190
Net Income									97,468								97,468
Dividends on Preferred Stock									(490)								(490)
Other Comprehensive Income													68				68
Balance as of June 30, 2020		200	$	0	$	1,813,442			$	2,346,504			$	290			$	4,160,236
Balance as of March 31, 2021																				Balance as of March 31, 2021	200			$	—	$	1,993,942		$	2,414,201		$	370		$	4,408,513

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		(Thousands of Dollars)	2022		2021

Operating Activities:	Operating Activities:					Operating Activities:
Net Income	Net Income	$	204,836	$	197,857	Net Income	$	92,739	$	93,924
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:					Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	Depreciation	166,710		157,865		Depreciation	89,033		82,793
Deferred Income Taxes	Deferred Income Taxes	28,742		26,062		Deferred Income Taxes	26,857		10,309
Uncollectible Expense	Uncollectible Expense	7,394		6,826		Uncollectible Expense	4,662		3,868
Pension, SERP and PBOP Income, Net	Pension, SERP and PBOP Income, Net	(12,990)		(9,296)		Pension, SERP and PBOP Income, Net	(13,742)		(6,335)
Pension Contributions	Pension Contributions	(10,000)		0		Pension Contributions	(5,000)		—
Regulatory Underrecoveries, Net	Regulatory Underrecoveries, Net	(12,562)		(59,685)		Regulatory Underrecoveries, Net	(10,813)		(3,405)
Amortization of Regulatory Assets, Net	Amortization of Regulatory Assets, Net	15,890		46,612		Amortization of Regulatory Assets, Net	29,345		18,418
Cost of Removal Expenditures						Cost of Removal Expenditures	(12,852)		(10,224)
Other	Other	(40,315)		(12,534)		Other	(5,531)		(13,362)
Changes in Current Assets and Liabilities:	Changes in Current Assets and Liabilities:					Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	Receivables and Unbilled Revenues, Net	(49,324)		(36,627)		Receivables and Unbilled Revenues, Net	2,051		(14,587)
Materials, Supplies and REC Inventory	Materials, Supplies and REC Inventory	59,256		53,599		Materials, Supplies and REC Inventory	(31,372)		(52,998)
Taxes Receivable/Accrued, Net	Taxes Receivable/Accrued, Net	57,584		5,279		Taxes Receivable/Accrued, Net	45,299		58,353
Accounts Payable	Accounts Payable	(88,729)		(49,881)		Accounts Payable	(55,743)		(45,604)
Other Current Assets and Liabilities, Net	Other Current Assets and Liabilities, Net	(80,605)		(113,276)		Other Current Assets and Liabilities, Net	34,931		51,445
Net Cash Flows Provided by Operating Activities	Net Cash Flows Provided by Operating Activities	245,887		212,801		Net Cash Flows Provided by Operating Activities	189,864		172,595

Investing Activities:	Investing Activities:					Investing Activities:
Investments in Property, Plant and Equipment	Investments in Property, Plant and Equipment	(426,053)		(447,545)		Investments in Property, Plant and Equipment	(234,120)		(215,483)
Other Investing Activities	Other Investing Activities	43		40		Other Investing Activities	96		22
Net Cash Flows Used in Investing Activities	Net Cash Flows Used in Investing Activities	(426,010)		(447,505)		Net Cash Flows Used in Investing Activities	(234,024)		(215,461)

Financing Activities:	Financing Activities:					Financing Activities:
Cash Dividends on Common Stock	Cash Dividends on Common Stock	(283,200)		(196,500)		Cash Dividends on Common Stock	(71,900)		(206,400)
Cash Dividends on Preferred Stock	Cash Dividends on Preferred Stock	(980)		(980)		Cash Dividends on Preferred Stock	(490)		(490)
Issuance of Long-Term Debt		300,000		400,000
Retirement of Long-Term Debt		(250,000)		(95,000)
Capital Contributions from Eversource Parent		60,000		0

Increase in Notes Payable to Eversource Parent	Increase in Notes Payable to Eversource Parent	200		7,800		Increase in Notes Payable to Eversource Parent	4,000		1,200
Increase in Notes Payable	Increase in Notes Payable	360,500		131,500		Increase in Notes Payable	112,500		248,500
Other Financing Activities	Other Financing Activities	(5,909)		(4,946)		Other Financing Activities	15		19
Net Cash Flows Provided by Financing Activities	Net Cash Flows Provided by Financing Activities	180,611		241,874		Net Cash Flows Provided by Financing Activities	44,125		42,829
Net Increase in Cash and Restricted Cash		488		7,170
Net Decrease in Cash and Restricted Cash						Net Decrease in Cash and Restricted Cash	(35)		(37)
Cash and Restricted Cash - Beginning of Period	Cash and Restricted Cash - Beginning of Period	17,410		6,312		Cash and Restricted Cash - Beginning of Period	18,179		17,410
Cash and Restricted Cash - End of Period	Cash and Restricted Cash - End of Period	$	17,898	$	13,482	Cash and Restricted Cash - End of Period	$	18,144	$	17,373

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Thousands of Dollars)	(Thousands of Dollars)	As of June 30, 2021		As of December 31, 2020		(Thousands of Dollars)	As of March 31, 2022		As of December 31, 2021

ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash	Cash	$	279	$	141	Cash	$	3,827	$	15
Receivables, Net (net of allowance for uncollectible accounts of $17,223 and $17,157 as of June 30, 2021 and December 31, 2020, respectively)		119,138		119,899
Receivables, Net (net of allowance for uncollectible accounts of $26,164 and $24,331 as of March 31, 2022 and December 31, 2021, respectively)						Receivables, Net (net of allowance for uncollectible accounts of $26,164 and $24,331 as of March 31, 2022 and December 31, 2021, respectively)	148,542		124,232
Accounts Receivable from Affiliated Companies	Accounts Receivable from Affiliated Companies	7,274		10,925		Accounts Receivable from Affiliated Companies	17,271		17,156
Unbilled Revenues	Unbilled Revenues	51,150		46,041		Unbilled Revenues	51,490		53,937

Materials, Supplies and REC Inventory	Materials, Supplies and REC Inventory	23,333		26,829		Materials, Supplies and REC Inventory	31,963		25,930
Regulatory Assets	Regulatory Assets	99,474		115,852		Regulatory Assets	124,701		107,169
Special Deposits	Special Deposits	35,109		36,767		Special Deposits	16,557		31,390
Prepaid Property Taxes		18,527		26,257

Prepayments and Other Current Assets	Prepayments and Other Current Assets	5,215		10,788		Prepayments and Other Current Assets	8,387		22,109
Total Current Assets	Total Current Assets	359,499		393,499		Total Current Assets	402,738		381,938
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	3,467,810		3,374,270		Property, Plant and Equipment, Net	3,722,618		3,656,462
Deferred Debits and Other Assets:	Deferred Debits and Other Assets:					Deferred Debits and Other Assets:
Regulatory Assets	Regulatory Assets	850,912		873,203		Regulatory Assets	654,507		679,182
Other Long-Term Assets	Other Long-Term Assets	21,492		23,733		Other Long-Term Assets	22,513		23,202
Total Deferred Debits and Other Assets	Total Deferred Debits and Other Assets	872,404		896,936		Total Deferred Debits and Other Assets	677,020		702,384
Total Assets	Total Assets	$	4,699,713	$	4,664,705	Total Assets	$	4,802,376	$	4,740,784

LIABILITIES AND CAPITALIZATION	LIABILITIES AND CAPITALIZATION					LIABILITIES AND CAPITALIZATION
Current Liabilities:	Current Liabilities:					Current Liabilities:
Notes Payable to Eversource Parent	Notes Payable to Eversource Parent	$	48,600	$	46,300	Notes Payable to Eversource Parent	$	196,400	$	110,600
Long-Term Debt – Current Portion		0		282,000

Rate Reduction Bonds – Current Portion	Rate Reduction Bonds – Current Portion	43,210		43,210		Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	Accounts Payable	122,068		132,635		Accounts Payable	157,876		166,452
Accounts Payable to Affiliated Companies	Accounts Payable to Affiliated Companies	28,191		43,397		Accounts Payable to Affiliated Companies	41,508		43,485
Regulatory Liabilities	Regulatory Liabilities	61,891		58,756		Regulatory Liabilities	106,393		120,176

Other Current Liabilities	Other Current Liabilities	46,984		58,487		Other Current Liabilities	64,356		63,005
Total Current Liabilities	Total Current Liabilities	350,944		664,785		Total Current Liabilities	609,743		546,928
Deferred Credits and Other Liabilities:	Deferred Credits and Other Liabilities:					Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	Accumulated Deferred Income Taxes	546,568		537,627		Accumulated Deferred Income Taxes	545,593		537,978
Regulatory Liabilities	Regulatory Liabilities	384,675		383,183		Regulatory Liabilities	388,838		381,366
Accrued Pension, SERP and PBOP		169,001		184,715

Other Long-Term Liabilities	Other Long-Term Liabilities	37,523		37,874		Other Long-Term Liabilities	49,844		64,264
Total Deferred Credits and Other Liabilities	Total Deferred Credits and Other Liabilities	1,137,767		1,143,399		Total Deferred Credits and Other Liabilities	984,275		983,608
Long-Term Debt	Long-Term Debt	1,163,710		817,070		Long-Term Debt	1,164,010		1,163,833
Rate Reduction Bonds	Rate Reduction Bonds	475,307		496,912		Rate Reduction Bonds	432,097		453,702
Common Stockholder's Equity:	Common Stockholder's Equity:					Common Stockholder's Equity:
Common Stock	Common Stock	0		0		Common Stock	—		—
Capital Surplus, Paid In	Capital Surplus, Paid In	1,088,134		928,134		Capital Surplus, Paid In	1,088,134		1,088,134
Retained Earnings	Retained Earnings	483,927		615,018		Retained Earnings	524,142		504,556
Accumulated Other Comprehensive Loss		(76)		(613)
Accumulated Other Comprehensive (Loss)/Income						Accumulated Other Comprehensive (Loss)/Income	(25)		23
Common Stockholder's Equity	Common Stockholder's Equity	1,571,985		1,542,539		Common Stockholder's Equity	1,612,251		1,592,713
Commitments and Contingencies (Note 9)	Commitments and Contingencies (Note 9)	0		0		Commitments and Contingencies (Note 9)	0		0
Total Liabilities and Capitalization	Total Liabilities and Capitalization	$	4,699,713	$	4,664,705	Total Liabilities and Capitalization	$	4,802,376	$	4,740,784

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Operating Revenues	Operating Revenues	$	278,849	$	255,224	$	572,284	$	531,592	Operating Revenues		$	339,427	$	293,435

Operating Expenses:	Operating Expenses:									Operating Expenses:
Purchased Power and Transmission	Purchased Power and Transmission	80,513		82,560		172,122		176,698		Purchased Power and Transmission		125,844		91,609
Operations and Maintenance	Operations and Maintenance	56,537		54,017		111,201		101,146		Operations and Maintenance		59,573		54,664
Depreciation	Depreciation	29,825		24,750		59,293		49,084		Depreciation		31,253		29,468
Amortization of Regulatory Assets, Net	Amortization of Regulatory Assets, Net	26,274		11,563		44,821		31,673		Amortization of Regulatory Assets, Net		26,834		18,547
Energy Efficiency Programs	Energy Efficiency Programs	9,365		8,786		19,713		18,150		Energy Efficiency Programs		8,718		10,348
Taxes Other Than Income Taxes	Taxes Other Than Income Taxes	23,453		20,457		45,603		40,158		Taxes Other Than Income Taxes		22,785		22,149
Total Operating Expenses	Total Operating Expenses	225,967		202,133		452,753		416,909		Total Operating Expenses		275,007		226,785
Operating Income	Operating Income	52,882		53,091		119,531		114,683		Operating Income		64,420		66,650
Interest Expense	Interest Expense	13,821		14,607		28,452		29,087		Interest Expense		13,645		14,630
Other Income, Net	Other Income, Net	4,260		3,626		8,427		6,817		Other Income, Net		7,509		4,166
Income Before Income Tax Expense	Income Before Income Tax Expense	43,321		42,110		99,506		92,413		Income Before Income Tax Expense		58,284		56,186
Income Tax Expense	Income Tax Expense	8,688		10,478		20,197		21,180		Income Tax Expense		12,698		11,510
Net Income	Net Income	$	34,633	$	31,632	$	79,309	$	71,233	Net Income		$	45,586	$	44,676

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		2021		2020		(Thousands of Dollars)		2022		2021

Net Income	Net Income	$	34,633	$	31,632	$	79,309	$	71,233	Net Income		$	45,586	$	44,676
Other Comprehensive Income, Net of Tax:
Other Comprehensive (Loss)/Income, Net of Tax:										Other Comprehensive (Loss)/Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	Qualified Cash Flow Hedging Instruments	266		269		564		538		Qualified Cash Flow Hedging Instruments		—		298
Changes in Unrealized Gains/(Losses) on Marketable Securities		16		16		(27)		25
Other Comprehensive Income, Net of Tax		282		285		537		563
Changes in Unrealized Losses on Marketable Securities										Changes in Unrealized Losses on Marketable Securities		(48)		(43)
Other Comprehensive (Loss)/Income, Net of Tax										Other Comprehensive (Loss)/Income, Net of Tax		(48)		255
Comprehensive Income	Comprehensive Income	$	34,915	$	31,917	$	79,846	$	71,796	Comprehensive Income		$	45,538	$	44,931

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY

(Unaudited)

For the Six Months Ended June 30, 2021
Common Stock Capital
Surplus,
Paid In Retained
Earnings Accumulated
Other
Comprehensive
Loss Total
Common
Stockholder's
Equity
(Thousands of Dollars, Except Stock Information) Stock Amount
Balance as of January 1, 2021 301 $ 0 $ 928,134 $ 615,018 $ (613) $ 1,542,539
Net Income 44,676 44,676
Dividends on Common Stock (25,200) (25,200)
Other Comprehensive Income 255 255
Balance as of March 31, 2021 301 0 928,134 634,494 (358) 1,562,270
Net Income 34,633 34,633
Dividends on Common Stock (185,200) (185,200)
Capital Contributions from Eversource Parent 160,000 160,000
Other Comprehensive Income 282 282
Balance as of June 30, 2021 301 $ 0 $ 1,088,134 $ 483,927 $ (76) $ 1,571,985


	For the Three Months Ended March 31, 2022
	Common Stock			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount
Balance as of January 1, 2022	301	$	—	$	1,088,134	$	504,556	$	23	$	1,592,713
Net Income						45,586				45,586
Dividends on Common Stock						(26,000)				(26,000)

Other Comprehensive Loss								(48)		(48)
Balance as of March 31, 2022	301	$	—	$	1,088,134	$	524,142	$	(25)	$	1,612,251


		For the Six Months Ended June 30, 2020																			For the Three Months Ended March 31, 2021
		Common Stock			Capital Surplus, Paid In				Retained Earnings				Accumulated Other Comprehensive Loss				Total Common Stockholder's Equity				Common Stock					Capital Surplus, Paid In			Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	(Thousands of Dollars, Except Stock Information)	Stock	Amount								(Thousands of Dollars, Except Stock Information)	Stock								Amount
Balance as of January 1, 2020		301	$	0			$	903,134							$	490,306			$	(1,707)		$	1,391,733
Balance as of January 1, 2021																				Balance as of January 1, 2021	301			$	—		$	928,134		$	615,018		$	(613)		$	1,542,539
Net Income	Net Income								39,601								39,601			Net Income									44,676						44,676
Dividends on Common Stock	Dividends on Common Stock								(22,300)								(22,300)			Dividends on Common Stock									(25,200)						(25,200)
Adoption of Accounting Standards Update 2016-13									(300)								(300)
Other Comprehensive Income	Other Comprehensive Income												278				278			Other Comprehensive Income												255			255
Balance as of March 31, 2020		301	0		903,134				507,307				(1,429)				1,409,012
Net Income									31,632								31,632
Other Comprehensive Income													285				285
Balance as of June 30, 2020		301	$	0	$	903,134			$	538,939			$	(1,144)			$	1,440,929
Balance as of March 31, 2021																				Balance as of March 31, 2021	301			$	—	$	928,134		$	634,494		$	(358)		$	1,562,270

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Thousands of Dollars)	(Thousands of Dollars)	2021		2020		(Thousands of Dollars)	2022		2021

Operating Activities:	Operating Activities:					Operating Activities:
Net Income	Net Income	$	79,309	$	71,233	Net Income	$	45,586	$	44,676
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:					Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	Depreciation	59,293		49,084		Depreciation	31,253		29,468
Deferred Income Taxes	Deferred Income Taxes	(842)		9,193		Deferred Income Taxes	7,480		(378)
Uncollectible Expense	Uncollectible Expense	3,226		1,255		Uncollectible Expense	2,496		1,221
Regulatory Underrecoveries, Net	Regulatory Underrecoveries, Net	(6,965)		(31,159)		Regulatory Underrecoveries, Net	(32,186)		(14,645)
Amortization of Regulatory Assets, Net	Amortization of Regulatory Assets, Net	44,821		31,673		Amortization of Regulatory Assets, Net	26,834		18,547
Pension, SERP and PBOP Income, Net						Pension, SERP and PBOP Income, Net	(3,997)		(935)

Cost of Removal Expenditures						Cost of Removal Expenditures	(7,131)		(5,154)
Other	Other	(14,445)		(5,191)		Other	(4,631)		(565)
Changes in Current Assets and Liabilities:	Changes in Current Assets and Liabilities:					Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	Receivables and Unbilled Revenues, Net	(3,717)		(3,237)		Receivables and Unbilled Revenues, Net	(25,972)		3,223
Materials, Supplies and REC Inventory	Materials, Supplies and REC Inventory	3,496		2,212		Materials, Supplies and REC Inventory	(6,033)		(2,296)
Taxes Receivable/Accrued, Net	Taxes Receivable/Accrued, Net	9,183		(5,790)		Taxes Receivable/Accrued, Net	8,067		9,867
Accounts Payable	Accounts Payable	(29,320)		8,219		Accounts Payable	9,389		(21,025)
Other Current Assets and Liabilities, Net	Other Current Assets and Liabilities, Net	(5,736)		(8,673)		Other Current Assets and Liabilities, Net	6,928		12,897
Net Cash Flows Provided by Operating Activities	Net Cash Flows Provided by Operating Activities	138,303		118,819		Net Cash Flows Provided by Operating Activities	58,083		74,901

Investing Activities:	Investing Activities:					Investing Activities:
Investments in Property, Plant and Equipment	Investments in Property, Plant and Equipment	(134,256)		(169,239)		Investments in Property, Plant and Equipment	(107,916)		(68,278)
Other Investing Activities	Other Investing Activities	270		250		Other Investing Activities	593		137
Net Cash Flows Used in Investing Activities	Net Cash Flows Used in Investing Activities	(133,986)		(168,989)		Net Cash Flows Used in Investing Activities	(107,323)		(68,141)

Financing Activities:	Financing Activities:					Financing Activities:
Cash Dividends on Common Stock	Cash Dividends on Common Stock	(210,400)		(22,300)		Cash Dividends on Common Stock	(26,000)		(25,200)
Capital Contributions from Eversource Parent		160,000		0
Issuance of Long-Term Debt		350,000		0

Retirement of Long-Term Debt						Retirement of Long-Term Debt	—		(122,000)
Repayment of Rate Reduction Bonds	Repayment of Rate Reduction Bonds	(21,605)		(21,605)		Repayment of Rate Reduction Bonds	(21,605)		(21,605)
Retirement of Long-Term Debt		(282,000)		0
Increase in Notes Payable to Eversource Parent	Increase in Notes Payable to Eversource Parent	2,300		92,300		Increase in Notes Payable to Eversource Parent	85,800		150,500
Other Financing Activities	Other Financing Activities	(2,941)		(43)		Other Financing Activities	(23)		(22)
Net Cash Flows (Used in)/Provided by Financing Activities		(4,646)		48,352
Net Cash Flows Provided by/(Used in) Financing Activities						Net Cash Flows Provided by/(Used in) Financing Activities	38,172		(18,327)
Net Decrease in Cash and Restricted Cash	Net Decrease in Cash and Restricted Cash	(329)		(1,818)		Net Decrease in Cash and Restricted Cash	(11,068)		(11,567)
Cash and Restricted Cash - Beginning of Period	Cash and Restricted Cash - Beginning of Period	39,555		36,688		Cash and Restricted Cash - Beginning of Period	35,126		39,555
Cash and Restricted Cash - End of Period	Cash and Restricted Cash - End of Period	$	39,226	$	34,870	Cash and Restricted Cash - End of Period	$	24,058	$	27,988

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 SUBSIDIARIES

COMBINED NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Presentation

Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business. Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas, NSTAR Gas and Eversource Gas Company of Massachusetts (EGMA) (natural gas utilities) and Aquarion (water utilities). Eversource provides energy delivery and/or water service to approximately ~~4.3~~4.4 million electric, natural gas and water customers through 910 regulated utilities in Connecticut, Massachusetts and New Hampshire.

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

The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying financial statements should be read in conjunction with the Combined Notes to Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of the Eversource ~~2020~~2021 Form 10-K, which was filed with the SEC on February 17, ~~2021.~~2022. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's and PSNH's financial position as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and the results of operations, comprehensive income, ~~and~~ common shareholders' equity ~~for the three~~ and ~~six months ended June 30, 2021 and 2020 and the~~ cash flows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021. The results of operations, ~~and~~ comprehensive income ~~for the three~~ and ~~six months ended June 30, 2021 and 2020 and the~~ cash flows for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ are not necessarily indicative of the results expected for a full year.

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

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

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

Eversource's utility subsidiaries' electric, natural gas and water distribution and transmission businesses are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries. See Note 2, "Regulatory Accounting," for further information.

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

Based on the status of our COVID-19 regulatory dockets, communications with our state regulatory commissions, and policies and practices in the jurisdictions in which we operate, we believe our state regulatory commissions in Connecticut and Massachusetts will allow us to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows. See Note 1C, "Summary of Significant Accounting Policies - Allowance for Uncollectible Accounts," for discussion of our evaluation of the allowance for doubtful accounts as of June 30, 2021 in light of the COVID-19 pandemic and Note 2, "Regulatory Accounting," for the amount of net incremental COVID-19 costs deferred on our balance sheet.

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

~~B. Accounting Standards~~

~~Accounting Standards Recently Adopted:~~ On ~~January 1, 2021, the Company adopted Accounting Standards Update (ASU) 2019-12,~~ ~~Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, which eliminates certain exceptions to the general principles~~May 4, 2022, Eversource announced that it had initiated a strategic review of ~~current income tax guidance in ASC 740 and simplifies and improves consistency in application~~its offshore wind investment portfolio. As part of that ~~income tax guidance through clarifications~~review, Eversource will explore strategic alternatives that could result in a potential sale of all, or part, of its 50 percent interest in its offshore wind partnership with Ørsted. Eversource expects to complete this review during 2022. Eversource’s offshore wind business includes a 50 percent ownership interest in North East Offshore, which holds PPAs and ~~amendments to ASC 740. The ASU did~~contracts for the Revolution Wind, South Fork Wind and Sunrise Wind projects, as well as undeveloped offshore lease area. As of March 31, 2022 and December 31, 2021, Eversource's total equity investment balance in its offshore wind business was $1.33 billion and $1.21 billion, respectively. Eversource’s initiation of the strategic review of its offshore wind investment does not ~~have a material~~ impact on the March 31, 2022 financial statements, and at this time, Eversource cannot predict the ultimate outcome or estimate the potential impact of ~~Eversource, CL&P, NSTAR Electric and PSNH.~~such review.

B. Allowance for Uncollectible Accounts

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

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

The allowance for uncollectible accounts is determined based upon a variety of judgments and factors, including ~~the application of~~an aging-based quantitative assessment that applies an estimated uncollectible percentage to each receivable aging category. Factors in determining credit loss include historical collection, write-off experience, analysis of delinquency statistics, and management's assessment of collectability from customers, including current conditions, customer payment trends, the impact on customer bills because of energy usage trends and changes in rates, flexible payment plans and financial hardship arrearage management programs being offered to customers, reasonable forecasts, and expectations of future collectability and collection efforts. Management continuously assesses the collectability of receivables and adjusts estimates based on actual experience and future expectations based on economic ~~indicators,~~conditions, collection efforts and other factors. Management also monitors the aging analysis of receivables to determine if there are changes in the collections of accounts receivable. Receivable balances are written off against the allowance for uncollectible accounts when the customer accounts are no longer in service and these balances are deemed to be uncollectible. Management concluded that the reserve balance as of March 31, 2022 adequately reflected the collection risk and net realizable value for its receivables.

As of ~~June 30,~~March 31, 2022 and December 31, 2021, ~~management evaluated~~ the adequacy of the allowance for uncollectible accounts in light of the COVID-19 pandemic and the related economic downturn. This evaluation included an analysis of collection and customer payment trends, economic conditions, delinquency statistics, aging-based quantitative assessments, the impact on residential customer bills because of energy usage and change in rates, flexible payment plans and financial hardship arrearage management programs being offered to customers, and COVID-19 developments, including any potential federal governmental pandemic relief programs and the expansion of unemployment benefit initiatives, which help to mitigate the potential for increasing customer account delinquencies. Additionally, management considered past economic declines and corresponding uncollectible reserves as part of the current assessment. This evaluation has shown that our operating companies have experienced an increase in aged receivables and lower cash collections from customers because of the length of the moratorium on disconnections in Connecticut and Massachusetts, and the economic slowdown resulting from the COVID-19 pandemic.

~~Based upon the evaluation performed, in the first half of 2021, management increased the allowance for uncollectible accounts for amounts~~total amount incurred as a result of COVID-19 ~~by $32.1~~included in the allowance for uncollectible accounts was $58.5 million ~~for~~and $55.3 million at Eversource, ~~($12.3~~$20.4 million ~~for~~and $23.9 million at CL&P, ~~$6.3~~and $9.0 million ~~for~~and $9.0 million at NSTAR Electric, respectively. At our Connecticut and ~~$14.7 million at our natural gas businesses). These~~Massachusetts utilities, the COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs ~~at our Connecticut and Massachusetts utilities~~ or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as management believes it is probable that these costs will ultimately be recovered from customers in future rates. ~~As of June 30, 2021, the total amount incurred~~No COVID-19 related uncollectible amounts were deferred at PSNH as a result of a July 2021 NHPUC order. Based on the status of our COVID-19 ~~included~~regulatory dockets, and policies and practices in the ~~allowance for~~jurisdictions in which we operate, we believe our state regulatory commissions in Connecticut and Massachusetts will allow us to recover our incremental uncollectible ~~accounts was $63.6 million at Eversource ($15.1 million at CL&P, $17.3 million at NSTAR Electric, and $30.1 million at our natural gas businesses).~~

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

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

Management concluded that the reserve balance as of June 30, 2021 adequately reflected the collection risk and net realizable value for Eversource’s receivables. Management will continue to evaluate the adequacy of the uncollectible allowance in future reporting periods based on an ongoing assessment of accounts receivable collections, delinquency statistics, and analysis of aging-based quantitative assessments.costs associated with COVID-19.

