Eversource Energy (ES) 10-K risk factor changes: FY2016 vs FY2015

In addition to the matters set forth under "Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995" included immediately prior to Item 1, [removed: _Business,_] [added: Business,] above, we are subject to a variety of significant risks.

We have instituted safeguards to protect our [removed: operational systems and] information technology [added: systems and] assets.

[added: The] FERC, through the North American Electric Reliability Corporation, requires certain safeguards to be implemented to deter cyber [removed: and/or physical] attacks.

These safeguards may not always be effective due to the evolving nature of cyber [removed: and/or physical] attacks.

Because our [removed: generation and] transmission [added: systems and generation] facilities are part of an interconnected regional grid, we face the risk of blackout due to [removed: a disruption] [added: grid disturbances or disruptions] on a neighboring interconnected system.

Any such [removed: cyber breaches,] acts of war or terrorism, physical attacks or grid disturbances could result in a significant decrease in revenues, significant expense to repair system [removed: damage or security breaches,] [added: damage, costs associated with governmental actions in response to such attacks,] and liability claims, [added: all of] which could have a material adverse impact on our financial position, results of operations [removed: or] [added: and] cash flows.

[removed: Strategic] [added: Strategic] development opportunities [removed: in both electric and natural gas transmission] may not be successful and projects may not commence operation as scheduled or be completed, which could have a material adverse effect on our business [removed: prospects.][added: prospects.]

We are pursuing broader strategic development investment opportunities that will benefit the New England region related to the construction of electric and natural gas transmission facilities, [added: off-shore wind electric generation facilities,] interconnections to generating resources and other investment opportunities.

The development, construction and expansion of electric transmission and [added: generation facilities and] natural gas transmission facilities involve numerous risks.

As a result of legislative and regulatory changes during 2015, the states in which we provide service have implemented new procedures to select for construction new major electric transmission and [added: natural] gas pipeline facilities.

If the projects in which we have invested are not selected for construction, it [removed: would] [added: could] have a material adverse effect on our future financial position, results of operations and cash flows.

[removed: The] [added: The] actions of regulators and legislators can significantly affect our earnings, liquidity and business [removed: activities.][added: activities.]

The rates that our electric and [added: natural] gas companies charge their customers are determined by their state regulatory commissions and by [added: the] FERC.

[added: 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.

Under state and federal law, our electric and [added: natural] gas companies are entitled to charge rates that are sufficient to allow them an opportunity to recover their reasonable operating and capital costs, to attract needed capital and maintain their financial integrity, while also protecting relevant public interests.

The FERC has jurisdiction over our transmission costs recovery and the allowed [removed: return on equity.][added: ROE.]

Certain outside parties have filed [removed: three] [added: four] complaints against all electric companies under the jurisdiction of ISO-NE alleging that the ROE is unjust and unreasonable.

[added: The] FERC also found that the formula rates generally lacked sufficient details to determine how costs are derived and recovered in rates.

There is no assurance that the commissions will approve the recovery of all costs incurred by our electric and [added: natural] gas companies, including costs for construction, operation and maintenance, as well as a reasonable return on their respective regulated assets.

[removed: Our] [added: Our] transmission, distribution and generation systems may not operate as expected, and could require unplanned expenditures, which could adversely affect our financial position, results of operations and cash [removed: flows.][added: flows.]

[removed: Severe] [added: Severe] storms could cause significant damage to any of our facilities requiring extensive expenditures, the recovery for which is subject to approval by [removed: regulators.][added: regulators.]

[removed: Our] [added: Our] goodwill is valued and recorded at an amount that, if impaired and written down, could adversely affect our future operating results and total [removed: capitalization.][added: capitalization.]

We have a significant amount of goodwill on our consolidated balance [removed: sheet.][added: sheet, which, as of December 31, 2016, totaled $3.5 billion.]

The annual goodwill impairment test in [removed: 2015] [added: 2016] resulted in a conclusion that our goodwill [removed: is] [added: was] not impaired.

[removed: Eversource] [added: Eversource] Energy and its utility subsidiaries are exposed to significant reputational risks, which make them vulnerable to increased regulatory oversight or other [removed: sanctions.][added: sanctions.]

Adverse publicity of this nature could harm the reputations of Eversource Energy and its subsidiaries; may make state legislatures, utility commissions and other regulatory authorities less likely to view [removed: Eversource Energy and its subsidiaries] [added: them] in a favorable light; and may cause [removed: Eversource Energy and its subsidiaries] [added: them] to be subject to less favorable legislative and regulatory outcomes or increased regulatory oversight.

The imposition of any of the foregoing could have a material adverse effect on the business, [added: financial position,] results of [removed: operations, cash flow] [added: operations] and [removed: financial condition] [added: cash flows] of Eversource Energy and each of its utility subsidiaries.

[removed: Limits] [added: Limits] on our access to and increases in the cost of capital may adversely impact our ability to execute our business [removed: plan.][added: plan.]

[removed: Our] [added: Our] counterparties may not meet their obligations to us or may elect to exercise their termination rights, which could adversely affect our [removed: earnings.][added: earnings.]

[removed: The] [added: The] unauthorized access to and the misappropriation of confidential and proprietary customer, employee, financial or system operating information could adversely affect our business operations and adversely impact our [removed: reputation.][added: reputation.]

We maintain limited privacy protection liability insurance to cover limited damages and defense costs arising from unauthorized disclosure of, or failure to protect, private [removed: information] [added: information,] as well as costs for notification to, or for credit card monitoring of, customers, employees and other persons in the event of a breach of private information.

While we have implemented measures designed to prevent [removed: cyber-attacks] [added: cyber attacks] and mitigate their effects should they [removed: occur.][added: occur, these measures may not be effective due to the continually evolving nature of efforts to access confidential information.]

[removed: The] [added: The] loss of key personnel or the inability to hire and retain qualified employees could have an adverse effect on our business, financial position and results of [removed: operations.][added: operations.]

[removed: Market] [added: Market] performance or changes in assumptions require us to make significant contributions to our pension and other postretirement benefit [removed: plans.][added: plans.]

[removed: Costs] [added: Costs] of compliance with [removed: environmental] regulations, including [added: environmental regulations and] climate change legislation, may increase and have an adverse effect on our business and results of [removed: operations.][added: operations.]

In addition, global climate change issues have received an increased focus from federal and state government [removed: agencies .][added: agencies.]

For further information, see Item 1, [removed: _Business_] [added: Business] - [removed: _Other] [added: Other] Regulatory and Environmental [removed: Matters_,] [added: Matters,] included in this Annual Report on Form 10-K.

[removed: As] [added: As] a holding company with no revenue-generating operations, Eversource parent's liquidity is dependent on dividends from its subsidiaries, its commercial paper program, and its ability to access the long-term debt and equity capital [removed: markets.][added: markets.]

Cyber attacks could severely impair operations, negatively impact our business, lead to the disclosure of confidential information and adversely affect our reputation.

A successful cyber attack on the information technology systems that control our transmission and distribution systems, generation facilities or other assets could impair or prevent us from managing these systems and facilities, operating our systems effectively, or properly managing our data, networks and programs.

The breach of certain information technology systems could adversely affect our ability to correctly record, process and report financial information.

A major cyber incident could result in significant expenses to investigate and to repair system damage or security breaches and could lead to litigation, fines, other remedial action, heightened regulatory scrutiny and damage to our reputation.

Any such cyber breaches could result in loss of service to customers and a significant decrease in revenues, which could have a material adverse impact on our financial position, results of operations or cash flows.

Acts of war or terrorism, both threatened and actual, or physical attacks could adversely affect our ability to operate our systems and could adversely affect our financial results and liquidity.

Acts of war or terrorism, both threatened and actual, or actual physical attacks that damage our transmission and distribution systems, generation facilities or other assets could negatively impact our ability to transmit, distribute or generate energy, or operate our systems efficiently or at all.

If our assets were physically damaged and were not recovered in a timely manner, it could result in a loss of service to customers and a significant decrease in revenues.

The fourth complaint period currently has not concluded.

We outsource certain business functions to third-party suppliers and service providers, and substandard performance by those third parties could harm our business, reputation and results of operations.

We outsource certain services to third parties in areas including information technology, transaction processing, human resources, payroll and payroll processing and other areas.

Outsourcing of services to third parties could expose us to substandard quality of service delivery or substandard deliverables, which may result in missed deadlines or other timeliness issues, non-compliance (including with applicable legal requirements and industry standards) or reputational harm, which could negatively impact our results of operations.

We also continue to pursue enhancements to standardize our systems and processes.

If any difficulties in the operation of these systems were to occur, they could adversely affect our results of operations, or adversely affect our ability to work with regulators, unions, customers or employees.

New technology, energy conservation measures and distributed generation could adversely affect our operations and financial results.

Advances in technology that reduce the costs of alternative methods of producing electric energy to a level that is competitive with that of current electric production methods, could result in loss of market share and customers, and may require us to make significant expenditures to remain competitive.

These changes in technology could also alter the channels through which electric customers buy or utilize energy, which could reduce our revenues or increase our expenses.

Customers' increased use of energy efficiency measures, distributed generation and energy storage technology could result in lower demand.

Reduced demand due to energy efficiency measures and the use of distributed generation, to the extent not substantially offset through ratemaking or decoupling mechanisms, could have a material adverse impact on our financial condition, results of operations and cash flows.

Risk Factors

Cyber breaches, acts of war or terrorism, or grid disturbances could negatively impact our business.

Cyber breaches, acts of war or terrorism, physical attacks or grid disturbances resulting from internal or external sources could target our transmission, distribution and generation facilities or our information technology systems.

Such actions could impair our ability to manage these facilities, operate our systems effectively, or properly manage our data, networks and programs, resulting in loss of service to customers.

If our settlement agreement regarding the divestiture of our generation assets in New Hampshire is not approved, it could have a material adverse effect on our earnings.

Under our settlement agreement for the divestiture of our generation assets in New Hampshire, we will be entitled to collect from customers an amount equal to the difference between the proceeds from the sale of these assets and the undepreciated book value of those assets.

Costs related to the divestiture would also be recoverable.

To minimize the financial impact on customers in New Hampshire, the legislature passed legislation that allows for the securitization of stranded costs to be recovered.

If the NHPUC does not approve the settlement, we may not be able to fully recover these costs in future rate proceedings, which could have a material adverse effect on our financial position, results of operations and cash flows.

Increases in electric and gas prices and/or a weak economy can lead to changes in legislative and regulatory policy promoting increased energy efficiency, conservation, and self-generation and/or a reduction in our customers' ability to pay their bills, which may adversely impact our business.

