8-KOther Events

EVERSOURCE ENERGY 8-K Report, Corporate Update (Jul 15, 2010)

Filed July 15, 2010For Securities:ES

Summary

This Form 8-K filing from Eversource Energy (formerly Northeast Utilities) on July 15, 2010, reports on two key events impacting its subsidiary, The Connecticut Light and Power Company (CL&P). First, CL&P has filed a request for reconsideration with the Connecticut Department of Public Utility Control (DPUC) regarding a recent rate case decision. While the final decision approved a slight increase in revenue over the draft decision, it disallowed the establishment of an $8.2 million regulatory asset related to lost tax benefits from the Affordable Care Act. This disallowance led Northeast Utilities to take a $9.8 million after-tax charge in the second quarter of 2010. If CL&P's reconsideration request is successful, this charge could be reversed, resulting in a potential $9.8 million benefit to earnings. Second, CL&P and The United Illuminating Company (UI) have jointly filed an application with the DPUC seeking approval for UI to invest in and own portions of the New England East West Solution (NEEWS) transmission projects that CL&P is constructing. This collaboration highlights ongoing efforts in grid modernization and infrastructure development within the region, aiming to enhance the reliability and capacity of the electric transmission system.

Key Highlights

  • 1CL&P filed a request for reconsideration with the DPUC regarding its electric distribution rate case final decision.
  • 2The DPUC's final decision increased CL&P's approved distribution revenues slightly for 2010 and 2011 compared to the draft decision.
  • 3The final decision disallowed CL&P from establishing an $8.2 million regulatory asset related to lost tax deductibility of certain post-retirement benefits under the Affordable Care Act.
  • 4Northeast Utilities (NU) recorded a $9.8 million after-tax charge ($0.06 per share) in Q2 2010 due to this disallowed regulatory asset.
  • 5CL&P believes that if the reconsideration is successful, it could lead to a $9.8 million benefit to earnings by re-establishing the regulatory asset.
  • 6CL&P and UI filed a joint application with the DPUC for UI to invest in and own parts of CL&P's New England East West Solution (NEEWS) transmission projects.
  • 7The NEEWS projects are part of an effort to improve the region's electric transmission infrastructure.

Frequently Asked Questions

CL&P is requesting reconsideration because the DPUC disallowed the establishment of an $8.2 million regulatory asset. This asset related to the company's share of future tax benefits lost due to the Affordable Care Act eliminating the tax deductibility of certain post-retirement benefits other than pensions (PBOP).

As a result of the disallowed regulatory asset, Northeast Utilities (NU) recorded an after-tax charge of $9.8 million in the second quarter of 2010, which equated to $0.06 per share. This charge represents the portion of the deferred amount attributable to CL&P and Yankee Gas Service Company.

Yes, the $9.8 million charge could potentially be reversed. If the DPUC accepts CL&P's position in its request for reconsideration, both CL&P and Yankee Gas would likely re-establish these costs as regulatory assets, resulting in a $9.8 million benefit to earnings.

CL&P and The United Illuminating Company (UI) have filed a joint application with the DPUC seeking approval for UI to invest in and own certain components of the New England East West Solution (NEEWS) transmission projects, which are being constructed by CL&P.