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

The total allowance for uncollectible accounts is included in Receivables, Net on the balance sheets. The activity in the allowance for uncollectible accounts by portfolio segment as of March 31stis as follows:

Eversource CL&P NSTAR Electric PSNH
(Millions of Dollars) Hardship Accounts Retail (Non-Hardship),
Wholesale, and Other Receivables Total Allowance Hardship Accounts Retail (Non-Hardship),
Wholesale and Other Receivables Total Allowance Hardship Accounts Retail (Non-Hardship),
Wholesale, and Other Receivables Total Allowance Total Allowance
Three Months Ended 2021
Beginning Balance $ 197.3 $ 194.4 $ 391.7 $ 138.4 $ 36.7 $ 175.1 $ 31.1 $ 58.2 $ 89.3 $ 17.3
Uncollectible Expense 0 11.4 11.4 0 2.8 2.8 0 3.5 3.5 2.0
Uncollectible Costs Deferred (1)
16.6 24.5 41.1 9.3 8.3 17.6 4.9 6.9 11.8 (0.3)
Write-Offs (3.4) (18.1) (21.5) (2.3) (5.4) (7.7) (0.1) (7.7) (7.8) (2.0)
Recoveries Collected 0.2 2.9 3.1 0.2 0.8 1.0 0 1.2 1.2 0.2
Ending Balance $ 210.7 $ 215.1 $ 425.8 $ 145.6 $ 43.2 $ 188.8 $ 35.9 $ 62.1 $ 98.0 $ 17.2
Six Months Ended 2021
Beginning Balance $ 194.8 $ 164.1 $ 358.9 $ 129.1 $ 28.3 $ 157.4 $ 39.7 $ 51.9 $ 91.6 $ 17.2
Uncollectible Expense 0 27.7 27.7 0 6.6 6.6 0 7.4 7.4 3.2
Uncollectible Costs Deferred (1)
22.0 51.6 73.6 21.2 15.7 36.9 (3.5) 15.2 11.7 0.8
Write-Offs (6.7) (34.8) (41.5) (5.2) (9.3) (14.5) (0.3) (15.2) (15.5) (4.5)
Recoveries Collected 0.6 6.5 7.1 0.5 1.9 2.4 0 2.8 2.8 0.5
Ending Balance $ 210.7 $ 215.1 $ 425.8 $ 145.6 $ 43.2 $ 188.8 $ 35.9 $ 62.1 $ 98.0 $ 17.2


	Eversource						CL&P						NSTAR Electric						PSNH
(Millions of Dollars)	Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Total Allowance








Three Months Ended 2022
Beginning Balance	$	226.1	$	191.3	$	417.4	$	144.6	$	36.7	$	181.3	$	43.3	$	53.7	$	97.0	$	24.3
Uncollectible Expense	—		17.1		17.1		—		3.8		3.8		—		4.7		4.7		2.5
Uncollectible Costs Deferred (1)	0.9		14.8		15.7		(4.0)		(2.1)		(6.1)		(3.3)		5.4		2.1		1.0
Write-Offs	(2.3)		(22.0)		(24.3)		(1.1)		(0.5)		(1.6)		(0.3)		(10.6)		(10.9)		(1.8)
Recoveries Collected	0.8		5.5		6.3		0.6		2.5		3.1		—		1.9		1.9		0.2
Ending Balance	$	225.5	$	206.7	$	432.2	$	140.1	$	40.4	$	180.5	$	39.7	$	55.1	$	94.8	$	26.2












Three Months Ended 2021
Beginning Balance	$	194.8	$	164.1	$	358.9	$	129.1	$	28.3	$	157.4	$	39.7	$	51.9	$	91.6	$	17.2
Uncollectible Expense	—		16.3		16.3		—		3.8		3.8		—		3.9		3.9		1.2
Uncollectible Costs Deferred (1)	5.4		27.1		32.5		11.9		7.5		19.4		(8.5)		8.4		(0.1)		1.2
Write-Offs	(3.3)		(16.7)		(20.0)		(2.9)		(4.0)		(6.9)		(0.1)		(7.5)		(7.6)		(2.5)
Recoveries Collected	0.4		3.6		4.0		0.3		1.1		1.4		—		1.5		1.5		0.2
Ending Balance	$	197.3	$	194.4	$	391.7	$	138.4	$	36.7	$	175.1	$	31.1	$	58.2	$	89.3	$	17.3

Eversource CL&P NSTAR Electric PSNH
(Millions of Dollars) Hardship Accounts Retail (Non-Hardship),
Wholesale, and Other Receivables Total Allowance Hardship Accounts Retail (Non-Hardship),
Wholesale and Other Receivables Total Allowance Hardship Accounts Retail (Non-Hardship),
Wholesale, and Other Receivables Total Allowance Total Allowance
Three Months Ended 2020
Beginning Balance $ 172.2 $ 89.9 $ 262.1 $ 110.7 $ 20.2 $ 130.9 $ 38.5 $ 32.6 $ 71.1 $ 11.2
Uncollectible Expense 0 9.2 9.2 0 3.0 3.0 0 3.1 3.1 0.6
Uncollectible Costs Deferred (1)
7.1 8.5 15.6 8.6 1.6 10.2 (3.7) 3.5 (0.2) 1.1
Write-Offs (4.4) (16.6) (21.0) (3.6) (6.0) (9.6) (0.2) (6.2) (6.4) (1.3)
Recoveries Collected 0.6 3.5 4.1 0.6 1.6 2.2 0 1.1 1.1 0.2
Ending Balance $ 175.5 $ 94.5 $ 270.0 $ 116.3 $ 20.4 $ 136.7 $ 34.6 $ 34.1 $ 68.7 $ 11.8
Six Months Ended 2020
Beginning Balance $ 143.3 $ 81.5 $ 224.8 $ 80.1 $ 17.2 $ 97.3 $ 43.9 $ 31.5 $ 75.4 $ 10.5
ASU 2016-13 Implementation
Impact on January 1, 2020 21.6 2.2 23.8 21.3 0.9 22.2 (1.6) 0.3 (1.3) 0.3
Uncollectible Expense 0 20.6 20.6 0 6.2 6.2 0 6.8 6.8 1.3
Uncollectible Costs Deferred (1)
18.9 17.0 35.9 21.5 3.4 24.9 (7.1) 6.9 (0.2) 2.4
Write-Offs (9.1) (33.4) (42.5) (7.4) (9.5) (16.9) (0.6) (14.2) (14.8) (3.0)
Recoveries Collected 0.8 6.6 7.4 0.8 2.2 3.0 0 2.8 2.8 0.3
Ending Balance $ 175.5 $ 94.5 $ 270.0 $ 116.3 $ 20.4 $ 136.7 $ 34.6 $ 34.1 $ 68.7 $ 11.8

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

D.C. Fair Value Measurements

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

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

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

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

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

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

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

E.D. Other Income, Net

The components of Other Income, Net on the statements of income were as follows:

For the Three Months Ended
June 30, 2021 June 30, 2020
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
Income Components $ 22.1 $ 4.3 $ 10.2 $ 2.7 $ 10.7 $ 0.9 $ 7.1 $ 1.6
AFUDC Equity 9.2 1.7 6.2 0.3 10.8 3.9 5.3 1.2
Equity in Earnings of Unconsolidated Affiliates (1)
4.7 0 0.1 0 5.9 0 0.1 0
Investment Income 1.9 1.2 0.6 0.3 1.8 2.2 0 0.3
Interest Income 8.4 2.7 4.8 0.9 1.0 1.4 0.5 0.5
Other 0.3 0 0 0.1 0 0.1 0.1 0
Total Other Income, Net $ 46.6 $ 9.9 $ 21.9 $ 4.3 $ 30.2 $ 8.5 $ 13.1 $ 3.6

For the Six Months Ended
June 30, 2021 June 30, 2020
(Millions of Dollars) Eversource CL&P NSTAR Electric PSNH Eversource CL&P NSTAR Electric PSNH
Pension, SERP and PBOP Non-Service
Income Components $ 42.2 $ 7.0 $ 20.2 $ 5.4 $ 23.4 $ 2.1 $ 15.0 $ 3.5
AFUDC Equity 18.4 3.4 12.4 0.9 21.4 7.9 10.3 2.6
Equity in Earnings of Unconsolidated Affiliates (1)
8.4 0 0.2 0 9.8 0 0.2 0
Investment Income/(Loss) 1.3 1.5 0.8 0.4 (2.5) (1.3) (1.3) (0.2)
Interest Income 9.9 2.8 4.9 1.6 1.8 1.6 0.7 0.8
Other 0.6 0.1 0.2 0.1 0.4 0.1 0.5 0.1
Total Other Income, Net $ 80.8 $ 14.8 $ 38.7 $ 8.4 $ 54.3 $ 10.4 $ 25.4 $ 6.8

~~(1)~~ Equity in earnings of unconsolidated affiliates includes $2.1 million of pre-tax unrealized gains associated with an investment in a renewable energy fund for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2020, equity in earnings of unconsolidated affiliates included $2.4 million of primarily realized gains associated with this investment.














	For the Three Months Ended
	March 31, 2022								March 31, 2021
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income Components	$	54.3	$	15.9	$	21.0	$	6.6	$	20.1	$	2.7	$	10.1	$	2.7
AFUDC Equity	9.9		2.8		4.9		0.4		9.2		1.7		6.2		0.6
Equity in Earnings of Unconsolidated Affiliates	0.4		—		—		—		3.7		—		0.1		—
Investment (Loss)/Income	(0.2)		(0.4)		(0.3)		0.2		(0.6)		0.4		0.2		0.1
Interest Income	6.7		1.3		3.5		0.3		1.5		0.1		0.1		0.7

Other	0.5		—		0.1		—		0.3		—		0.1		0.1
Total Other Income, Net	$	71.6	$	19.6	$	29.2	$	7.5	$	34.2	$	4.9	$	16.8	$	4.2

F.E. Other Taxes

Eversource's companies that serve customers in Connecticut collect gross receipts taxes levied by the state of Connecticut from their customers. These gross receipts taxes are recorded separately with collections in Operating Revenues and with payments in Taxes Other Than Income Taxes on the statements of income as follows:


		For the Three Months Ended				For the Six Months Ended					For the Three Months Ended
(Millions of Dollars)	(Millions of Dollars)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020		(Millions of Dollars)	March 31, 2022		March 31, 2021
Eversource	Eversource	$	39.9	$	37.6	$	88.5	$	80.7	Eversource	$	48.6	$	48.6
CL&P	CL&P	35.4		33.1		74.6		68.6		CL&P	37.8		39.2

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.

F. Supplemental Cash Flow Information

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


(Millions of Dollars)	(Millions of Dollars)	As of June 30, 2021		As of June 30, 2020		(Millions of Dollars)	As of March 31, 2022		As of March 31, 2021
Eversource	Eversource	$	344.8	$	336.1	Eversource	$	385.6	$	262.9
CL&P	CL&P	66.4		95.0		CL&P	102.1		70.9
NSTAR Electric	NSTAR Electric	103.8		75.5		NSTAR Electric	85.8		68.2
PSNH	PSNH	33.9		48.3		PSNH	49.5		23.5

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, 2021								As of December 31, 2020									As of March 31, 2022								As of December 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Cash as reported on the Balance Sheets	Cash as reported on the Balance Sheets	$	217.4	$	198.4	$	0.6	$	0.3	$	106.6	$	90.8	$	0.1	$	0.1	Cash as reported on the Balance Sheets	$	46.2	$	21.6	$	0.7	$	3.8	$	66.8	$	55.8	$	0.7	$	—
Restricted cash included in:	Restricted cash included in:																	Restricted cash included in:
Special Deposits	Special Deposits	71.8		8.6		17.2		35.1		73.6		8.7		17.2		36.8		Special Deposits	73.3		8.7		17.3		16.6		78.2		18.7		17.4		31.4
Marketable Securities	Marketable Securities	34.1		0.4		0.1		0.6		41.2		0.3		0.1		0.6		Marketable Securities	26.0		0.3		0.1		0.5		31.3		0.3		0.1		0.5
Other Long-Term Assets	Other Long-Term Assets	44.7		0		0		3.2		43.6		0		0		2.1		Other Long-Term Assets	19.1		—		—		3.2		44.7		—		—		3.2
Cash and Restricted Cash as reported on the Statements of Cash Flows	Cash and Restricted Cash as reported on the Statements of Cash Flows	$	368.0	$	207.4	$	17.9	$	39.2	$	265.0	$	99.8	$	17.4	$	39.6	Cash and Restricted Cash as reported on the Statements of Cash Flows	$	164.6	$	30.6	$	18.1	$	24.1	$	221.0	$	74.8	$	18.2	$	35.1

Special Deposits represent cash collections related to the PSNH RRB customer charges that are held in trust, required ISO-NE cash deposits, and CYAPC and YAEC cash balances. The December 31, 2021 balance also included a $10 million customer assistance fund to provide bill payment assistance to certain existing non-hardship and hardship customers carrying arrearages at CL&P established under the terms of the PURA-approved October 2021 settlement agreement. Those customers were provided with $10 million of bill forgiveness in the first quarter of 2022, which represented a non-cash transaction. Special Deposits are included in Current Assets on the balance sheets. Restricted cash included in Marketable Securities represents money market funds held in trusts to fund certain non-qualified executive benefits and restricted trusts to fund CYAPC and YAEC's spent nuclear fuel storage obligations.

Restricted cash ~~included in Other Long-Term Assets~~also includes ~~$41.5 million related to~~ an Energy Relief Fund for energy efficiency and clean energy measures in the Merrimack Valley and an additional energy efficiency program established under the terms of the EGMA 2020 settlement agreement. As of March 31, 2022, $20.0 million of this restricted cash was recorded as short-term in Special Deposits and $15.9 million was recorded in Other Long-Term Assets. As of December 31, 2021, this restricted cash totaled $41.5 million and was recorded in Other Long-Term Assets on the balance sheet.

2. REGULATORY ACCOUNTING

Eversource's utility companies are subject to rate regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which considers the effect of regulation on the timing of the recognition of certain revenues and expenses. The regulated companies' financial statements reflect the effects of the rate-making process. The rates charged to the customers of Eversource's regulated companies are designed to collect each company's costs to provide service, plus a return on investment.

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

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

2120

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


		As of June 30, 2021								As of December 31, 2020									As of March 31, 2022								As of December 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Benefit Costs	Benefit Costs	$	2,625.1	$	551.7	$	653.9	$	255.1	$	2,794.2	$	632.3	$	690.0	$	267.6	Benefit Costs	$	1,452.5	$	268.0	$	386.9	$	116.5	$	1,481.0	$	272.4	$	395.5	$	118.9
Storm Costs, Net																		Storm Costs, Net	1,249.3		735.7		449.4		64.2		1,102.7		695.6		341.3		65.8
Regulatory Tracking Mechanisms																		Regulatory Tracking Mechanisms	937.7		295.2		375.0		97.0		1,050.5		333.6		376.6		85.4
Income Taxes, Net	Income Taxes, Net	755.4		460.5		112.2		17.4		747.1		458.9		110.4		15.2		Income Taxes, Net	791.2		471.8		112.8		14.5		790.7		470.5		112.6		17.5
Securitized Stranded Costs	Securitized Stranded Costs	500.5		0		0		500.5		522.1		0		0		522.1		Securitized Stranded Costs	468.1		—		—		468.1		478.9		—		—		478.9
Storm Restoration Costs, Net		745.9		500.2		169.5		76.2		765.6		515.1		186.4		64.1
Regulatory Tracker Mechanisms		950.9		347.5		378.8		79.1		850.5		246.6		332.2		95.3
Goodwill-related																		Goodwill-related	293.6		—		252.1		—		297.8		—		255.7		—
Derivative Liabilities	Derivative Liabilities	279.7		279.7		0		0		296.3		293.1		0		0		Derivative Liabilities	229.4		229.4		—		—		249.2		249.2		—		—
Goodwill-related		306.2		0		262.9		0		314.7		0		270.2		0
Asset Retirement Obligations	Asset Retirement Obligations	118.2		33.2		55.8		4.0		118.4		32.1		58.6		3.9		Asset Retirement Obligations	117.5		34.2		61.9		4.2		115.0		33.6		59.8		4.1
Other Regulatory Assets	Other Regulatory Assets	151.4		31.6		51.3		18.1		161.0		33.7		56.1		20.9		Other Regulatory Assets	162.1		28.9		35.4		14.7		150.0		29.9		37.7		15.8
Total Regulatory Assets	Total Regulatory Assets	6,433.3		2,204.4		1,684.4		950.4		6,569.9		2,211.8		1,703.9		989.1		Total Regulatory Assets	5,701.4		2,063.2		1,673.5		779.2		5,715.8		2,084.8		1,579.2		786.4
Less: Current Portion	Less: Current Portion	1,186.9		458.6		448.0		99.5		1,076.6		345.6		399.9		115.9		Less: Current Portion	1,128.1		382.1		433.7		124.7		1,129.1		371.6		444.0		107.2
Total Long-Term Regulatory Assets	Total Long-Term Regulatory Assets	$	5,246.4	$	1,745.8	$	1,236.4	$	850.9	$	5,493.3	$	1,866.2	$	1,304.0	$	873.2	Total Long-Term Regulatory Assets	$	4,573.3	$	1,681.1	$	1,239.8	$	654.5	$	4,586.7	$	1,713.2	$	1,135.2	$	679.2

Regulatory Costs in Long-Term Assets: Eversource's regulated companies had ~~$255.6~~$262.5 million (including ~~$115.5~~$113.4 million for CL&P, ~~$77.1~~$84.2 million for NSTAR Electric and ~~$3.1~~$3.4 million for PSNH) and ~~$196.9~~$252.5 million (including ~~$84.1~~$114.9 million for CL&P, ~~$69.8~~$85.0 million for NSTAR Electric and ~~$4.3~~$3.4 million for PSNH) of additional regulatory costs as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, that were included in long-term assets on the balance sheets. These amounts represent incurred costs for which recovery has not yet been specifically approved by the applicable regulatory agency. However, based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates.

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, these regulatory costs included ~~net~~ incremental COVID-19 related ~~costs~~non-tracked uncollectible expense deferred of ~~$45.8~~$35.0 million and ~~$24.0~~$33.0 million at Eversource, ~~respectively, of which, $39.1~~$15.3 million and ~~$15.8~~$18.0 million respectively, related to non-tracked uncollectible expense and the remainder related to facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment. Net incremental COVID-19 related costs deferred at CL&P, and $6.1 million and $6.1 million at NSTAR Electric, totaled $13.2 million and $15.8 million, respectively, as of June 30, 2021, and $4.7 million and $11.9 million, respectively, as of December 31, 2020, and primarily related to deferred non-tracked uncollectible expense.respectively.

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


		As of June 30, 2021								As of December 31, 2020									As of March 31, 2022								As of December 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
EDIT due to Tax Cuts and Jobs Act of 2017	EDIT due to Tax Cuts and Jobs Act of 2017	$	2,748.6	$	1,005.4	$	1,030.5	$	364.2	$	2,778.6	$	1,010.7	$	1,044.0	$	371.5	EDIT due to Tax Cuts and Jobs Act of 2017	$	2,665.7	$	992.7	$	973.3	$	356.1	$	2,685.2	$	996.1	$	984.5	$	359.2
Cost of Removal	Cost of Removal	657.1		108.7		374.4		17.1		624.8		98.4		363.6		12.9		Cost of Removal	667.2		108.6		388.2		19.1		649.6		100.1		381.0		17.2
Regulatory Tracking Mechanisms																		Regulatory Tracking Mechanisms	571.8		226.7		237.2		94.9		448.4		182.0		185.1		107.0
Benefit Costs	Benefit Costs	70.4		0		60.2		0		83.6		0		72.5		0		Benefit Costs	128.3		—		103.1		—		133.5		—		107.4		—
Regulatory Tracker Mechanisms		474.7		190.3		147.7		51.0		366.5		148.9		139.7		47.8
AFUDC - Transmission	AFUDC - Transmission	78.7		43.9		34.8		0		76.8		44.6		32.2		0		AFUDC - Transmission	85.1		44.0		41.1		—		81.0		43.2		37.8		—
CL&P Settlement Agreement and Storm Performance Penalty																		CL&P Settlement Agreement and Storm Performance Penalty	12.9		12.9		—		—		81.3		81.3		—		—
Other Regulatory Liabilities	Other Regulatory Liabilities	383.1		78.8		77.5		14.3		309.9		39.5		63.2		9.8		Other Regulatory Liabilities	416.2		75.0		107.4		25.1		389.7		57.1		91.5		18.2
Total Regulatory Liabilities	Total Regulatory Liabilities	4,412.6		1,427.1		1,725.1		446.6		4,240.2		1,342.1		1,715.2		442.0		Total Regulatory Liabilities	4,547.2		1,459.9		1,850.3		495.2		4,468.7		1,459.8		1,787.3		501.6
Less: Current Portion	Less: Current Portion	532.5		219.8		173.0		61.9		389.4		137.2		164.8		58.8		Less: Current Portion	652.4		251.6		279.3		106.4		602.4		266.5		228.2		120.2
Total Long-Term Regulatory Liabilities	Total Long-Term Regulatory Liabilities	$	3,880.1	$	1,207.3	$	1,552.1	$	384.7	$	3,850.8	$	1,204.9	$	1,550.4	$	383.2	Total Long-Term Regulatory Liabilities	$	3,894.8	$	1,208.3	$	1,571.0	$	388.8	$	3,866.3	$	1,193.3	$	1,559.1	$	381.4

~~Recent Regulatory Developments:~~

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

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

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

3. PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

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


Eversource	Eversource	As of June 30, 2021		As of December 31, 2020		Eversource	As of March 31, 2022		As of December 31, 2021
(Millions of Dollars)	(Millions of Dollars)					(Millions of Dollars)
Distribution - Electric	Distribution - Electric	$	17,104.8	$	16,703.2	Distribution - Electric	$	17,809.0	$	17,679.1
Distribution - Natural Gas	Distribution - Natural Gas	6,227.8		6,111.2		Distribution - Natural Gas	6,713.7		6,694.8
Transmission - Electric	Transmission - Electric	12,296.8		11,954.0		Transmission - Electric	13,011.0		12,882.4
Distribution - Water	Distribution - Water	1,772.7		1,743.1		Distribution - Water	1,924.9		1,900.9
Solar	Solar	200.4		201.5		Solar	200.9		200.9
Utility	Utility	37,602.5		36,713.0		Utility	39,659.5		39,358.1
Other (1)	Other (1)	1,386.9		1,269.0		Other (1)	1,509.6		1,469.5
Property, Plant and Equipment, Gross	Property, Plant and Equipment, Gross	38,989.4		37,982.0		Property, Plant and Equipment, Gross	41,169.1		40,827.6
Less: Accumulated Depreciation	Less: Accumulated Depreciation					Less: Accumulated Depreciation
Utility	Utility	(8,756.6)		(8,476.3)		Utility	(8,976.2)		(8,885.2)
Other	Other	(525.8)		(477.6)		Other	(609.8)		(580.1)
Total Accumulated Depreciation	Total Accumulated Depreciation	(9,282.4)		(8,953.9)		Total Accumulated Depreciation	(9,586.0)		(9,465.3)
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	29,707.0		29,028.1		Property, Plant and Equipment, Net	31,583.1		31,362.3
Construction Work in Progress	Construction Work in Progress	2,171.6		1,854.4		Construction Work in Progress	2,269.5		2,015.4
Total Property, Plant and Equipment, Net	Total Property, Plant and Equipment, Net	$	31,878.6	$	30,882.5	Total Property, Plant and Equipment, Net	$	33,852.6	$	33,377.7


		As of June 30, 2021						As of December 31, 2020							As of March 31, 2022						As of December 31, 2021
(Millions of Dollars)	(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Distribution - Electric	Distribution - Electric	$	6,989.4	$	7,716.5	$	2,439.2	$	6,820.7	$	7,544.4	$	2,378.4	Distribution - Electric	$	7,188.9	$	8,151.1	$	2,509.3	$	7,117.6	$	8,105.5	$	2,496.2
Transmission - Electric	Transmission - Electric	5,653.4		4,866.5		1,778.6		5,512.0		4,701.3		1,742.4		Transmission - Electric	5,912.5		5,137.1		1,963.1		5,859.0		5,090.5		1,934.6
Solar	Solar	0		200.4		0		0		201.5		0		Solar	—		200.9		—		—		200.9		—
Property, Plant and Equipment, Gross	Property, Plant and Equipment, Gross	12,642.8		12,783.4		4,217.8		12,332.7		12,447.2		4,120.8		Property, Plant and Equipment, Gross	13,101.4		13,489.1		4,472.4		12,976.6		13,396.9		4,430.8
Less: Accumulated Depreciation	Less: Accumulated Depreciation	(2,559.4)		(3,182.8)		(879.9)		(2,475.4)		(3,074.1)		(848.9)		Less: Accumulated Depreciation	(2,592.6)		(3,271.8)		(912.8)		(2,572.1)		(3,227.3)		(908.4)
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	10,083.4		9,600.6		3,337.9		9,857.3		9,373.1		3,271.9		Property, Plant and Equipment, Net	10,508.8		10,217.3		3,559.6		10,404.5		10,169.6		3,522.4
Construction Work in Progress	Construction Work in Progress	395.8		836.6		129.9		377.3		750.0		102.4		Construction Work in Progress	432.2		791.6		163.0		399.0		707.0		134.1
Total Property, Plant and Equipment, Net	Total Property, Plant and Equipment, Net	$	10,479.2	$	10,437.2	$	3,467.8	$	10,234.6	$	10,123.1	$	3,374.3	Total Property, Plant and Equipment, Net	$	10,941.0	$	11,008.9	$	3,722.6	$	10,803.5	$	10,876.6	$	3,656.5

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

4. DERIVATIVE INSTRUMENTS

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

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

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

The gross fair values of derivative assets and liabilities with the same counterparty are offset and reported as net Derivative Assets or Derivative Liabilities, with current and long-term portions, on the balance sheets. The following table presents the gross fair values of contracts, categorized by risk type, and the net amounts recorded as current or long-term derivative assets or liabilities:

As of June 30, 2021 As of December 31, 2020
(Millions of Dollars) Fair Value Hierarchy Commodity Supply and Price Risk
Management
Netting (1)
Net Amount
Recorded as a Derivative Commodity Supply and Price Risk
Management
Netting (1)
Net Amount
Recorded as
a Derivative
Current Derivative Assets:
CL&P Level 3 $ 14.1 $ (0.4) $ 13.7 $ 13.7 $ (0.4) $ 13.3
Long-Term Derivative Assets:
CL&P Level 3 55.0 (1.7) 53.3 58.7 (1.8) 56.9
Current Derivative Liabilities:
CL&P Level 3 (70.9) 0 (70.9) (68.8) 0 (68.8)
Other Level 2 0 0 0 (3.3) 0.1 (3.2)
Long-Term Derivative Liabilities:
CL&P Level 3 (275.8) 0 (275.8) (294.5) 0 (294.5)


		As of March 31, 2022						As of December 31, 2021
CL&P (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	Level 3	$	14.8	$	(0.4)	$	14.4	$	14.7	$	(1.0)	$	13.7
Long-Term Derivative Assets	Level 3	41.4		(1.3)		40.1		46.9		(0.9)		46.0
Current Derivative Liabilities	Level 3	(74.4)		—		(74.4)		(73.5)		—		(73.5)
Long-Term Derivative Liabilities	Level 3	(209.5)		—		(209.5)		(235.4)		—		(235.4)

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

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts

Commodity Supply and Price Risk Management: As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities. CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI. The combined capacities of these contracts as of both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were 675 MW. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets.

As of December 31, 2020, Eversource had New York Mercantile Exchange (NYMEX) financial contracts for natural gas futures in order to reduce variability associated with the price of 8.9 million MMBtu of natural gas. These contracts were classified as Level 2 in the fair value hierarchy. NSTAR Gas terminated its financial contracts swap program in April 2021.

For the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there were gains of ~~$0.9~~$6.2 million and losses of ~~less than $0.1~~$11.1 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts. ~~For the six months ended June 30, 2021 and 2020, there were losses of $10.2 million and $18.0 million, respectively.~~

Fair Value Measurements of Derivative Instruments

The fair value of derivative contracts classified as Level 3 utilizes both significant observable and unobservable inputs. The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions related to exit price. Significant observable inputs for valuations of these contracts include energy and energy-related product prices in future years for which quoted prices in an active market exist. Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy and energy-related products, and accounting requirements. The future capacity prices for periods that are not quoted in an active market or established at auction are based on available market data and are escalated based on estimates of inflation in order to address the full term of the contract.

Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty's credit rating for assets and the Company's credit rating for liabilities. Significant observable inputs for valuations of these contracts include energy-related product prices in future years for which quoted prices in an active market exist. 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. Fair value measurements categorized in Level 3 of the fair value hierarchy are prepared by individuals with expertise in valuation techniques, pricing of energy-related products, and accounting requirements.

The following is a summary of ~~Level 3 derivative contracts and the range of~~ the significant unobservable inputs utilized in the valuations ~~over the duration~~ of the ~~contracts:~~derivative contracts classified as Level 3:


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

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

Exit price premiums of ~~6.0~~4.5 percent through ~~10.4~~8.8 percent, or a weighted average of ~~9.3~~7.7 percent, are also Level 3 significant unobservable inputs applied to these contracts and reflect the uncertainty and illiquidity premiums that would be required based on the most recent market activity available for similar type contracts. The risk premium was weighted by the relative fair value of the net derivative instruments.

As of December 31, 2021, Level 3 unobservable inputs also utilized in the valuation of CL&P’s capacity-related contracts included capacity prices of $2.61 per kW-Month over the period 2025 through 2026. As of March 31, 2022, these capacity price inputs are now observable.

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

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


CL&P	CL&P	For the Three Months Ended June 30,				For the Six Months Ended June 30,				CL&P	For the Three Months Ended March 31,
(Millions of Dollars)	(Millions of Dollars)	2021		2020		2021		2020		(Millions of Dollars)		2022		2021
Derivatives, Net:	Derivatives, Net:									Derivatives, Net:
Fair Value as of Beginning of Period	Fair Value as of Beginning of Period	$	(293.1)	$	(333.8)	$	(293.1)	$	(329.2)	Fair Value as of Beginning of Period		$	(249.2)	$	(293.1)
Net Realized/Unrealized Gains/(Losses) Included in Regulatory Assets	Net Realized/Unrealized Gains/(Losses) Included in Regulatory Assets	0.9		(1.3)		(11.5)		(17.6)		Net Realized/Unrealized Gains/(Losses) Included in Regulatory Assets		6.2		(12.5)
Settlements	Settlements	12.5		13.1		24.9		24.8		Settlements		13.6		12.5
Fair Value as of End of Period	Fair Value as of End of Period	$	(279.7)	$	(322.0)	$	(279.7)	$	(322.0)	Fair Value as of End of Period		$	(229.4)	$	(293.1)

5. MARKETABLE SECURITIES

Eversource holds marketable securities that are primarily used to fund certain non-qualified executive benefits. The trusts that hold these marketable securities are not subject to regulatory oversight by state or federal agencies. Eversource’s marketable securities also include CYAPC and YAEC ~~maintain~~ legally restricted trusts that each ~~of which holds marketable~~hold equity and available-for-sale debt securities to fund the spent nuclear fuel removal obligations of their nuclear fuel storage facilities. Equity and available-for-sale debt marketable securities are recorded at fair value, with the current portion recorded in Prepayments and Other Current Assets and the long-term portion recorded in Marketable Securities on the balance sheets.

Equity Securities: Unrealized gains and losses on equity securities held in Eversource's non-qualified executive benefit trust are recorded in Other Income, Net on the statements of income. The fair value of these equity securities as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was ~~$39.9~~$31.5 million and ~~$40.9~~$40.2 million, respectively. For the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there were unrealized losses of $4.4 million and unrealized gains of ~~$1.9~~$1.1 million ~~and $6.6 million respectively,~~ recorded in Other Income, Net related to these equity ~~securities. For the six months ended June 30, 2021 and 2020, there were unrealized gains of $3.0 million and unrealized losses of $2.5 million,~~securities, respectively.