Energy consumption is significantly impacted by the general level of economic activity and cost of energy supply.

This focus on conservation, energy efficiency and self-generation may result in a decline in electricity and natural gas sales in our service territories.

Economic downturns or periods of high energy supply costs can also impact customers’ ability to pay their energy bills, resulting in increased bad debt expense.

If energy use were to decline or bad debt expense were to increase, without corresponding adjustments in rates at our electric and gas companies that do not currently have revenue decoupling, then our revenues would be reduced, which would have an adverse effect on our financial position, results of operations and cash flows.

As of December 31, 2015, goodwill totaled $3.5 billion.

These measures may not be effective due to the continually evolving nature of efforts to access confidential information.

[removed: Management's Discussion and Analysis of] Financial Condition and [removed: Results of Operations][added: Business Analysis]

[removed: EVERSOURCE] [added: EVERSOURCE] ENERGY AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

All [removed: per share] [added: per-share] amounts are reported on a diluted basis.

Refer to the Glossary of Terms included in this combined Annual Report on Form 10-K for abbreviations and acronyms used throughout this [removed: _Management's] [added: Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations_.][added: Operations.]

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 [removed: liabilities] [added: liabilities,] as a whole.

The discussion below also includes non-GAAP financial measures referencing our [removed: 2015, 2014] [added: 2015] and [removed: 2013] [added: 2014] earnings and EPS excluding certain integration costs incurred by Eversource parent and our Regulated companies.

We use these non-GAAP financial measures to evaluate and to provide details of earnings by business and to more fully compare and explain our [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] results without including the impact of these items.

Reconciliations of the [removed: above] non-GAAP financial measures to the most directly comparable GAAP measures of consolidated diluted EPS and Net Income Attributable to Common Shareholders are included under "Financial Condition and Business Analysis – Overview – Consolidated" and "Financial Condition and Business Analysis – Overview – Regulated Companies" in [removed: _Management's] [added: this Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations_,] [added: Operations,] herein.

[added: | • |] We earned [removed: $878.5] [added: $942.3] million, or [removed: $2.76] [added: $2.96] per share, in [removed: 2015,] [added: 2016,] compared with [removed: $819.5] [added: $878.5] million, or [removed: $2.58] [added: $2.76] per share, in [removed: 2014.][added: 2015. |]

Eversource [added: Parent and Other Companies: Excluding the impact of integration costs, Eversource] parent and other companies [removed: earned] [added: had earnings of] $9.5 [removed: million, or $0.03 per share,] [added: million] in 2015, compared with [added: earnings of] $11.5 [removed: million, or $0.04 per share,] [added: million] in 2014.

[removed: _Liquidity:_][added: Liquidity:]

[added: Consolidated:] Cash and cash equivalents totaled [removed: $23.9] [added: $30.3] million as of December 31, [removed: 2015,] [added: 2016,] compared with [removed: $38.7] [added: $23.9] million as of December 31, [removed: 2014.][added: 2015.]

In [removed: 2015,] [added: 2016,] we paid cash dividends [removed: on common shares] of [removed: $529.8] [added: $564.5] million, [added: or $1.78 per common share,] compared with [removed: $475.2 million] [added: $529.8 million, or $1.67 per common share] in [removed: 2014.][added: 2015.]

On February [removed: 3, 2016,] [added: 2, 2017,] our Board of Trustees approved a common share dividend [removed: payment] of [removed: $0.445] [added: $0.475] per share, payable on March 31, [removed: 2016] [added: 2017] to shareholders of record as of March 2, [removed: 2016.][added: 2017.]

The [removed: 2016] [added: 2017] dividend [removed: represented] [added: represents] an increase of [removed: 6.6] [added: 6.7] percent over the dividend paid in December [removed: 2015,] [added: 2016,] and is the equivalent to dividends on common shares of [removed: approximately $565] [added: $602.1] million on an annual basis.

[removed: These] [added: The] projections do not include [removed: capital] investments related to Access Northeast or [removed: Clean Energy Connect.][added: Bay State Wind.]

[removed: _Strategic,] [added: Strategic,] Legislative, Regulatory, Policy and Other [removed: Items:_][added: Items:]

[removed: These electric and natural gas energy efficiency and C&LM plans include] [added: The plan includes] the ability to earn performance incentives [added: related to these aggressive savings goals totaling approximately $20 million annually over the three-year period for NSTAR Electric, WMECO and NSTAR Gas,] as well as [removed: recover] [added: recovery of] LBR [added: estimated to be approximately $55 million annually] for NSTAR Electric until it is operating under a decoupled rate structure.

[removed: _Consolidated:_ A] [added: Consolidated: Below is a] summary of our earnings by business, which also reconciles the non-GAAP financial measures of [removed: consolidated non-GAAP earnings and EPS, as well as] EPS by [removed: business,] [added: business] to the most directly comparable GAAP measures of [removed: consolidated Net Income Attributable to Common Shareholders and] diluted EPS, [removed: is as follows:][added: for the years ended December 31, 2016, 2015 and 2014.]

| | [removed: | For] [added: For] the Years Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | [added: | | | | | |]

| | [added: 2016] | [removed: 2015] | | | | | | [removed: 2014] | [added: 2015] | | | | | [removed: 2013] | | | [added: 2014] | | [added: | | | | |]

| [removed: _(Millions] [added: (Millions] of Dollars, Except Per Share [removed: Amounts)_] [added: Amounts)] | [added: Amount] | [removed: Amount] | | | [removed: Per Share] [added: Per Share] | | | [removed: Amount] | [added: Amount] | | [removed: Per Share] | | [added: Per Share] | [removed: Amount] | | | [removed: Per Share] [added: Amount] | | [added: | | Per Share | | |]

| Net Income Attributable to Common Shareholders (GAAP) | [removed: |] $ | [removed: 878.5] [added: 942.3] | | [added: |] $ | [removed: 2.76] [added: 2.96] | | [added: |] $ | [removed: 819.5] [added: 878.5] | | [added: |] $ | [removed: 2.58] [added: 2.76] | | [added: |] $ | [removed: 786.0] [added: 819.5] | | [added: |] $ | [removed: 2.49] [added: 2.58] | [added: |]

| Regulated Companies | [removed: |] $ | [removed: 884.8] [added: 911.3] | | [added: |] $ | [removed: 2.78] [added: 2.86] | | [added: |] $ | [removed: 830.1] [added: 884.8] | | [added: |] $ | [removed: 2.61] [added: 2.78] | | [added: |] $ | [removed: 774.9] [added: 830.1] | | [added: |] $ | [removed: 2.45] [added: 2.61] | [added: |]

| Eversource Parent and Other Companies | [added: 31.0] | | [removed: 9.5] | | [added: 0.10] | [removed: 0.03] | | | [removed: 11.5] [added: 9.5] | | | [removed: 0.04] | [added: 0.03] | | [removed: 24.9] | | [added: 11.5] | [removed: 0.08] | [added: | | 0.04 | | |]

| Non-GAAP Earnings | [added: N/A] | | [removed: 894.3] | | [added: N/A] | [removed: 2.81] | | | [removed: 841.6] [added: 894.3] | | | [removed: 2.65] | [added: 2.81] | | [removed: 799.8] | | [added: 841.6] | [removed: 2.53] | [added: | | 2.65 | | |]

| Integration Costs (after-tax) [added: (1)] | [added: —] | | [removed: (15.8)] | | [added: —] | [removed: (0.05)] | | | [removed: (22.1)] [added: (15.8] | | [added: )] | [removed: (0.07)] | [added: (0.05] | | [removed: (13.8)] [added: )] | | [added: (22.1] | [removed: (0.04)] | [added: ) | | (0.07 | | ) |]

[added: (1)] The 2015 and 2014 integration costs [removed: are] [added: were] associated with our branding efforts and severance costs.

[removed: _Regulated Companies:_] [added: Regulated Companies:] Our Regulated companies consist of the electric distribution, electric transmission, and natural gas distribution segments.

| Electric Distribution | [removed: |] $ | [removed: 507.9] [added: 462.8] | | [added: |] $ | [removed: 1.59] [added: 1.46] | | [added: |] $ | [removed: 462.4] [added: 507.9] | | [added: |] $ | [removed: 1.45] [added: 1.59] | | [added: |] $ | [removed: 427.0] [added: 462.4] | | [added: |] $ | [removed: 1.35] [added: 1.45] | [added: |]

| Electric Transmission | [added: 370.8] | | [removed: 304.5] | | [added: 1.16] | [removed: 0.96] | | | [removed: 295.4] [added: 304.5] | | | [removed: 0.93] | [added: 0.96] | | [removed: 287.0] | | [added: 295.4] | [removed: 0.91] | [added: | | 0.93 | | |]

| Natural Gas Distribution | [added: 77.7] | | [removed: 72.4] | | [added: 0.24] | [removed: 0.23] | | | [removed: 72.3] [added: 72.4] | | | [added: |] 0.23 | | | [removed: 60.9] | [added: 72.3] | | [removed: 0.19] | [added: | 0.23 | | |]

| Non-GAAP Earnings | [added: N/A] | | [removed: 884.8] | | [added: N/A] | [removed: 2.78] | | | [removed: 830.1] [added: 884.8] | | | [removed: 2.61] | [added: 2.78] | | [removed: 774.9] | | [added: 830.1] | [removed: 2.45] | [added: | | 2.61 | | |]

| Integration Costs (after-tax) [added: (1)] | [added: —] | | [removed: (0.8)] | | [added: —] | [removed: \-] | | | [removed: \-] [added: (0.8] | | [added: )] | [removed: \-] | [added: —] | | [removed: \-] | | [added: —] | [removed: \-] | [added: | | — | | |]

| Net Income - Regulated Companies | [removed: |] $ | [removed: 884.0] [added: 911.3] | | [added: |] $ | [removed: 2.78] [added: 2.86] | | [added: |] $ | [removed: 830.1] [added: 884.0] | | [added: |] $ | [removed: 2.61] [added: 2.78] | | [added: |] $ | [removed: 774.9] [added: 830.1] | | [added: |] $ | [removed: 2.45] [added: 2.61] | [added: |]

[added: (1)] The 2015 Regulated companies' integration costs include severance in connection with cost saving initiatives.

