Eversource Energy (ES) 10-K risk factor changes: FY2021 vs FY2020

A successful cyberattack on the information technology systems that control our transmission, distribution, [added: natural] gas and water systems 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.

We [removed: deployed] [added: deploy] substantial technologies to system and application security, encryption and other measures to protect our computer systems and infrastructure from unauthorized access or misuse.

We maintain cyber insurance to cover damages and defense costs related to breaches of networks or operational technology, but it may be insufficient [added: in limits and coverage exclusions] to cover all losses.

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

In the regular course of business, we, and our third-party suppliers, [added: rely on information technology to] maintain sensitive customer, employee, financial and system operating information.

[removed: We believe that we have in place, or are developing, successful mechanisms with] [added: The future impact will also depend on the outcome of future proceedings before] our state regulatory commissions to recover our incremental costs associated with COVID-19, [removed: while balancing the impact on our customers’ bills] [added: which include uncollectible customer receivable expenses,] and our [removed: operating cash flows, however our] financial condition may be adversely affected depending on the outcome of [removed: planned proceedings before our state regulatory commissions.][added: those proceedings.]

The [added: COVID-19 pandemic, including any new or emerging variants, continues to evolve, and the] extent of the impact to us in the future will vary and depend in large part on the duration, scope and severity of the pandemic and the timing and extent of COVID-19 relief legislation, and the resulting impact on economic, health care and capital market conditions.

Business [added: and Operational] Risks:

Strategic development opportunities associated with offshore wind or investment opportunities in electric transmission or clean-energy opportunities may not be successful, and projects may not commence operation as scheduled or [added: within budget, or] be completed, which could have a material adverse effect on our business prospects.

We are pursuing broader strategic development investment opportunities that will benefit the Northeast region related to the [added: development,] construction [added: and operation] of offshore wind electric generation facilities, and investment opportunities in electric transmission facilities and other clean-energy infrastructure.

[removed: Risks include federal, state and local regulatory approval processes, new legislation impacting the industry, changes to federal income tax laws, economic events or factors,] environmental and community concerns, design and siting issues, difficulties in obtaining required rights of way, competition from incumbent utilities and other entities, [removed: and] actions of our strategic [removed: partners.][added: partners, and capacity factors once projects are placed in operation.]

[removed: The] [added: Our offshore wind] partnership’s ability to generate [removed: revenue] [added: returns] from [added: its] offshore wind projects [removed: depends] [added: will depend] on meeting [removed: our] construction schedules, controlling cost overruns, maintaining continuing interconnection arrangements, power purchase agreements, or other market mechanisms as well as interconnecting utility and Regional Transmission Organizations rules, policies, procedures and FERC tariffs that permit future offshore wind project operations.

[removed: Any] [added: Additionally, scheduling delays in offshore wind projects, any] changes to tax laws [removed: or to] [added: impacting] Eversource’s ability to monetize tax attributes associated with these [removed: projects] [added: projects, or the cancellation of any projects, as well as the other risk factors described above,] could [removed: also] have a material adverse effect on [removed: cash flows] [added: our financial position, results of operations,] and [removed: project returns.][added: cash flows, or our future growth opportunities may not be realized as anticipated.]

[removed: These] [added: The states in which we provide service have implemented selection] procedures [added: for such new facilities that] require the review of competing projects and permit the selection of only those projects that are expected to provide the greatest benefit to customers.

We [added: rely on third-party suppliers for equipment, materials, and services and we] outsource certain business functions to third-party suppliers and service providers, and substandard performance [added: or inability to fulfill obligations] by those third parties could harm our business, reputation and results of operations.

As a result of our acquisition of the Columbia Gas of Massachusetts (CMA) assets from NiSource on October 9, 2020, we have entered into a Transition Services Agreement with NiSource whereby NiSource is performing certain services on behalf of [removed: our newly formed] Eversource Gas Company of Massachusetts in the areas of information technology, transaction processing, human resources, payroll and payroll processing and certain operational areas for periods ranging from 1 to 24 [removed: months.][added: months from the acquisition date.]

If any difficulties in the [added: global supply chain cycle or] 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.

Our transmission and distribution businesses face several operational risks, including the breakdown, failure of, or damage to operating equipment, information technology systems, or processes, especially due to age; labor disputes; disruptions in the delivery of electricity, natural gas and water; increased capital expenditure requirements, including those due to environmental regulation; catastrophic events such as fires, explosions, a solar event, an electromagnetic event, or other similar occurrences; extreme weather conditions beyond equipment and plant design capacity; human error; [added: global supply chain disruptions;] and potential claims for property damage or personal injuries beyond the scope of our insurance coverage.