Eversource's equity securities also include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts, which had fair values of ~~$207.3~~$195.5 million and ~~$205.1~~$214.0 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Unrealized gains and losses for these spent nuclear fuel trusts are subject to regulatory accounting treatment and are recorded in Marketable Securities with the corresponding offset to ~~Other Long-Term Liabilities~~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.~~securities:


		As of June 30, 2021								As of December 31, 2020									As of March 31, 2022								As of December 31, 2021
Eversource (Millions of Dollars)	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		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	Debt Securities	$	224.0	$	7.0	$	(0.1)	$	230.9	$	213.1	$	11.2	$	(0.1)	$	224.2	Debt Securities	$	211.4	$	0.5	$	(3.6)	$	208.3	$	214.5	$	5.1	$	(0.2)	$	219.4

Eversource's debt securities include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of ~~$198.4~~$183.4 million and ~~$192.5~~$189.9 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Unrealized gains and losses on available-for-sale debt securities held in Eversource's non-qualified benefit trust are recorded in Accumulated Other Comprehensive Income, excluding amounts related to credit losses or losses on securities intended to be sold, which are recorded in Other Income, Net. There have been no significant unrealized losses and no credit losses for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ and no allowance for credit losses as of ~~June 30, 2021.~~March 31, 2022. Factors considered in determining whether a credit loss exists include adverse conditions specifically affecting the issuer, the payment history, ratings and rating changes of the security, and the severity of the impairment. For asset-backed debt securities, underlying collateral and expected future cash flows are also evaluated. Debt securities included in Eversource's non-qualified benefit trust portfolio are investment-grade bonds with a lower default risk based on their credit quality.

As of ~~June 30, 2021,~~March 31, 2022, the contractual maturities of available-for-sale debt securities were as follows:


Eversource (Millions of Dollars)	Eversource (Millions of Dollars)	Amortized Cost		Fair Value		Eversource (Millions of Dollars)	Amortized Cost		Fair Value
Less than one year (1)	Less than one year (1)	$	36.5	$	36.5	Less than one year (1)	$	27.0	$	27.0
One to five years	One to five years	67.5		69.4		One to five years	61.9		61.6
Six to ten years	Six to ten years	49.7		51.4		Six to ten years	36.3		35.5
Greater than ten years	Greater than ten years	70.3		73.6		Greater than ten years	86.2		84.2
Total Debt Securities	Total Debt Securities	$	224.0	$	230.9	Total Debt Securities	$	211.4	$	208.3

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

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

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


Eversource (Millions of Dollars)	Eversource (Millions of Dollars)	As of June 30, 2021		As of December 31, 2020		Eversource (Millions of Dollars)	As of March 31, 2022		As of December 31, 2021
Level 1:	Level 1:					Level 1:
Mutual Funds and Equities	Mutual Funds and Equities	$	247.2	$	246.0	Mutual Funds and Equities	$	227.0	$	254.2
Money Market Funds	Money Market Funds	34.1		41.2		Money Market Funds	26.0		31.3
Total Level 1	Total Level 1	$	281.3	$	287.2	Total Level 1	$	253.0	$	285.5
Level 2:	Level 2:					Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	U.S. Government Issued Debt Securities (Agency and Treasury)	$	100.8	$	72.9	U.S. Government Issued Debt Securities (Agency and Treasury)	$	80.0	$	81.3
Corporate Debt Securities	Corporate Debt Securities	62.8		63.8		Corporate Debt Securities	62.5		65.3
Asset-Backed Debt Securities	Asset-Backed Debt Securities	13.6		11.9		Asset-Backed Debt Securities	11.6		12.6
Municipal Bonds	Municipal Bonds	6.4		24.0		Municipal Bonds	11.7		12.3
Other Fixed Income Securities	Other Fixed Income Securities	13.2		10.4		Other Fixed Income Securities	16.5		16.6
Total Level 2	Total Level 2	$	196.8	$	183.0	Total Level 2	$	182.3	$	188.1
Total Marketable Securities	Total Marketable Securities	$	478.1	$	470.2	Total Marketable Securities	$	435.3	$	473.6

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

6. SHORT-TERM AND LONG-TERM DEBT

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $2.00 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas, Yankee Gas, EGMA and Aquarion Water Company of Connecticut are parties to a five-year ~~$1.45~~$2.00 billion revolving credit facility, which terminates on ~~December 6, 2024. Eversource parent and EGMA have a short-term $550 million~~October 15, 2026. This revolving credit facility ~~which terminates on October 20, 2021. These revolving credit facilities serve~~serves to backstop Eversource parent's $2.00 billion commercial paper program.

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit facility, which terminates on ~~December 6, 2024.~~October 15, 2026. The revolving credit facility serves to backstop NSTAR Electric's $650 million commercial paper program.

The amount of borrowings outstanding and available under the commercial paper programs were as follows:


		Borrowings Outstanding as of					Available Borrowing Capacity as of				Weighted-Average Interest Rate as of							Borrowings Outstanding as of								Available Borrowing Capacity as of								Weighted-Average Interest Rate as of
		June 30, 2021		December 31, 2020			June 30, 2021	December 31, 2020			June 30, 2021				December 31, 2020			March 31, 2022				December 31, 2021				March 31, 2022				December 31, 2021				March 31, 2022				December 31, 2021
(Millions of Dollars)	(Millions of Dollars)									(Millions of Dollars)
Eversource Parent Commercial Paper Program	Eversource Parent Commercial Paper Program	$	1,447.0		$	1,054.3		$	553.0				$	945.7						0.19	%			0.25	%	Eversource Parent Commercial Paper Program		$	1,393.8			$	1,343.0			$	606.2			$	657.0	0.93	%	0.31	%
NSTAR Electric Commercial Paper Program	NSTAR Electric Commercial Paper Program	555.5		195.0			94.5	455.0			0.11	%			0.16	%	NSTAR Electric Commercial Paper Program		275.0				162.5				375.0				487.5				0.43		%		0.14		%

There were 0no borrowings outstanding on the revolving credit facilities as of ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

CL&P and PSNH have uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire on May 12, 2022. There are 0no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of ~~June 30, 2021.~~March 31, 2022.

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

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

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of ~~June 30,~~March 31, 2022, there were intercompany loans from Eversource parent to PSNH of $196.4 million and to a subsidiary of NSTAR Electric of $4.0 million. As of December��31, 2021, there were intercompany loans from Eversource parent to PSNH of $48.6 million, and to a subsidiary of NSTAR Electric of $21.5 million. As of December 31, 2020, there were intercompany loans from Eversource parent to PSNH of $46.3 million, and to a subsidiary of NSTAR Electric of $21.3$110.6 million. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets.

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

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

(Millions of Dollars)

Issuance/(Repayment)

Issue Date or Repayment Date

Maturity Date

Use of Proceeds for Issuance/
Repayment Information

~~CL&P:~~

~~2.05%~~Eversource Parent 2.90% Series ~~A First Mortgage Bonds~~V Senior Notes

~~425.0~~650.0

~~June 2021~~February 2022

~~July 2031~~March 2027

Repaid Series K Senior Notes at maturity and short-term debt ~~paid capital expenditures and working capital~~

~~NSTAR Electric:~~

~~3.10% 2021 Debentures~~Eversource Parent 3.38% Series W Senior Notes

~~300.0~~650.0

~~May 2021~~February 2022

~~June 2051~~March 2032

~~Refinanced investments in eligible green~~

~~expenditures, which were previously financed in~~

~~2019~~Repaid Series K Senior Notes at maturity and ~~2020~~

short-term debt

~~3.50%~~Eversource Parent 2.75% Series FK Senior Notes

~~(250.0)~~

~~June 2021~~

~~September 2021~~

~~Paid on par call date in advance of maturity date~~

~~PSNH:~~

~~4.05% Series Q First Mortgage Bonds~~

~~(122.0)~~(750.0)

March ~~2021~~2022

~~June 2021~~March 2022

Paid ~~on par call date in advance of~~at maturity ~~date~~

~~3.20%~~Yankee Gas 8.48% Series RB First Mortgage Bonds

~~(160.0)~~

~~June 2021~~

~~September 2021~~

~~Paid on par call date in advance of maturity date~~

~~2.20% Series V First Mortgage Bonds~~

~~350.0~~

~~June 2021~~

~~June 2031~~

~~Repaid short-term debt, including short-term debt used to redeem Series R First Mortgage Bonds, paid capital expenditures and working capital~~

~~Other:~~

~~Eversource Parent 2.50% Series I Senior Notes~~

~~(450.0)~~

~~February 2021~~

~~March 2021~~

~~Paid on par call date in advance of maturity date~~

~~Eversource Parent 2.55% Series S Senior Notes~~

~~350.0~~ (20.0)

March ~~2021~~2022

March ~~2031~~

~~Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes~~

~~Aquarion Water Company of Connecticut 3.31%~~

~~Senior Notes~~

~~100.0~~

~~April 2021~~

~~April 2051~~

~~Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital~~

~~Aquarion Water Company of Connecticut 5.50% Notes~~

~~(40.0)~~

~~April 2021~~

~~April 2021~~2022

Paid at maturity

In~~July 2021, CL&P provided notice to the trustee of the CL&P 4.375% PCRBs that CL&P will redeem the $120.5 million of bonds on September 1, 2021, in advance of the 2028 maturity date.~~

7. RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

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

PSNH Funding was formed solely to issue RRBs to finance PSNH's unrecovered remaining costs associated with the divestiture of its generation assets. PSNH Funding is considered a VIE primarily because the equity capitalization is insufficient to support its operations. PSNH has the power to direct the significant activities of the VIE and is most closely associated with the VIE as compared to other interest holders. Therefore, PSNH is considered the primary beneficiary and consolidates PSNH Funding in its consolidated financial statements.

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


(Millions of Dollars)	(Millions of Dollars)					(Millions of Dollars)
PSNH Balance Sheets:	PSNH Balance Sheets:	As of June 30, 2021		As of December 31, 2020		PSNH Balance Sheets:	As of March 31, 2022		As of December 31, 2021
Restricted Cash - Current Portion (included in Current Assets)	Restricted Cash - Current Portion (included in Current Assets)	$	34.9	$	36.8	Restricted Cash - Current Portion (included in Current Assets)	$	16.3	$	31.1
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		2.1		Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		3.2
Securitized Stranded Cost (included in Regulatory Assets)	Securitized Stranded Cost (included in Regulatory Assets)	500.5		522.1		Securitized Stranded Cost (included in Regulatory Assets)	468.1		478.9
Other Regulatory Liabilities (included in Regulatory Liabilities)	Other Regulatory Liabilities (included in Regulatory Liabilities)	8.9		9.1		Other Regulatory Liabilities (included in Regulatory Liabilities)	6.0		5.4
Accrued Interest (included in Other Current Liabilities)	Accrued Interest (included in Other Current Liabilities)	7.7		8.0		Accrued Interest (included in Other Current Liabilities)	2.9		7.5
Rate Reduction Bonds - Current Portion	Rate Reduction Bonds - Current Portion	43.2		43.2		Rate Reduction Bonds - Current Portion	43.2		43.2
Rate Reduction Bonds - Long-Term Portion	Rate Reduction Bonds - Long-Term Portion	475.3		496.9		Rate Reduction Bonds - Long-Term Portion	432.1		453.7


(Millions of Dollars) PSNH Income Statements:	(Millions of Dollars) PSNH Income Statements:	For the Three Months Ended				For the Six Months Ended				(Millions of Dollars) PSNH Income Statements:	For the Three Months Ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020				March 31, 2022		March 31, 2021
Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)	$	10.8	$	10.8	$	21.6	$	21.6	Amortization of RRB Principal (included in Amortization of Regulatory Assets, Net)		$	10.8	$	10.8
Interest Expense on RRB Principal (included in Interest Expense)	Interest Expense on RRB Principal (included in Interest Expense)	4.6		5.0		9.3		10.0		Interest Expense on RRB Principal (included in Interest Expense)		4.4		4.7

8. PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSION

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

The components of net periodic benefit plan expense/(income) for the Pension, SERP and PBOP Plans, prior to amounts capitalized as Property, Plant and Equipment or deferred as regulatory ~~assets~~assets/(liabilities) for future recovery or refund, are shown below. The service cost component of net periodic benefit plan expense/(income), less the capitalized portion, is included in Operations and Maintenance expense on the statements of income. The remaining components of net periodic benefit plan expense/(income), less the deferred portion, are included in Other Income, Net on the statements of income. Pension, SERP and PBOP ~~expense~~expense/(income) reflected in the statements of cash flows for CL&P, NSTAR Electric and PSNH does not include intercompany allocations of net periodic benefit plan expense/(income), as these amounts are cash settled on a short-term basis.


		Pension and SERP								PBOP									Pension and SERP								PBOP
		For the Three Months Ended June 30, 2021								For the Three Months Ended June 30, 2021									For the Three Months Ended March 31, 2022								For the Three Months Ended March 31, 2022
(Millions of Dollars)	(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	Service Cost	$	18.4	$	5.5	$	3.9	$	2.2	$	3.3	$	0.6	$	0.6	$	0.3	Service Cost	$	17.7	$	4.5	$	3.6	$	1.8	$	2.8	$	0.5	$	0.5	$	0.2
Interest Cost	Interest Cost	27.1		6.7		6.7		3.6		4.2		0.8		1.1		0.4		Interest Cost	38.6		7.8		8.1		4.2		5.0		0.9		1.3		0.5
Expected Return on Plan Assets	Expected Return on Plan Assets	(87.4)		(21.7)		(27.1)		(11.8)		(19.8)		(2.6)		(9.2)		(1.5)		Expected Return on Plan Assets	(131.7)		(26.6)		(32.0)		(14.1)		(22.4)		(2.8)		(10.6)		(1.6)
Actuarial Loss		47.8		10.8		15.3		5.2		1.3		0.4		0.5		0.1
Actuarial Losses, net																		Actuarial Losses, net	30.7		4.2		8.5		2.2		—		—		—		—
Prior Service Cost/(Credit)	Prior Service Cost/(Credit)	0.3		0		0.1		0		(5.3)		0.3		(4.2)		0.1		Prior Service Cost/(Credit)	0.4		—		0.1		—		(5.4)		0.2		(4.3)		0.1
Total Net Periodic Benefit Plan Expense/(Income)		$	6.2	$	1.3	$	(1.1)	$	(0.8)	$	(16.3)	$	(0.5)	$	(11.2)	$	(0.6)
Intercompany Expense/(Income) Allocations		N/A		$	2.3	$	2.5	$	0.7	N/A		$	(0.6)	$	(0.6)	$	(0.2)
Total Net Periodic Benefit Plan Income																		Total Net Periodic Benefit Plan Income	$	(44.3)	$	(10.1)	$	(11.7)	$	(5.9)	$	(20.0)	$	(1.2)	$	(13.1)	$	(0.8)
Intercompany Income Allocations																		Intercompany Income Allocations	N/A		$	(3.8)	$	(2.9)	$	(0.8)	N/A		$	(0.9)	$	(0.9)	$	(0.3)

		Pension and SERP								PBOP
		For the Six Months Ended June 30, 2021								For the Six Months Ended June 30, 2021
(Millions of Dollars)		Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost		$	39.7	$	11.8	$	7.9	$	4.4	$	6.8	$	1.2	$	1.2	$	0.6
Interest Cost		59.7		14.0		13.4		7.2		8.6		1.6		2.2		0.9
Expected Return on Plan Assets		(196.3)		(43.3)		(54.0)		(23.7)		(39.5)		(5.2)		(18.5)		(3.0)
Actuarial Loss		109.4		23.8		30.8		10.1		3.9		0.8		1.1		0.3
Prior Service Cost/(Credit)		0.6		0		0.2		0		(10.6)		0.5		(8.4)		0.2
Total Net Periodic Benefit Plan Expense/(Income)		$	13.1	$	6.3	$	(1.7)	$	(2.0)	$	(30.8)	$	(1.1)	$	(22.4)	$	(1.0)
Intercompany Expense/(Income) Allocations		N/A		$	3.6	$	4.0	$	1.2	N/A		$	(0.9)	$	(1.0)	$	(0.3)

2826


		Pension and SERP								PBOP									Pension and SERP								PBOP
		For the Three Months Ended June 30, 2020								For the Three Months Ended June 30, 2020									For the Three Months Ended March 31, 2021								For the Three Months Ended March 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	Service Cost	$	18.7	$	5.4	$	3.8	$	2.0	$	2.0	$	0.4	$	0.5	$	0.2	Service Cost	$	21.3	$	6.3	$	4.0	$	2.2	$	3.5	$	0.6	$	0.6	$	0.3
Interest Cost	Interest Cost	44.3		9.3		9.7		4.8		6.4		1.0		1.6		0.8		Interest Cost	32.6		7.3		6.7		3.6		4.4		0.8		1.1		0.5
Expected Return on Plan Assets	Expected Return on Plan Assets	(99.3)		(19.8)		(25.7)		(11.1)		(18.7)		(2.5)		(8.5)		(1.4)		Expected Return on Plan Assets	(108.9)		(21.6)		(26.9)		(11.9)		(19.7)		(2.6)		(9.3)		(1.5)
Actuarial Loss	Actuarial Loss	50.7		9.7		14.0		3.9		2.0		0.2		0.5		0.3		Actuarial Loss	61.6		13.0		15.5		4.9		2.6		0.4		0.6		0.3
Prior Service Cost/(Credit)	Prior Service Cost/(Credit)	0.3		0		0.1		0		(5.2)		0.2		(4.3)		0.1		Prior Service Cost/(Credit)	0.3		—		0.1		—		(5.3)		0.2		(4.2)		0.1
Total Net Periodic Benefit Plan Expense/(Income)	Total Net Periodic Benefit Plan Expense/(Income)	$	14.7	$	4.6	$	1.9	$	(0.4)	$	(13.5)	$	(0.7)	$	(10.2)	$	0	Total Net Periodic Benefit Plan Expense/(Income)	$	6.9	$	5.0	$	(0.6)	$	(1.2)	$	(14.5)	$	(0.6)	$	(11.2)	$	(0.3)
Intercompany Expense/(Income) Allocations	Intercompany Expense/(Income) Allocations	N/A		$	2.4	$	2.3	$	0.8	N/A		$	(0.2)	$	(0.2)	$	(0.1)	Intercompany Expense/(Income) Allocations	N/A		$	1.3	$	1.5	$	0.5	N/A		$	(0.3)	$	(0.4)	$	(0.1)

		Pension and SERP								PBOP
		For the Six Months Ended June 30, 2020								For the Six Months Ended June 30, 2020
(Millions of Dollars)		Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost		$	38.3	$	11.1	$	7.6	$	4.2	$	4.9	$	0.9	$	1.1	$	0.4
Interest Cost		88.6		18.8		19.3		9.7		12.2		2.2		3.3		1.4
Expected Return on Plan Assets		(199.6)		(39.8)		(51.5)		(22.4)		(36.8)		(4.9)		(17.0)		(2.8)
Actuarial Loss		100.0		19.7		27.3		8.0		4.1		0.6		1.2		0.4
Prior Service Cost/(Credit)		0.6		0		0.2		0		(10.6)		0.4		(8.5)		0.2
Total Net Periodic Benefit Plan Expense/(Income)		$	27.9	$	9.8	$	2.9	$	(0.5)	$	(26.2)	$	(0.8)	$	(19.9)	$	(0.4)
Intercompany Expense/(Income) Allocations		N/A		$	4.3	$	4.2	$	1.4	N/A		$	(0.6)	$	(0.6)	$	(0.3)

Eversource Contributions: Based on the current status of the Pension Plans and federal pension funding requirements, there is no minimum funding requirement for our Pension Plans for 2022. Eversource currently expects to make contributions ~~of $180~~between $100 million to ~~the Pension Plans~~$175 million in ~~2021,~~2022, most of which ~~$99 million and $30 million~~ will be contributed by ~~CL&P~~Eversource Service, however the planned contribution is discretionary and ~~NSTAR Electric, respectively.~~subject to change. Eversource currently estimates contributing $2.4 million to the PBOP Plans in 2022.

9. COMMITMENTS AND CONTINGENCIES

A. Environmental Matters

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

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

As of June 30, 2021 As of December 31, 2020
Number of Sites Reserve
(in millions) Number of Sites Reserve
(in millions)
Eversource 62 $ 108.8 63 $ 102.4
CL&P 14 10.7 15 12.3
NSTAR Electric 12 3.9 12 4.7
PSNH 9 6.6 9 7.1

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


	As of March 31, 2022			As of December 31, 2021
	Number of Sites	Reserve (in millions)		Number of Sites	Reserve (in millions)
Eversource	61	$	117.8	61	$	115.4
CL&P	14	14.3		14	13.9
NSTAR Electric	11	3.2		11	3.3
PSNH	9	6.4		9	6.3

Included in the number of sites and reserve amounts above are former MGP sites that were operated several decades ago and manufactured natural gas from coal and other processes, which resulted in certain by-products remaining in the environment that may pose a potential risk to human health and the environment, for which Eversource may have potential liability. The reserve balances related to these former MGP sites were ~~$101.0~~$108.3 million and ~~$92.2~~$105.6 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and related primarily to the natural gas business segment.

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

B. Long-Term Contractual Arrangements

The following is an update to the current status of long-term contractual arrangements set forth in Note 13B of the Eversource ~~2020~~2021 Form 10-K.

Renewable Energy: Renewable energy contracts include non-cancelable commitments under contracts of NSTAR Electric for the purchase of energy and RECs from renewable energy facilities.


NSTAR Electric	NSTAR Electric															NSTAR Electric
(Millions of Dollars)	(Millions of Dollars)	2021		2022		2023		2024		2025		Thereafter		Total		(Millions of Dollars)	2022		2023		2024		2025		2026		Thereafter		Total
Renewable Energy	Renewable Energy	$	48.1	$	103.6	$	229.3	$	339.4	$	346.2	$	6,527.7	$	7,594.3	Renewable Energy	$	75.6	$	78.3	$	269.4	$	315.8	$	322.1	$	5,812.2	$	6,873.4

The table has been updated to include long-term commitments of NSTAR Electric pertaining to the Vineyard Wind LLC contract awarded under the Massachusetts Clean Energy ~~83D contract,~~83C procurement solicitation. NSTAR Electric, along with other Massachusetts distribution companies, entered into 20-year contracts for ~~which construction~~this 800 megawatt offshore wind project. Construction on the Vineyard Wind project commenced in ~~2021.~~2022. Estimated costs under this contract are expected to begin in ~~2023~~2024 and range between ~~$150~~$240 million and ~~$415~~$375 million per year ~~under a~~under NSTAR Electric’s 20-year contract, totaling approximately ~~$6.7~~$6.0 billion.

C. Guarantees and Indemnifications

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

Guarantees issued on behalf of unconsolidated entities, including equity method offshore wind investments, for which Eversource parent is the guarantor, are recorded at fair value as a liability on the balance sheet at the inception of the guarantee. Eversource regularly reviews performance risk under these guarantee arrangements, and in the event it becomes probable that Eversource parent will be required to perform under the guarantee, the amount of probable payment will be recorded. The fair value of guarantees issued on behalf of unconsolidated entities are recorded within Other Long-Term Liabilities on the balance sheet, and ~~was $0.5~~were $7.0 million and $7.3 million as of ~~June 30, 2021.~~March 31, 2022 and December 31, 2021, respectively.

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

As of June 30, 2021

As of March 31, 2022

Company (Obligor)

Description

Maximum Exposure
(in millions)

Expiration Dates

Company (Obligor)

Description

Maximum Exposure
(in millions)

Expiration Dates

North East Offshore LLC

Construction-related purchase agreements with third-party contractors (1)

29.7

(1)

North East Offshore LLC

Construction-related purchase agreements with third-party contractors (1)

936.3

(1)

Sunrise Wind LLC

Construction-related purchase agreements with third-party contractors (2)

330.6

2026

Revolution Wind, LLC

Construction-related purchase agreements with third-party contractors (3)

254.7

2024 - 2027

South Fork Wind, LLC

Construction-related purchase agreements with third-party contractors (4)

165.3

2023 - 2026

Eversource Investment LLC

Funding and indemnification obligations of North East Offshore LLC (2)

(2)

Eversource Investment LLC

Funding and indemnification obligations of North East Offshore LLC (5)

107.8

(5)

South Fork Wind, LLC

Power Purchase Agreement Security (6)

7.1

(6)

Sunrise Wind LLC

OREC capacity production (3)

2.2

(3)

Sunrise Wind LLC

OREC capacity production (7)

2.2

(7)

Bay State Wind LLC

Real estate purchase

2.5

2022

South Fork Wind, LLC

Transmission interconnection

1.6

—

South Fork Wind, LLC

Transmission interconnection

1.2

—

Bay State Wind LLC

Real estate purchase

2.5

2022

Eversource Investment LLC

Letters of Credit (8)

4.3

—

Various

Surety bonds (4)

59.5

2021 - 2023

Various

Surety bonds (9)

35.0

2022 - 2023

Rocky River Realty Company and
Eversource Service

Lease payments for real estate

4.4

2024

Eversource Service

Lease payments for real estate

0.7

2024

(1) Eversource parent issued guarantees on behalf of its 50 percent-owned affiliate, North East Offshore LLC (NEO), under which Eversource parent agreed to guarantee 50 percent of NEO’s performance of obligations under certain purchase agreements with third-party contactors, in an aggregate amount not to exceed $1.3 billion with an expiration date in 2025. Eversource parent also issued a separate guarantee to Ørsted on behalf of NEO, under which Eversource parent agreed to guarantee 50 percent of NEO’s payment obligations under certain offshore wind project construction-related agreements with Ørsted in an aggregate amount not to exceed $62.5 ~~million.~~million and expiring upon full performance of the guaranteed obligation. Any amounts paid under this guarantee to Ørsted will count toward, but not increase, the maximum amount of the Funding Guarantee described in Note 2,5, below. The guarantee expires upon the full performance of the guaranteed obligations.

(2) Eversource parent issued a guaranty on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guarantee Sunrise Wind LLC's performance of certain obligations, in an aggregate amount not to exceed $420.6 million, in connection with a construction-related purchase agreement. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) April 2026 and (ii) full performance of the guaranteed obligations.

(3) Eversource parent issued guarantees on behalf of its 50 percent-owned affiliate, Revolution Wind, LLC, whereby Eversource parent will guarantee Revolution Wind, LLC's performance of certain obligations, in an aggregate amount not to exceed $268.5 million, in connection with construction-related purchase agreements. Eversource parent’s obligations under the guarantees expire upon the earlier of (i) dates ranging from November 2024 and November 2027 and (ii) full performance of the guaranteed obligations.

(4) Eversource parent issued guarantees on behalf of its 50 percent-owned affiliate, South Fork Wind, LLC, whereby Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations in connection with construction-related purchase agreements. Under these guarantees, Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations, in a total aggregate amount not to exceed $184.0 million. Eversource parent’s obligations under these guarantees expire upon the earlier of (i) dates ranging from June 2023 and August 2026 and (ii) full performance of the guaranteed obligations.

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

~~(3)~~

(6) Eversource parent issued a guarantee on behalf of its 50 percent-owned affiliate, South Fork Wind, LLC, whereby Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations, in an amount not to exceed $7.1 million, under a Power Purchase Agreement between the Long Island Power Authority and South Fork Wind, LLC (the Agreement). The guarantee expires upon the later of (i) the end of the Agreement term and (ii) full performance of the guarantee obligations.

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

~~(4)~~(8) Surety bond expiration dates reflect termination dates, the majority of which will be renewed or extended. Certain surety bonds contain credit ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource parent are downgraded.

~~Letter of Credit~~: On September 16, 2020, Eversource parent entered into a guarantee on behalf of EI, which holds Eversource's investments in offshore wind-related equity method investments, under which Eversource parent would guarantee EI's obligations under a letter of credit facility with a financial institution that EI may request in an aggregate amount of up to approximately $25 million. In January 2022, Eversource parent issued two letters of credit on behalf of South Fork Wind, LLC related to future decommissioning obligations of certain onshore transmission assets totaling $4.3 million.

(9) 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.

Second Quarter 2022 Guarantees: In April 2022, Eversource parent issued three additional guarantees, two on behalf of Revolution Wind, LLC and one on behalf of South Fork Wind, LLC, whereby Eversource parent will guarantee performance of construction-related purchase agreements in an aggregate amount not to exceed $160.2 million.

D. Spent Nuclear Fuel Obligations - Yankee Companies

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

Spent Nuclear Fuel Litigation:

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

DOE Phase V Damages - On March 25, 2021, each of the Yankee Companies filed a fifth set of lawsuits against the DOE in the Court of Federal Claims. The Yankee Companies ~~are calculating and will be~~filed claims seeking monetary damages totaling $120.4 million for CYAPC, YAEC and MYAPC, resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2017 to 2020 (DOE Phase V). The DOE Phase V trial is expected to begin in the third quarter of 2023.

E. FERC ROE Complaints

~~Four~~NaN separate complaints were filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties (collectively, the Complainants). In each of the first ~~three~~3 complaints, filed on October 1, 2011, December 27, 2012, and July 31, 2014, respectively, the Complainants challenged the NETOs' base ROE of 11.14 percent that had been utilized since 2005 and sought an order to reduce it prospectively from the date of the final FERC order and for the separate 15-month complaint periods. In the fourth complaint, filed April 29, 2016, the Complainants challenged the NETOs' base ROE billed of 10.57 percent and the maximum ROE for transmission incentive (incentive cap) of 11.74 percent, asserting that these ROEs were unjust and unreasonable.

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

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

Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020.~~2021. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020.~~2021.

On October 16, 2018, FERC issued an order on all ~~four~~4 complaints describing how it intends to address the issues that were remanded by the Court. FERC proposed a new framework to determine (1) whether an existing ROE is unjust and unreasonable and, if so, (2) how to calculate a replacement ROE. Initial briefs were filed by the NETOs, Complainants and FERC Trial Staff on January 11, 2019 and reply briefs were filed on March 8, 2019. The NETOs' brief was supportive of the overall ROE methodology determined in the October 16, 2018 order provided the FERC does not change the proposed methodology or alter its implementation in a manner that has a material impact on the results.