[added: Regulated Companies:] Excluding integration costs, our electric distribution segment earnings increased $45.5 million in 2015, as compared to 2014, due primarily to the impact of the December 1, 2014 CL&P base distribution rate increase, the $27.5 million favorable earnings impact related to the resolution of NSTAR [removed: Electric’s] [added: Electric's] basic service bad debt adder and the settlement with the Massachusetts Attorney General on eleven open dockets covering the CPSL program filings and the recovery of LBR related to 2009 through 2011 energy efficiency programs at NSTAR Electric, an increase in the recovery of LBR at NSTAR Electric related to 2015 energy efficiency programs, and higher retail sales volumes at NSTAR Electric and PSNH.

[removed: _Eversource] [added: Eversource] Parent and Other [removed: Companies:_ Excluding the impact of integration costs,] [added: Companies:] Eversource parent and other companies had earnings of [removed: $9.5] [added: $31.0] million in [removed: 2015,] [added: 2016,] compared with [removed: earnings] [added: a net loss] of [removed: $11.5] [added: $5.5] million in [removed: 2014.][added: 2015.]

[removed: _Electric] [added: Electric] and Natural Gas Sales [removed: Volumes:_] [added: Volumes:] Weather, fluctuations in energy supply costs, conservation measures (including utility-sponsored energy efficiency programs), and economic conditions affect customer energy usage.

In our service territories, weather impacts electric 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 [removed: are] electric sales volumes.

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| • | Our electric distribution segment, which includes generation results, earned $462.8 million, or $1.46 per share, in 2016, compared with $507.1 million, or $1.59 per share, in 2015. Our electric transmission segment earned $370.8 million, or $1.16 per share, in 2016, compared with $304.5 million, or $0.96 per share, in 2015. Our natural gas distribution segment earned $77.7 million, or $0.24 per share, in 2016, compared with $72.4 million, or $0.23 per share, in 2015. |

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| • | Eversource parent and other companies earned $31.0 million, or $0.10 per share, in 2016, compared with a net loss of $5.5 million, or $0.02 per share, in 2015. |

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| • | Cash flows provided by operating activities totaled $2.2 billion in 2016, compared with $1.4 billion in 2015. Investments in property, plant and equipment totaled $2.0 billion in 2016 and $1.7 billion in 2015. Cash and cash equivalents totaled $30.3 million as of December 31, 2016, compared with $23.9 million as of December 31, 2015. |

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| • | In 2016, we issued $800 million of new long-term debt consisting of $500 million by Eversource parent, $250 million by NSTAR Electric, and $50 million by WMECO. In 2016, NSTAR Electric repaid at maturity, $200 million of existing long-term debt. |

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| • | In 2016, we paid cash dividends on common shares of $564.5 million, compared with $529.8 million in 2015. On February 2, 2017, our Board of Trustees approved a common share dividend of $0.475 per share, payable on March 31, 2017 to shareholders of record as of March 2, 2017. The 2017 dividend represents an increase of 6.7 percent over the dividend paid in December 2016, and is the equivalent to dividends on common shares of $602.1 million on an annual basis. |

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| • | We project to make capital expenditures of approximately $9.6 billion from 2017 through 2020, of which we expect approximately $5.3 billion to be in our electric and natural gas distribution segments and approximately $3.9 billion to be in our electric transmission segment. We also project to invest approximately $0.4 billion in information technology and facilities upgrades and enhancements. These projections do not include any expected investments related to either Access Northeast or Bay State Wind. |

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| • | On October 14, 2016, the NHPUC granted NPT public utility status, conditional on final project permitting. On January 31, 2017, the New Hampshire Supreme Court upheld a lower court's ruling that NPT has the right to install underground transmission lines under existing public highway easements in New Hampshire with approval of the New Hampshire Department of Transportation. |

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| • | Bay State Wind is a proposed off-shore wind project being jointly developed by Eversource and Denmark-based DONG Energy. Bay State Wind will be located in a 300-square-mile area approximately 15 to 25 miles south of Martha's Vineyard that has the ultimate potential to generate at least 2,000 MW of wind power energy. |

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| • | On August 8, 2016, Massachusetts legislation was enacted that requires EDCs to jointly solicit RFPs and enter into long-term contracts for offshore wind and clean energy, such as hydropower, land-based wind or solar, provided that reasonable proposals have been received. The RFP for clean energy, such as hydropower, is due to be released by April 1, 2017. The initial RFP for no less than 400 MW of off-shore wind is due to be released by June 30, 2017. Northern Pass and Bay State Wind, respectively, will be bid into these RFPs. |

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| • | Eversource, Spectra and National Grid are currently evaluating a series of options surrounding the Access Northeast project as a result of recent state regulatory and judicial decisions in New England regarding EDCs entering into long-term natural gas capacity contracts. These options include state infrastructure legislation changes and LDC contracts in order to help bring needed additional natural gas pipeline and storage capacity to New England. As a result, the final design, cost, and in-service date of Access Northeast will continue to be refined. |

Also included in the summary for the years ended December 31, 2015 and 2014, is a reconciliation of the non-GAAP financial measure of consolidated non-GAAP earnings to the most directly comparable GAAP measure of consolidated Net Income Attributable to Common Shareholders.

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| Net Income Attributable to Common Shareholders (GAAP) | $ | 942.3 | | | $ | 2.96 | | | $ | 878.5 | | | $ | 2.76 | | | $ | 819.5 | | | $ | 2.58 | |

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On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy.

CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy.

Financial Condition and Business Analysis

_Results:_

Excluding integration costs, we earned $894.3 million, or $2.81 per share, in 2015 and $841.6 million, or $2.65 per share, in 2014.

Our electric distribution segment, which includes generation, earned $507.9 million, or $1.59 per share, in 2015, compared with $462.4 million, or $1.45 per share, in 2014.

Our electric transmission segment earned $304.5 million, or $0.96 per share, in 2015, compared with $295.4 million, or $0.93 per share, in 2014.

Our natural gas distribution segment earned $72.4 million, or $0.23 per share, in 2015, compared with $72.3 million, or $0.23 per share, in 2014.

The 2015 electric and natural gas distribution results exclude $0.8 million of after-tax integration costs.

The 2015 and 2014 results exclude $15 million, or $0.05 per share, and $22.1 million, or $0.07 per share, respectively, of after-tax integration costs.

Investments in property, plant and equipment totaled $1.7 billion in 2015 and $1.6 billion in 2014.

In 2015, we issued approximately $1.23 billion of new long-term debt consisting of $450 million by Eversource parent, $350 million by CL&P, $250 million by NSTAR Electric, $100 million by NSTAR Gas, and $75 million by Yankee Gas.

In 2015, we repaid $212 million of existing long-term debt consisting of $162 million by CL&P and $50 million by WMECO.

We project to make capital expenditures of approximately $9.2 billion from 2016 through 2019.

Of the $9.2 billion, we expect to invest approximately $4.9 billion in our electric and natural gas distribution segments and $3.9 billion in our electric transmission segment.

In addition, we project to invest approximately $0.4 billion in information technology and facilities upgrades and enhancements.

On December 18, 2015, the New Hampshire Site Evaluation Committee (NH SEC) accepted NPT’s application as complete allowing the formal siting process to move forward.

The project is expected to be operational in the first half of 2019.

On January 28, 2016, NPT bid into the three-state Clean Energy RFP process.

The Clean Energy Connect Project is a planned transmission, wind and hydro generation project that we plan to co-develop with experienced renewable generation companies.

On January 28, 2016, the Clean Energy Connect project was bid into the three-state Clean Energy RFP process.

Our investment, should the Clean Energy Connect Project be selected in the RFP process, is currently estimated to be at least $400 million and will consist of the Massachusetts portion of a new 25-mile, 345 kV transmission line with a 600 MW capacity.

On January 28, 2016, the DPU approved NSTAR Electric’s, WMECO’s, and NSTAR Gas’ three-year electric and natural gas energy efficiency plan, which was jointly developed with other Massachusetts electric distribution companies (EDCs) and natural gas distribution companies.

On December 31, 2015, DEEP approved CL&P’s and Yankee Gas’ three-year electric and natural gas C&LM plan, which was jointly developed with other Connecticut EDCs and natural gas distribution companies.

On January 7, 2015, the DPU issued an order concluding that NSTAR Electric had removed energy-related bad debt costs from base distribution rates effective January 1, 2006.

As a result of the DPU order, in the first quarter of 2015 NSTAR Electric increased its regulatory assets and reduced its operations and maintenance expense by $24.2 million for energy-related bad debt costs through 2014, resulting in after-tax earnings of $14.5 million.

NSTAR Electric filed for recovery of the energy-related bad debt costs regulatory asset from customers and on November 20, 2015, the DPU approved NSTAR Electric’s proposed rate increase to recover these costs over a 12-month period, beginning January 1, 2016.

| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Residential | 9,882 | | 9,798 | | 0.9% |

| Commercial | 16,486 | | 16,340 | | 0.9% |

| Industrial | 2,614 | | 2,673 | | (2.2)% |

| Residential | 11,559 | | 11,519 | | 0.3% |

| Commercial | 11,112 | | 11,109 | | \- % |

| Industrial | 2,963 | | 3,003 | | (1.3)% |

| | Sales Volumes (million cubic feet) | | | | Percentage |

| Residential | 38,455 | | 38,969 | | (1.3)% |

| Commercial | 43,006 | | 42,977 | | 0.1 % |

[removed: Market] [added: Market] Risk [removed: Information][added: Information]

[removed: _Commodity] [added: Commodity] Price Risk [removed: Management:_] [added: 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.

[removed: Other] [added: Other] Risk Management [removed: Activities][added: Activities]

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

As of December 31, [removed: 2015,] [added: 2016,] approximately [removed: 95] [added: 97] percent of our long-term debt, including fees and interest due for CYAPC's spent nuclear fuel disposal costs, was at a fixed interest rate.

Assuming a one percentage point increase in our variable interest rates, annual interest expense would have increased by a pre-tax amount of [removed: $4.7] [added: $2.7] million.

[removed: _Credit] [added: Credit] Risk [removed: Management:_] [added: 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.

As of December 31, [removed: 2015,] [added: 2016,] our Regulated companies did not hold collateral (letters of credit) from counterparties related to our standard service contracts.

As of December 31, [removed: 2015,] [added: 2016,] Eversource had [removed: $17.1] [added: $21.7] million of cash posted with ISO-NE related to energy [removed: purchase] transactions.