These changes in [removed: technology] [added: technology, including micro-grids and advances in energy or battery storage,] could also alter the channels through which electric customers buy or utilize energy, which could reduce our revenues or increase our expenses.

Labor disputes, work stoppages or an inability to negotiate future collective bargaining agreements on commercially reasonable terms, as well as the [added: increased competition for talent or the] intentional misconduct of employees or contractors, may also have an adverse effect on our business, financial position and results of operations.

Physical risks from climate change may include an increase in sea levels and changes in weather conditions, such as changes in precipitation and extreme weather [removed: events including drought.][added: events.]

Severe weather, such as ice and snow storms, [added: tornadoes, micro-bursts,] hurricanes, [added: floods,] droughts, and other natural disasters, may cause outages and property damage, which may require us to incur additional costs that may not be recoverable from customers.

If, upon review, any of our state regulatory authorities finds that our actions were imprudent, some of those restoration costs may not be recoverable from [removed: customers.][added: customers, and could result in penalties or fines.]

We maintain property insurance, but it may be insufficient [added: in limits and coverage exclusions] to cover all losses.

We maintain liability insurance, but it may be insufficient [added: in limits and coverage exclusions] to cover all losses.

We maintain property and liability insurance, but it may be insufficient [added: in limits and coverage exclusions] to cover all losses.

The actions of regulators and legislators could [removed: significantly impact our ability to recover costs] [added: result] in [removed: a timely manner and can] [added: outcomes that may adversely] affect our earnings and liquidity.

The FERC also regulates the transmission of electric energy, the sale of electric energy at wholesale, accounting, issuance of certain securities and certain other matters, including reliability standards through [added: the] NERC.

Each of these companies prepares and submits periodic rate filings with their respective regulatory commissions for review and approval, which allows for various entities to challenge our current or future rates, structures or mechanisms and could alter or limit the rates we are allowed to charge our [removed: customers and may not match the timing of when costs are incurred.][added: customers.]

Additionally, catastrophic events at other utilities could result in our regulators and legislators imposing additional requirements that may lead to additional costs for the [removed: Company.][added: companies.]

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

Because utility companies, including our electric, natural gas and water utility subsidiaries, have large customer bases, they are subject to adverse publicity focused on the reliability of their distribution services and the speed with which they are able to respond to electric outages, natural gas leaks and similar interruptions caused by storm damage or other unanticipated [removed: events.][added: events, including those related to climate change.]

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

Our subsidiaries' operations are subject to extensive federal, state and local environmental statutes, rules and regulations that govern, among other things, water quality, water discharges, the management of hazardous [added: material] and solid waste, and air emissions.

Compliance with these requirements requires us to incur significant costs relating to environmental [added: permitting,] monitoring, maintenance and upgrading of facilities, [removed: remediation] and [removed: permitting.][added: remediation.]

We have a significant amount of goodwill on our consolidated balance sheet, which, as of December 31, [removed: 2020,] [added: 2021,] totaled [removed: $4.4] [added: $4.48] billion.

[added: Additional large funding requirements, when combined with the financing requirements of our construction] program, could impact the timing, amounts, and number of future financings and negatively affect our financial position, results of operations and cash flows.

There may be additional risks and uncertainties (either currently unknown or not currently believed to be material) that could adversely affect our financial position, results of operations, and cash flows.

Cyberattacks that seek to exploit potential vulnerabilities in the utility industry and seek to disrupt electric, natural gas and water transmission and distribution systems are increasing in sophistication, magnitude and frequency.

Specifically, regarding vulnerabilities, we patch systems where patches are available to deploy, and have technologies that detect exploits of vulnerabilities and proactively block the exploit when it happens.

Although we did not experience any material impacts from the SolarWinds event in 2020 or the Log4j security vulnerability that was widely publicized in December 2021, there can be no assurance that we will not experience future events that may be material.

We employ system controls to prevent the dissemination of certain confidential information and periodically train employees on phishing risks.

Accordingly, our projects may not be selected for construction.

The development and construction of projects selected for construction involves numerous significant risks including scheduling delays, increased costs, tax strategies and changes to federal tax laws, federal, state and local permitting and regulatory approval processes, specifically BOEM’s approval processes, new legislation impacting the industry, future legislative or regulatory actions that could result in these projects not being probable of entering the construction phase, economic events or factors,

Our contractual arrangements with these contractors typically include performance standards, progress payments, insurance requirements and security for performance.

Due to the COVID-19 pandemic and current state of the global economy as a whole, we may experience supply chain issues with obtaining key materials, equipment or services timely and at a reasonable price across all business lines.

We also implement new information technology systems from time to time, which may disrupt operations.