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

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

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

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

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

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

F. Eversource and NSTAR Electric Boston Harbor Civil Action

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

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

G. CL&P Regulatory Matters

CL&P Tropical Storm Isaias Response ~~Investigation~~

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

On May 6, 2021, as part of the penalty proceeding, PURA issued a notice of violation that included an assessment of $30 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $1.6 million fine for violations of accident reporting requirements to be paid to the State of Connecticut’s general fund. On July 14, 2021, PURA issued a final decision in this penalty proceeding that included an assessment of $28.6 million, maintaining the $28.4 million performance penalty and reducing the $1.6 million fine for accident reporting to $0.2 million. ~~PURA directed the~~The $28.4 million performance penalty ~~to be~~is currently being credited to customers on electric bills beginning on ~~August~~September 1, 2021 ~~through July 31, 2022.~~over a one-year period. The $28.4 million is the maximum statutory penalty amount under applicable Connecticut law in effect at the time of Tropical Storm Isaias, which is 2.5 percent of CL&P’s annual distribution revenues. ~~Management has accrued PURA’s assessment in~~In the first quarter of ~~2021. As of June 30,~~ 2021, the liability for the ~~assessment~~performance penalty of $30 million was recorded as a current regulatory liability on CL&P’s balance sheet and as a charge to Operations and Maintenance expense on the ~~six months ended June 30, 2021~~ income statement. The after-tax earnings impact of this charge was $0.07 per share. The ~~Company believes it has meritorious defenses~~penalty was subsequently reclassified from Operations and ~~intends~~Maintenance expense to ~~vigorously defend CL&P’s position, but does not have~~a reduction of Operating Revenues in the third quarter of 2021 in connection with the finalization of an ~~estimate of the ultimate outcome~~October 1, 2021 settlement agreement that was approved by PURA on ~~CL&P’s financial position, results of operations or cash flows at this time.~~October 27, 2021.

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

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

Preferred Stock, Long-Term Debt and Rate Reduction Bonds: The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections. The fair value of long-term debt and RRB debt securities is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields. The fair values provided in the table below are classified as Level 2 within the fair value hierarchy. Carrying amounts and estimated fair values are as follows:


		Eversource				CL&P				NSTAR Electric				PSNH					Eversource				CL&P				NSTAR Electric				PSNH
(Millions of Dollars)	(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
As of June 30, 2021:
As of March 31, 2022:																		As of March 31, 2022:
Preferred Stock Not Subject to Mandatory Redemption	Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	166.4	$	116.2	$	122.2	$	43.0	$	44.2	$	0	$	0	Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	158.3	$	116.2	$	115.5	$	43.0	$	42.8	$	—	$	—
Long-Term Debt	Long-Term Debt	16,651.2		18,364.0		4,335.6		5,049.8		3,688.3		4,208.4		1,163.7		1,239.0		Long-Term Debt	18,729.6		18,562.3		4,215.7		4,392.2		3,986.3		4,094.1		1,164.0		1,086.3
Rate Reduction Bonds	Rate Reduction Bonds	518.5		579.6		0		0		0		0		518.5		579.6		Rate Reduction Bonds	475.3		492.8		—		—		—		—		475.3		492.8

As of December 31, 2020:
As of December 31, 2021:																		As of December 31, 2021:
Preferred Stock Not Subject to Mandatory Redemption	Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	169.1	$	116.2	$	123.4	$	43.0	$	45.7	$	0	$	0	Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	166.3	$	116.2	$	122.3	$	43.0	$	44.0	$	—	$	—
Long-Term Debt	Long-Term Debt	16,179.1		18,420.1		3,914.8		4,800.9		3,643.2		4,294.0		1,099.1		1,207.0		Long-Term Debt	18,216.7		19,636.3		4,215.4		4,848.9		3,985.4		4,453.5		1,163.8		1,220.6
Rate Reduction Bonds	Rate Reduction Bonds	540.1		603.4		0		0		0		0		540.1		603.4		Rate Reduction Bonds	496.9		543.3		—		—		—		—		496.9		543.3

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

11. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

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


		For the Six Months Ended June 30, 2021								For the Six Months Ended June 30, 2020									For the Three Months Ended March 31, 2022								For the Three Months Ended March 31, 2021
Eversource (Millions of Dollars)	Eversource (Millions of Dollars)	Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total		Qualified Cash Flow Hedging Instruments		Unrealized Gains on Marketable Securities		Defined Benefit Plans		Total		Eversource (Millions of Dollars)	Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total		Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total
Balance as of January 1st		$	(1.4)	$	1.1	$	(76.1)	$	(76.4)	$	(3.0)	$	0.7	$	(62.8)	$	(65.1)
Balance as of Beginning of Period																		Balance as of Beginning of Period	$	(0.4)	$	0.4	$	(42.3)	$	(42.3)	$	(1.4)	$	1.1	$	(76.1)	$	(76.4)

OCI Before Reclassifications	OCI Before Reclassifications	0		(0.5)		(2.4)		(2.9)		0		0.4		(1.6)		(1.2)		OCI Before Reclassifications	—		(0.8)		—		(0.8)		—		(0.7)		—		(0.7)
Amounts Reclassified from AOCI	Amounts Reclassified from AOCI	0.9		0		4.1		5.0		0.6		0		3.1		3.7		Amounts Reclassified from AOCI	—		—		1.5		1.5		0.4		—		1.5		1.9
Net OCI	Net OCI	0.9		(0.5)		1.7		2.1		0.6		0.4		1.5		2.5		Net OCI	—		(0.8)		1.5		0.7		0.4		(0.7)		1.5		1.2
Balance as of June 30th		$	(0.5)	$	0.6	$	(74.4)	$	(74.3)	$	(2.4)	$	1.1	$	(61.3)	$	(62.6)
Balance as of End of Period																		Balance as of End of Period	$	(0.4)	$	(0.4)	$	(40.8)	$	(41.6)	$	(1.0)	$	0.4	$	(74.6)	$	(75.2)

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

12. COMMON SHARES

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


		Shares									Shares
				Authorized as of June 30, 2021 and December 31, 2020		Issued as of									Authorized as of March 31, 2022 and December 31, 2021		Issued as of
		Par Value			June 30, 2021		December 31, 2020		Par Value							March 31, 2022		December 31, 2021
Eversource	Eversource	$	5		380,000,000		357,818,402			357,818,402		Eversource	$	5		380,000,000		357,818,402		357,818,402
CL&P	CL&P	$	10	24,500,000		6,035,205		6,035,205		CL&P	$	10			24,500,000		6,035,205		6,035,205
NSTAR Electric	NSTAR Electric	$	1	100,000,000		200		200		NSTAR Electric	$	1			100,000,000		200		200
PSNH	PSNH	$	1	100,000,000		301		301		PSNH	$	1			100,000,000		301		301

Treasury Shares: As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were ~~14,217,299~~12,968,130 and ~~14,864,379~~13,415,206 Eversource common shares held as treasury shares, respectively. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were 344,850,272 and 344,403,196 Eversource common shares outstanding, we~~re 343,601,103 and~~ ~~342,954,023,~~ respectively.

Eversource issues treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment and share purchase plan, and matching contributions under the Eversource 401k Plan. Eversource also issued treasury shares for its 2021 water business acquisition. The issuance of treasury shares represents a non-cash transaction, as the treasury shares were used to fulfill Eversource's obligations that require the issuance of common shares.

13. COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $1.9 million for each of the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020 and $3.8 million for each of the six months ended June 30, 2021 and 2020.~~2021. These dividends were presented as Net Income Attributable to Noncontrolling Interests on the Eversource statements of income. Noncontrolling Interest – Preferred Stock of Subsidiaries on the Eversource balance sheets totaled $155.6 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. On the Eversource balance sheets, Common Shareholders' Equity was fully attributable to Eversource parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest.

14. EARNINGS PER SHARE

Basic EPS is computed based upon the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of common shares outstanding plus the potential dilutive effect of certain share-based compensation awards as if they were converted into outstanding common shares. The dilutive effect of unvested RSU and performance share awards is calculated using the treasury stock method. RSU and performance share awards are included in basic weighted average common shares outstanding as of the date that all necessary vesting conditions have been satisfied. ~~There~~For the three months ended March 31, 2022 and 2021, there were 0no antidilutive share awards excluded from the computation of diluted EPS for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2020, there were 158,242 and 79,121 antidilutive share awards excluded from the EPS computation respectively, as their impact would have been antidilutive. Antidilutive shares pertained to a purchase option extended to underwriters in connection with Eversource’s common share issuance on June 15, 2020.EPS.

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
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Net Income Attributable to Common Shareholders $ 264.5 $ 252.2 $ 630.7 $ 587.0
Weighted Average Common Shares Outstanding:
Basic 343,844,626 337,946,663 343,761,435 334,524,452
Dilutive Effect of:
Share-Based Compensation Awards and Other 591,070 614,986 623,758 681,110
Equity Forward Sale Agreement 0 0 0 543,842
Total Dilutive Effect 591,070 614,986 623,758 1,224,952
Diluted 344,435,696 338,561,649 344,385,193 335,749,404
Basic and Diluted EPS $ 0.77 $ 0.75 $ 1.83 $ 1.75


Eversource (Millions of Dollars, except share information)	For the Three Months Ended
		March 31, 2022		March 31, 2021
Net Income Attributable to Common Shareholders		$	443.4	$	366.1
Weighted Average Common Shares Outstanding:
Basic		345,156,346		343,678,243
Dilutive Effect		504,787		656,446
Diluted		345,661,133		344,334,689
Basic EPS		$	1.28	$	1.07
Diluted EPS		$	1.28	$	1.06

15. REVENUES

The following tables present operating revenues disaggregated by revenue source:


		For the Three Months Ended June 30, 2021															For the Three Months Ended March 31, 2022
Eversource (Millions of Dollars)	Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total		Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers	Revenues from Contracts with Customers															Revenues from Contracts with Customers
Retail Tariff Sales	Retail Tariff Sales															Retail Tariff Sales
Residential	Residential	$	882.1	$	174.2	$	0	$	36.0	$	0	$	0	$	1,092.3	Residential	$	1,186.2	$	556.8	$	—	$	28.2	$	—	$	—	$	1,771.2
Commercial	Commercial	594.1		89.6		0		16.1		0		(1.3)		698.5		Commercial	661.3		257.6		—		14.6		—		(1.1)		932.4
Industrial	Industrial	82.0		34.8		0		1.1		0		(4.4)		113.5		Industrial	89.6		68.1		—		1.1		—		(4.5)		154.3
Total Retail Tariff Sales Revenues	Total Retail Tariff Sales Revenues	1,558.2		298.6		0		53.2		0		(5.7)		1,904.3		Total Retail Tariff Sales Revenues	1,937.1		882.5		—		43.9		—		(5.6)		2,857.9
Wholesale Transmission Revenues	Wholesale Transmission Revenues	0		0		416.9		0		20.3		(345.9)		91.3		Wholesale Transmission Revenues	—		—		446.2		—		24.4		(364.7)		105.9
Wholesale Market Sales Revenues	Wholesale Market Sales Revenues	97.2		15.7		0		1.0		0		0		113.9		Wholesale Market Sales Revenues	365.5		33.5		—		0.8		—		—		399.8
Other Revenues from Contracts with Customers	Other Revenues from Contracts with Customers	25.1		1.0		3.4		1.2		309.7		(307.0)		33.4		Other Revenues from Contracts with Customers	17.7		1.0		3.8		1.9		359.1		(353.1)		30.4

Amortization of/(Reserve for) Revenues Subject to Refund (1)																Amortization of/(Reserve for) Revenues Subject to Refund (1)	58.4		—		—		(0.4)		—		—		58.0
Total Revenues from Contracts with Customers	Total Revenues from Contracts with Customers	1,680.5		315.3		420.3		55.4		330.0		(658.6)		2,142.9		Total Revenues from Contracts with Customers	2,378.7		917.0		450.0		46.2		383.5		(723.4)		3,452.0
Alternative Revenue Programs	Alternative Revenue Programs	(4.8)		(3.4)		(9.3)		(2.7)		0		(1.2)		(21.4)		Alternative Revenue Programs	4.8		10.2		(15.0)		2.2		—		13.6		15.8
Other Revenues (1)		0.8		(0.1)		0.2		0.1		0		0		1.0
Other Revenues (2)																Other Revenues (2)	2.8		0.4		0.2		0.1		—		—		3.5
Total Operating Revenues	Total Operating Revenues	$	1,676.5	$	311.8	$	411.2	$	52.8	$	330.0	$	(659.8)	$	2,122.5	Total Operating Revenues	$	2,386.3	$	927.6	$	435.2	$	48.5	$	383.5	$	(709.8)	$	3,471.3




















	For the Three Months Ended March 31, 2021
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	1,066.0	$	466.3	$	—	$	27.7	$	—	$	—	$	1,560.0
Commercial	559.9		207.6		—		13.8		—		(1.4)		779.9
Industrial	83.0		55.9		—		1.0		—		(3.5)		136.4
Total Retail Tariff Sales Revenues	1,708.9		729.8		—		42.5		—		(4.9)		2,476.3
Wholesale Transmission Revenues	—		—		394.3		—		19.2		(321.0)		92.5
Wholesale Market Sales Revenues	149.1		26.4		—		0.8		—		—		176.3
Other Revenues from Contracts with Customers	18.2		1.3		3.4		1.2		323.8		(321.3)		26.6

Total Revenues from Contracts with Customers	1,876.2		757.5		397.7		44.5		343.0		(647.2)		2,771.7
Alternative Revenue Programs	23.0		22.8		2.7		1.8		—		2.2		52.5
Other Revenues (2)	1.1		0.2		0.2		0.1		—		—		1.6
Total Operating Revenues	$	1,900.3	$	780.5	$	400.6	$	46.4	$	343.0	$	(645.0)	$	2,825.8





















	For the Three Months Ended March 31, 2022						For the Three Months Ended March 31, 2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	599.1	$	404.6	$	182.5	$	545.8	$	362.4	$	157.8
Commercial	242.2		331.3		88.4		214.2		268.3		77.8
Industrial	33.5		34.1		22.0		36.7		24.6		21.7
Total Retail Tariff Sales Revenues	874.8		770.0		292.9		796.7		655.3		257.3
Wholesale Transmission Revenues	209.1		165.2		71.9		189.0		147.1		58.2
Wholesale Market Sales Revenues	279.9		57.9		27.7		109.7		24.4		15.0
Other Revenues from Contracts with Customers	7.9		11.6		2.6		7.3		11.7		3.2
Amortization of Revenues Subject to Refund (1)	58.4		—		—		—		—		—
Total Revenues from Contracts with Customers	1,430.1		1,004.7		395.1		1,102.7		838.5		333.7
Alternative Revenue Programs	1.3		(8.2)		(3.3)		8.9		13.8		3.0
Other Revenues (2)	0.1		2.0		0.9		0.2		1.1		—
Eliminations	(145.7)		(135.3)		(53.3)		(124.5)		(116.4)		(43.3)
Total Operating Revenues	$	1,285.8	$	863.2	$	339.4	$	987.3	$	737.0	$	293.4

3433

For the Six Months Ended June 30, 2021
Eversource
(Millions of Dollars)
Electric
Distribution Natural Gas
Distribution Electric
Transmission Water Distribution Other Eliminations Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential $ 1,948.1 $ 641.1 $ 0 $ 63.7 $ 0 $ 0 $ 2,652.9
Commercial 1,154.0 297.4 0 29.8 0 (2.7) 1,478.5
Industrial 165.0 90.8 0 2.2 0 (8.0) 250.0
Total Retail Tariff Sales Revenues 3,267.1 1,029.3 0 95.7 0 (10.7) 4,381.4
Wholesale Transmission Revenues 0 0 811.2 0 39.5 (666.9) 183.8
Wholesale Market Sales Revenues 246.3 42.0 0 1.8 0 0 290.1
Other Revenues from Contracts with Customers 43.4 2.4 6.8 2.4 633.5 (628.3) 60.2
Total Revenues from Contracts with Customers 3,556.8 1,073.7 818.0 99.9 673.0 (1,305.9) 4,915.5
Alternative Revenue Programs 18.2 18.6 (6.6) (0.9) 0 1.0 30.3
Other Revenues (1)
1.9 0 0.5 0.2 0 0 2.6
Total Operating Revenues $ 3,576.9 $ 1,092.3 $ 811.9 $ 99.2 $ 673.0 $ (1,304.9) $ 4,948.4
For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution Natural Gas
Distribution Electric
Transmission Water Distribution Other Eliminations Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential $ 916.0 $ 116.1 $ 0 $ 39.7 $ 0 $ 0 $ 1,071.8
Commercial 526.0 67.8 0 15.9 0 (1.3) 608.4
Industrial 77.7 21.1 0 1.2 0 (3.4) 96.6
Total Retail Tariff Sales Revenues 1,519.7 205.0 0 56.8 0 (4.7) 1,776.8
Wholesale Transmission Revenues 0 0 383.4 0 19.2 (332.2) 70.4
Wholesale Market Sales Revenues 60.5 10.1 0 0.9 0 0 71.5
Other Revenues from Contracts with Customers 21.1 1.4 3.3 0.9 264.6 (262.8) 28.5
Total Revenues from Contracts with Customers 1,601.3 216.5 386.7 58.6 283.8 (599.7) 1,947.2
Alternative Revenue Programs 14.2 (5.3) (10.2) (3.2) 0 9.4 4.9
Other Revenues (1)
0.7 0 0.2 0.1 0 0 1.0
Total Operating Revenues $ 1,616.2 $ 211.2 $ 376.7 $ 55.5 $ 283.8 $ (590.3) $ 1,953.1
For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution Natural Gas
Distribution Electric
Transmission Water Distribution Other Eliminations Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential $ 1,879.7 $ 354.1 $ 0 $ 67.5 $ 0 $ 0 $ 2,301.3
Commercial 1,133.0 202.4 0 30.6 0 (2.3) 1,363.7
Industrial 157.5 49.5 0 2.3 0 (6.6) 202.7
Total Retail Tariff Sales Revenues 3,170.2 606.0 0 100.4 0 (8.9) 3,867.7
Wholesale Transmission Revenues 0 0 719.7 0 36.6 (615.8) 140.5
Wholesale Market Sales Revenues 151.5 23.2 0 1.8 0 0 176.5
Other Revenues from Contracts with Customers 42.6 2.8 6.6 2.0 541.9 (538.9) 57.0
Total Revenues from Contracts with Customers 3,364.3 632.0 726.3 104.2 578.5 (1,163.6) 4,241.7
Alternative Revenue Programs 53.1 26.9 19.6 (2.1) 0 (18.1) 79.4
Other Revenues (1)
4.2 0.9 0.4 0.3 0 0 5.8
Total Operating Revenues $ 3,421.6 $ 659.8 $ 746.3 $ 102.4 $ 578.5 $ (1,181.7) $ 4,326.9

(1)

For the Three Months Ended June 30, 2021 For the Three Months Ended June 30, 2020
(Millions of Dollars) CL&P NSTAR Electric PSNH CL&P NSTAR Electric PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential $ 440.8 $ 304.7 $ 136.6 $ 469.3 $ 311.5 $ 135.2
Commercial 215.7 296.1 82.8 199.3 261.0 66.1
Industrial 28.4 29.1 24.5 33.3 24.8 19.6
Total Retail Tariff Sales Revenues 684.9 629.9 243.9 701.9 597.3 220.9
Wholesale Transmission Revenues 195.7 160.1 61.1 191.4 142.5 49.5
Wholesale Market Sales Revenues 68.1 18.9 10.2 39.3 13.2 8.0
Other Revenues from Contracts with Customers 9.5 15.3 4.4 8.1 11.1 5.9
Total Revenues from Contracts with Customers 958.2 824.2 319.6 940.7 764.1 284.3
Alternative Revenue Programs (1.1) (15.3) 2.3 (7.5) 3.6 7.9
Other Revenues (1)
(0.2) 0.7 0.5 0.2 0.7 0
Eliminations (127.3) (122.2) (43.6) (116.0) (107.4) (37.0)
Total Operating Revenues $ 829.6 $ 687.4 $ 278.8 $ 817.4 $ 661.0 $ 255.2
For the Six Months Ended June 30, 2021 For the Six Months Ended June 30, 2020
(Millions of Dollars) CL&P NSTAR Electric PSNH CL&P NSTAR Electric PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential $ 986.6 $ 667.1 $ 294.4 $ 959.2 $ 642.4 $ 278.1
Commercial 429.9 564.4 160.6 425.6 562.9 145.3
Industrial 65.2 53.6 46.2 67.3 51.6 38.6
Total Retail Tariff Sales Revenues 1,481.7 1,285.1 501.2 1,452.1 1,256.9 462.0
Wholesale Transmission Revenues 384.6 307.2 119.4 343.2 277.3 99.2
Wholesale Market Sales Revenues 177.8 43.4 25.1 104.0 27.6 19.9
Other Revenues from Contracts with Customers 16.8 27.0 7.6 17.0 21.8 11.8
Total Revenues from Contracts with Customers 2,060.9 1,662.7 653.3 1,916.3 1,583.6 592.9
Alternative Revenue Programs 7.8 (1.5) 5.3 37.1 23.0 12.6
Other Revenues (1)
0.1 1.8 0.5 1.9 2.1 0.6
Eliminations (251.9) (238.6) (86.8) (238.2) (213.9) (74.5)
Total Operating Revenues $ 1,816.9 $ 1,424.4 $ 572.3 $ 1,717.1 $ 1,394.8 $ 531.6
Amortization of Revenues Subject to Refund within the Electric Distribution segment in the first quarter of 2022 represents customer credits being distributed to CL&P’s customers on retail electric bills as a result of the October 2021 CL&P settlement agreement and the 2021 civil penalty for non-compliance with storm performance standards. Total customer credits as a result of the 2021 settlement and civil penalty were $93.4 million. The settlement amount of $65 million was refunded over a two-month billing period from December 1, 2021 to January 31, 2022 and the civil penalty of $28.4 million is being refunded over a one year billing period, which began September 1, 2021.

~~(1)~~(2) Other Revenues include certain fees charged to customers that are not considered revenue from contracts with customers. Other Revenues also include lease revenues under lessor accounting guidance of $1.0 million (including $0.2 million at CL&P and ~~$0.7~~$0.6 million at NSTAR Electric) and ~~$1.1~~$1.6 million (including $0.2 million at CL&P and ~~$0.7~~$1.1 million at NSTAR Electric) for the three months ended ~~June 30,~~March 31, 2022 and 2021, and 2020, respectively, and $2.7 million (including $0.4 million at CL&P and $1.8 million at NSTAR Electric) and $2.2 million (including $0.4 million at CL&P and $1.4 million at NSTAR Electric) for the six months ended June 30, 2021 and 2020, respectively.

16. SEGMENT INFORMATION

Eversource is organized into the Electric Distribution, Electric Transmission, Natural Gas Distribution and Water Distribution reportable segments and Other based on a combination of factors, including the characteristics of each segments' services, the sources of operating revenues and expenses and the regulatory environment in which each segment operates. These reportable segments represent substantially all of Eversource's total consolidated revenues. Revenues from the sale of electricity, natural gas and water primarily are derived from residential, commercial and industrial customers and are not dependent on any single customer. The Electric Distribution reportable segment includes the results of NSTAR Electric's solar power facilities. Eversource's reportable segments are determined based upon the level at which Eversource's chief operating decision maker assesses performance and makes decisions about the allocation of company resources.

The remainder of Eversource's operations is presented as Other in the tables below and primarily consists of 1) the equity in earnings of Eversource parent from its subsidiaries and intercompany interest income, both of which are eliminated in consolidation, and interest expense related to the debt of Eversource parent, 2) the revenues and expenses of Eversource Service, most of which are eliminated in consolidation, 3) the operations of CYAPC and YAEC, 4) the results of other unregulated subsidiaries, which are not part of its core business, and 5) Eversource parent's equity ownership interests that are not consolidated, which primarily include the offshore wind business, a natural gas pipeline owned by Enbridge, Inc., and a renewable energy investment fund.

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

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

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

Eversource's segment information is as follows:


		For the Three Months Ended June 30, 2021
Eversource (Millions of Dollars)		Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues		$	1,676.5	$	311.8	$	411.2	$	52.8	$	330.0	$	(659.8)	$	2,122.5
Depreciation and Amortization		(132.3)		(34.6)		(74.5)		(11.5)		(28.4)		1.1		(280.2)
Other Operating Expenses		(1,360.3)		(257.7)		(121.9)		(25.4)		(285.7)		660.3		(1,390.7)
Operating Income, Net		$	183.9	$	19.5	$	214.8	$	15.9	$	15.9	$	1.6	$	451.6
Interest Expense		$	(61.1)	$	(14.6)	$	(32.6)	$	(8.1)	$	(41.8)	$	12.8	$	(145.4)
Other Income, Net		29.9		4.6		6.8		0.9		309.2		(304.8)		46.6
Net Income Attributable to Common Shareholders		121.6		4.1		137.6		8.9		282.7		(290.4)		264.5

		For the Six Months Ended June 30, 2021															For the Three Months Ended March 31, 2022
Eversource (Millions of Dollars)	Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total		Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	Operating Revenues	$	3,576.9	$	1,092.3	$	811.9	$	99.2	$	673.0	$	(1,304.9)	$	4,948.4	Operating Revenues	$	2,386.3	$	927.6	$	435.2	$	48.5	$	383.5	$	(709.8)	$	3,471.3
Depreciation and Amortization	Depreciation and Amortization	(354.3)		(80.3)		(148.0)		(22.8)		(55.7)		2.1		(659.0)		Depreciation and Amortization	(351.6)		(51.9)		(81.9)		(12.3)		(30.2)		1.6		(526.3)
Other Operating Expenses	Other Operating Expenses	(2,890.8)		(793.6)		(237.3)		(50.5)		(585.2)		1,305.2		(3,252.2)		Other Operating Expenses	(1,845.6)		(657.3)		(129.3)		(27.1)		(331.4)		708.8		(2,281.9)
Operating Income	Operating Income	$	331.8	$	218.4	$	426.6	$	25.9	$	32.1	$	2.4	$	1,037.2	Operating Income	$	189.1	$	218.4	$	224.0	$	9.1	$	21.9	$	0.6	$	663.1
Interest Expense	Interest Expense	$	(114.4)	$	(28.5)	$	(65.3)	$	(16.0)	$	(83.4)	$	24.4	$	(283.2)	Interest Expense	$	(59.4)	$	(15.8)	$	(33.2)	$	(8.2)	$	(46.8)	$	10.1	$	(153.3)
Other Income, Net	Other Income, Net	50.6		8.5		12.2		1.9		733.4		(725.8)		80.8		Other Income, Net	47.6		10.1		8.9		2.2		495.9		(493.1)		71.6
Net Income Attributable to Common Shareholders	Net Income Attributable to Common Shareholders	214.9		151.6		273.0		12.6		677.6		(699.0)		630.7		Net Income Attributable to Common Shareholders	140.9		164.0		148.5		3.7		468.7		(482.4)		443.4
Cash Flows Used for Investments in Plant	Cash Flows Used for Investments in Plant	510.4		305.9		443.2		53.8		109.9		0		1,423.2		Cash Flows Used for Investments in Plant	280.5		127.3		266.9		27.8		62.1		—		764.6

For the Three Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution (1)
Electric
Transmission Water Distribution
Other (1)
Eliminations (1)
Total
Operating Revenues $ 1,616.2 $ 211.2 $ 376.7 $ 55.5 $ 283.8 $ (590.3) $ 1,953.1
Depreciation and Amortization (140.7) (21.2) (68.8) (10.8) (22.7) 0.3 (263.9)
Other Operating Expenses (1,293.3) (176.1) (111.2) (25.4) (243.1) 593.5 (1,255.6)
Operating Income $ 182.2 $ 13.9 $ 196.7 $ 19.3 $ 18.0 $ 3.5 $ 433.6
Interest Expense $ (54.3) $ (10.7) $ (32.1) $ (8.4) $ (37.6) $ 8.8 $ (134.3)
Other Income, Net 16.4 0.4 10.6 0 303.2 (300.4) 30.2
Net Income Attributable to Common Shareholders 115.0 2.6 129.5 10.4 282.8 (288.1) 252.2
For the Six Months Ended June 30, 2020
Eversource
(Millions of Dollars)
Electric
Distribution
Natural Gas
Distribution (1)
Electric
Transmission Water Distribution
Other (1)
Eliminations (1)
Total
Operating Revenues $ 3,421.6 $ 659.8 $ 746.3 $ 102.4 $ 578.5 $ (1,181.7) $ 4,326.9
Depreciation and Amortization (308.1) (40.3) (136.2) (22.2) (44.0) 0.9 (549.9)
Other Operating Expenses (2,732.9) (487.7) (218.0) (50.4) (500.0) 1,184.8 (2,804.2)
Operating Income $ 380.6 $ 131.8 $ 392.1 $ 29.8 $ 34.5 $ 4.0 $ 972.8
Interest Expense $ (107.4) $ (22.0) $ (62.7) $ (17.1) $ (80.3) $ 20.5 $ (269.0)
Other Income, Net 28.9 1.8 15.7 0.1 686.9 (679.1) 54.3
Net Income Attributable to Common Shareholders 245.1 88.6 256.2 12.5 639.2 (654.6) 587.0
Cash Flows Used for Investments in Plant 563.2 205.6 460.8 46.0 124.6 0 1,400.2

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












	For the Three Months Ended March 31, 2021
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	1,900.3	$	780.5	$	400.6	$	46.4	$	343.0	$	(645.0)	$	2,825.8
Depreciation and Amortization	(221.9)		(45.7)		(73.5)		(11.3)		(27.3)		1.0		(378.7)
Other Operating Expenses	(1,530.5)		(535.8)		(115.4)		(25.1)		(299.5)		644.8		(1,861.5)
Operating Income	$	147.9	$	199.0	$	211.7	$	10.0	$	16.2	$	0.8	$	585.6
Interest Expense	$	(53.3)	$	(13.9)	$	(32.7)	$	(7.9)	$	(41.6)	$	11.6	$	(137.8)
Other Income, Net	20.7		3.9		5.5		1.0		424.1		(421.0)		34.2
Net Income Attributable to Common Shareholders	93.2		147.6		135.4		3.6		394.9		(408.6)		366.1
Cash Flows Used for Investments in Plant	256.6		131.8		225.2		27.6		47.8		—		689.0

3734

The following table summarizes Eversource's segmented total assets:

Eversource
(Millions of Dollars)
Electric
Distribution Natural Gas
Distribution Electric
Transmission Water Distribution Other Eliminations Total
As of June 30, 2021 $ 25,904.6 $ 6,593.2 $ 12,289.3 $ 2,419.6 $ 21,669.0 $ (21,641.1) $ 47,234.6
As of December 31, 2020 24,981.9 6,450.5 11,695.0 2,375.2 22,089.4 (21,492.4) 46,099.6

~~17. ACQUISITION OF ASSETS OF COLUMBIA GAS OF MASSACHUSETTS~~

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

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

~~The preliminary allocation of the cash purchase price is as follows:~~


~~(Millions of Dollars)~~
~~Current Assets~~	$	~~138~~
~~Restricted Cash~~	57
~~PP&E~~	~~1,184~~
~~Goodwill~~	50
~~Other Noncurrent Assets, excluding Goodwill~~	~~131~~
~~Other Current Liabilities~~	~~(81)~~
~~Other Noncurrent Liabilities~~	~~(310)~~
~~Cash Purchase Price~~	$	~~1,169~~


Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
As of March 31, 2022	$	25,883.2	$	7,329.7	$	12,757.8	$	2,572.1	$	23,394.3	$	(22,647.9)	$	49,289.2
As of December 31, 2021	25,411.2		7,215.9		12,377.8		2,551.1		22,674.7		(21,738.6)		48,492.1

3835

EVERSOURCE ENERGY AND SUBSIDIARIES

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

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

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

The only common equity securities that are publicly traded are common shares of Eversource. The earnings and EPS of each business discussed below do not represent a direct legal interest in the assets and liabilities of such business, but rather represent a direct interest in our assets and liabilities as a whole. EPS by business is a financial measure not recognized under GAAP (non-GAAP) that is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. Our earnings discussion also includes a non-GAAP financial ~~measure~~measures referencing our ~~2021 and 2020~~2022 earnings and EPS excluding certain acquisition and transition ~~costs.~~costs and our 2021 earnings and EPS excluding charges at CL&P related to an October 2021 settlement agreement that included credits to customers and funding of various customer assistance initiatives and a 2021 storm performance penalty imposed on CL&P by the PURA.