Quantitative and Qualitative Disclosures about Market Risk

We are engaged primarily in the energy delivery business through the following [removed: wholly owned] [added: wholly-owned] utility subsidiaries:

[added: | • |] The Connecticut Light and Power Company (CL&P), a regulated electric utility that serves residential, commercial and industrial customers in parts of Connecticut; [added: |]

[added: | • |] NSTAR Electric Company (NSTAR Electric), a regulated electric utility that serves residential, commercial and industrial customers in parts of eastern Massachusetts; [added: |]

[added: | • |] Public Service Company of New Hampshire (PSNH), a regulated electric utility that serves residential, commercial and industrial customers in parts of New Hampshire and owns generation assets used to serve customers; [added: |]

[added: | • |] Western Massachusetts Electric Company (WMECO), a regulated electric utility that serves residential, commercial and industrial customers in parts of western Massachusetts and owns solar generating assets; [added: |]

[added: | • |] NSTAR Gas Company (NSTAR Gas), a regulated natural gas utility that serves residential, commercial and industrial customers in parts of Massachusetts; and [added: |]

[added: | • |] Yankee Gas Services Company (Yankee Gas), a regulated natural gas utility that serves residential, commercial and industrial customers in parts of Connecticut. [added: |]

[removed: CL&P,] [added: Proposed Merger of] NSTAR [removed: Electric, PSNH] [added: Electric] and [added: WMECO]

Eversource Energy's electric distribution segment includes the generation [removed: businesses] [added: results] of PSNH and WMECO.

These three segments represented substantially all of Eversource Energy's total consolidated revenues for the years ended December 31, [added: 2016,] 2015 and 2014.

[removed: ELECTRIC] [added: ELECTRIC] DISTRIBUTION [removed: SEGMENT][added: SEGMENT]

[removed: General][added: General]

Eversource Energy's electric distribution segment consists of the distribution businesses of CL&P, NSTAR Electric, PSNH and WMECO, which are engaged in the distribution of electricity to retail customers in Connecticut, eastern Massachusetts, New Hampshire and western Massachusetts, respectively, plus the regulated electric generation [removed: businesses] [added: assets] of PSNH and WMECO.

The following table shows the sources of [removed: 2015] [added: 2016] electric franchise retail revenues for Eversource Energy's electric distribution companies, collectively, based on categories of customers:

| [removed: _(Thousands] [added: (Thousands] of Dollars, except [removed: percentages)_] [added: percentages)] | [added: 2016] | [removed: 2015] | | [removed: %] [added: | %] of [removed: Total] [added: Total] | [added: |]

| Total Retail Electric Revenues | $ | [removed: 6,562,600] [added: 6,381,337] | | [removed: 100%] | [added: 100 | % |]

A summary of our distribution companies' retail electric GWh sales volumes and percentage changes for [removed: 2015,] [added: 2016,] as compared to [removed: 2014,] [added: 2015,] is as follows:

| | [removed: 2015] [added: 2016] | | [removed: 2014] | [added: 2015] | [removed: Percentage Change] | [added: | Percentage Change | |]

For CL&P [removed: (effective December 1, 2014)] and WMECO, fluctuations in retail electric sales volumes do not impact earnings due to their respective regulatory commission approved [added: distribution] revenue decoupling mechanisms.

CL&P and WMECO reconcile their annual base distribution rate recovery amounts to their respective pre-established levels of baseline distribution delivery service [removed: revenues.][added: revenues of $1.059 billion and $132.4 million, respectively.]

Any difference between the allowed level of distribution revenue [added: for CL&P] and [added: WMECO and] the actual amount [removed: incurred] [added: delivered] during a 12-month period is adjusted through rates in the following period.

[removed: ELECTRIC] [added: ELECTRIC] DISTRIBUTION – [removed: CONNECTICUT][added: CONNECTICUT]

[removed: THE] [added: THE] CONNECTICUT LIGHT AND POWER [removed: COMPANY][added: COMPANY]

As of December 31, [removed: 2015,] [added: 2016,] CL&P furnished retail franchise electric service to approximately 1.2 million customers in 149 cities and towns in Connecticut, covering an area of 4,400 square miles.

The following table shows the sources of CL&P's [removed: 2015] [added: 2016] electric franchise retail revenues based on categories of customers:

| [removed: _(Thousands] [added: (Thousands] of Dollars, except [removed: percentages)_] [added: percentages)] | [added: 2016] | [removed: 2015] | | | [removed: %] [added: %] of [removed: Total] [added: Total] | [added: |]

| Total Retail Electric Revenues | $ | [removed: 2,674,506] [added: 2,649,544] | | | [removed: 100%] [added: 100] | [added: % |]

A summary of CL&P's retail electric GWh sales volumes and percentage changes for [removed: 2015,] [added: 2016,] as compared to [removed: 2014,] [added: 2015,] is as follows:

[removed: Rates][added: Rates]

CL&P's retail rates include a delivery service component, which includes distribution, transmission, conservation, [removed: renewables, CTA, SBC] [added: renewable energy programs] and other charges that are assessed on all customers.

For those customers who do not choose a competitive energy supplier, under SS rates for customers with less than 500 kilowatts of demand, and LRS rates for customers with 500 kilowatts or more of demand, CL&P purchases power under standard offer contracts and passes the cost of the [added: purchased] power to customers through a combined [removed: GSC and FMCC] charge on customers' bills.

CL&P continues to supply approximately [removed: 40] [added: 42] percent of its customer load at SS or LRS rates while the other [removed: 60] [added: 58] percent of its customer load has migrated to competitive energy suppliers.

[removed: An electric generation services] [added: | • | A default energy service] charge [removed: (GSC),] which recovers energy-related costs incurred as a result of providing electric generation service supply to all customers that have not migrated to competitive energy suppliers. [added: These charges recover the costs of PSNH's generation, as well as purchased power, and include an allowed ROE of 9.81 percent. |]

[added: | • | An electric GSC, which recovers energy-related costs incurred as a result of providing electric generation service supply to all customers that have not migrated to competitive energy suppliers.] The GSC is adjusted periodically and reconciled semi-annually in accordance with the policies and procedures of the PURA, with any differences refunded to, or recovered from, customers. [added: |]

[added: | • |] A revenue decoupling adjustment (effective December 1, 2014) that reconciles the amounts recovered from customers, on an annual basis, to the distribution revenue requirement approved by the PURA in its last rate case, which currently is an annual amount of $1.059 billion. [added: |]

[added: | • |] A distribution charge, which includes a fixed customer charge and a demand and/or energy charge to collect the costs of building and expanding the infrastructure to deliver [removed: power] [added: electricity] to customers, as well as ongoing operating costs to maintain the infrastructure. [added: |]

[removed: A federally-mandated congestion charge (FMCC),] [added: | • | An FMCC,] which recovers any costs imposed by the FERC as part of the New England Standard Market Design, including locational marginal pricing, locational installed capacity payments, and any costs approved by the PURA to reduce these charges. [added: The FMCC also recovers costs associated with CL&P's system resiliency program. The FMCC is adjusted periodically and reconciled semi-annually in accordance with the policies and procedures of the PURA, with any differences refunded to, or recovered from, customers. |]

[added: | • |] A transmission charge that recovers the cost of transporting electricity over [removed: high voltage] [added: high-voltage] lines from generating plants to substations, including costs allocated by ISO-NE to maintain the wholesale electric market. [added: |]

[added: | • |] A [removed: competitive transition assessment charge (CTA),] [added: CTA charge,] assessed to recover stranded costs associated with electric industry restructuring such as various IPP contracts. [added: The CTA is reconciled annually to actual costs incurred and reviewed by the PURA, with any difference refunded to, or recovered from, customers. |]

[removed: A systems benefits charge (SBC),] [added: | • | An SBC,] established to fund expenses associated [removed: with:] [added: with] various hardship and low income [removed: programs;] [added: programs and] a program [removed: to compensate] [added: that compensates] municipalities for [removed: losses in] [added: lost] property tax [removed: revenue] [added: revenues] due to [removed: decreases in the value] [added: decreased values] of [removed: electric] generating facilities [removed: resulting directly from] [added: caused by] electric industry restructuring. [added: The SBC is reconciled annually to actual costs incurred and reviewed by the PURA, with any difference refunded to, or recovered from, customers. |]

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

| | |

| --- | --- |

CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy in their respective service territories.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| Residential | $ | 3,448,043 | | | 54 | % |

| Commercial | 2,465,664 | | | | 39 | % |

| Industrial | 328,103 | | | | 5 | % |

| Other | 139,527 | | | | 2 | % |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Residential | 21,002 | | | 21,441 | | | (2.0 | )% |

| Commercial | 27,206 | | | 27,598 | | | (1.4 | )% |

| Industrial | 5,434 | | | 5,577 | | | (2.6 | )% |

| Total | 53,642 | | | 54,616 | | | (1.8 | )% |

For 2016, retail electric sales volumes at our electric utilities with a traditional rate structure (NSTAR Electric and PSNH) were lower, as compared to 2015, due primarily to the impact of increased customer energy conservation efforts, including those resulting from company-sponsored energy efficiency programs.

Fluctuations in retail electric sales volumes at NSTAR Electric and PSNH impact earnings as they operate under a traditional rate structure, where sales volume, impacted by weather, has a direct impact on revenue recognized.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| | CL&P | | | | | |

| Residential | $ | 1,603,351 | | | 61 | |

| Commercial | 858,965 | | | | 32 | |

| Industrial | 139,556 | | | | 5 | |

| Other | 47,672 | | | | 2 | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

Business

On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy.

WMECO are each doing business as Eversource Energy.

| | | | | |

| --- | --- | --- | --- | --- |

| Residential | $ | 3,608,155 | | 55 |

| Commercial | | 2,476,686 | | 38 |

| Industrial | | 326,564 | | 5 |

| Other | | 151,195 | | 2 |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Residential | 21,441 | | 21,317 | | 0.6 % |

| Commercial | 27,598 | | 27,449 | | 0.5 % |

| Industrial | 5,577 | | 5,676 | | (1.7)% |

| Total | 54,616 | | 54,442 | | 0.3 % |

Our 2015 consolidated retail electric sales volumes were slightly higher, as compared to 2014, due primarily to the impact of colder winter weather experienced in the first quarter of 2015 and warmer weather in the third quarter of 2015, partially offset by milder winter weather in the fourth quarter of 2015 throughout our service territories as well as an increase in customer conservation efforts, including the impact of energy efficiency programs sponsored by CL&P, NSTAR Electric, PSNH and WMECO.

Fluctuations in retail electric sales volumes at NSTAR Electric and PSNH impact earnings.

| | CL&P | | | | |

| Residential | $ | 1,641,165 | | | 61 |

| Commercial | | 841,093 | | | 31 |

| Industrial | | 129,544 | | | 5 |

| Other | | 62,704 | | | 3 |

| Residential | 10,094 | | 10,026 | | 0.7 % |

| Commercial | 9,635 | | 9,643 | | (0.1)% |

| Industrial | 2,342 | | 2,377 | | (1.5)% |

| Total | 22,071 | | 22,046 | | 0.1 % |

The FMCC also recovers costs associated with CL&P's system resiliency program.