In addition, physical attacks against third-party providers could have a similar effect on the operation of our systems.

Our electric, natural gas and water companies are required to engage in regulatory approval proceedings as a part of the process of establishing the terms and rates for their respective services.

These proceedings typically involve multiple parties, including governmental bodies and officials, consumer advocacy groups, and various consumers of energy, who have differing concerns.

Any change in rates, including changes in allowed rate of return, are subject to regulatory approval proceedings that can be contentious, lengthy, and subject to appeal.

This may lead to uncertainty as to the ultimate result of those proceedings.

Established rates are also subject to subsequent prudency reviews by state regulators, whereby various portions of rates could

be adjusted, subject to refund or disallowed, including cost recovery mechanisms.

The ultimate outcome and timing of regulatory rate proceedings could have a significant effect on our ability to recover costs or earn an adequate return.

Adverse decisions in our proceedings could adversely affect our financial position, results of operations and cash flows.

The inability to recover a significant amount of operating costs could have an adverse effect on our financial position, results of operations, and cash flows.

Changes to rates may occur at times different from when costs are incurred.

In addition to the risk of disallowance of incurred costs, regulators may also impose downward adjustments in a company’s allowed ROE as well as assess penalties and fines.

These actions would have an adverse effect on our financial position, results of operations and cash flows.

Addressing any adverse publicity, regulatory scrutiny or enforcement or other legal proceedings is time consuming and expensive and, regardless of the factual basis for the assertions being made, can have a negative impact on the reputation of our business, on the morale and performance of our employees and on our relationships with respective regulators, customers and counterparties.

The direct and indirect effects of negative publicity, and the demands of responding to and addressing it, may have a material adverse effect on our financial position, results of operations and cash flows.

Although we have recorded liabilities for known environmental obligations, these costs can be difficult to estimate due to uncertainties about the extent of contamination, remediation alternatives, the remediation levels required by state and federal agencies, and the financial ability of other potentially responsible parties.

The continuing effects of the COVID-19 pandemic could lead to an increased risk of cybersecurity attacks, interruptions in the global supply chain that impact us and our vendors, and the loss of key personnel, among other effects.

See the accompanying Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations* for additional information.

We continue to respond to COVID-19 by taking steps to mitigate the potential risks to Eversource posed by its spread.

We provide a critical service to our customers, which means it is paramount that we keep our employees who operate our businesses safe, and minimize unnecessary risk of exposure to COVID-19.

We have updated and implemented our company-wide pandemic plan to address specific aspects of the COVID-19 pandemic.

This plan guides our emergency response, business continuity, and the precautionary measures we are taking on behalf of employees and our customers.

- *Cybersecurity attacks*: We, as well as others in the power and utility industry, have continued to experience significant events where outside parties, utilizing sophisticated methods, have attempted to compromise both our vendors and employees to try to gain access to our email systems, as well as attempting to access our other systems or networks.

Eversource was not affected by the SolarWinds event.

We continue to implement strong cybersecurity measures and have increased the education of our employees and contractors to ensure that our systems remain functional in order to both serve our operational needs with a remote workforce and to ensure uninterrupted service to our customers.

Our incident response team works with compromised vendors to assist them in improving their security posture.

We also continuously review and update our response plans to include responding to an event while in a remote work environment.

- *Access to, or cost of, capital resources:* We utilize the commercial paper market extensively for our short-term borrowing needs.

At the onset of the pandemic in the United States, liquidity in the commercial paper credit market began to deteriorate rapidly.

However, federal legislative actions, including actions taken by the Federal Reserve, have provided sufficient liquidity and stabilization of the credit markets.

We continue to monitor the ability for us to access the global capital and credit markets; however, if we are unable to access these markets, then our financial condition may be adversely affected.

We have had open, full access to the capital markets throughout the COVID-19 pandemic.

- *Actions of regulators:* We continue to work closely with our state regulatory commissions and consumer advocates on customer assistance measures, including payment plan options in order to mitigate the impact on customer rates in the future, as well as financial hardship and arrearage management programs for those customers who are unable to pay their utility bills.

We developed these long-term solutions for customers in order to help minimize the extent of the impact of COVID-19 on customer receivable balances and customers’ affordability in light of the current financial impact they may experience.

- *Timing of strategic development opportunities:* The successful execution of our timeline for developing our offshore wind projects is based on several factors, including state and federal siting and permitting approvals.

We implemented, and continue to update, mitigation plans that addressed permitting delays due to COVID-19 work restrictions between March and June 2020 that resulted in a moderate impact to our offshore wind projects siting and permit filing timelines.

However, we are unable to assess the potential impact that a reintroduction of work restrictions in response to a future resurgence in COVID-19 infections would have on our projects’ timelines.