We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our ~~2021~~2022 and ~~2020~~2021 results without including these items. This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods. We believe the impacts of acquisition and transition costs, the CL&P October 2021 settlement agreement, and the 2021 storm performance penalty imposed on CL&P by the PURA are not indicative of our ongoing costs and performance. We view these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. Due to the nature and significance of the effect of these items on Net Income Attributable to Common Shareholders and EPS, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business. These non-GAAP financial measures should not be considered as alternatives to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as indicators of operating performance.

We make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify our forward-looking statements through the use of words or phrases such as "estimate," "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in our forward-looking statements. 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~~may cause our actual results or outcomes to differ materially from those contained in our forward-looking statements, including, but not limited to:

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

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

• the negative impacts of the novel coronavirus (COVID-19) pandemic, including any new or emerging variants, on our customers, vendors, employees, regulators, and operations,

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

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

• acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems,

• actions or inaction of local, state and federal regulatory, public policy and taxing bodies,

• substandard performance of third-party suppliers and service providers,

• fluctuations in weather patterns, including extreme weather due to climate change,

• changes in business conditions, which could include disruptive technology or development of alternative energy sources related to our current or future business model,

• contamination of, or disruption in, our water supplies,

• changes in levels or timing of capital expenditures,

• changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations,

• changes in accounting standards and financial reporting regulations,

• actions of rating agencies, and

• other presently unknown or unforeseen factors.

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

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

or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A, Risk Factors, included in this combined Quarterly Report on Form 10-Q and in Eversource's ~~2020~~2021 combined Annual Report on Form 10-K. This combined Quarterly Report on Form 10-Q and Eversource's ~~2020~~2021 combined Annual Report on Form 10-K also describe material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Financial Statements. We encourage you to review these items.

Financial Condition and Business Analysis

Executive Summary

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

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

Earnings Overview and Future Outlook:

•We earned ~~$264.5~~$443.4 million, or ~~$0.77 per share, in the second quarter of 2021, and $630.7 million, or $1.83~~$1.28 per share, in the first ~~half~~quarter of ~~2021,~~2022, compared with ~~$252.2~~$366.1 million, or ~~$0.75 per share, in the second quarter of 2020, and $587.0 million, or $1.75~~$1.06 per share, in the first ~~half of 2020. Our results include after-tax transition and acquisition costs of $6.8 million, or $0.02 per share, in the second~~ quarter of 2021, and $13.0 million, or $0.04 per share, in the first half of 2021, compared with $3.9 million, or $0.01 per share, in the second quarter of 2020, and $7.4 million, or $0.02 per share, in the first half of 2020. Excluding those transition and acquisition costs, we earned $271.3 million, or $0.79 per share, in the second quarter of 2021, and $643.7 million, or $1.87 per share, in the first half of 2021, compared with $256.1 million, or $0.76 per share, in the second quarter of 2020, and $594.4 million, or $1.77 per share, in the first half of 2020.2021.

•~~The~~Our first ~~half~~quarter of 2022 results include after-tax acquisition and transition costs of $5.3 million, or $0.02 per share, recorded at Eversource parent. Our first quarter of 2021 ~~earnings~~results include an after-tax charge at CL&P of $24.1 million, or $0.07 per share, ~~at CL&P~~ recorded within the electric distribution segment ~~primarily for customer bill credits assessed by~~resulting from a PURA assessment as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020. Our first quarter of 2021 results also include after-tax acquisition and transition costs of $6.2 million, or $0.02 per share, recorded at Eversource parent. Excluding those costs, our non-GAAP earnings were $448.7 million, or $1.30 per share, in the first quarter of 2022, compared with $396.4 million, or $1.15 per share, in the first quarter of 2021.

•We reaffirmed our projection of our long-term EPS growth rate through ~~2025~~2026 from our regulated utility businesses in the upper half of the 5 to 7 percent range. We estimate to earn ~~toward~~within the ~~lower end of the 2021~~2022 non-GAAP earnings guidance range of between ~~$3.81~~$4.00 per share and ~~$3.93~~$4.17 per share, which excludes the impact of acquisition and transition ~~costs related to our October 2020 purchase of the assets of CMA and acquisition~~ costs. ~~That 2021 non-GAAP earnings estimate includes the $0.07 per share charge for the penalty proceeding for CL&P’s Tropical Storm Isaias response that the PURA assessed on May 6, 2021.~~

Liquidity:

•Cash flows provided by operating activities totaled ~~$807.4~~$371.9 million in the first ~~half~~quarter of ~~2021,~~2022, compared with ~~$1.01 billion~~$411.4 million in the first ~~half~~quarter of ~~2020.~~2021. Investments in property, plant and equipment totaled ~~$1.42 billion~~$764.6 million in the first ~~half~~quarter of ~~2021,~~2022, compared with ~~$1.40 billion~~$689.0 million in the first ~~half~~quarter of ~~2020.~~ 2021.

•Cash totaled ~~$217.4~~$46.2 million as of ~~June 30, 2021,~~March 31, 2022, compared with ~~$106.6~~$66.8 million as of December 31, ~~2020.~~2021. Our available borrowing capacity under our commercial paper programs totaled ~~$647.5~~$981.2 million as of ~~June 30, 2021.~~

•March 31, 2022. In the first ~~half~~quarter of ~~2021,~~2022, we issued ~~$1.53~~$1.30 billion of new long-term debt ~~consisting of $425 million at CL&P, $300 million at NSTAR Electric, $350 million at PSNH, $350 million at Eversource parent,~~ and ~~$100 million at Aquarion Water Company of Connecticut. In the first half of 2021,~~ we repaid ~~$1.02 billion~~$770 million of long-term ~~debt, consisting of $250 million at NSTAR Electric, $282 million at PSNH, $450 million at Eversource parent, and $40 million at Aquarion Water Company of Connecticut.~~debt.

•On May ~~5, 2021,~~4, 2022, our Board of Trustees approved a common share dividend payment of ~~$0.6025~~$0.6375 per share, ~~paid~~payable on June 30, ~~2021~~2022 to shareholders of record as of May ~~20, 2021.~~19, 2022. On February 2, 2022, our Board of Trustees approved a common share dividend payment of $0.6375 per share, paid on March 31, 2022 to shareholders of record as of March 3, 2022.

~~Regulatory~~Strategic Items:

•On ~~April 28, 2021, PURA issued~~May 4, 2022, we announced that we have initiated a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances. On May 6, 2021, asstrategic review of our offshore wind investment portfolio. As part of that review, we will explore strategic alternatives that could result in a ~~separate penalty proceeding, PURA issued~~potential sale of all, or part, of our 50 percent interest in our offshore wind partnership with Ørsted. We expect to complete this review during 2022. If the recommended path forward following the strategic review is a ~~notice~~sale of ~~violation to CL&P that included an assessment~~all, or part, of $30 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $1.6 million fine to be paid to the State of Connecticut’s general fund. On July 14, 2021, PURA issued a final decision in this penalty proceeding that included an assessment of $28.6 million, maintaining the $28.4 million performance penalty and reducing the $1.6 million fine for accident reporting to $0.2 million. We have accrued PURA’s assessmentour interest in the ~~first quarter of 2021, which resulted~~partnership, we expect potential proceeds from such transaction would likely be used to support our regulated investments in ~~an after-tax charge of $0.07 per share on~~strengthening, modernizing and decarbonizing our regulated energy and water delivery systems. As the ~~six months ended June 30, 2021 income statement. We believe~~strategic review proceeds, we ~~have meritorious defenses and intend~~remain committed to ~~vigorously defend CL&P’s position, but do not have an estimate~~continue providing oversight of the ~~ultimate outcome on CL&P’s financial position, results~~siting and construction of ~~operations or cash flows at this time. On June 10, 2021, CL&P appealed the April 28, 2021 PURA decision.~~onshore elements of our South Fork Wind, Revolution Wind and Sunrise Wind offshore wind projects.

4037

•~~In PURA’s April 28, 2021 decision, PURA also ordered CL&P~~South Fork Wind received all required approvals to ~~adjust its future rates~~start construction and the project entered the construction phase in ~~a pending or future rate proceeding to reflect a monetary penalty in~~early 2022. Site preparation and onshore activities for the form of a downward adjustment of 90 basis points in its allowed rate of return on equity (ROE), which is currently 9.25 percent. The estimated annual impact of a 90 basis point ROE reduction at CL&P would be a decrease of approximately $31 million of future annual revenuesproject’s underground onshore transmission line and approximately $21 million of lower annual earnings. The ROE reduction would impact revenues and earnings prospectively, once new rates are established. In light of our pending court appeal, coupled with the uncertainty of how long that penalty, if implemented, would last, we cannot predict the ultimate outcome or the resulting financial impact on CL&P.

•PURA has an ongoing proceeding related to new rate designs to consider the implementation of an interim rate decrease, low-income and economic development rates for electric customers, and a review of that rate design implementation process. In the second phase of this case, PURA is considering a potential interim rate decrease for CL&P. It is unclear how such a decrease would relate to the 90 basis point reduction PURA ordered as part of its April 28, 2021 decision concerning Tropical Storm Isaias. It is also unclear how long such a decrease, if implemented, would last. As a result, we cannot predict the ultimate outcome or the resulting financial impact on CL&P. A negative outcome in this phaseconstruction of the ~~proceeding could adversely impact CL&P’s future revenues, earnings and cash flows.~~onshore interconnection facility located in East Hampton, New York are underway.

Earnings Overview

Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net Income Attributable to Common Shareholders and diluted EPS.


		For the Three Months Ended June 30,								For the Six Months Ended June 30,									For the Three Months Ended March 31,
		2021				2020				2021				2020						2022	2021
(Millions of Dollars, Except Per Share Amounts)	(Millions of Dollars, Except Per Share Amounts)	Amount		Per Share		Amount		Per Share		Amount		Per Share		Amount		Per Share		(Millions of Dollars, Except Per Share Amounts)			Amount		Per Share		Amount		Per Share
Net Income Attributable to Common Shareholders (GAAP)	Net Income Attributable to Common Shareholders (GAAP)	$	264.5	$	0.77	$	252.2	$	0.75	$	630.7	$	1.83	$	587.0	$	1.75	Net Income Attributable to Common Shareholders (GAAP)			$	443.4	$	1.28	$	366.1	$	1.06

Regulated Companies (1)		$	272.2	$	0.79	$	257.5	$	0.77	$	652.1	$	1.89	$	602.4	$	1.79
Eversource Parent and Other Companies (non-GAAP) (1)		(0.9)		—		(1.4)		(0.01)		(8.4)		(0.02)		(8.0)		(0.02)
Regulated Companies (Non-GAAP)																		Regulated Companies (Non-GAAP)			$	457.1	$	1.32	$	403.9	$	1.17
Eversource Parent and Other Companies (Non-GAAP)																		Eversource Parent and Other Companies (Non-GAAP)			(8.4)		(0.02)		(7.5)		(0.02)
Non-GAAP Earnings	Non-GAAP Earnings	$	271.3	$	0.79	$	256.1	$	0.76	$	643.7	$	1.87	$	594.4	$	1.77	Non-GAAP Earnings			$	448.7	$	1.30	$	396.4	$	1.15
Transition and Acquisition Costs (after-tax) (2)		(6.8)		(0.02)		(3.9)		(0.01)		(13.0)		(0.04)		(7.4)		(0.02)
CL&P Storm Performance Penalty (after-tax) (1)																		CL&P Storm Performance Penalty (after-tax) (1)			—		—		(24.1)		(0.07)
Acquisition and Transition Costs (after-tax) (2)																		Acquisition and Transition Costs (after-tax) (2)			(5.3)		(0.02)		(6.2)		(0.02)
Net Income Attributable to Common Shareholders (GAAP)	Net Income Attributable to Common Shareholders (GAAP)	$	264.5	$	0.77	$	252.2	$	0.75	$	630.7	$	1.83	$	587.0	$	1.75	Net Income Attributable to Common Shareholders (GAAP)			$	443.4	$	1.28	$	366.1	$	1.06

(1) The ~~2020 amounts were revised~~2021 after-tax cost relates to a charge recorded at CL&P as a result of the April 28, 2021 PURA decision and May 6, 2021 PURA notice of violation, which included a $28.4 million penalty for storm performance results and is currently being provided as credits to customer bills and a $1.6 million fine to the State of Connecticut’s general fund. The $1.6 million fine was subsequently reduced to $0.2 million in PURA’s July 14, 2021 decision. As a result of the October 1, 2021 CL&P settlement agreement, CL&P agreed to withdraw its pending appeals related to the storm performance penalty imposed in PURA’s April 28, 2021 and July 14, 2021 decisions. Management views the CL&P storm performance penalty and the subsequent October 1, 2021 settlement agreement impacts collectively, and as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. As a result, beginning in the third quarter of 2021, the storm performance penalty was presented as a non-GAAP adjustment to net income. The first quarter of 2021 non-GAAP reconciliation has been recast to conform to ~~the current period segment~~this presentation.

(2)The ~~2020 acquisition~~after-tax costs are ~~associated with~~for the continuing transition of systems as a result of our purchase of the assets of CMA on October 9, ~~2020. The 2021 costs are for the transition of systems as a result of~~2020 and integrating the CMA ~~acquisition and~~assets onto Eversource’s systems. The after-tax costs also include costs associated with our ~~pending~~ water business ~~acquisition.~~acquisitions.

Regulated Companies: Our regulated companies comprise the electric distribution, electric transmission, natural gas distribution and water distribution segments. A summary of our segment earnings and EPS is as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,
2021 2020 2021 2020
(Millions of Dollars, Except Per Share Amounts) Amount Per Share Amount Per Share Amount Per Share Amount Per Share
Electric Distribution $ 121.6 $ 0.35 $ 115.0 $ 0.34 $ 214.9 $ 0.62 $ 245.1 $ 0.73
Electric Transmission 137.6 0.40 129.5 0.39 273.0 0.79 256.2 0.76
Natural Gas Distribution (1)
4.1 0.01 2.6 0.01 151.6 0.44 88.6 0.26
Water Distribution 8.9 0.03 10.4 0.03 12.6 0.04 12.5 0.04
Net Income - Regulated Companies $ 272.2 $ 0.79 $ 257.5 $ 0.77 $ 652.1 $ 1.89 $ 602.4 $ 1.79

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


	For the Three Months Ended March 31,
		2022	2021
(Millions of Dollars, Except Per Share Amounts)			Amount		Per Share		Amount		Per Share
Net Income - Regulated Companies (GAAP)			$	457.1	$	1.32	$	379.8	$	1.10

Electric Distribution, excluding CL&P Storm Performance Penalty (Non-GAAP)			$	140.9	$	0.41	$	117.3	$	0.34
Electric Transmission			148.5		0.43		135.4		0.39
Natural Gas Distribution			164.0		0.47		147.6		0.43
Water Distribution			3.7		0.01		3.6		0.01
Net Income - Regulated Companies (Non-GAAP)			$	457.1	$	1.32	$	403.9	$	1.17
CL&P Storm Performance Penalty (after-tax)			—		—		(24.1)		(0.07)
Net Income - Regulated Companies (GAAP)			$	457.1	$	1.32	$	379.8	$	1.10

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

~~Our electric distribution segment earnings decreased $30.2~~$47.7 million in the first ~~half~~quarter of ~~2021,~~2022, as compared to the first ~~half~~quarter of ~~2020,~~2021, due primarily to ~~an after-tax~~the absence in 2022 of the $30.0 million pre-tax charge ~~of $0.07 per share~~to earnings at CL&P for ~~the accrual of an assessment~~a storm performance penalty imposed by PURA ~~recorded in the first quarter of 2021~~ as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August ~~2020. For further information, see "Regulatory Developments and Rate Matters - Connecticut" included~~2020 that was recorded in ~~this~~ ~~Management’s Discussion and Analysis. Earnings were also unfavorably impacted by higher operations and maintenance expense driven by higher employee-related expenses and higher~~2021. The after-tax impact of the CL&P storm ~~restoration costs, higher depreciation expense, higher property tax expense, and higher interest expense. The~~performance penalty was $24.1 million, or $0.07 per share. Excluding that charge, electric distribution segment earnings ~~decrease was partially offset by~~increased $23.6 million due primarily to base distribution rate increases at NSTAR Electric effective January 1, ~~2021,~~2022 and at PSNH effective ~~January~~August 1, 2021, ~~and at CL&P effective May 1, 2020, and~~ higher earnings from CL&P's capital ~~tracker~~tracking mechanism due to increased electric system ~~improvements.~~improvements, and lower pension plan expense in Connecticut and New Hampshire. Those earnings increases were partially offset by higher operations and maintenance expense driven primarily by higher storm costs, higher depreciation, higher property tax expense and higher interest expense. Our Massachusetts utilities recover qualified pension and PBOP expenses related to their distribution operations through a rate reconciling mechanism that fully tracks the change in net pension and PBOP expenses each year, therefore the change in their pension expense does not impact earnings.

4138

Our electric transmission segment earnings increased ~~$8.1 million and $16.8~~$13.1 million in the ~~second~~first quarter ~~and the first half~~ of ~~2021, respectively,~~2022, as compared to the ~~second~~first quarter ~~and the first half~~ of ~~2020,~~2021, 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 from the annual billing and cost reconciliation filing with FERC.~~infrastructure.

Our natural gas distribution segment earnings increased ~~$1.5~~$16.4 million in the ~~second~~first quarter of ~~2021,~~2022, as compared to the ~~second~~first quarter of ~~2020,~~2021, due primarily to base distribution rate increases at ~~Yankee Gas effective January 1, 2021 (with changes to customer rates beginning March 1, 2021)~~EGMA and at NSTAR Gas effective November 1, 2020. The earnings increase was partially offset by a loss from the addition of Eversource Gas Company of Massachusetts (EGMA) operations of $5.6 million due to the seasonality of the natural gas business, higher depreciation expense, and higher property tax expense.

~~Our natural gas distribution segment earnings increased $63.0 million in the first half of~~ 2021, as compared to the first half of 2020, due primarily to the addition of EGMA earnings of $41.7 million. Additionally, the earnings increase was due to base distribution rate increases at NSTAR Gas effective November 1, 2020 and at Yankee Gas effective January 1, 2021 (with changes to customer rates beginning March 1, 2021), and higher earnings from capital ~~tracker~~tracking mechanisms due to continued investments in natural gas ~~infrastructure. The~~infrastructure, and lower pension plan expense at Yankee Gas. Those earnings ~~increase was~~increases were partially offset by ~~higher depreciation expense,~~ higher operations and maintenance expense, ~~and~~ higher property tax expense, higher interest expense, and higher depreciation expense. Our natural gas companies' decoupled rate structure is seasonally structured and provides greater earnings in the winter heating months in correlation to higher customer usage. Therefore, the majority of the impact of the EGMA and NSTAR Gas annual base distribution rate increases have been recognized by the end of the first quarter of 2022.

Our water distribution segment earnings ~~decreased $1.5 million and~~ increased $0.1 million in the ~~second~~first quarter ~~and the first half~~ of ~~2021, respectively,~~2022, as compared to the ~~second quarter and the~~ first ~~half of 2020. The earnings decrease in the second quarter was due primarily to lower revenues due to the sale of the Hingham, Massachusetts water system in the third~~ quarter of ~~2020.~~2021.

Eversource Parent and Other Companies: Eversource parent and other ~~companies had increased~~companies’ losses ~~of $2.4 million and $6.0 million~~were flat in the ~~second~~first quarter ~~and the first half~~ of ~~2021, respectively,~~2022, as compared to the ~~second~~first quarter of 2021. Higher interest expense was offset by a higher return at Eversource Service as a result of increased investments in property, plant and ~~the first half~~equipment and an after-tax decrease of ~~2020, due primarily to an increase~~$0.9 million in ~~the~~acquisition and transition ~~and integration~~ costs of EGMA ~~of $2.9 million and $5.6 million, respectively.~~recorded at Eversource parent.

Impact of COVID-19

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

The current and expected future financial impacts of COVID-19 as it relates to our businesses primarily relate to collectability of customer receivables and customer payment plans and ~~increased expenses for cleaning and supplies for personal protective equipment.~~the outcome of future proceedings before our state regulatory commissions to recover our incremental costs associated with COVID-19.

As of ~~June 30, 2021,~~March 31, 2022, our allowance for uncollectible customer receivable balance of ~~$425.8~~$432.2 million, of which ~~$210.7~~$225.5 million relates to hardship accounts that are specifically recovered in rates charged to customers, adequately reflected the collection risk and net realizable value for our receivables. We continue to evaluate the adequacy of the uncollectible allowance based on an ongoing assessment of accounts receivable collections and customer payment trends, economic conditions, delinquency statistics, aging-based quantitative assessments, the impact on residential customer bills because of energy usage and change in rates, flexible payment plans and financial hardship arrearage management programs being offered to customers, and COVID-19 developments, including any potential federal governmental pandemic relief programs and the expansion of unemployment benefit initiatives, which help to mitigate the potential for increasing customer account delinquencies. Additionally, management considered past economic declines and corresponding uncollectible reserves as part of the current assessment. This evaluation has shown that our operating companies have experienced an increase in aged receivables and lower cash collections from customers because of the length of the moratorium on disconnections in Connecticut and Massachusetts, and the economic slowdown resulting from the COVID-19 pandemic.

Based upon the evaluation performed, in the first half of 2021, we increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by $32.1 million for Eversource ($12.3 million for CL&P, $6.3 million for NSTAR Electric, and $14.7 million at our natural gas businesses). These COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs at our Connecticut and Massachusetts utilities or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as we believe it is probable that these costs will ultimately be recovered from customers in future rates. As of ~~June 30,~~March 31, 2022 and December 31, 2021, the total amount incurred as a result of COVID-19 included in the allowance for uncollectible accounts was ~~$63.6~~$58.5 million and $55.3 million at Eversource, ~~($15.1~~$20.4 million and $23.9 million at CL&P, ~~$17.3~~and $9.0 million and $9.0 million at NSTAR Electric, respectively. At our Connecticut and ~~$30.1 million~~Massachusetts utilities, the COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as management believes it is probable that these costs will ultimately be recovered from customers in future rates. No COVID-19 related uncollectible amounts were deferred at ~~our natural gas businesses).~~PSNH as a result of a July 2021 NHPUC order. Based on the status of our COVID-19 regulatory dockets, ~~communications with our state regulatory commissions,~~ and policies and practices in the jurisdictions in which we operate, we believe our state regulatory commissions in Connecticut and Massachusetts will allow us to recover our incremental uncollectible customer receivable costs associated with ~~COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows.~~COVID-19.

~~On July 7,~~As of March 31, 2022 and December 31, 2021, ~~the NHPUC issued an order to New Hampshire utilities that concluded that recovery~~a total of $35.0 million and $33.0 million, respectively, of incremental ~~bad debt or waived late fees~~COVID-19 related ~~to the COVID-19 pandemic would be addressed in a future rate case to the extent those~~non-tracked uncollectible costs are relevant at that time. The NHPUC concluded that New Hampshire utilities would not be permitted to establish a regulatory asset for these items. As a result of the order, in the second quarter of 2021, PSNH removed its $0.6 million deferral of net incremental COVID-19 costs. In New Hampshire, the moratorium on disconnections of non-hardship residential and commercial customers ended in late 2020 and PSNH has resumed disconnection activities, which has resulted in improved collection of outstanding customer receivable balances.

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

~~In the first half of 2021, net incremental costs incurred as a result of COVID~~-19 totaled $23.8 million, and related to uncollectible expense that impacts earnings, facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment, net of cost savings and benefits under the CARES Act. In the first half of 2021, we deferred $21.8 million of these net incremental COVID-19 costswere recorded on the balance ~~sheet. Net incremental COVID-19 expenses that reduced pre-tax earnings totaled $2.0 million on the statement of income in the first half of 2021~~. As of June 30, 2021, we deferred $45.8 million of net incremental COVID-19 costs on the balance sheet, of which $39.1 million of that deferral related to uncollectible expense that impacts earnings and $6.7 million related to cleaning and supplies for personal protective equipment.sheets.

Liquidity

Sources and Uses of Cash: Eversource’s regulated business is capital intensive and requires considerable capital resources. Eversource’s regulated companies’ capital resources are provided by cash flows generated from operations, short-term borrowings, long-term debt issuances, capital contributions from Eversource parent, and existing cash, and are used to fund their liquidity and capital requirements. Eversource’s regulated companies typically maintain minimal cash balances and use short-term borrowings to meet their working capital needs and other cash requirements. Short-term borrowings are also used as a bridge to long-term debt financings. The levels of short-term borrowing may vary significantly over the course of the year due to the impact of fluctuations in cash flows from operations, dividends paid, capital contributions received and the timing of long-term debt financings.

Eversource, CL&P, NSTAR Electric and PSNH each uses its available capital resources to fund its respective construction expenditures, meet debt requirements, pay operating costs, including storm-related costs, pay dividends, and fund other corporate obligations, such as pension contributions. Eversource's regulated companies recover their electric, natural gas and water distribution construction expenditures as the related project costs are depreciated over the life of the assets. This impacts the timing of the revenue stream designed to fully recover the total investment plus a return on the equity and debt used to finance the investments. Eversource's regulated companies spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment and recovery period. In addition, Eversource uses its capital resources to fund investments in its offshore wind business, which are recognized as long-term assets.

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.

Cash totaled ~~$217.4~~$46.2 million as of ~~June 30, 2021,~~March 31, 2022, compared with ~~$106.6~~$66.8 million as of December 31, ~~2020.~~2021.

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							Borrowings Outstanding as of								Available Borrowing Capacity as of								Weighted-Average Interest Rate as of
		June 30, 2021		December 31, 2020			June 30, 2021	December 31, 2020			June 30, 2021				December 31, 2020			March 31, 2022				December 31, 2021				March 31, 2022				December 31, 2021				March 31, 2022				December 31, 2021
(Millions of Dollars)	(Millions of Dollars)									(Millions of Dollars)
Eversource Parent Commercial Paper Program	Eversource Parent Commercial Paper Program	$	1,447.0		$	1,054.3		$	553.0				$	945.7						0.19	%			0.25	%	Eversource Parent Commercial Paper Program		$	1,393.8			$	1,343.0			$	606.2			$	657.0	0.93	%	0.31	%
NSTAR Electric Commercial Paper Program	NSTAR Electric Commercial Paper Program	555.5		195.0			94.5	455.0			0.11	%			0.16	%	NSTAR Electric Commercial Paper Program		275.0				162.5				375.0				487.5				0.43		%		0.14		%

There were no borrowings outstanding on the revolving credit facilities as of ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

CL&P and PSNH have uncommitted line of credit agreements totaling $450 million and $300 million, respectively, which will expire on May 12, 2022. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of ~~June 30, 2021.~~March 31, 2022.

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of ~~June 30,~~March 31, 2022, there were intercompany loans from Eversource parent to PSNH of $196.4 million and to a subsidiary of NSTAR Electric of $4.0 million. As of December 31, 2021, there were intercompany loans from Eversource parent to PSNH of $48.6 million, and to a subsidiary of NSTAR Electric of $21.5 million. As of December 31, 2020, there were intercompany loans from Eversource parent to PSNH of $46.3 million, and to a subsidiary of NSTAR Electric of $21.3$110.6 million. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets.