The FMCC is adjusted periodically and reconciled semi-annually in accordance with the policies and procedures of the PURA, with any differences refunded to, or recovered from, customers.

The CTA is reconciled annually to actual costs incurred and reviewed by the PURA, with any difference refunded to, or recovered from, customers.

The SBC is reconciled annually to actual costs incurred and reviewed by the PURA, with any difference refunded to, or recovered from, customers.

A Clean Energy Fund charge, which is used to promote investment in renewable energy sources.

The Clean Energy Fund charge is set by statute and is currently 0.1 cent per kWh.

The capacity CfDs obligate both CL&P and UI to make or receive payments on a monthly basis to or from the project and generation owners based on the difference between a contractually set capacity price and the capacity market prices that the project and generation owners receive in the ISO-NE capacity markets.

Three CfDs (totaling approximately 500 MW of peaking capacity) with three peaking generation units.

Both of these projects are expected to be operational by the end of 2016.

Also in December 2014, the PURA granted a re-opener request to CL&P’s base distribution rate application for further review of the appropriate balance of ADIT utilized in the calculation of rate base.

On July 2, 2015, the PURA issued a final order that approved a settlement agreement filed on May 19, 2015 between CL&P and the PURA Prosecutorial Staff, and which included an increase to total allowed annual revenue requirements of $18.4 million beginning December 1, 2014.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Residential | $ | 1,205,387 | | 48 | | $ | 255,797 | | 59 |

[removed: _DOE] [added: DOE] Phase I [removed: Damages_] [added: Damages] - In 1998, the Yankee Companies [removed: (CYAPC, YAEC and MYAPC)] filed separate complaints against the DOE in the Court of Federal Claims seeking monetary damages resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal by January 31, 1998 pursuant to the terms of the 1983 spent fuel and [removed: high level] [added: high-level] waste disposal contracts between the Yankee Companies and the DOE [removed: (DOE] [added: ("DOE] Phase I [removed: Damages).][added: Damages").]

Phase I covered damages for the [removed: period] [added: years] 1998 through 2002.

Following multiple appeals and cross-appeals in December 2012, the judgment awarding [removed: CYAPC] $39.6 million, [removed: YAEC] $38.3 million and [removed: MYAPC] $81.7 million [added: to CYAPC, YAEC and MYAPC, respectively,] became final.

On September 17, 2014, in accordance with the [removed: MYAPC’s three-year] [added: MYAPC] refund plan, MYAPC returned a portion of the DOE Phase I Damages proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $3.2 million, $1.1 million, $1.4 million and $0.8 million, respectively.

[removed: _DOE] [added: DOE] Phase II [removed: Damages_] [added: Damages] - In December 2007, the Yankee Companies each filed subsequent lawsuits against the DOE seeking recovery of actual damages incurred related to the alleged failure of the DOE to provide for a permanent facility to store spent nuclear fuel generated in years 2001 through 2008 for CYAPC and YAEC and from 2002 through 2008 for MYAPC [removed: (DOE] [added: ("DOE] Phase II [removed: Damages).][added: Damages").]

[added: In November 2013, the court issued a] final judgment awarding [removed: CYAPC] $126.3 million, [removed: YAEC] $73.3 million, and [removed: MYAPC] $35.8 [removed: million.][added: million to CYAPC, YAEC and MYAPC, respectively.]

[removed: _DOE] [added: DOE] Phase III Damages [removed: -_] [added: -] In August 2013, the Yankee Companies each filed subsequent lawsuits against the DOE seeking recovery of actual damages incurred in the years 2009 through [removed: 2012.][added: 2012 ("DOE Phase III").]

The [added: DOE Phase III] trial [removed: on this matter was held] [added: concluded] on [removed: June 30 and] July 1, 2015, [removed: with] [added: followed by] a post-trial briefing that concluded on October [removed: 14,] [added: 4,] 2015.

For further discussion of legal proceedings, see Item 1, [removed: _Business:_ "-] [added: Business: "–] Electric Distribution Segment," [removed: "-] [added: "–] Electric Transmission Segment," and [removed: "-] [added: "–] Natural Gas Distribution Segment" for information about various state and federal regulatory and rate proceedings, civil lawsuits related thereto, and information about proceedings relating to power, transmission and pricing issues; [removed: "-] [added: "–] Nuclear Fuel Storage" for information related to [removed: high-level] nuclear waste; and [removed: "-] [added: "–] Other Regulatory and Environmental Matters" for information about proceedings involving [removed: surface] water and air quality requirements, toxic substances and hazardous waste, electric and magnetic fields, [removed: licensing of hydroelectric projects,] and other matters.

In addition, see Item 1A, [removed: _Risk Factors_,] [added: Risk Factors,] for general information about several significant risks.

On March 25, 2016, the court issued its decision and awarded CYAPC, YAEC and MYAPC damages of $32.6 million, $19.6 million and $24.6 million, respectively.

In total, the Yankee Companies were awarded $76.8 million of the $77.9 million in damages sought in the DOE Phase III.

The decision became final on July 18, 2016, and the Yankee Companies received the awards from the DOE on October 14, 2016.

The Yankee Companies received FERC approval of their proposed distribution of certain amounts of the awarded damages proceeds to member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, which CYAPC and MYAPC made in December 2016.

MYAPC also refunded $56.5 million from its spent nuclear fuel trust, a portion of which was also refunded to the Eversource utility subsidiaries.

In total, Eversource received $26.1 million, of which CL&P, NSTAR Electric, PSNH and WMECO received $13.6 million, $5.0 million, $3.9 million, and $3.6 million, respectively.

These amounts will be refunded to the customers of the respective Eversource utility subsidiaries.

Legal Proceedings

On September 28, 2015, MYAPC returned the remaining DOE Phase I Damages proceeds to the member companies, including CL&P, NSTAR Electric, PSNH, and WMECO, in the amount of $2.3 million, $0.8 million, $1 million and $0.6 million, respectively.

In November 2013, the court issued a

The parties are awaiting a decision from the court.

Conservation Law Foundation v.

PSNH

On July 21, 2011, the Conservation Law Foundation (CLF) filed a citizens suit under the provisions of the federal Clean Air Act against PSNH alleging permitting violations at the company's Merrimack generating station.

The suit alleges that PSNH failed to have proper permits for replacement of the Unit 2 turbine at Merrimack, installation of activated carbon injection equipment for the unit, and violated a permit condition concerning operation of the electrostatic precipitators at the station.

On September 27, 2012, the federal court dismissed portions of CLF's suit pertaining to the installation of activated carbon injection and the electrostatic precipitators.

CLF filed an amended complaint on May 28, 2013, related to routine maintenance of the boiler performed in 2008 and 2009.

The suit seeks injunctive relief, civil penalties, and costs.

CLF has pursued similar claims before the NHPUC, the N.H. Air Resources Council, and the N.H. Site Evaluation Committee, all of which have been denied.

PSNH continues to believe this suit is without merit and intends to defend it vigorously.

However, at this time the case has been stayed while the State settlement process related to the divestiture of generating assets, including Merrimack Station, continues.

3.

[removed: ![\[f2015form10k001.jpg\]](https://www.sec.gov/Archives/edgar/data/72741/000007274116000063/f2015form10k001.jpg)][added: | |  |]

[removed: UNITED] [added: | | UNITED] STATES SECURITIES AND EXCHANGE COMMISSION [added: WASHINGTON, D.C. 20549 FORM 10-K |]

| x | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

| | [removed: For] [added: For] the Fiscal Year Ended December 31, [removed: 2015] [added: 2016 or] |

| [removed: Commission] [added: Commission] File [removed: Number] [added: Number] | [removed: Registrant;] [added: Registrant;] State of Incorporation; Address; and Telephone [removed: Number] [added: Number] | [removed: I.R.S.] [added: I.R.S.] Employer Identification [removed: No.] [added: No.] |

| 1-5324 | [removed: EVERSOURCE] [added: EVERSOURCE] ENERGY [removed: (a] [added: (a] Massachusetts voluntary association) 300 Cadwell Drive Springfield, Massachusetts 01104 Telephone: [removed: (413) 785-5871] [added: (800) 286-5000] | 04-2147929 |

| 0-00404 | [removed: THE] [added: THE] CONNECTICUT LIGHT AND POWER COMPANY [removed: (a] [added: (a] Connecticut corporation) 107 Selden Street Berlin, Connecticut 06037-1616 Telephone: [removed: (860) 665-5000] [added: (800) 286-5000] | 06-0303850 |

| 1-02301 | [removed: NSTAR] [added: NSTAR] ELECTRIC COMPANY [removed: (a] [added: (a] Massachusetts corporation) 800 Boylston Street Boston, Massachusetts 02199 Telephone: [removed: (617) 424-2000] [added: (800) 286-5000] | 04-1278810 |

| 1-6392 | [removed: PUBLIC] [added: PUBLIC] SERVICE COMPANY OF NEW [removed: HAMPSHIRE] [added: HAMPSHIRE] (a New Hampshire corporation) Energy Park 780 North Commercial Street Manchester, New Hampshire 03101-1134 Telephone: [removed: (603) 669-4000] [added: (800) 286-5000] | 02-0181050 |

| 0-7624 | [removed: WESTERN] [added: WESTERN] MASSACHUSETTS ELECTRIC COMPANY [removed: (a] [added: (a] Massachusetts corporation) 300 Cadwell Drive Springfield, Massachusetts 01104 Telephone: [removed: (413) 785-5871] [added: (800) 286-5000] | 04-1961130 |

| [removed: Eversource Energy] [added: Eversource Energy] | Common Shares, $5.00 par value | New York Stock Exchange, Inc. |

| Registrant | Title of Each Class | [added: | | |]

| [removed: The] [added: The] Connecticut Light and Power [removed: Company] [added: Company] | Preferred Stock, par value $50.00 per share, issuable in series, of which the following series are outstanding: | [added: | | |]

| [removed: NSTAR] [added: NSTAR] Electric [removed: Company] [added: Company] | Preferred Stock, par value $100.00 per share, issuable in series, of which the following series are outstanding: | | | | [removed: |]

| | [added: |] 4.25% [added: 4.78%] | Series [added: Series] | [added: of 1956 of 1958] |

| | [removed: Yes] [added: Yes] | [removed: No] [added: No] |

Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the [removed: registrant was] [added: registrants were] required to submit and post such files).