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

(Millions of Dollars)

Issuance/(Repayment)

Issue Date or Repayment Date

Maturity Date

Use of Proceeds for Issuance/
Repayment Information

~~CL&P:~~Eversource Parent 2.90% Series V Senior Notes

650.0

February 2022

March 2027

Repaid Series K Senior Notes at maturity and short-term debt

Eversource Parent 3.38% Series W Senior Notes

650.0

February 2022

March 2032

Repaid Series K Senior Notes at maturity and short-term debt

~~2.05%~~Eversource Parent 2.75% Series AK Senior Notes

(750.0)

March 2022

Paid at maturity

Yankee Gas 8.48% Series B First Mortgage Bonds

~~425.0~~

~~June 2021~~

~~July 2031~~

~~Repaid short-term debt, paid capital expenditures and working capital~~

~~NSTAR Electric:~~

~~3.10% 2021 Debentures~~

~~300.0~~

~~May 2021~~

~~June 2051~~

~~Refinanced investments in eligible green~~

~~expenditures, which were previously financed in~~

~~2019 and 2020~~

~~3.50% Series F Senior Notes~~

~~(250.0)~~

~~June 2021~~

~~September 2021~~

~~Paid on par call date in advance of maturity date~~

~~PSNH:~~

~~4.05% Series Q First Mortgage Bonds~~

~~(122.0)~~(20.0)

March ~~2021~~

~~June 2021~~

~~Paid on par call date in advance of maturity date~~

~~3.20% Series R First Mortgage Bonds~~

~~(160.0)~~

~~June 2021~~

~~September 2021~~

~~Paid on par call date in advance of maturity date~~

~~2.20% Series V First Mortgage Bonds~~

~~350.0~~

~~June 2021~~

~~June 2031~~

~~Repaid short-term debt, including short-term debt used to redeem Series R First Mortgage Bonds, paid capital expenditures and working capital~~

~~Other:~~

~~Eversource Parent 2.50% Series I Senior Notes~~

~~(450.0)~~

~~February 2021~~2022

March ~~2021~~

~~Paid on par call date in advance of maturity date~~

~~Eversource Parent 2.55% Series S Senior Notes~~

~~350.0~~

~~March 2021~~

~~March 2031~~

~~Repaid short-term debt, including short-term debt used to redeem Series I Senior Notes~~

Aquarion Water Company of Connecticut 3.31%
Senior Notes

~~100.0~~

~~April 2021~~

~~April 2051~~

~~Repaid 5.50% Notes, repaid short-term debt, paid capital expenditures and working capital~~

~~Aquarion Water Company of Connecticut 5.50% Notes~~

~~(40.0)~~

~~April 2021~~

~~April 2021~~2022

Paid at maturity

In~~July 2021, CL&P provided notice to the trustee of the CL&P 4.375% PCRBs that CL&P will redeem the $120.5 million of bonds on September 1, 2021, in advance of the 2028 maturity date.~~

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $21.6 million of RRB principal payments and ~~$9.6~~$9.0 million of interest payments in the first ~~half~~quarter of ~~2021,~~2022, and paid $21.6 million of RRB principal payments and ~~$10.3~~$9.6 million of interest payments in the first ~~half~~quarter of ~~2020.~~2021.

Cash Flows: Cash flows from operating activities primarily result from the transmission and distribution of electricity, and the distribution of natural gas and water. Cash flows provided by operating activities totaled ~~$807.4~~$371.9 million in the first ~~half~~quarter of ~~2021,~~2022, compared with ~~$1.01 billion~~$411.4 million in the first ~~half~~quarter of ~~2020.~~2021. Changes in Eversource’s cash flows from operations were generally consistent with changes in its results of operations, as adjusted by changes in working capital in the normal course of business and as further discussed. Operating cash flows were unfavorably impacted by the timing of cash collections on our accounts receivable, an increase in regulatory under-recoveries driven by the timing of collections for regulatory tracking mechanisms and an increase in cash payments for storm costs, customer credits being distributed to CL&P’s customers in the first quarter of 2022 as a result of the October 2021 settlement agreement and the 2021 storm performance penalty for its response to Tropical Storm Isaias, a $22.3 million increase in cost of removal expenditures, and an increase in income tax payments of $7.2 million made ~~of $91.0 million~~ in ~~the first half of 2021,~~2022, as compared ~~with income tax refunds received of $37.9 million in the first half of 2020,~~to 2021. These unfavorable impacts were partially offset by the timing of cash payments made on our accounts payable, a $71.1 million increase in Pension and PBOP contributions made in the first half of 2021, cash payments made in the first half of 2021 for storm restoration costs of approximately $49 million related to Tropical Storm Isaias at CL&P, the timing of cash collections on our accounts receivable, and the timing of other working capital ~~items. These unfavorable impacts were partially offset by improvements~~items, and a $5.0 million decrease in ~~the timing of collections for regulatory tracking mechanisms and the addition of cash flows of EGMA.~~pension contributions made in 2022, as compared to 2021.

On May ~~5, 2021,~~4, 2022, our Board of Trustees approved a common share dividend payment of ~~$0.6025~~$0.6375 per share, ~~paid~~payable on June 30, ~~2021~~2022 to shareholders of record as of May ~~20, 2021.~~19, 2022. On February 2, 2022, our Board of Trustees approved a common share dividend payment of $0.6375 per share, paid on March 31, 2022 to shareholders of record as of March 3, 2022. In the first ~~half~~quarter of ~~2021,~~2022, we paid cash dividends of ~~$402.2~~$213.9 million and issued non-cash dividends of ~~$11.6~~$5.9 million in the form of treasury shares, totaling dividends of ~~$413.8~~$219.8 million. In the first ~~half~~quarter of ~~2020,~~2021, we paid cash dividends of ~~$366.8~~$201.0 million and issued non-cash dividends of ~~$11.6~~$5.9 million in the form of treasury shares, totaling dividends of ~~$378.4~~$206.9 million.

In the first ~~half~~quarter of ~~2021,~~2022, CL&P, NSTAR Electric and PSNH paid ~~$140.2~~$73.1 million, ~~$283.2~~$71.9 million, and ~~$210.4~~$26.0 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 income/expense. In the first ~~half~~quarter of ~~2021,~~2022, investments for Eversource, CL&P, NSTAR Electric, and PSNH were ~~$1.42 billion, $393.3~~$764.6 million, ~~$426.1~~$205.3 million, $234.1 million, and ~~$134.3~~$107.9 million, respectively. Capital expenditures were primarily for continuing projects to maintain and improve infrastructure and operations, including enhancing reliability to the transmission and distribution systems.

~~We expect~~Contractual Obligations: Our cash requirements from contractual obligations were reported in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the ~~future operating~~Eversource 2021 Form 10-K. See Note 9B, "Commitments and Contingencies – Long-Term Contractual Arrangements," to the financial statements for discussion of material changes to our cash ~~flows of Eversource, CL&P, NSTAR Electric~~requirements from contractual obligations. Other than as described in the footnote, there have been no material changes to our cash requirements from contractual obligations and ~~PSNH, along with~~payment schedules previously disclosed in 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.

2021 Form 10-K.

Credit Ratings: On ~~May 6, 2021, S&P~~April 8, 2022, Fitch changed CL&P’s outlook from ~~stable~~negative to ~~negative and affirmed its existing outlook for Eversource parent, NSTAR Electric and PSNH. On June 14, 2021, Moody’s changed Eversource parent’s and CL&P’s outlook from stable to negative.~~stable.

Business Development and Capital Expenditures

Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense (all of which are non-cash factors), totaled ~~$1.46 billion~~$685.6 million in the first ~~half~~quarter of ~~2021,~~2022, compared to ~~$1.44 billion~~$620.7 million in the first ~~half~~quarter of ~~2020.~~2021. These amounts included $~~105.6~~53.7 million and ~~$127.0~~$47.8 million in the first ~~half~~quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.

Electric Transmission Business: Our consolidated electric transmission business capital expenditures ~~decreased~~increased by ~~$22.0~~$43.3 million in the first ~~half~~quarter of ~~2021,~~2022, as compared to the first ~~half~~quarter of ~~2020.~~2021. A summary of electric transmission capital expenditures by company is as follows:


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
(Millions of Dollars)	(Millions of Dollars)	2021		2020		(Millions of Dollars)	2022		2021
CL&P	CL&P	$	163.4	$	192.7	CL&P	$	93.8	$	81.3
NSTAR Electric	NSTAR Electric	199.8		159.9		NSTAR Electric	83.4		82.0
PSNH	PSNH	72.1		104.7		PSNH	53.3		23.9
Total Electric Transmission Segment	Total Electric Transmission Segment	$	435.3	$	457.3	Total Electric Transmission Segment	$	230.5	$	187.2

~~Eastern~~Our transmission projects are designed to improve the reliability of the electric grid, meet customer demand for power, strengthen the electric grid's resilience against extreme weather and other safety and security threats, and increase access to clean power generation from renewable sources, such as solar and offshore wind. In Connecticut, Massachusetts and New Hampshire, ~~Transmission Projects:~~ ~~These~~our transmission projects ~~consist~~include transmission line upgrades, the installation of ~~a portfolio of~~new transmission lines, and substation enhancements.

Our transmission projects in Massachusetts include electric transmission upgrades in ~~southern New Hampshire, northern Massachusetts and continuing into~~ the greater Boston metropolitan ~~area,~~area. Two of which 28 upgrades are in Eversource's service territory (two in New Hampshire and 26 in Massachusetts). The two New Hampshire upgrades, including the Merrimack Valley Reliability Project, have been placed in service, and 23 Massachusetts upgrades have been placed in service. On December 17, 2019, the Massachusetts Siting Board issued a favorable decision on the Sudbury-Hudson Reliability Project, the last project requiring such approval. On January 17, 2020, the Town of Sudbury and Protect Sudbury, a community group, appealed the decision to the Massachusetts Supreme Judicial Court. On June 25, 2021, the Massachusetts Supreme Judicial Court rejected the Town’s appeal, affirming all aspects of the Siting Board’s final decision. On March 11, 2021, Protect Sudbury filed a petition with the Surface Transportation Board, a federal agency, claiming the Massachusetts Bay Transportation Authority (MBTA) did not have the right to lease a portion of its inactive railroad corridor, a claim previously rejected by the Massachusetts Land Court. MBTA filed its response on April 30, 2021 and a decision is anticipated by the end of the year. The two other remainingthese upgrades, the Mystic-Woburn and the Wakefield-Woburn reliability projects, are under construction and are expected to be placed in service by the second quarter of 2023. Construction on the last remaining upgrade, the Sudbury-Hudson Reliability Project, is expected to commence in the second quarter of 2022. We ~~estimate our portion~~spent $9.5 million during the first quarter of ~~the investment will be~~2022 and we expect to make additional capital expenditures of approximately ~~$750~~$160 million ~~of which, $549 million has been spent and capitalized through June 30, 2021.~~

~~Southeastern Massachusetts Transmission Projects:~~ ~~These~~on these remaining transmission upgrades. There are also several transmission projects ~~consist of a portfolio of electric transmission and substation upgrades~~underway in southeastern Massachusetts, including Cape Cod, required to reinforce the Southeastern Massachusetts transmission system and bring the system into compliance with applicable national and regional reliability standards. OfWe spent $6.5 million during the ~~twelve upgrades in Eversource’s service territory, four require siting approvals from the Massachusetts regulatory agencies,~~first quarter of ~~which, one has received approval~~2022 and ~~is currently under construction, two have completed hearings and are awaiting orders and one, a joint project with National Grid, has yet~~we expect to ~~be filed. In addition to the project with siting approval, three~~make additional ~~projects, permitted locally, are under construction, and five projects have been placed in-service. We estimate our portion~~capital expenditures of ~~the investment will be~~ approximately ~~$175~~$130 million ~~of which, $36 million has been spent and capitalized through June 30, 2021.~~on these transmission upgrades.

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

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


		For the Six Months Ended June 30,															For the Three Months Ended March 31,
(Millions of Dollars)	(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total		(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		Total Electric		Natural Gas		Water		Total
2022																2022
Basic Business																Basic Business	$	59.3	$	27.3	$	13.5	$	100.1	$	54.9	$	1.8	$	156.8
Aging Infrastructure																Aging Infrastructure	34.2		48.6		12.4		95.2		61.2		23.6		180.0
Load Growth and Other																Load Growth and Other	14.0		36.4		5.2		55.6		8.8		0.1		64.5
Total Distribution																Total Distribution	107.5		112.3		31.1		250.9		124.9		25.5		401.3
Solar																Solar	—		0.1		—		0.1		—		—		0.1
Total																Total	$	107.5	$	112.4	$	31.1	$	251.0	$	124.9	$	25.5	$	401.4
2021	2021															2021
Basic Business	Basic Business	$	102.0	$	79.4	$	26.9	$	208.3	$	97.3	$	6.6	$	312.2	Basic Business	$	45.0	$	31.3	$	13.6	$	89.9	$	25.4	$	1.7	$	117.0
Aging Infrastructure	Aging Infrastructure	71.8		106.0		33.1		210.9		207.4		44.1		462.4		Aging Infrastructure	34.1		46.1		19.5		99.7		77.2		16.7		193.6
Load Growth and Other	Load Growth and Other	36.0		68.2		6.6		110.8		32.4		0.3		143.5		Load Growth and Other	20.3		35.3		7.7		63.3		12.8		0.1		76.2
Total Distribution	Total Distribution	209.8		253.6		66.6		530.0		337.1		51.0		918.1		Total Distribution	99.4		112.7		40.8		252.9		115.4		18.5		386.8
Solar	Solar	—		(1.1)		—		(1.1)		—		—		(1.1)		Solar	—		(1.1)		—		(1.1)		—		—		(1.1)
Total	Total	$	209.8	$	252.5	$	66.6	$	528.9	$	337.1	$	51.0	$	917.0	Total	$	99.4	$	111.6	$	40.8	$	251.8	$	115.4	$	18.5	$	385.7
2020
Basic Business		$	92.8	$	101.9	$	22.1	$	216.8	$	38.3	$	4.9	$	260.0
Aging Infrastructure		91.0		113.6		45.0		249.6		175.8		49.6		475.0
Load Growth and Other		36.2		51.0		8.1		95.3		23.4		0.4		119.1
Total Distribution		220.0		266.5		75.2		561.7		237.5		54.9		854.1
Solar		—		1.0		—		1.0		—		—		1.0
Total		$	220.0	$	267.5	$	75.2	$	562.7	$	237.5	$	54.9	$	855.1

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

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

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

Pending Acquisition of ~~New England Service~~Torrington Water Company: On ~~April 8, 2021,~~March 7, 2022, Aquarion and ~~New England Service~~The Torrington Water Company ~~(NESC)~~(TWC) entered into a definitive agreement pursuant to which Aquarion would acquire all outstanding shares of ~~NESC. NESC~~TWC. TWC provides regulated water service to approximately ~~10,000~~10,100 customers in ~~Connecticut, Massachusetts, and New Hampshire.~~Connecticut. The acquisition will be structured as a stock-for-stock exchange and Eversource will issue ~~approximately 463,000~~between 885,000 and 925,000 common shares at closing. The transaction requires approval from the PURA ~~DPU, NHPUC and other regulators~~ and is expected to close by the end of ~~2021. On August 3, 2021, NESC shareholders voted to approve the pending acquisition.~~2022.

Offshore Wind Business:

Strategic Review of Offshore Wind Investments: On May 4, 2022, we announced that we have initiated a strategic review of our offshore wind investment portfolio. As part of that review, we will explore strategic alternatives that could result in a potential sale of all, or part, of our 50 percent interest in our offshore wind partnership with Ørsted. We expect to complete this review during 2022. If the recommended path forward following the strategic review is a sale of all, or part, of our interest in the partnership, we expect potential proceeds from such transaction would likely be used to support our regulated investments in strengthening, modernizing and decarbonizing our regulated energy and water delivery systems. As the strategic review proceeds, we remain committed to continue providing oversight of the siting and construction of onshore elements of our South Fork Wind, Revolution Wind and Sunrise Wind offshore wind projects.

Our offshore wind business includes a 50 percent ownership ~~interests~~interest in ~~both~~ North East Offshore, ~~and Bay State Wind,~~ which ~~together hold~~holds PPAs and contracts for the Revolution Wind, South Fork Wind and Sunrise Wind projects, as well as undeveloped offshore ~~leases issued by BOEM.~~lease area. Our offshore wind projects are being developed and constructed through a joint and equal partnership with Ørsted. ~~This partnership also participates in new procurement opportunities for offshore wind energy in the Northeast U.S.~~

The offshore leases include a 257 square-mile ocean lease off the coasts of Massachusetts and Rhode Island and a separate, adjacent 300-square-mile ocean lease located approximately 25 miles south of the coast of Massachusetts. In aggregate, these ocean lease sites jointly-owned by Eversource and Ørsted could eventually develop at least 4,000 MW of clean, renewable offshore wind energy.

We are preparing our final project designs and advancing the appropriate federal, state and local siting and permitting processes along with our offshore wind partner, Ørsted, all of which is competitively sensitive. We currently expect to make investments in our offshore wind business of approximately $300 million to $500 million during 2021, subject to advancing our final project designs and federal, state and local permitting processes. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, Eversource's total equity investment balance in its offshore wind business was ~~$982.6 million~~$1.33 billion and ~~$887.1 million,~~$1.21 billion, respectively. This equity investment includes capital expenditures for the three projects, as well as capitalized costs related to future development, acquisition costs of offshore lease areas, and capitalized interest.

Contracts, Permitting and Construction of Offshore Wind Projects:The following table provides a summary of the Eversource and Ørsted major projects with announced contracts:

Wind Project State Servicing Size (MW) Term (Years) Price per MWh Pricing Terms Contract Status
Revolution Wind Rhode Island 400 20 $98.43 Fixed price contract; no price escalation Approved
Revolution Wind Connecticut 304 20 $98.43 - $99.50 Fixed price contracts; no price escalation Approved
South Fork Wind New York (LIPA) 90 20 $160.33 2 percent average price escalation Approved
South Fork Wind New York (LIPA) 42 20 $86.25 2 percent average price escalation Approved
Sunrise Wind New York (NYSERDA)
924 (1)
25
$110.37 (2)
Fixed price contract; no price escalation Approved

Wind Project

State Servicing

Size (MW)

Term (Years)

Price per MWh

Pricing Terms

Contract Status

Revolution Wind

Rhode Island

400

$98.43

Fixed price contract; no price escalation

Approved

Revolution Wind

Connecticut

304

$98.43 - $99.50

Fixed price contracts; no price escalation

Approved

South Fork Wind

New York (LIPA)

$160.33

2 percent average price escalation

Approved

South Fork Wind

New York (LIPA)

$86.25

2 percent average price escalation

Approved

Sunrise Wind

New York (NYSERDA)

924

$110.37 (1)

Fixed price contract; no price escalation

Approved

(1)~~The contractual capacity increased from 880 MWs to 924 MWs, as allowed under the original agreement with NYSERDA.~~

~~(2)~~ Index Offshore Wind Renewable Energy Certificate (OREC) strike price.

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

Federal Siting and Permitting Process: The ~~South Fork Wind project has commenced the~~ federal siting and permitting process for each of our offshore wind projects commence with the filing of ~~its~~a Construction and Operations Plan (COP) application with ~~BOEM in 2018.~~ BOEM.The first major milestone in the BOEM review process is an issuance of a Notice of Intent (NOI) to complete an Environmental Impact Statement (EIS)~~, which South Fork Wind received in 2018. In August 2020, we received the~~. BOEM then provides a final review schedule ~~from BOEM regarding South Fork Wind’s~~for the project’s COP approval. ~~In January 2021,~~ BOEM ~~released its Draft~~conducts environmental and technical reviews of the COP. The EIS ~~for the South Fork Wind project, which assessed~~assesses the environmental, social, and economic impacts of constructing the ~~project. Identified impacts were negligible~~project and recommends measures to ~~major adverse impacts~~minimize impacts. The Final EIS will inform BOEM in deciding whether to ~~marine~~approve the project or to approve with modifications and ~~terrestrial archaeological resources and to historic, and non-historic visual resources from project construction and operations. The Draft EIS also analyzed four alternatives to be evaluated as part~~BOEM will then issue its Record of Decision. BOEM issues its final approval of the ~~process. Each~~COP following the Record of Decision.

Revolution Wind and Sunrise Wind filed their COP applications with BOEM in March 2020 and September 2020, respectively. On April 30, 2021, Revolution Wind received BOEM’s NOI to prepare an EIS for the review of the ~~identified alternative configurations had~~COP submitted by Revolution Wind. For Revolution Wind, a ~~similar level~~final EIS is expected in the first quarter of ~~environmental impacts,~~2023, the Record of Decision in the second quarter of 2023, and ~~if an alternative configuration was selected, the South Fork Wind project would still meet the contractual output under its PPA. A Final EIS~~final approval is expected in the third quarter of 2023. On August 31, 2021, ~~and~~Sunrise Wind received BOEM’s NOI to prepare an EIS for the review of the COP. For Sunrise Wind, a final ~~decision~~EIS and Record of Decision are expected in the third quarter of 2023, and final approval is expected in ~~January 2022.~~the fourth quarter of 2023.

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

Revolution Wind and Sunrise Wind filed their COP applications with BOEM in March 2020 and September 2020, respectively. Both projects received FAST41 designation in 2020. On April 30, 2021, Revolution Wind received BOEM’s NOI to prepare an EIS for the review of the COP submitted by Revolution Wind. For Revolution Wind, a final EIS is expected in the first quarter of 2023, and a final decision is expected in the third quarter of 2023. For Sunrise Wind, we are awaiting BOEM to outline its timeline for completing the review of its COP in an NOI, which we expect to receive in 2021.

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

On September 10, 2020, the Town of East Hampton and the East Hampton Town Trustees announced that they had reached an agreement with South Fork Wind to issue the necessary easements and other real estate rights necessary to construct the South Fork Wind project. The Town approved the easements on January 21, 2021, and Trustees approved the lease on January 25, 2021.

State permitting applications in Rhode Island for Revolution Wind and in New York for Sunrise Wind were filed in December 2020. The Revolution Wind state siting application was deemed complete on January 22, 2021, and the preliminary hearing was completed on March 22, 2021. On April 26, 2021, the Rhode Island Energy Facilities Siting Board issued a Preliminary Decision and Order on scheduling with Advisory Opinions for local and state ~~agencies to be submitted by~~agencies. All advisory opinions were received in August, ~~26, 2021,~~in accordance with the expedited schedule, and evidentiary hearings ~~will begin prior to~~began in October ~~12, 2021.~~2021 and are ongoing. The Sunrise Wind state siting application was deemed complete on July 1, 2021, initiating the formal review process, and Sunrise Wind filed a formal notice of intent to commence settlement negotiations towards a Joint Proposal on August 31, 2021. Settlement negotiations are ongoing.

Construction Process - South Fork Wind: South Fork Wind received all required approvals to start construction and the project entered the construction phase in early 2022. Site preparation and onshore activities for the ~~project.~~project’s underground onshore transmission line and construction of the onshore interconnection facility located in East Hampton, New York are underway. Offshore installation, including the project’s monopile foundations, 11-megawatt wind turbines, and offshore substation, is expected to occur in 2023. Construction-related purchase agreements with third-party contractors and materials contracts have largely been secured. South Fork Wind faces several challenges and appeals of New York State and federal agency approvals, however it believes it is probable it will be able to overcome these challenges.

Projected In-Service Dates: ~~Based on BOEM’s permit schedule outlining when BOEM will complete its review of the South Fork Wind COP, we~~We expect the South Fork Wind project to be in-service by the end of 2023. For Revolution Wind and Sunrise Wind, based on the BOEM permit schedule included in each respective NOI outlining when BOEM will complete its review of the ~~NOI,~~COP, we currently expect an in-service date in 2025, and are continuing to analyze the overall project schedule. For Sunrise Wind, we do not yet have BOEM’s permitting timeline. Therefore, depending on the schedule included in the pending BOEM NOI, we would expect an in-service datedates in 2025 for ~~Sunrise Wind.~~both projects.

Projected Investments: For Revolution Wind and Sunrise Wind, we are preparing our final project designs and advancing the appropriate federal, state, and local siting and permitting processes along with our offshore wind partner, Ørsted. Construction of South Fork Wind is underway. Construction-related purchase agreements with third-party contractors and materials contracts are approximately 80 percent secured. Subject to advancing our final project designs and federal, state and local permitting processes and construction schedules, we currently expect to make investments in our offshore wind business between $0.9 billion and $1.0 billion in 2022 and expect to make investments for our three projects in total between $3.0 billion and $3.6 billion from 2023 through 2026. These estimates assume that the three projects are completed and are in-service by the end of 2025, as planned. These projected investments could be impacted by the strategic review of our offshore wind investment portfolio discussed above.

FERC Regulatory Matters

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

All amounts associated with the first complaint period have been refunded. Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020.~~2021. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020.~~2021.

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

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

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

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

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

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

On April 15, 2021, FERC issued a Supplemental NOPR that proposes to eliminate the existing 50 basis point return on equity for utilities that have been participating in a regional transmission organization (RTO ROE incentive) for more than three years. On June 25, 2021, the NETOs jointly filed comments strongly opposing the Commission’s proposal. On July 26, 2021, the NETOs filed Supplemental NOPR reply comments responding to various parties advocating for the elimination of the RTO Adder. If the FERC issues a final order eliminating the RTO ROE incentive as proposed in the Supplemental NOPR, the estimated annual impact (using ~~2020 actual data)~~2021 estimated rate base) on ~~Eversource’s~~Eversource's after-tax earnings is approximately ~~$15~~$17 million. The Supplemental NOPR contemplates an effective date 30 days from the final order.

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

Regulatory Developments and Rate Matters

Electric, Natural Gas and Water Utility Base Distribution Rates: The regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first ~~half~~quarter of ~~2021,~~2022, changes made to the regulated companies’ rates did not have a material impact on their earnings, financial position, or cash flows. For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource ~~2020~~2021 Form 10-K.

Connecticut:

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

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

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

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

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

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

~~CL&P Rate Adjustment Mechanisms (RAM)~~Advanced Metering Infrastructure Filing: On July 31, 2020, ~~PURA temporarily suspended its June 26, 2020 approval of certain delivery rate components effective July 1, 2020, and ordered~~ CL&P submitted to ~~restore rates to those in effect as of June 30, 2020 in order to allow~~ PURA ~~time to reexamine the rates. Rates were adjusted effective~~its proposed $512 million Advanced Metering Infrastructure investment and implementation plan. On August ~~1, 2020. On December 2, 2020,~~17, 2021, PURA issued a ~~final decision~~Notice of Request for Amended EDC Advanced Metering Infrastructure Proposal. CL&P submitted an Amended Proposal in response to this request on November 8, 2021 with an updated schedule for the years 2022 through 2028, which ~~it adjusted~~included additional information as required by the ~~timing~~PURA. As required, the plan includes a full deployment of advanced metering functionality and a composite business case in support of the annual rate adjustments for the Transmission Adjustment Clause (TAC) charge, the Non-Bypassable Federally Mandated Congestion Charge (NBFMCC), the Electric System Improvements Tracker (ESI), Competitive Transition Assessment (CTA), System Benefits Charge (SBC) and Revenue Decoupling Mechanism (RDM) soAdvanced Metering Infrastructure plan. The procedural schedule includes briefs that ~~these rates take effect~~were filed on May 1st of each year. On March 1, 2021, consistent with this new timing, CL&P filed for new rates for these rate components for effect on May 1, 2021. Additionally, CL&P proposed delaying and extending recovery of 2020 under-recoveries associated with these rates beginning October 1, 2021. On April 28, 2021, PURA issued its interim decision on CL&P’s proposal that accepted the May 1, 2021 rate proposals for the CTA, TAC, ESI and RDM, but ordered that these rate changes go into effect on June 1, 2021, as opposed to May 1, 2021. Further, PURA elected to keep in place the current rates for the NBFMCC and SBC until further review of the costs being recovered in those rates could be performed. Finally, PURA indicated it would further review CL&P’s proposal to begin recovery of 2020 under-recoveries associated with these rates on October 1, 2021, and over what the period of recovery would be at a later time. We expect to receive a draft decision in August and a final decision on September 15, 2021.29, 2022.

~~CL&P Impact~~Yankee Gas System Expansion Plan Order: In September 2021, PURA undertook a review of ~~2021 Rate Changes:~~Connecticut natural gas companies’ infrastructure system expansion plan (SEP) to determine if the SEP continues to be in the best interest of the state’s comprehensive energy strategy. On ~~June 1, 2021, CL&P implemented~~April 27, 2022, PURA issued an ~~overall rate increase of $0.00411 per kWh for residential customers. The rate increase included delivery rate changes~~order for the ~~CTA, TAC, ESI~~immediate winding down of the SEP by (1) ending the enrollment of new customers in the SEP program and ~~RDM charges. Partially offsetting~~permitting only a specific group of potential customers who have executed a services agreement with a natural gas company on or before a specified date to qualify for incentives under the current SEP; (2) directing all surplus non-firm margin to be deferred as a regulatory liability and applied to rate ~~increase was~~base in a ~~base distribution~~future rate ~~decrease, which was driven by a reduction~~proceeding; and (3) directing the natural gas companies to ~~storm cost amortization resulting from a 2019 PURA decision. For residential customers with 700 kWh monthly usage,~~cease all outbound and passive marketing regarding the SEP. Eversource is currently evaluating the prospective impact of this proceeding, however, does not believe the impact of the June 1, 2021 rate changes equated to an increase of $2.88 on monthly customer bills. For residential customers on standard offer service, on July 1, 2021, CL&P implemented a decrease in the supply rate, resulting in an overall rate decrease of $0.01388 per kWh. For residential customers on standard offer service with 700 kWh monthly usage, the impact of the July 1, 2021 rate decrease equated to a reduction of $9.72 on monthly customer bills.

~~By September 1, 2021, CL&P expects to adjust its rates for the $28.4 million penalty imposed by PURA for non-compliance with performance standards that~~ will be ~~provided as credits on customer bills. This credit will go back~~material to ~~customers over a one-year period. On October 1, 2021, CL&P expects to implement new NBFMCC~~its future financial position, results of operations and SBC delivery rates and to adjust rates for $196 million of under-recoveries as of December 31, 2020 associated with the NBFMCC, TAC and RDM. We expect a final decision from PURA on these rate changes and the corresponding collection period for the under-recoveries balance on September 15, 2021.cash flows.