| | [removed: Large] [added: Large] Accelerated [removed: Filer] [added: Filer] | | [removed: Accelerated Filer] [added: Accelerated Filer] | | [removed: Non-accelerated Filer] [added: Non-accelerated Filer] |

The aggregate market value of Eversource [removed: Energy’s] [added: Energy's] Common Shares, $5.00 par value, held by non-affiliates, computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of Eversource Energy's most recently completed second fiscal quarter (June 30, [removed: 2015)] [added: 2016)] was [removed: $14,345,789,335] [added: $18,939,770,997] based on a closing market price of [removed: $45.41] [added: $59.90] per share for the [removed: 315,916,964] [added: 316,189,833] common shares outstanding [added: held by non-affiliates] on June 30, [removed: 2015.][added: 2016.]

| Company - Class of Stock | Outstanding as of January 31, [removed: 2016] [added: 2017] |

| Eversource Energy Common shares, $5.00 par value | [removed: 317,191,249] [added: 316,885,808] shares |

| The Connecticut Light and Power Company Common stock, $10.00 par value [removed: NSTAR Electric Company Common Stock, $1.00 par value] | 6,035,205 shares [removed: 100 shares] |

[removed: GLOSSARY] [added: GLOSSARY] OF [removed: TERMS][added: TERMS]

[removed: |] The following is a glossary of abbreviations or acronyms that are found in this report: [removed: | |]

| [removed: Current] [added: Current] or former Eversource Energy companies, segments or [removed: investments:] [added: investments:] | |

| [removed: Regulators:] [added: Regulators:] | |

| [removed: Other] [added: Other] Terms and [removed: Abbreviations:] [added: Abbreviations:] | |

| [removed: AOCI] [added: AOCL] | Accumulated Other Comprehensive [removed: Income/(Loss)] [added: Loss] |

| [removed: ES 2014] [added: Eversource 2015] Form 10-K | The Eversource Energy and Subsidiaries [removed: 2014] [added: 2015] combined Annual Report on Form 10-K as filed with the SEC |

| HQ | Hydro-Québec, a corporation [removed: wholly owned] [added: wholly-owned] by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada |

| Hydro Renewable Energy | Hydro Renewable Energy, Inc., a [removed: wholly owned] [added: wholly-owned] subsidiary of Hydro-Québec |

| Northern Pass | The [removed: high voltage direct current] [added: high-voltage direct-current and associated alternating-current] transmission line project from Canada into New Hampshire |

[removed: EVERSOURCE] [added: EVERSOURCE] ENERGY AND SUBSIDIARIES

[removed: 2015] [added: 2016] FORM 10-K ANNUAL REPORT

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: Page] [added: Page] |

| [removed: PART I] [added: PART I] | | |

[removed: Item] [added: | Item] 1A. [added: | [Risk Factors](#s8769008EB30C5AF98255DBE562C4FAEB) | [17](#s8769008EB30C5AF98255DBE562C4FAEB) |]

[removed: Unresolved] [added: | Item 1B. | [Unresolved] Staff [removed: Comments 19][added: Comments](#s8CFA47A5C51E524C8151479A7552EF5E) | [20](#s8CFA47A5C51E524C8151479A7552EF5E) |]

10-K 1 a201610kdocument.htm 10-K

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| | | | | |

| | | | | |

| | | $1.90 $2.00 $2.04 $2.20 3.90% $2.06 $2.09 4.50% 4.96% 4.50% 5.28% $3.24 6.56% | Series Series Series Series Series Series E Series F Series Series Series Series Series G Series | of 1947 of 1947 of 1949 of 1949 of 1949 of 1954 of 1955 of 1956 of 1958 of 1963 of 1967 of 1968 of 1968 |

| | | | | |

| | Yes | No |

| | Yes | No |

| | | |

| | | |

| | Yes | No |

| | | |

| | | |

| | | |

| | Yes | No |

| | | |

| NSTAR Electric Company Common Stock, $1.00 par value | 100 shares |

| Eversource Service | Eversource Energy Service Company |

| Access Northeast | A project being developed jointly by Eversource, Spectra Energy Partners, LP ("Spectra"), and National Grid plc ("National Grid") through Algonquin Gas Transmission, LLC to bring needed additional natural gas pipeline and storage capacity to New England. |

| ADIT | Accumulated Deferred Income Taxes |

| Bay State Wind | A proposed offshore wind project being developed off the coast of Massachusetts |

| Bcf | Billion cubic feet |

| EDC | Electric distribution company |

| McF | Million cubic feet |

| NETO | New England Transmission Owners |

| OCI | Other Comprehensive Income/(Loss) |

| RNS | Regional Network Service |

| | | |

| | | |

| Item 1. | [Business](#s27A787CFE0035ADB8F284B32544753C9) | [2](#s27A787CFE0035ADB8F284B32544753C9) |

| Item 2. | [Properties](#sAE96F5FDFB7054308979FD1151FE8D6B) | [21](#sAE96F5FDFB7054308979FD1151FE8D6B) |

| Item 3. | [Legal Proceedings](#s3921AEC96A835EFD923F4D891A05A69C) | [23](#s3921AEC96A835EFD923F4D891A05A69C) |

| Item 4. | [Mine Safety Disclosures](#s5D642CBBBA55555795216A4CFD63C8D4) | [23](#s5D642CBBBA55555795216A4CFD63C8D4) |

| | | |

| PART II | | |

| Item 5. | [Market for the Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#s359C780D6B0B543AB6A3B218EC426BC5) | [26](#s359C780D6B0B543AB6A3B218EC426BC5) |

| Item 6. | [Selected Consolidated Financial Data](#s1EE55460C26E5840860AEACDAFBAD144) | [28](#s1EE55460C26E5840860AEACDAFBAD144) |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#s821166c3dc564ab7b7e72281ad8dc17e) | [30](#s64106A3B9BBC55EEA1009A4C921313E5) |

10-K 1 f2015form10k.htm 2015 FORM 10-K

WASHINGTON, D.C. 20549

FORM 10-K

| | or |

| --- | --- | --- |

| --- | --- | --- | --- | --- | --- |

| | | $1.90 | Series | of 1947 | |

| | | $2.00 | Series | of 1947 | |

| | | $2.04 | Series | of 1949 | |

| | | $2.20 | Series | of 1949 | |

| | | 3.90% | Series | of 1949 | |

| | | $2.06 | Series E | of 1954 | |

| | | $2.09 | Series F | of 1955 | |

| | | 4.50% | Series | of 1956 | |

| | | 4.96% | Series | of 1958 | |

| | | 4.50% | Series | of 1963 | |

| | | 5.28% | Series | of 1967 | |

| | | $3.24 | Series G | of 1968 | |

| | | 6.56% | Series | of 1968 | |

| | | | |

| --- | --- | --- | --- |

| | 4.78% | Series | |

| Eversource Service | Eversource Energy Service Company (effective January 1, 2014 includes the operations of NSTAR Electric & Gas) |

| NSTAR Electric & Gas | NSTAR Electric & Gas Corporation, a former Eversource Energy service company (effective January 1, 2014 merged into Eversource Energy Service Company) |

Item 1.

Business 2

Risk Factors 16

Item 1B.

Unresolved Staff Comments

| |

| --- |

| Item 2. Properties |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Transmission and Distribution System | | | | | |

| As of December 31, 2015, Eversource and our electric operating subsidiaries owned the following: | | | | | |

| | | Electric | | Electric | |

| Eversource | | Distribution | | Transmission | |

| Number of substations owned | | 512 | | 66 | |

| Transformer capacity (in kVa) | | 41,484,000 | | 13,780,000 | |

| Overhead lines (in circuit miles) | | 40,258 | | 3,932 | |

| Capacity range of overhead transmission lines (in kV) | | N/A | | 69 to 345 | |

| Underground lines (distribution in circuit miles and transmission in cable miles) | | 16,778 | | 407 | |

| Capacity range of underground transmission lines (in kV) | | N/A | | 69 to 345 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | CL&P | | | | NSTAR Electric | | | | PSNH | | | | WMECO | | |

| | | | Distribution | | Transmission | | Distribution | | Transmission | | Distribution | | Transmission | | Distribution | | Transmission |

| Number of substations owned | | | 182 | | 19 | | 133 | | 24 | | 154 | | 16 | | 43 | | 7 |

| Transformer capacity (in kVa) | | | 19,605,000 | | 3,117,000 | | 11,431,000 | | 6,728,000 | | 5,257,000 | | 3,868,000 | | 5,191,000 | | 67,000 |

| Overhead lines (in circuit miles) | | | 16,951 | | 1,662 | | 7,983 | | 750 | | 11,913 | | 1,039 | | 3,411 | | 481 |

| Capacity range of overhead transmission lines (in kV) | | | N/A | | 69 to 345 | | N/A | | 115 to 345 | | N/A | | 115 to 345 | | N/A | | 69 to 345 |

| Underground lines (distribution in circuit miles and transmission in cable miles) | | | 6,528 | | 136 | | 7,354 | | 260 | | 1,821 | | 1 | | 1,075 | | 10 |

| Capacity range of underground transmission lines (in kV) | | | N/A | | 69 to 345 | | N/A | | 115 to 345 | | N/A | | 115 | | N/A | | 115 |

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | NSTAR | | | | | | | |

| | | | Eversource | | | CL&P | | | Electric | | | PSNH | | | WMECO | |

| Underground and overhead line transformers in service | | | 618,387 | | | 288,352 | | | 126,353 | | | 160,848 | | | 42,834 | |

| Aggregate capacity (in kVa) | | | 35,097,967 | | | 15,300,765 | | | 11,429,921 | | | 6,202,270 | | | 2,165,011 | |

Electric Generating Plants

As of December 31, 2015, PSNH owned the following electric generating plants:

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Type of Plant | | Number of Units | | Year Installed | | Claimed Capability* (kilowatts) |

| Steam Plants | | 5 | | 1952-74 | | 935,343 |

| Hydro | | 20 | | 1901-83 | | 58,115 |

| Internal Combustion | | 5 | | 1968-70 | | 101,869 |

[removed: CL&P,] [added: | | Eversource | | | CL&P | | |] NSTAR [removed: Electric,] [added: Electric | | |] PSNH [removed: and] [added: | | |] WMECO [removed: are each doing business as Eversource Energy.][added: | |]