Massachusetts:

NSTAR Electric Distribution Rates: As part of an inflation-based mechanism, NSTAR Electric submitted its fourth annual Performance Based Rate Adjustment filing on November 10, 2021 and on December 22, 2021, the DPU approved a $36.8 million increase to base distribution rates effective January 1, 2022.

NSTAR Electric Distribution Rate Case: On January 14, 2022, NSTAR Electric filed an application with the DPU for approval of an $89 million increase in base distribution rates, with new rates anticipated to be effective January 1, 2023. On April 22, 2022, NSTAR Electric updated its requested increase to $88 million. As part of this filing, NSTAR Electric is requesting a renewal of the performance-based ratemaking plan originally authorized in its last rate case for up to a ten-year term, alignment with state electrification policy, storm fund refinements, and Advanced Metering Infrastructure tariff approval. A final decision from the DPU is expected on December 1, 2022.

NSTAR Electric Grid Modernization and ~~AMI~~Advanced Metering Infrastructure Filing: On July 1, 2021, NSTAR Electric submitted for DPU approval its four-year $198.8 million grid modernization plan for the years 2022 through 2025 and proposed $620 million Advanced Metering Infrastructure ~~(AMI)~~ investment and implementation plan (including program operating costs) for the years ~~2023~~2022 through 2028. As required, the plan includes a ten-year vision, five-year strategic plan, including a full deployment of advanced metering functionality, separate four-year grid-facing and customer-facing short-term investment plans, and a composite business case in support of the ~~AMI~~Advanced Metering Infrastructure plan. NSTAR Electric has requested expedited approval of $38.3 million of the $198.8 million grid modernization plan before December 2021 for previously approved continuing investments that are currently in process and are expected to be spent in 2022 so these activities will not be interrupted pending full plan approval. NSTAR Electric expects DPU guidance for all ~~investment years~~investments by the ~~second~~fourth quarter of 2022. For ~~AMI~~Advanced Metering Infrastructure investments, additional review of the cost recovery mechanism will be conducted in ~~a subsequent proceeding~~NSTAR Electric’s base distribution rate case that ~~will be~~was filed ~~later in 2021~~on January 14, 2022 with a decision expected ~~in the second half of~~on December 1, 2022. Reply briefs are due to be filed by NSTAR Electric on June 27, 2022.

New Hampshire:

~~COVID Regulatory Docket:~~Energy Efficiency Plan: On ~~July 7,~~November 12, 2021, the NHPUC issued an order rejecting the proposed 2021 through 2023 energy efficiency plan and significantly reduced funding and operational functions of the program. The order eliminated the recovery of performance incentives and made other key changes to the energy efficiency plan beginning in 2022. PSNH sought a rehearing of the order and was denied, which resulted in PSNH filing a formal appeal to the New Hampshire ~~utilities~~Supreme Court.

On February 10, 2022, the NHPUC issued an order that ~~concluded~~restored the 2022 energy efficiency rate to be consistent with the 2021 rate, which PSNH implemented effective March 1, 2022. On February 24, 2022, state legislation was signed into law that ~~recovery of incremental bad debt or waived late fees related to~~undid the ~~COVID-19 pandemic would be addressed in the context~~most impactful effects of the ~~utility’s next~~November 12, 2021 NHPUC order. The legislation directed that the joint utility energy efficiency plan and programming framework in effect on January 1, 2021 be utilized going forward, including utility performance incentive payments, lost base revenue calculations, and Evaluation, Measurement, and Verification process. Additionally, the legislation established a process for future plan proposals, including the 2024 through 2026 triennial plan, and includes a mechanism for future rate ~~case when related costs, to~~increases based on the extent those costs remain relevant under test year based rate-setting, would be considered in the context of the utility’s full revenue requirement and overall rate of return. The NHPUC concluded that New Hampshire utilities would not be permitted to establish a regulatory asset for these items.consumer price index. As a result of the new legislation passed specific to this order, inPSNH withdrew its appeal to the ~~second quarter~~New Hampshire Supreme Court. PSNH made the required filing for the remainder of ~~2021, PSNH removed its $0.6 million deferral of net incremental COVID-19 costs.~~the 2022 through 2023 triennial plan on March 1, 2022, which was approved as filed by the NHPUC on April 29, 2022.

~~PSNH Distribution Rates:~~In connection with an October 9, 2020 settlement agreement, PSNH is permitted step increases effective August 1, 2021 and August 1, 2022 to reflect plant additions in the calendar years 2020 and 2021, respectively. On July 30, 2021, the NHPUC approved the step adjustment for 2020 plant in service to recover a revenue requirement of $11.0 million, subject to reconciliation after completion of an audit, for rates effective August 1, 2021.

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 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 ~~2020~~2021 Form 10-K. There have been no material changes with regard to these critical accounting policies.

Other Matters

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

~~Contractual Obligations and Commercial Commitments: See Note 9B, "Commitments and Contingencies – Long-Term Contractual Arrangements," for discussion of material changes to contractual obligations since the Eversource 2020 Form 10-K.~~

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

RESULTS OF OPERATIONS – EVERSOURCE ENERGY AND SUBSIDIARIES

The following provides the amounts and variances in operating revenues and expense line items in the statements of income for Eversource for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ included in this combined Quarterly Report on Form 10-Q:

For the Three Months Ended June 30, For the Six Months Ended June 30,
(Millions of Dollars) 2021 2020 Increase/(Decrease) 2021 2020 Increase
Operating Revenues $ 2,122.5 $ 1,953.1 $ 169.4 $ 4,948.4 $ 4,326.9 $ 621.5
Operating Expenses:
Purchased Power, Fuel and Transmission 650.1 630.1 20.0 1,648.6 1,506.7 141.9
Operations and Maintenance 411.1 332.1 79.0 876.7 674.1 202.6
Depreciation 274.6 240.5 34.1 545.4 476.7 68.7
Amortization 5.6 23.4 (17.8) 113.6 73.2 40.4
Energy Efficiency Programs 129.0 115.4 13.6 317.0 263.7 53.3
Taxes Other Than Income Taxes 200.5 178.0 22.5 409.9 359.7 50.2
Total Operating Expenses 1,670.9 1,519.5 151.4 3,911.2 3,354.1 557.1
Operating Income 451.6 433.6 18.0 1,037.2 972.8 64.4
Interest Expense 145.4 134.2 11.2 283.1 268.9 14.2
Other Income, Net 46.6 30.2 16.4 80.8 54.3 26.5
Income Before Income Tax Expense 352.8 329.6 23.2 834.9 758.2 76.7
Income Tax Expense 86.4 75.5 10.9 200.4 167.4 33.0
Net Income 266.4 254.1 12.3 634.5 590.8 43.7
Net Income Attributable to Noncontrolling Interests 1.9 1.9 — 3.8 3.8 —
Net Income Attributable to Common Shareholders $ 264.5 $ 252.2 $ 12.3 $ 630.7 $ 587.0 $ 43.7


	For the Three Months Ended March 31,
(Millions of Dollars)		2022		2021		Increase/ (Decrease)
Operating Revenues		$	3,471.3	$	2,825.8	$	645.5
Operating Expenses:
Purchased Power, Fuel and Transmission		1,389.7		998.5		391.2
Operations and Maintenance		472.4		465.5		6.9
Depreciation		289.3		270.7		18.6
Amortization		236.9		108.0		128.9
Energy Efficiency Programs		199.5		188.1		11.4
Taxes Other Than Income Taxes		220.4		209.4		11.0

Total Operating Expenses		2,808.2		2,240.2		568.0
Operating Income		663.1		585.6		77.5
Interest Expense		153.3		137.8		15.5
Other Income, Net		71.6		34.2		37.4
Income Before Income Tax Expense		581.4		482.0		99.4
Income Tax Expense		136.1		114.0		22.1
Net Income		445.3		368.0		77.3
Net Income Attributable to Noncontrolling Interests		1.9		1.9		—
Net Income Attributable to Common Shareholders		$	443.4	$	366.1	$	77.3

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

Operating Revenues

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


		Electric						Firm Natural Gas								Water							Electric							Firm Natural Gas						Water
		Sales Volumes (GWh)		Percentage Increase				Sales Volumes (MMcf)				Percentage (Decrease)/Increase				Sales Volumes (MG)				Percentage (Decrease)/Increase			Sales Volumes (GWh)				Percentage Increase			Sales Volumes (MMcf)				Percentage Increase		Sales Volumes (MG)		Percentage Increase/(Decrease)
Three Months Ended June 30:		2021	2020			2021			2020					2021			2020
Traditional		1,853	1,789			3.6	%		—		—			—	%		311		482					(35.5)	%
Decoupled and Special Contracts (1)(2)		10,142	9,658	5.0	%			24,790		26,772		(7.4)	%			5,530		5,185		6.7	%
Total Sales Volumes		11,995	11,447	4.8	%			24,790		26,772		(7.4)	%			5,841		5,667		3.1	%
Three Months Ended March 31:																						Three Months Ended March 31:	2022			2021			Percentage Increase		2022		2021			Percentage Increase	2022	2021		Percentage Increase/(Decrease)

Six Months Ended June 30:

Traditional	Traditional	3,804	3,695	2.9	%			—		—		—	%			570		916		(37.8)	%	Traditional	1,992			1,951	2.1	%		—		—		—	%	324	258	25.6	%
Decoupled and Special Contracts ~~(2)~~(1)	Decoupled and Special Contracts ~~(2)~~(1)	20,874	20,123	3.7	%			90,792		87,335		4.0	%			10,007		9,557		4.7	%	Decoupled and Special Contracts ~~(2)~~(1)	10,973			10,732	2.2	%		68,518		66,002		3.8	%	4,342	4,478	(3.0)	%
Total Sales Volumes	Total Sales Volumes	24,678	23,818	3.6	%			90,792		87,335		4.0	%			10,577		10,473		1.0	%	Total Sales Volumes	12,965			12,683	2.2	%		68,518		66,002		3.8	%	4,666	4,736	(1.5)	%

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

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

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

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

Operating Revenues: Operating Revenues by segment ~~increased/(decreased)~~increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, as follows:

(Millions of Dollars) Three Months Ended Six Months Ended
Electric Distribution $ 60.3 $ 155.3
Natural Gas Distribution 100.6 432.5
Electric Transmission 34.5 65.6
Water Distribution (2.7) (3.2)
Other 46.2 94.5
Eliminations (69.5) (123.2)
Total Operating Revenues $ 169.4 $ 621.5


(Millions of Dollars)	Three Months Ended
Electric Distribution	$	486.0
Natural Gas Distribution	147.1
Electric Transmission	34.6
Water Distribution	2.1
Other	40.5
Eliminations	(64.8)
Total Operating Revenues	$	645.5

Electric and Natural Gas (excluding EGMA) Distribution Revenues:

Base Distribution Revenues:

•Base electric distribution revenues increased ~~$22.9 million and $46.1~~$9.7 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020, respectively,~~2021, due primarily to the impact of base distribution rate increases at NSTAR Electric effective January 1, ~~2021,~~2022 resulting from its annual Performance Based Rate Adjustment filing, and at PSNH effective ~~January~~August 1, 2021 ~~and at CL&P effective May 1,~~to reflect plant additions in calendar year 2020 ~~partially offset by a base distribution rate decrease at CL&P implemented June 1, 2021.~~included in its revenue requirement.

•Base natural gas distribution revenues (excluding EGMA) increased ~~$11.4 million and $40.4~~$9.7 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020, respectively,~~2021, due primarily to a base distribution rate ~~increases~~increase at NSTAR Gas effective November 1, 2020, which includes a shift of recovery into base rates of certain GSEP investments, and at Yankee Gas effective January 1, 2021. Although new rates at Yankee Gas were implemented on March 1, 2021 to customers, the provisions of the base distribution rate increase were effective January 1, 2021.

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

Tracked distribution revenues increased/(decreased) for the three ~~and six~~ months ended ~~June 30, 2021, as compared to the same periods in 2020, due primarily to the following:~~

Electric Distribution Natural Gas Distribution
(Millions of Dollars) Three Months Ended Six Months Ended Three Months Ended Six Months Ended
Retail Tariff Tracked Revenues:
Energy supply procurement $ (71.8) $ (100.9) $ 2.0 $ 31.1
Retail transmission 60.2 79.2 — —
Other distribution tracking mechanisms 19.8 46.2 (5.5) 11.2
Wholesale Market Sales Revenue 36.7 94.8 (2.2) 2.1

~~The decrease in energy supply procurement within electric distribution for the three months ended June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020, was driven~~2021, due primarily ~~by lower average prices and lower average supply-related sales volumes.~~ to the following:


	Three Months Ended
(Millions of Dollars)	Electric Distribution		Natural Gas Distribution
Retail Tariff Tracked Revenues:
Energy supply procurement	$	165.0	$	42.1
Retail transmission	97.7		—
Other distribution tracking mechanisms	(3.9)		0.4
Wholesale Market Sales Revenue	216.4		2.5

The ~~decrease~~increase in energy supply procurement within both electric distribution and natural gas distribution for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in 2020, was driven primarily by lower average prices, partially offset by higher average supply-related sales volumes. The increase in energy supply procurement within natural gas distribution for the six months ended June 30, 2021, ~~as compared to the same period in 2020,~~ was driven primarily by higher average prices and higher average supply-related sales volumes.

Fluctuations in retail transmission revenues are driven by the recovery of the costs of our wholesale transmission business, such as those billed by ISO-NE and Local and Regional Network Service charges. For further information, see "Purchased Power, Fuel and Transmission Expense" below.

The increase in ~~the~~ electric distribution wholesale market sales revenue was due primarily to higher average electricity market prices received for wholesale sales at CL&P, NSTAR Electric and PSNH for ~~both~~ the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020.~~2021. ISO-NE average ~~wholesale~~ market prices received for CL&P’s wholesale sales increased approximately ~~62 percent and 94~~117 percent for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, driven primarily by ~~increased market demand as a result~~higher natural gas prices in New England.The increase was also due tohigher wholesale sales at CL&P resulting from the sale of ~~colder winter temperatures~~output generated by the Seabrook PPA beginning in ~~2021.~~the first quarter of 2022. Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA and Seabrook PPA that CL&P entered into in 2019, as required by regulation. CL&P sells the energy purchased from Millstone and Seabrook into the wholesale market and uses the proceeds from the energy sales to offset the contract costs. The net sales or net cost amount is refunded to, or recovered from, customers in the FMCC rate.

The increase in electric distribution wholesale market sales revenues was also driven by higher proceeds from a one-year sale of transmission rights, effective June 2021, under CL&P’s, NSTAR Electric’s and PSNH’s Hydro-Quebec transmission support agreements. Proceeds from these sales are credited back to customers.

EGMA Natural Gas Distribution Revenues: ~~The addition of~~ EGMA ~~increased~~ total operating revenues at the natural gas distribution segment increased by ~~$96.8 million and $349.4~~$91.6 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~March 31, 2022, as compared to the same period in 2021. Included in the total operating revenues increase was EGMA’s base natural gas distribution revenues increase of $20.9 million due primarily to a base distribution rate increase effective November 1, 2021.

Electric Transmission Revenues: Electric transmission revenues increased ~~$34.5 million and $65.6~~$34.6 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to a higher transmission rate base as a result of our continued investment 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 also primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business in rates charged to their customers.

Purchased Power, Fuel and Transmission expense includes costs associated with purchasing electricity and natural gas on behalf of our ~~customers.~~customers and the cost of energy purchase contracts, as required by regulation. These electric and natural gas supply costs and other energy-related costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power, Fuel and Transmission expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to the following:

(Millions of Dollars) Three Months Ended Six Months Ended
Purchased Power Costs $ (38.0) $ (56.3)
Natural Gas Costs 41.5 175.2
Transmission Costs 59.0 75.6
Eliminations (42.5) (52.6)
Total Purchased Power, Fuel and Transmission $ 20.0 $ 141.9


(Millions of Dollars)	Three Months Ended
Purchased Power Costs	$	221.0
Natural Gas Costs	95.9
Transmission Costs	100.4
Eliminations	(26.1)
Total Purchased Power, Fuel and Transmission	$	391.2

The ~~decrease~~increase in purchased power expense at the electric distribution business for the three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, was driven primarily by ~~lower average prices associated with~~higher expense related to the procurement of energy supply resulting from higher average prices and ~~lower~~higher average supply-related sales volumes. The decrease in purchased power expense at the electric distribution business for the six months ended June 30, 2021, as compared to the same period in 2020, was driven primarily by lower average prices associated with the procurement of energy supply, partially offset byvolumes, higher long-term contractual energy-related costs that are recovered in the ~~NBFMCC~~non-bypassable component of the FMCC mechanism at CL~~&P.~~ &P, and higher net metering costs at NSTAR Electric.

The increase in costs at the natural gas distribution segment for the three ~~and six~~ months ended June 30, 2021, as compared to the same periods in 2020, was due primarily to the addition of EGMA natural gas supply costs as a result of the 2020 CMA asset acquisition of $27.3 million and $122.4 million, respectively, and higher average prices. The increase in costs at the natural gas distribution segment for the six months ended June 30, 2021,March 31, 2022, as compared to the same period in ~~2020,~~2021, was ~~also~~ due primarily to higher average prices and higher average supply-related sales volumes.

The increase in transmission costs for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, was primarily the result of an increase in costs billed by ISO-NE that

support regional grid investments and an increase resulting from the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers. This was partially offset by a decrease in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network. ~~This was partially offset by a decrease in the retail transmission cost deferral, which reflects the actual costs of transmission service compared to estimated amounts billed to customers.~~

Operations and Maintenance expense includes tracked costs and costs that are part of base electric, natural gas and water distribution rates with changes impacting earnings (non-tracked costs). Operations and Maintenance expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to the following:
(Millions of Dollars) Three Months Ended Six Months Ended
Base Electric Distribution (Non-Tracked Costs):
CL&P assessment by PURA for Tropical Storm Isaias response $ (1.4) $ 28.6
Employee-related expenses, including labor and benefits 13.8 28.6
Storm restoration costs 6.3 15.8
Operations-related expenses, including vegetation management, vehicles, and outside services 2.7 10.6
Shared corporate costs (including computer software depreciation at Eversource Service) 5.5 10.8
Other non-tracked operations and maintenance 5.0 6.4
Total Base Electric Distribution (Non-Tracked Costs) 31.9 100.8
Tracked Costs (Electric Distribution and Electric Transmission) 8.9 16.9
Natural Gas Distribution:
Base (Non-Tracked) Costs, excluding EGMA (1.4) 3.2
Tracked Costs, excluding EGMA 2.3 3.3
EGMA Operations and Maintenance 39.9 85.5
Total Natural Gas Distribution 40.8 92.0
Water Distribution — —
Parent and Other Companies and eliminations:
Eversource Parent and Other Companies - other operations and maintenance 39.0 78.2
Transition and Acquisition Costs 3.9 7.6
Eliminations (45.5) (92.9)
Total Operations and Maintenance $ 79.0 $ 202.6


(Millions of Dollars)	Three Months Ended
Base Electric Distribution (Non-Tracked Costs):
Absence in 2022 of CL&P charge for Tropical Storm Isaias response in 2021	$	(30.0)
Employee-related expenses, including labor and benefits	(6.5)
Funding of CL&P storm reserve as part of June 1, 2021 rate change (offset by lower Amortization expense)	6.0
Storm costs	8.0
Operations-related expenses, including vehicles, vegetation management and outside services	(9.3)
Other non-tracked operations and maintenance	12.1
Total Base Electric Distribution (Non-Tracked Costs)	(19.7)
Tracked Electric Costs (Electric Distribution and Electric Transmission)	19.4




Natural Gas Distribution	11.0
Water Distribution	1.6
Parent and Other Companies and eliminations:
Eversource Parent and Other Companies - other operations and maintenance	33.2
Acquisition and Transition Costs	(1.3)
Eliminations	(37.3)
Total Operations and Maintenance	$	6.9

Depreciation expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due to higher utility plant in service ~~balances, and due to the addition of EGMA utility plant balances as a result of the 2020 CMA asset acquisition of $11.8 million and $23.5 million, respectively.~~balances.

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

Amortization ~~decreased~~increased for the three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in 2020, due primarily to a decrease in storm amortization expense at CL&P related to the completion of the amortization period of certain storm cost deferred assets, and the deferral adjustment of energy supply, energy-related and other costs. Amortization increased for the six months ended June 30, 2021, ~~as compared to the same period in 2020,~~ due primarily to the deferral adjustment of energy supply, energy-related and other tracked costs that are included in the non-bypassable component of the FMCC mechanism at CL&P, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. The increase ~~for the six-month period~~ was partially offset by a decrease in storm amortization expense at CL&P related to the completion of the amortization period of certain storm ~~cost~~costs deferred assets.

Energy Efficiency Programs expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to the deferral adjustment, ~~at NSTAR Electric and PSNH,~~ which reflects the actual costs of energy efficiency programs compared to the amounts billed to customers, and the timing of the recovery of energy efficiency costs. The increase in the second quarter and first half of 2021 was also due to the addition of EGMA energy efficiency program costs as a result of the 2020 CMA asset acquisition of $11.5 million and $41.2 million, respectively. The costs for the majority of the state energy policy initiatives and expanded energy efficiency programs are recovered from customers in rates and have no impact on earnings.

Taxes Other Than Income Taxes expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to an increase in property taxes as a result of higher utility plant ~~balances, the addition of EGMA property taxes as a result of the 2020 CMA asset acquisition of $10.5 million and $17.9 million, respectively, and higher Connecticut gross earnings taxes.~~balances.

Interest Expense increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to an increase in interest on long-term debt as a result of new debt issuances ($~~6.3 million and $15.7 million, respectively) and~~11.6 million), an increase in interest expense on regulatory deferrals ($~~5.2 million~~4.4 million), and ~~$2.9 million, respectively), partially offset by a decrease~~an increase in interest on notes payable ($~~0.1 million and $4.6 million, respectively) and~~0.2 million), partially offset by an increase in AFUDC related to debt funds and other capitalized interest ($~~0.7 million~~1.0 million) and ~~$0.1 million, respectively)~~a decrease in RRB interest expense ($0.3 million).

Other Income, Net increased for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2020,~~2021, due primarily to an increase

related to pension, SERP and PBOP non-service income components ($~~11.4 million and $18.8 million, respectively)~~34.2 million), an increase in interest income primarily from regulatory deferrals ($~~7.4 million and $8.1 million, respectively) and~~5.2 million), an increase in ~~investment income driven by market volatility ($0.1 million and $3.8 million), partially offset by lower~~ AFUDC related to equity funds ($~~1.6 million~~0.7 million), and ~~$3.0 million, respectively)~~a decrease in investment losses ($0.4 million), partially offset by a decrease in equity in earnings related to Eversource's equity method investments ($3.3 million).

Income Tax Expense increased for the three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to higher pre-tax earnings ($~~4.9~~20.9 million), higher state taxes ($~~4.9~~7.3 million), and lower share-based payment excess tax benefits ($~~0.4~~1.8 million), ~~and an increase~~partially offset by a decrease in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~0.9~~3.8 million), ~~partially offset by~~the absence in 2022 of a valuation allowance increase in 2021 ($1.7 million), and an increase in amortization of EDIT ($~~0.2~~2.4 million).

Income Tax Expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, due primarily to higher pre-tax earnings ($16.1 million), higher state taxes ($12.0 million), lower share-based payment excess tax benefits ($2.7 million), an increase in a valuation allowance ($1.7 million), and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($2.8 million), partially offset by an increase in amortization of EDIT ($2.3 million).

5549

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~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ 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) 2021 2020 Increase/
(Decrease) 2021 2020 Increase/
(Decrease) 2021 2020 Increase/
(Decrease)
Operating Revenues $ 1,816.9 $ 1,717.1 $ 99.8 $ 1,424.4 $ 1,394.8 $ 29.6 $ 572.3 $ 531.6 $ 40.7
Operating Expenses:
Purchased Power and Transmission 681.4 690.1 (8.7) 417.6 434.7 (17.1) 172.1 176.7 (4.6)
Operations and Maintenance 327.8 270.2 57.6 279.6 238.1 41.5 111.2 101.1 10.1
Depreciation 167.8 158.2 9.6 166.7 157.9 8.8 59.3 49.1 10.2
Amortization of Regulatory Assets, Net 47.7 0.9 46.8 15.9 46.6 (30.7) 44.8 31.7 13.1
Energy Efficiency Programs 65.1 67.8 (2.7) 139.4 125.4 14.0 19.7 18.2 1.5
Taxes Other Than Income Taxes 175.3 162.8 12.5 108.7 99.4 9.3 45.7 40.1 5.6
Total Operating Expenses 1,465.1 1,350.0 115.1 1,127.9 1,102.1 25.8 452.8 416.9 35.9
Operating Income 351.8 367.1 (15.3) 296.5 292.7 3.8 119.5 114.7 4.8
Interest Expense 81.6 76.7 4.9 69.5 64.0 5.5 28.4 29.1 (0.7)
Other Income, Net 14.8 10.4 4.4 38.7 25.4 13.3 8.4 6.8 1.6
Income Before Income Tax Expense 285.0 300.8 (15.8) 265.7 254.1 11.6 99.5 92.4 7.1
Income Tax Expense 71.0 64.8 6.2 60.9 56.2 4.7 20.2 21.2 (1.0)
Net Income $ 214.0 $ 236.0 $ (22.0) $ 204.8 $ 197.9 $ 6.9 $ 79.3 $ 71.2 $ 8.1


	For the Three Months Ended March 31,
	CL&P						NSTAR Electric						PSNH
(Millions of Dollars)	2022		2021		Increase/ (Decrease)		2022		2021		Increase/ (Decrease)		2022		2021		Increase/ (Decrease)
Operating Revenues	$	1,285.8	$	987.3	$	298.5	$	863.2	$	737.0	$	126.2	$	339.4	$	293.4	$	46.0
Operating Expenses:
Purchased Power and Transmission	523.5		373.3		150.2		313.7		226.5		87.2		125.8		91.6		34.2
Operations and Maintenance	157.1		175.4		(18.3)		164.9		143.2		21.7		59.6		54.7		4.9
Depreciation	87.3		83.4		3.9		89.0		82.8		6.2		31.3		29.5		1.8
Amortization of Regulatory Assets, Net	169.7		62.8		106.9		29.3		18.4		10.9		26.8		18.5		8.3
Energy Efficiency Programs	35.4		35.6		(0.2)		80.3		75.1		5.2		8.7		10.3		(1.6)
Taxes Other Than Income Taxes	90.3		91.4		(1.1)		59.8		54.6		5.2		22.8		22.2		0.6
Total Operating Expenses	1,063.3		821.9		241.4		737.0		600.6		136.4		275.0		226.8		48.2
Operating Income	222.5		165.4		57.1		126.2		136.4		(10.2)		64.4		66.6		(2.2)
Interest Expense	40.6		39.0		1.6		38.2		32.3		5.9		13.6		14.6		(1.0)
Other Income, Net	19.6		4.9		14.7		29.2		16.8		12.4		7.5		4.2		3.3
Income Before Income Tax Expense	201.5		131.3		70.2		117.2		120.9		(3.7)		58.3		56.2		2.1
Income Tax Expense	48.5		32.9		15.6		24.5		27.0		(2.5)		12.7		11.5		1.2
Net Income	$	153.0	$	98.4	$	54.6	$	92.7	$	93.9	$	(1.2)	$	45.6	$	44.7	$	0.9

Operating Revenues

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


		For the Six Months Ended June 30,						For the Three Months Ended March 31,
		2021	2020	Increase	Percentage Increase			2022	2021	Increase	Percentage Increase
CL&P	CL&P	9,952	9,520	432	4.5	%	CL&P	5,263	5,154	109	2.1	%
NSTAR Electric	NSTAR Electric	10,922	10,603	319	3.0	%	NSTAR Electric	5,710	5,578	132	2.4	%
PSNH	PSNH	3,804	3,695	109	2.9	%	PSNH	1,992	1,951	41	2.1	%

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 ~~$99.8~~$298.5 million at CL&P, ~~$29.6~~$126.2 million at NSTAR Electric, and ~~$40.7~~$46.0 million at PSNH, for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020.~~2021.

Base Distribution Revenues:

•CL&P's distribution revenues increased $5.7 million due primarily to the impact of its base distribution rate increase effective May 1, 2020, partially offset by the base distribution rate decrease implemented June 1, 2021. The decrease in the base distribution rate on June 1, 2021 was due primarily to the completion of the recovery of certain storm cost amortization and therefore the decrease in revenues did not impact earnings.$0.3 million.

•NSTAR Electric's distribution revenues increased ~~$25.3~~$6.2 million due primarily to the impact of its base distribution rate increase effective January 1, ~~2021.~~2022 resulting from its annual Performance Based Rate Adjustment filing.

•PSNH's distribution revenues increased ~~$15.1~~$3.2 million due primarily to the impact of its base distribution rate increase effective ~~January~~August 1, ~~2021.~~2021 to reflect plant additions in calendar year 2020 included in its revenue requirement.

Tracked Revenues: Tracked distribution revenues consist of certain costs that are recovered from customers in retail rates through regulatory commission-approved cost tracking mechanisms and therefore, recovery of these costs has no impact on earnings. ~~Tracked revenues~~Revenues from certain of these cost tracking mechanisms also include certain incentives earned, return ~~on rate base and~~ on capital tracking mechanisms, and carrying charges that are billed in rates to customers, which do impact earnings. Costs recovered through cost tracking mechanisms include, among others, energy supply procurement and other energy-related costs, retail transmission charges, energy efficiency program costs, electric restructuring and stranded cost recovery revenues (including securitized RRB charges), certain capital tracking mechanisms for infrastructure improvements, and additionally for NSTAR Electric, pension and PBOP benefits, ~~and~~ net metering for distributed ~~generation.~~generation, and solar-related programs. 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.

5650

Tracked revenues increased/(decreased) for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:


(Millions of Dollars)	(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	CL&P		NSTAR Electric		PSNH
Retail Tariff Tracked Revenues:	Retail Tariff Tracked Revenues:							Retail Tariff Tracked Revenues:
Energy supply procurement	Energy supply procurement	$	(16.1)	$	(61.7)	$	(23.1)	Energy supply procurement	$	104.8	$	16.3	$	43.9
Retail transmission	Retail transmission	9.1		40.2		29.9		Retail transmission	28.7		66.4		2.6
Other distribution tracking mechanisms	Other distribution tracking mechanisms	12.2		21.3		12.7		Other distribution tracking mechanisms	2.5		7.8		(14.2)
Wholesale Market Sales Revenue	Wholesale Market Sales Revenue	73.8		15.8		5.2		Wholesale Market Sales Revenue	170.2		33.5		12.7

The ~~decrease~~increase in energy supply procurement at CL&P and PSNH was driven primarily by ~~lower~~higher average prices ~~partially offset by~~and higher average supply-related sales volumes. The ~~decrease~~increase in energy supply procurement at NSTAR Electric was driven primarily by ~~both lower~~higher average prices, ~~and~~partially offset by lower average supply-related sales volumes. Fluctuations in retail transmission revenues are driven by the recovery of the costs of our wholesale transmission business, such as those billed by ISO-NE and Local and Regional Network Service charges. For further information, see "Purchased Power and Transmission Expense" below.

The increase in ~~the electric distribution~~ wholesale market sales revenue ~~at CL&P~~ was due primarily to higher average electricity market prices received for wholesale sales at CL&P, NSTAR Electric and PSNH for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020.~~2021. ISO-NE average ~~wholesale~~ market prices received for CL&P’s wholesale sales increased approximately 94117 percent ~~comparatively,~~for the three months ended March 31, 2022, as compared to the same period in 2021, driven primarily ~~driven~~ by ~~increased market demand as a result~~higher natural gas prices in New England.The increase was also due tohigher wholesale sales at CL&P resulting from the sale of ~~colder winter temperatures~~output generated by the Seabrook PPA beginning in ~~2021.~~ the first quarter of 2022. Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA and Seabrook PPA that CL&P entered into in 2019, as required by regulation. CL&P sells the energy purchased from Millstone and Seabrook into the wholesale market and uses the proceeds from the energy sales to offset the contract costs. The net sales or net cost amount is refunded to, or recovered from, customers in the FMCC rate.

The increase in wholesale market sales revenues at CL&P, NSTAR Electric and PSNH was also driven by higher proceeds from a one-year sale of transmission rights, effective June 2021, under CL&P’s, NSTAR Electric’s and PSNH’s Hydro-Quebec transmission support agreements. Proceeds from these sales are credited back to customers.

Transmission Revenues: Transmission revenues increased ~~$26.8~~$13.4 million at CL&P, ~~$26.0~~$13.8 million at NSTAR Electric, and ~~$12.8~~$7.4 million at PSNH for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to a higher transmission rate base as a result of our continued investment 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 in rates charged to their customers. The impact of eliminations decreased revenues by ~~$13.7~~$21.2 million at CL&P, ~~$24.7~~$18.9 million at NSTAR Electric and ~~$12.3~~$10.0 million at PSNH for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020.~~2021.

Purchased Power and Transmission expense includes costs associated with purchasing electricity on behalf of CL&P, NSTAR Electric and PSNH's ~~customers.~~customers and the cost of energy purchase contracts, as required by regulation. These energy supply and other energy-related costs are recovered from customers in rates through commission-approved cost tracking mechanisms, which have no impact on earnings (tracked costs). Purchased Power and Transmission expense ~~decreased~~increased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:


(Millions of Dollars)	(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	CL&P		NSTAR Electric		PSNH
Purchased Power Costs	Purchased Power Costs	$	(2.7)	$	(32.3)	$	(21.3)	Purchased Power Costs	$	141.3	$	39.6	$	40.1
Transmission Costs	Transmission Costs	6.7		39.9		29.0		Transmission Costs	29.8		66.5		4.1
Eliminations	Eliminations	(12.7)		(24.7)		(12.3)		Eliminations	(20.9)		(18.9)		(10.0)
Total Purchased Power and Transmission	Total Purchased Power and Transmission	$	(8.7)	$	(17.1)	$	(4.6)	Total Purchased Power and Transmission	$	150.2	$	87.2	$	34.2

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

•The ~~decrease~~increase at CL&P was due primarily to ~~lower~~higher expense related to the procurement of energy supply resulting from ~~lower~~higher average prices ~~partially offset by~~ and higher average supply-related volumes, and higher long-term contractual energy-related costs that are recovered in the ~~NBFMCC~~non-bypassable component of the FMCC mechanism.

•The ~~decrease~~increase at NSTAR Electric was due primarily to ~~lower~~ higher net metering costs and higher expense related to the procurement of energy supply resulting from ~~lower~~higher average prices, ~~and~~partially offset by lower average supply-related sales volumes.

•The ~~decrease~~increase at PSNH was due primarily to ~~lower~~higher expense related to the procurement of energy supply resulting from higher average prices and higher average supply-related sales volumes, partially offset by lower ~~average prices.~~stranded costs resulting from higher Regional Greenhouse Gas Initiative (RGGI) proceeds received, which are credited back to customers. The higher RGGI proceeds resulted from an increase in RGGI auction clearing prices for allowances in the three months ended March 31, 2022, as compared to the same period in 2021.

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 increase in transmission costs at CL&P and NSTAR Electric was due primarily t~~o an increase in Local Network Service charges, which reflects the cost of transmission service provided by Eversource over our local transmission network, and~~to an increase in costs billed by ISO-NE that support regional grid ~~investments. This was partially offset by a decrease in~~investments and an increase resulting from 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 at NSTAR Electric~~ This was ~~primarily the result of an increase in costs billed by ISO-NE,~~ partially offset by a decrease in Local Network Service charges, which reflect the ~~retail~~cost of transmission ~~cost deferral.~~service provided by Eversource over our local transmission network.

•The increase in transmission costs at PSNH was due primarily to ~~an increase in Local Network Service charges,~~ an increase in costs billed by ISO-NE ~~and an increase in~~that support regional grid investments, partially offset by a decrease resulting from the retail transmission cost ~~deferral.~~deferral and a decrease in Local Network Service charges.

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)/increased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:


(Millions of Dollars)	(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		(Millions of Dollars)	CL&P		NSTAR Electric		PSNH
Base Electric Distribution (Non-Tracked Costs):	Base Electric Distribution (Non-Tracked Costs):							Base Electric Distribution (Non-Tracked Costs):
CL&P assessment by PURA for Tropical Storm Isaias response		$	28.6	$	—	$	—
Employee-related expenses, including labor and benefits		5.7		13.6		0.8
Storm restoration costs		8.4		5.7		1.7
Operations-related expenses, including vegetation management, vehicles, and outside services		5.9		0.9		3.8
Shared corporate costs (including computer software depreciation at Eversource Service)		3.0		6.9		0.9
Absence in 2022 of CL&P charge for Tropical Storm Isaias response in 2021								Absence in 2022 of CL&P charge for Tropical Storm Isaias response in 2021	$	(30.0)	$	—	$	—
Funding of CL&P storm reserve as part of June 1, 2021 rate change (offset by lower Amortization expense)								Funding of CL&P storm reserve as part of June 1, 2021 rate change (offset by lower Amortization expense)	6.0		—		—
Storm costs								Storm costs	0.9		4.2		2.9
Operations-related expenses, including employee-related costs, vehicles, vegetation management and outside services								Operations-related expenses, including employee-related costs, vehicles, vegetation management and outside services	(5.1)		(2.7)		0.6
Other non-tracked operations and maintenance	Other non-tracked operations and maintenance	2.6		1.6		2.2		Other non-tracked operations and maintenance	3.4		7.8		0.9
Total Base Electric Distribution (Non-Tracked Costs)	Total Base Electric Distribution (Non-Tracked Costs)	54.2		28.7		9.4		Total Base Electric Distribution (Non-Tracked Costs)	(24.8)		9.3		4.4
Tracked Costs:	Tracked Costs:							Tracked Costs:
Transmission expenses	Transmission expenses	3.7		4.2		2.5		Transmission expenses	3.2		3.7		1.2
Other tracked operations and maintenance	Other tracked operations and maintenance	(0.3)		8.6		(1.8)		Other tracked operations and maintenance	3.3		8.7		(0.7)
Total Tracked Costs	Total Tracked Costs	3.4		12.8		0.7		Total Tracked Costs	6.5		12.4		0.5
Total Operations and Maintenance	Total Operations and Maintenance	$	57.6	$	41.5	$	10.1	Total Operations and Maintenance	$	(18.3)	$	21.7	$	4.9

Depreciation increased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, for CL&P, NSTAR Electric and PSNH due to higher net plant in service balances.

Amortization of Regulatory Assets, Net expense includes the deferral of energy supply, energy-related costs and other costs that are included in certain regulatory-approved cost tracking mechanisms. This deferral adjusts expense to match the corresponding revenues compared to the actual costs incurred. Energy supply and energy-related costs are recovered from customers in rates and have no impact on earnings. Amortization expense also includes the amortization of certain costs as those costs are collected in rates. Amortization of Regulatory Assets, Net ~~increased/decreased~~increased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The increase at CL&P was due primarily to the deferral adjustment of energy supply, energy-related and other tracked costs that are included in the non-bypassable component of the FMCC mechanism, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs. The increase was partially offset by a decrease in storm amortization expense related to the completion of the amortization period of certain storm cost deferred assets.

•The ~~decrease~~increase at NSTAR Electric was due to the deferral adjustment of energy supply, energy-related costs and other tracked costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

•The increase at PSNH was due to the deferral adjustment of energy-related and other tracked costs, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

Energy Efficiency Programs expense includes costs of various state energy policy initiatives and expanded energy efficiency programs that are recovered from customers in rates, most of which have no impact on earnings. Energy Efficiency Programs expense increased/decreased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The ~~decrease~~increase at ~~CL&P~~NSTAR Electric was due to the deferral adjustment, which reflects actual costs of energy efficiency programs compared to the estimated amounts billed to customers, and the timing of the recovery of energy efficiency costs.

•The ~~increases~~decrease at ~~NSTAR Electric and~~ PSNH ~~were~~was due to the deferral adjustment, which reflects actual costs of energy efficiency programs compared to the estimated amounts billed to customers, and the timing of the recovery of energy efficiency costs.

Taxes Other Than Income Taxes ~~increased~~increased/decreased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The ~~increase~~decrease at CL&P was related to lower gross earnings taxes partially offset by higher property taxes as a result of a higher utility plant ~~balance and higher gross earnings taxes.~~balance.

•The ~~increases~~increase at NSTAR Electric ~~and PSNH were~~was due to higher property taxes as a result of higher utility plant balances.

Interest Expense ~~increased at CL&P and NSTAR Electric and~~ increased/decreased ~~at PSNH~~ for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The increase at CL&P was due to ~~a decrease~~higher interest on long-term debt ($0.9 million) and higher interest expense on regulatory deferrals ($0.9 million), partially offset by an increase in AFUDC related to debt funds ($~~2.4 million), an increase in interest expense on regulatory deferrals ($1.7 million), and higher interest on long-term debt ($1.6~~0.2 million).

•The increase at NSTAR Electric was due to higher interest ~~on long-term debt ($3.4 million) and an increase in interest~~ expense on regulatory deferrals ($~~2.5~~3.3 million), higher interest on long-term debt ($1.6 million), and a decrease in AFUDC related to debt funds ($0.4 million).

•The decrease at PSNH was due to ~~a decrease in interest expense on regulatory deferrals~~lower amortization of debt discounts and premiums, net ($~~1.1~~0.8 million) and a decrease in RRB interest expense ($~~0.7 million), partially offset by a decrease in AFUDC related to debt funds ($0.9~~0.3 million).

Other Income, Net increased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The increase at CL&P was due primarily to an increase related to pension, SERP and PBOP non-service income components ($~~4.9~~13.2 million), ~~investment income in 2021 compared to investment losses in 2020 driven by market volatility ($2.8 million), and~~ an increase in interest income primarily on regulatory deferrals ($1.2 million), ~~partially offset by a decrease~~and an increase in AFUDC related to equity funds ($~~4.5~~1.1 million), partially offset by investment losses in 2022 compared to investment income in 2021 driven by market volatility ($0.8 million).

•The increase at NSTAR Electric was due primarily to an increase related to pension, SERP and PBOP non-service income components ($~~5.2~~10.9 million), and an increase in interest income primarily on regulatory deferrals ($~~4.2~~3.4 million), ~~investment income in 2021 compared to investment losses in 2020 driven~~partially offset by ~~market volatility ($2.1 million), and an increase~~a decrease in AFUDC related to equity funds ($~~2.1~~1.3 million) and investment losses in 2022 compared to investment income in 2021 driven by market volatility ($0.5 million).

•The increase at PSNH was due primarily to an increase related to pension, SERP and PBOP non-service income components ($~~1.9~~3.9 million), ~~higher~~partially offset by a decrease in interest income primarily on regulatory deferrals ($~~0.8~~0.4 million), and ~~investment income in 2021 compared to investment losses in 2020 driven by market volatility ($0.6 million), partially offset by~~ a decrease in AFUDC related to equity funds ($~~1.7~~0.2 million).

Income Tax Expense increased/decreased for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to the following:

•The increase at CL&P was due primarily to higher pre-tax earnings ($14.7 million) and higher state taxes ($~~6.1~~3.8 million), partially offset by an increase in amortization of EDIT ($0.5 million), the absence in 2022 of a valuation allowance increase in 2021 ($1.7 million), and a decrease in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($0.7 million).

•The decrease at NSTAR Electric was due primarily to a decrease in pre-tax earnings ($0.8 million), lower state taxes ($0.1 million), and an increase in amortization of EDIT ($3.3 million), partially offset by lower share-based payment excess tax benefits ($~~0.8 million), an increase in a valuation allowance ($1.7~~0.6 million) and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~0.9 million), partially offset by lower pre-tax earnings ($3.3~~1.1 million).

•The increase at ~~NSTAR Electric~~PSNH was due primarily to higher pre-tax earnings ($~~2.4~~0.4 million), higher state taxes ($~~0.5~~0.6 million), ~~an increase~~and a decrease in amortization of EDIT ($1.4 million), partially offset by a decrease in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($~~0.9 million), and lower share-based payment excess tax benefits ($0.9 million).~~

•The decrease at PSNH was due primarily to an increase in amortization of EDIT ($3.4 million) and lower state taxes ($0.4 million), partially offset by higher pre-tax earnings ($1.5 million), lower share-based payment excess tax benefits ($0.3 million), and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($1.01.2 million).

EARNINGS SUMMARY

CL&P's earnings ~~decreased $22.0~~increased $54.6 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to ~~an after-tax~~the absence in 2022 of the $30.0 million pre-tax charge ~~of $0.07 per share~~to earnings for the ~~accrual of an assessment~~storm performance penalty imposed by PURA ~~recorded in the first quarter of 2021~~ as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August ~~2020.~~2020 that was recorded in 2021. The after-tax impact of the storm performance penalty was $24.1 million. Earnings were also ~~unfavorably~~favorably impacted ~~by higher operations and maintenance expense, higher depreciation expense, higher property and other tax expense, and higher interest expense. The earnings decrease was partially offset~~ by higher earnings from its capital ~~tracker~~tracking mechanism due to increased electric system improvements, an increase in transmission earnings driven by a higher transmission rate base and ~~the base distribution rate~~lower pension plan expense. The earnings increase ~~effective May 1, 2020.~~was partially offset by higher operations and maintenance expense, higher depreciation, higher property tax expense and higher interest expense.

NSTAR Electric's earnings ~~increased $6.9~~decreased $1.2 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to thehigher operations and maintenance expense driven by higher storm costs, higher depreciation expense, and higher interest expense. The earnings decrease was partially offset by the base distribution rate increase effective January 1, ~~2021~~2022 and an increase in transmission earnings driven by a higher transmission rate base. The earnings increase was partially offset by higher operations and maintenance expense driven by higher employee-related expenses and higher storm restoration costs. Earnings were also unfavorably impacted by higher depreciation expense, higher property tax expense and higher interest expense.

PSNH's earnings increased ~~$8.1~~$0.9 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to the same period in ~~2020,~~2021, due primarily to ~~the base distribution rate increase effective January 1, 2021,~~ an increase in transmission earnings driven by a higher transmission rate base, the base distribution rate increase effective August 1, 2021, and lower pension plan expense. The earnings increase was partially offset by the ~~impact~~absence in ~~2021~~2022 of a favorable impact of a new tracker mechanism at PSNH approved as part of the 2020 rate settlement ~~agreement. The earnings increase~~agreement that was ~~partially offset by~~recorded in 2021, higher operations and maintenance expense driven primarily by higher ~~depreciation expense~~storm costs, and higher ~~property tax~~depreciation expense.

LIQUIDITY

Cash Flows: CL&P had cash flows provided by operating activities of ~~$224.0~~$135.3 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to ~~$282.9~~$156.2 million in the same period of ~~2020.~~2021. The decrease in operating cash flows was due primarily to an increase in regulatory under-recoveries driven by the timing of collections for regulatory tracking mechanisms and an increase of $23.9 million in cash payments for storm costs, customer credits being distributed to CL&P’s customers in the first quarter of 2022 as a result of the October 2021 settlement agreement and the 2021 storm performance penalty for its response to Tropical Storm Isaias, the timing of cash collections on our accounts receivable, and the timing of other working capital items. These unfavorable impacts were partially offset by the timing of cash payments made on our accounts payable, the absence in 2022 of pension contributions of $18.9 million made in 2021, and a $14.5 million increase in income tax refunds received in 2022, as compared to 2021.

NSTAR Electric had cash flows provided by operating activities of $189.9 million for the three months ended March 31, 2022, as compared to $172.6 million in the same period of 2021. The increase in operating cash flows was due primarily to the timing of cash collections on our accounts receivable, ~~cash payments made~~a $12.4 million increase in the first half of 2021 for storm restoration costs of approximately $49 million related to Tropical Storm Isaias, pension contributions of $37.9 million made in the first half of 2021, income tax payments of $5.9 million in the first half of 2021, as compared to income tax refunds received ~~of $26.4 million~~ in ~~the first half of 2020, and the timing of cash payments made on our accounts payable. These unfavorable impacts were partially offset by the timing of collections for regulatory tracking mechanisms~~2022, as compared to 2021, and the timing of other working capital ~~items, and an increase in non-cash adjustments to net income.~~

NSTAR Electric had cash flows provided by operating activities of $245.9 million for the six months ended June 30, 2021, as compared to $212.8 million in the same period of 2020. The increase in operating cash flows was due primarily to the timing of collections for regulatory tracking mechanisms, the timing of other working capital items, and an increase of $14.3 million in income tax refunds received in the first half of 2021, as compared to the same period in 2020.items. These favorable impacts were partially offset by the timing of cash payments made on our accounts payable, the timing of ~~cash~~ collections ~~on our accounts receivable,~~for regulatory tracking mechanisms, and $5.0 million of pension contributions ~~of $10.0 million~~ made in ~~the first half of 2021.~~2022.

PSNH had cash flows provided by operating activities of ~~$138.3~~$58.1 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, as compared to ~~$118.8~~$74.9 million in the same period of ~~2020.~~2021. The ~~increase~~decrease in operating cash flows was due primarily to the timing of cash collections on our accounts receivable, the timing of collections for regulatory tracking mechanisms, the timing of other working capital items, and ~~an increase~~a $6.5 million decrease in ~~non-cash adjustments~~income tax refunds received in 2022, as compared to ~~net income.~~2021. These ~~favorable~~unfavorable impacts were partially offset by the timing of cash payments made on our accounts ~~payable, and an increase of $7.4 million in income tax payments made in the first half of 2021.~~payable.

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 months ended June 30, 2021 and 2020 included in this combined Quarterly Report on Form 10-Q:

For the Three Months Ended June 30,
(Millions of Dollars) 2021 2020 Increase/(Decrease)
Operating Revenues $ 829.6 $ 817.4 $ 12.2
Operating Expenses:
Purchased Power and Transmission 308.1 315.4 (7.3)
Operations and Maintenance 152.4 134.6 17.8
Depreciation 84.4 79.7 4.7
Amortization of Regulatory Liabilities, Net (15.1) (5.7) (9.4)
Energy Efficiency Programs 29.5 32.3 (2.8)
Taxes Other Than Income Taxes 84.0 80.0 4.0
Total Operating Expenses 643.3 636.3 7.0
Operating Income 186.3 181.1 5.2
Interest Expense 42.6 38.7 3.9
Other Income, Net 9.9 8.5 1.4
Income Before Income Tax Expense 153.6 150.9 2.7
Income Tax Expense 38.0 33.6 4.4
Net Income $ 115.6 $ 117.3 $ (1.7)

~~Operating Revenues~~

~~Sales Volumes:~~ CL&P's retail electric GWh sales volumes were 4,797 and 4,579 for the three months ended June 30, 2021 and 2020, respectively, resulting in an increase of 4.8 percent. Fluctuations in retail electric sales volumes do not impact earnings due to its PURA-approved distribution revenue decoupling mechanism.

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

~~Base Distribution Revenues:~~ CL&P's distribution revenues decreased $3.0 million due primarily to the impact of a base distribution rate decrease implemented on June 1, 2021. The decrease in the base distribution rate was due primarily to the completion of the recovery of certain storm cost amortization and therefore the decrease in revenues did not impact earnings.

~~Tracked Revenues:~~ Tracked revenues increased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to an increase in wholesale market sales revenue ($28.8 million), due primarily to higher average electricity market prices for wholesale sales for the three months ended June 30, 2021, as compared to the same period in 2020. ISO-NE average wholesale market prices increased approximately 62 percent comparatively. Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA entered into in 2019, as required by regulation. This increase was partially offset by a decrease in energy supply procurement revenues ($18.5 million). The decrease in energy supply procurement was driven by lower average prices, partially offset by higher average supply-related sales volumes.

~~Transmission Revenues:~~ ~~Transmission revenues increased $12.3 million due primarily to a higher transmission rate base as a result of continued investment in our transmission infrastructure.~~

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

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


~~(Millions of Dollars)~~
~~Purchased Power Costs~~	$	~~(1.0)~~
~~Transmission Costs~~	~~3.9~~
~~Eliminations~~	~~(10.2)~~
~~Total Purchased Power and Transmission~~	$	~~(7.3)~~

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

~~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 three months ended June 30, 2021, as compared to the same period in 2020, due primarily to the following:


~~(Millions of Dollars)~~
~~Base Electric Distribution (Non-Tracked Costs):~~
~~Storm Restoration Costs~~	$	~~6.3~~
~~Operations-related expenses, including vegetation management, vehicles, and outside services~~	~~5.2~~
~~Employee-related expenses, including labor and benefits~~	~~2.5~~
~~Other non-tracked operations and maintenance~~	~~2.4~~
~~Total Base Electric Distribution (Non-Tracked Costs)~~	~~16.4~~
~~Total Tracked Costs~~	~~1.4~~
~~Total Operations and Maintenance~~	$	~~17.8~~

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

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

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

~~Taxes Other Than Income Taxes~~ increased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to higher gross earnings taxes and higher property taxes as a result of a higher utility plant balance.

~~Interest Expense~~ increased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to an increase in interest expense on regulatory deferrals ($2.3 million) and a decrease in AFUDC related to debt funds ($1.1 million).

~~Other Income, Net~~ increased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to an increase related to pension, SERP and PBOP non-service income components ($3.4 million) and an increase in interest income primarily on regulatory deferrals ($1.3 million), partially offset by a decrease in AFUDC related to equity funds ($2.2 million) and a decrease in investment income ($1.0 million).

~~Income Tax Expense~~ ~~increased for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to higher pre-tax earnings ($0.6 million) and higher state taxes ($3.8 million).~~

~~EARNINGS SUMMARY~~

~~CL&P's earnings decreased $1.7 million~~for the three months ended June 30, 2021, as compared to the same period in 2020, due primarily to higher operations and maintenance expense, higher depreciation expense, and higher property and other tax expense. The earnings decrease was partially offset by higher earnings from its capital tracker mechanism due to increased electric system improvements and an increase in transmission earnings driven by a higher transmission rate base.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

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

Other Risk Management Activities

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

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

Our regulated companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies. Our regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor contracting risks, including credit risk. As of ~~June 30, 2021,~~March 31, 2022, our regulated companies held collateral (letters of credit or cash) of ~~$20.5~~$92.7 million from counterparties related to our standard service contracts. As of ~~June 30, 2021,~~March 31, 2022, Eversource had $34.6 million of cash posted with ISO-NE related to energy transactions.

We have provided additional disclosures regarding interest rate risk management and credit risk management in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," in Eversource's ~~2020~~2021 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 ~~2020~~2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Management, on behalf of Eversource, CL&P, NSTAR Electric and PSNH, evaluated the design and operation of the disclosure controls and procedures as of ~~June 30, 2021~~March 31, 2022 to determine whether they are effective in ensuring that the disclosure of required information is made timely and in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the SEC. This evaluation was made under management's supervision and with management's participation, including the principal executive officer and principal financial officer as of the end of the period covered by this Quarterly Report on Form 10-Q. There are inherent limitations of disclosure controls and procedures, including the possibility of human error and the circumventing or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. The principal executive officer and principal financial officer have concluded, based on their review, that the disclosure controls and procedures of Eversource, CL&P, NSTAR Electric and PSNH are effective to ensure that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and regulations and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in internal controls over financial reporting for Eversource, CL&P, NSTAR Electric and PSNH during the quarter ended ~~June 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

6355

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are parties to various legal proceedings. We have disclosed certain legal proceedings in Part I, Item 3, "Legal Proceedings," and elsewhere in our ~~2020~~2021 Form 10-K. These disclosures are incorporated herein by reference. There have been no material legal proceedings identified and no material changes with regard to the legal proceedings previously disclosed in our ~~2020~~2021 Form 10-K.

ITEM 1A. RISK FACTORS

We are subject to a variety of significant risks in addition to the matters set forth under our forward-looking statements section in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report on Form 10-Q. We have identified a number of these risk factors in Part I, Item 1A, "Risk Factors," in our ~~2020~~2021 Form 10-K, which risk factors are incorporated herein by reference. These risk factors should be considered carefully in evaluating our risk profile. ~~The following risk factor should be read in conjunction~~

~~with the risk factors described in the 2020 Form 10-K.~~

~~Regulatory, Legislative and Compliance Risks:~~

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

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

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

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

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

In addition to the risk of disallowance of incurred costs, regulators may also impose downward adjustments in a company’s allowed ROE as well as assess penalties and fines. These actions would have an adverse effect on our financial position, results of operations and cash flows.

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

FERC's policy has encouraged competition for transmission projects, even within existing service territories of electric companies. Implementation of FERC's goals, including within our service territories, may expose us to competition for construction of transmission projects, additional regulatory considerations, and potential delay with respect to future transmission projects, which may adversely affect our results of operations and lower rate base growth.

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

~~Other than as set forth above, there~~ have been no additional risk factors identified and no material changes with regard to the risk factors previously disclosed in our ~~2020~~2021 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 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)
April 1 - April 30, 2021 — $ — — —
May 1 - May 31, 2021 121 85.23 — —
June 1 - June 30, 2021 2,445 80.41 — —
Total 2,566 $ 80.64 — —


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)
January 1 - January 31, 2022	—	$	—	—	—
February 1 - February 28, 2022	—	—		—	—
March 1 - March 31, 2022	2,244	88.99		—	—
Total	2,244	$	88.99	—	—

6556

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)
*	4.1	Sixteenth Supplemental Indenture between Eversource Energy and The Bank of New York Trust Company, N.A., as Trustee, dated as of February 1, 2022, relating to (i) $650 million aggregate principal amount of Senior Notes, Series V, Due 2027 and (ii) $650 million aggregate principal amount of Senior Notes, Series W, Due 2032 (Exhibit 4.1, Eversource Energy Current Report on Form 8-K filed February 25, 2022, File No. 001-05324)

	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	Supplemental Indenture (2021 Series A Bonds) between CL&P and Deutsche Bank Trust Company Americas, as Trustee, dated as of June 1, 2021 (Exhibit 4.1, CL&P Current Report on Form 8-K filed on July 2, 2021, File No. 000-00404)

	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	~~Form of 3.10% Debenture due 2051 (Exhibit 4, NSTAR Electric Company Current Report on Form 8-K filed on June 2, 2021, 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	Twenty-Fourth Supplemental Indenture establishing the terms of the Bonds, dated as of June 1, 2021, between the Company and U.S. Bank National Association, as Trustee, relating to $350 million of 2.20% First Mortgage Bonds, Series V, due 2031 (Exhibit 4.1, Public Service Company of New Hampshire Current Report on Form 8-K filed June 21, 2021, 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 (Eversource, CL&P, NSTAR Electric, 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, 2021,~~March 31, 2022, formatted in Inline XBRL

6757

SIGNATURE

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


	EVERSOURCE ENERGY

~~August~~May 6, ~~2021~~2022	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE


	THE CONNECTICUT LIGHT AND POWER COMPANY

~~August~~May 6, ~~2021~~2022	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE


	NSTAR ELECTRIC COMPANY

~~August~~May 6, ~~2021~~2022	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

SIGNATURE


	PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

~~August~~May 6, ~~2021~~2022	By:	/s/ Jay S. Buth
		Jay S. Buth
		Vice President, Controller and Chief Accounting Officer

6858


(Millions of Dollars)	Three Months Ended		Six Months Ended
Electric Distribution	$	60.3	$	155.3
Natural Gas Distribution	100.6		432.5
Electric Transmission	34.5		65.6
Water Distribution	(2.7)		(3.2)
Other	46.2		94.5
Eliminations	(69.5)		(123.2)
Total Operating Revenues	$	169.4	$	621.5