Transmission and Distribution System

As of December 31, 2016, Eversource and our electric operating subsidiaries owned the following:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| | Electric Distribution | | | Electric Transmission | |

| Eversource | | | | | |

| Number of substations owned | 510 | | | 70 | |

| Transformer capacity (in kVa) | 42,516,000 | | | 16,346,000 | |

| Overhead lines (in circuit miles) | 40,321 | | | 3,939 | |

| Capacity range of overhead transmission lines (in kV) | N/A | | | 69 to 345 | |

| Underground lines (distribution in circuit miles and transmission in cable miles) | 17,043 | | | 402 | |

| Capacity range of underground transmission lines (in kV) | N/A | | | 69 to 345 | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | CL&P | | | | | | NSTAR Electric | | | | | | PSNH | | | | | | WMECO | | | | |

| | Distribution | | | Transmission | | | Distribution | | | Transmission | | | Distribution | | | Transmission | | | Distribution | | | Transmission | |

| Number of substations owned | 182 | | | 19 | | | 134 | | | 26 | | | 151 | | | 18 | | | 43 | | | 7 | |

| Transformer capacity (in kVa) | 19,874,000 | | | 3,633,000 | | | 11,658,000 | | | 6,716,000 | | | 5,372,000 | | | 5,905,000 | | | 5,612,000 | | | 92,000 | |

| Overhead lines (in circuit miles) | 16,947 | | | 1,662 | | | 7,985 | | | 750 | | | 11,977 | | | 1,046 | | | 3,412 | | | 481 | |

| Capacity range of overhead transmission lines (in kV) | N/A | | | 69 to 345 | | | N/A | | | 115 to 345 | | | N/A | | | 115 to 345 | | | N/A | | | 69 to 345 | |

| Underground lines (distribution in circuit miles and transmission in cable miles) | 6,586 | | | 136 | | | 7,533 | | | 255 | | | 1,850 | | | 1 | | | 1,074 | | | 10 | |

| Capacity range of underground transmission lines (in kV) | N/A | | | 69 to 345 | | | N/A | | | 115 to 345 | | | N/A | | | 115 | | | N/A | | | 115 | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| Underground and overhead line transformers in service | 621,123 | | | 289,174 | | | 126,566 | | | 162,433 | | | 42,950 | |

| Aggregate capacity (in kVa) | 35,539,546 | | | 15,496,087 | | | 11,546,818 | | | 6,313,118 | | | 2,183,523 | |

Electric Generating Plants

As of December 31, 2016, PSNH owned the following electric generating plants:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Type of Plant | | Number of Units | | | Year Installed | | Claimed Capability* (kilowatts) | |

| Steam Plants | | 5 | | | 1952-74 | | 935,343 | |

| Hydro | | 20 | | | 1901-83 | | 58,115 | |

| Internal Combustion | | 5 | | | 1968-70 | | 101,869 | |

| Biomass | | 1 | | | 2006 | | 42,594 | |

| Total PSNH Generating Plant | | 31 | | | | | 1,137,921 | |

Item 3.

Legal Proceedings 21

Item 4.

Mine Safety Disclosures 22

| | | |

| PART II | | |

Item 5.

Market for the Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24

Item 6.

Selected Consolidated Financial Data 26

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk 60

Item 8.

Financial Statements and Supplementary Data 61

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 136

Item 9A.

Controls and Procedures 136

Item 9B.

Other Information 136

| PART III | | |

Item 10.

Directors, Executive Officers and Corporate Governance 137

Item 11.

Executive Compensation 140

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 165

Item 13.

Certain Relationships and Related Transactions, and Director Independence 166

Item 14.

Principal Accountant Fees and Services 167

| PART IV | | |

Item 15.

Exhibits and Financial Statement Schedules 169

| Signatures | | 170 |

iii

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

[removed: EXECUTIVE] [added: EXECUTIVE] OFFICERS OF THE [removed: REGISTRANT][added: REGISTRANT]

The following table sets forth the executive officers of Eversource Energy as of February [removed: 16, 2016.][added: 22, 2017.]

| [removed: Name] [added: Name] | | [removed: Age] [added: Age] | | [removed: Title] [added: Title] |

| [removed: Thomas] [added: James] J. [removed: May] [added: Judge] | | [removed: 68] [added: 61] | | [removed: Chairman of the Board,] President and Chief Executive Officer |

| [removed: James] [added: Philip] J. [removed: Judge] [added: Lembo] | | [removed: 60] [added: 61] | | Executive Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Treasurer] |

| Leon J. Olivier | | [removed: 67] [added: 69] | | Executive Vice President-Enterprise Energy Strategy and Business Development |

| [removed: David R. McHale] [added: Werner J. Schweiger] | | [removed: 55] [added: 57] | | Executive Vice President and Chief [removed: Administrative] [added: Operating] Officer |

| Gregory B. Butler | | [removed: 58] [added: 59] | | [removed: Senior] [added: Executive] Vice President and General Counsel |

| Christine M. [removed: Carmody*] [added: Carmody] | | [removed: 53] [added: 54] | | [removed: Senior] [added: Executive] Vice President-Human Resources [removed: of Eversource Service] [added: and Information Technology] |

| Joseph R. Nolan, [removed: Jr.*] [added: Jr.] | | [removed: 52] [added: 53] | | [removed: Senior] [added: Executive] Vice [removed: President-Corporate] [added: President-Customer and Corporate] Relations [removed: of Eversource Service] |

| Jay S. Buth | | [removed: 46] [added: 47] | | Vice President, Controller and Chief Accounting Officer |

[removed: May._] Mr. [removed: May] [added: Judge] has served as [removed: Chairman of the Board of Eversource Energy since October 10, 2013, and as] President and Chief Executive Officer and [removed: as] a Trustee of Eversource [removed: Energy;] [added: Energy and] as Chairman [removed: and a Director] of CL&P, NSTAR Electric, [removed: NSTAR Gas, PSNH, WMECO and Yankee Gas;] [added: PSNH] and [added: WMECO since May 4, 2016;] as Chairman, President and Chief Executive Officer [added: of Eversource Service] and [added: Chairman of NSTAR Gas and Yankee Gas since May 9, 2016; and as] a Director of [added: CL&P, PSNH, WMECO, Yankee Gas and] Eversource Service since April 10, [removed: 2012.][added: 2012, and of NSTAR Electric and NSTAR Gas since September 27, 1999.]

Mr. [removed: May] [added: Judge] previously served as [removed: Chairman, President and Chief] Executive [removed: Officer and a Trustee of NSTAR, and as Chairman,] [added: Vice] President and Chief [removed: Executive] [added: Financial] Officer of [added: Eversource Energy, CL&P,] NSTAR [removed: Electric] [added: Electric, PSNH] and [added: WMECO from April 10, 2012 until May 4, 2016, and of] NSTAR [added: Gas, Yankee] Gas [removed: until] [added: and Eversource Service from] April 10, [removed: 2012.][added: 2012 until May 9, 2016.]

Mr. [removed: May] [added: Judge] has served as Chairman of the Board of Eversource Energy Foundation, Inc. since [removed: October 15, 2013,] [added: May 9, 2016] and as a Director [removed: of Eversource Energy Foundation, Inc.] since April 10, 2012.

He has served as a Trustee of the NSTAR Foundation since [removed: August 18, 1987.][added: May 9, 2016.]

[removed: _James] [added: James] J.

[removed: Judge._] Mr. [removed: Judge] [added: Lembo] has served as Executive Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Treasurer] of Eversource Energy, CL&P, NSTAR Electric, [removed: NSTAR Gas,] PSNH, WMECO, [added: NSTAR Gas,] Yankee Gas and Eversource Service [removed: and] [added: since August 8, 2016;] as a Director of CL&P, [removed: PSNH, WMECO, Yankee Gas] [added: NSTAR Electric, PSNH] and [removed: Eversource Service] [added: WMECO] since [removed: April 10, 2012] [added: May 4, 2016,] and of NSTAR [removed: Electric and NSTAR] [added: Gas, Yankee] Gas [added: and Eversource Service] since [removed: September 27, 1999.][added: May 9, 2016.]

[removed: Previously, Mr. Judge served as] [added: He was] Senior Vice President and Chief Financial Officer of NSTAR, NSTAR Electric and NSTAR Gas from 1999 until April [added: 10,] 2012.

Mr. [removed: Judge] [added: Lembo] has served as [removed: Treasurer and as] a Director [added: and as Treasurer] of Eversource Energy Foundation, Inc. since [removed: April 10, 2012.][added: May 9, 2016.]

[removed: _Leon] [added: Leon] J.

Mr. Olivier has served as Executive Vice President-Enterprise Energy Strategy and Business Development of Eversource Energy since September 2, 2014 and [added: of Eversource Service since August 11, 2014, and] as a Director of Eversource Service since January 17, 2005.

Mr. [removed: Olivier] [added: Nolan] previously served as [removed: Executive] [added: Senior] Vice [removed: President and Chief Operating Officer] [added: President-Corporate Relations] of Eversource Energy [removed: and Eversource Service] from May [removed: 13, 2008] [added: 4, 2016] until [removed: September 2, 2014, and as Chief Executive Officer] [added: August 8, 2016,] of [removed: NSTAR Electric and NSTAR Gas] [added: Eversource Service] from April 10, 2012 until August [removed: 11, 2014, of CL&P, PSNH, WMECO and Yankee Gas from January 15, 2007 to September 29, 2014, and of CL&P from September 10, 2001 to September 29, 2014, and as a Director] [added: 8, 2016,] of NSTAR Electric and NSTAR Gas from [removed: November 27,] [added: April 10,] 2012 [removed: to] [added: until] September 29, 2014, [added: and] of [added: CL&P,] PSNH, WMECO and Yankee Gas from [removed: January 17, 2005 to September 29, 2014, and of CL&P from September 10, 2001 to] [added: November 27, 2012 until] September 29, 2014.

[removed: Previously,] Mr. Olivier [removed: served as] [added: was] Executive Vice President-Operations of Eversource Energy from February 13, 2007 [removed: to] [added: until] May 12, [added: 2008, and of Eversource Service from January 15, 2007 until May 12,] 2008.

Mr. [removed: McHale] [added: Nolan] has served as [removed: Executive Vice President and Chief Administrative Officer] [added: a Director] of Eversource Energy [removed: and Eversource Service] [added: Foundation, Inc.] since April 10, [removed: 2012] [added: 2012,] and as [removed: a] [added: Executive] Director of Eversource [removed: Service] [added: Energy Foundation, Inc.] since [removed: January 1, 2005.][added: October 15, 2013.]

[removed: Mr. McHale previously served as Executive Vice President and] [added: He was] Chief [removed: Administrative] [added: Executive] Officer of [removed: CL&P,] NSTAR [removed: Electric, NSTAR Gas, PSNH, WMECO and Yankee Gas from April 10, 2012 to September 29, 2014 and as a Director of NSTAR] Electric and NSTAR Gas from [removed: November 27,] [added: April 10,] 2012 [removed: to September 29,] [added: until August 11,] 2014, of [added: CL&P,] PSNH, WMECO and Yankee Gas from January [removed: 1, 2005 to September 29,] [added: 15, 2007 until August 11,] 2014, and of CL&P from [removed: January 15, 2007 to] September [added: 10, 2001 until September] 29, 2014.

[removed: Previously,] Mr. [removed: McHale] [added: Lembo previously] served as [removed: Executive] [added: Senior] Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Treasurer] of Eversource Energy, CL&P, [removed: PSNH, WMECO, Yankee Gas] [added: NSTAR Electric, PSNH] and [removed: Eversource Service] [added: WMECO] from [removed: January 2009 to April 2012, and as Senior Vice President] [added: May 4, 2016 until August 8, 2016,] and [removed: Chief Financial Officer] of [removed: Eversource Energy, CL&P, PSNH, WMECO,] [added: NSTAR Gas,] Yankee Gas and Eversource Service from [removed: January 2005 to December 2008.][added: May 9, 2016 until August 8, 2016.]

[removed: He] [added: Mr. Butler] has served as a Director of Eversource Energy Foundation, Inc. since [removed: January] [added: December] 1, [removed: 2005.][added: 2002.]

[removed: _Werner] [added: Werner] J.

[removed: Schweiger._] Mr. Schweiger has served as Executive Vice President and Chief Operating Officer of Eversource Energy since September 2, [removed: 2014] [added: 2014,] and of Eversource Service since August 11, [removed: 2014, and as President of CL&P since June 2, 2015 and] [added: 2014;] as Chief Executive Officer of CL&P, NSTAR Electric, [removed: NSTAR Gas,] PSNH, [removed: WMECO] [added: WMECO, NSTAR Gas] and Yankee Gas since August 11, [removed: 2014, and] [added: 2014;] as a Director of Eversource Service, NSTAR Gas and Yankee Gas since September 29, [removed: 2014] [added: 2014,] and of CL&P, [removed: PSNH,] NSTAR [removed: Electric] [added: Electric, PSNH] and WMECO since May 28, 2013.

[removed: He previously served as President-Electric Distribution of Eversource Service from January 16, 2013 until August 11, 2014 and as] [added: Mr. Schweiger was] President of NSTAR Electric from April 10, 2012 until January 16, [removed: 2013] [added: 2013;] and [removed: as] a Director of NSTAR Electric from November 27, 2012 [removed: to] [added: until] January 16, 2013.

[removed: From February 27, 2002 until April 10, 2012, Mr. Schweiger] [added: He] was Senior Vice President-Operations of NSTAR Electric and NSTAR [removed: Gas.][added: Gas from February 27, 2002 until April 10, 2012.]

[removed: _Gregory] [added: Gregory] B.

Mr. Butler [removed: has] [added: previously] served as Senior Vice President and General Counsel of Eversource Energy [removed: since] [added: from] May 1, [removed: 2014,] [added: 2014 until August 8, 2016,] of NSTAR [removed: Electric,] [added: Electric] and NSTAR Gas [removed: since] [added: from] April 10, [removed: 2012,] [added: 2012 until August 8, 2016,] and of CL&P, PSNH, WMECO, Yankee Gas and Eversource Service [removed: since] [added: from] March 9, [removed: 2006.][added: 2006 until August 8, 2016.]

Mr. Butler has served as [added: Executive Vice President and General Counsel of Eversource Energy, CL&P, NSTAR Electric, PSNH, WMECO, NSTAR Gas, Yankee Gas and Eversource Service since August 8, 2016; as] a Director of NSTAR Electric and NSTAR Gas since April 10, 2012, of Eversource Service since November 27, 2012, and of CL&P, PSNH, WMECO and Yankee Gas since April 22, 2009.

[removed: Mr. Butler previously served as] [added: He was] Senior Vice President, General Counsel and Secretary of Eversource Energy from April 10, 2012 until May 1, [removed: 2014,] [added: 2014;] and [removed: as] Senior Vice President and General Counsel of Eversource Energy from December 1, 2005 [removed: to] [added: until] April 10, 2012.

[removed: _Christine] [added: Christine] M.

[removed: Carmody._] Ms. Carmody has served as [removed: Senior] [added: Executive] Vice President-Human Resources [added: and Information Technology] of Eversource [added: Energy and Eversource] Service since [removed: April 10, 2012] [added: August 8, 2016,] and as a Director of Eversource Service since November 27, 2012.

Ms. Carmody previously served as Senior Vice President-Human Resources of [added: Eversource Energy from May 4, 2016 until August 8, 2016, of Eversource Service from April 10, 2012 until August 8, 2016, of] CL&P, PSNH, WMECO and Yankee Gas from November 27, 2012 [removed: to] [added: until] September 29, 2014, and of NSTAR Electric and NSTAR Gas from August 1, 2008 [removed: to September 29, 2014, and as a Director of CL&P, PSNH, WMECO and Yankee Gas from April 10, 2012 to September 29, 2014 and of NSTAR Electric and NSTAR Gas from November 27, 2012 to] [added: until] September 29, 2014.

[removed: Previously,] Ms. Carmody [removed: served as] [added: was] Vice President-Organizational Effectiveness of NSTAR, NSTAR Electric and NSTAR Gas from June 2006 [removed: to] [added: until] August 2008.

[removed: _Joseph] [added: Joseph] R.

| | | | | |

Judge.

He was Treasurer of Eversource Energy Foundation, Inc. from April 10, 2012 to May 9, 2016.

Philip J.

Lembo.

He was Vice President and Treasurer of Eversource Energy, CL&P, PSNH and WMECO from April 10, 2012 until May 4, 2016, and of Yankee Gas and Eversource Service from April 10, 2012 until May 9, 2016.

Mr. Lembo was Vice President and Treasurer of NSTAR Electric from March 29, 2006 until May 4, 2016, of NSTAR Gas from March 29, 2006 until May 9, 2016, and of NSTAR from March 29, 2006 until April 10, 2012.

Butler.

Carmody.

She was a Director of CL&P, PSNH, WMECO and Yankee Gas from April 10, 2012 until September 29, 2014, and of NSTAR Electric and NSTAR Gas from November 27, 2012 until September 29, 2014.

Olivier.

Mr. Olivier previously served as Executive Vice President and Chief Operating Officer of Eversource Energy from May 13, 2008 until September 2, 2014, and of Eversource Service from May 13, 2008 until August 11, 2008.

He was a Director of NSTAR Electric and NSTAR Gas from November 27, 2012 until September 29, 2014, of PSNH, WMECO and Yankee Gas from January 17, 2005 until September 29, 2014, and of CL&P from September 10, 2001 until September 29, 2014.

Schweiger.

He was President of CL&P from June 2, 2015 until June 27, 2016; President of NSTAR Gas and Yankee Gas from September 29, 2014 until November 10, 2014; and President-Electric Distribution of Eversource Service from January 16, 2013 until August 11, 2014.

Buth.

Mine Safety Disclosures

| Werner J. Schweiger | | 56 | | Executive Vice President and Chief Operating Officer |

*Deemed an executive officer of Eversource Energy pursuant to Rule 3b-7 under the Securities Exchange Act of 1934.

_Thomas J.

Mr. May has served as a Director of NSTAR Electric and NSTAR Gas since September 27, 1999.

He served as Chairman, Chief Executive Officer and a Trustee since NSTAR was formed in 1999, and was elected President in 2002.

He previously served as President of Eversource Energy Foundation, Inc. from October 15, 2013 to September 29, 2014.

Olivier_.

_David R.

McHale_.

Mr. McHale has served as a Trustee of the NSTAR Foundation since April 10, 2012.

Butler_.

He has served as a Director of Eversource Energy Foundation, Inc. since December 1, 2002.

Mr. Nolan has served as a Director of Eversource Energy Foundation, Inc. since April 10, 2012, and has served as Executive Director of Eversource Energy Foundation, Inc. since October 15, 2013.

[added: (a)] Market Information and (c) Dividends

| [removed: Year] [added: Year] | | [removed: Quarter] [added: Quarter] | | [removed: High] [added: High] | | | [removed: Low] | [added: Low] | | [removed: Dividends Declared] | | [added: Dividends Declared | | |]

| 2015 | | First | | $ | 56.83 | | [added: |] $ | 48.54 | | [added: |] $ | 0.4175 | [added: |]

| | | Second | | [removed: |] 51.42 | | | [added: |] 45.20 | | | [added: |] 0.4175 | [added: | |]

| | | Third | | [removed: |] 52.15 | | | [added: |] 44.64 | | | [added: |] 0.4175 | [added: | |]

| | | Fourth | | [removed: |] 52.85 | | | [added: |] 48.18 | | | [added: |] 0.4175 | [added: | |]

Information with respect to dividend restrictions for us, CL&P, NSTAR Electric, PSNH, and WMECO is contained in Item [removed: 7, _Management's Discussion and Analysis of Financial Condition and Results of Operations_, under the caption "Liquidity" and Item] 8, [removed: _Financial] [added: Financial] Statements and Supplementary [removed: Data_,] [added: Data,] in the [removed: _Combined] [added: Combined] Notes to Financial [removed: Statements_,] [added: Statements,] within this Annual Report on Form 10-K.

| | [removed: For] [added: For] the Years Ended December [removed: 31,] [added: 31,] | | | | | [added: | |]

| [removed: _(Millions] [added: (Millions] of [removed: Dollars)_] [added: Dollars)] | [removed: 2015] [added: 2016] | | | [removed: 2014] | [added: 2015] | [added: | |]

| NSTAR Electric | [added: 278.3] | [removed: 198.0] | | | [removed: 253.0] [added: 198.0] | [added: | |]

| PSNH | [added: 77.6] | [removed: 106.0] | | | [removed: 66.0] [added: 106.0] | [added: | |]

| WMECO | [added: 38.0] | [removed: 37.2] | | | [removed: 60.0] [added: 37.2] | [added: | |]

[added: (b)] Holders

As of January 31, [removed: 2016,] [added: 2017,] there were [removed: 42,493] [added: 39,191] registered common shareholders of our company on record.

As of the same date, there were a total of [removed: 317,191,249 common] [added: 316,885,808] shares issued.