- *Suppliers and Vendors:* We have instituted measures to ensure our supply chain remains open to us; however, there could be global shortages that will impact our maintenance, capital programs, and storm response that we currently cannot anticipate.

- *Loss of key personnel:* We continue to adjust our pandemic plan to address various scenarios including reduced workforce levels and limited mutual aid in the event of a significant storm event.

We have implemented remote work arrangements for our workforce by enabling nearly half of our employees to work from home and taking extra precautions for our field-based employees.

We have taken significant safety measures to ensure adequate social distancing for our field crews to safely provide essential services to our customers.

We have also adopted protocols to ensure the safety and health of those employees who work onsite in critical facilities.

We continue to monitor COVID-19 developments affecting our workforce and will take additional precautions that we determine are necessary in order to mitigate the impacts.

Although to date our workforce continues to be able to safely and reliably deliver our critical services to customers, we are unable to predict the extent of the impact of COVID-19 on our employees.

The future impact will also depend on the outcome of planned proceedings before our state regulatory commissions to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses.

The development of these activities involves numerous significant risks around schedule, cost, capacity factors, tax strategies and permitting (both on and offshore).

Various external factors could result in increased costs or result in delays or cancellation of these projects.

Should any of these factors result in significant delays or cancellations, our financial position, results of operations, and cash flows could be materially adversely affected, or our future growth opportunities may not be realized as anticipated.

Eversource has a joint and equal partnership with Ørsted for the development and operation of three offshore wind projects.

Offshore wind is currently an emerging industry in the U.S., but it has a very robust operational and construction history in Europe.

As such, siting, permitting, tax legislation, and supply chain are currently being addressed for the first time in the U.S. The projects currently being developed by our partnership may not achieve the results we anticipate.

After projects are placed in operation, capacity factors will directly affect revenues generated from these investments.

Other factors that may have an adverse impact on our anticipated project returns include significant schedule delays resulting from federal, state or local permitting processes.

Specifically, the approval from the BOEM is a critical path item in the projects' timeline.

As a result of legislative and regulatory changes, the states in which we provide service have implemented new selection procedures for new major electric transmission, offshore wind and other clean energy facilities.

If the projects in which we have invested are not selected for construction, or even if our projects are selected, then legislative or regulatory actions could result in our projects not being probable of entering the construction phase, which could have a material adverse effect on our future financial position, results of operations and cash flows.

The amount of costs incurred by the companies, coupled with increases in fuel and energy prices, could lead to consumer or regulatory resistance to the timely recovery of such costs, thereby adversely affecting our financial position, results of operations and cash flows.

The annual goodwill impairment test in 2020 resulted in a conclusion that our goodwill was not impaired.

The consolidated financial statements of Eversource, NSTAR Electric and PSNH and the financial statements of CL&P are herein collectively referred to as the "financial statements." Our discussion of fiscal year [removed: 2020] [added: 2021] compared to fiscal year [removed: 2019] [added: 2020] is included herein.

Unless expressly stated otherwise, for discussion and analysis of fiscal year [removed: 2018] [added: 2019] items and [added: of] fiscal year [removed: 2019] [added: 2020] compared to fiscal year [removed: 2018,] [added: 2019,] please refer to Item 7, *Management's Discussion and Analysis of Financial Condition and Results of Operations,* in our combined [removed: [2019 Annual] [added: 2020 [Annual] Report on Form [removed: 10-K](http://www.sec.gov/ix?doc=/Archives/edgar/data/13372/000007274120000008/a201910kdocument.htm),] [added: 10-K](http://www.sec.gov/ix?doc=/Archives/edgar/data/72741/000007274121000005/es-20201231.htm),] which is incorporated herein by reference.

The earnings and EPS of each business discussed below do not represent a direct legal interest in the assets and liabilities of such [removed: business] [added: business,] but rather represent a direct interest in our assets and liabilities as a whole.

EPS by business is a financial measure not recognized under [removed: GAAP,] [added: GAAP (non-GAAP) that is] calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period.

We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] results without including these items.

We believe the [added: impacts of the CL&P settlement agreement, the storm performance penalty imposed on CL&P by the PURA, and] acquisition [removed: costs] and [removed: the NPT impairment charge] [added: transition costs] are not indicative of our ongoing costs and performance.

Due to the nature and significance of [added: the effect of] these items on Net Income Attributable to Common [removed: Shareholders,] [added: Shareholders and EPS,] we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business.

- We earned [removed: $1.21] [added: $1.22] billion, or [removed: $3.55] [added: $3.54] per share, in [removed: 2020,] [added: 2021,] compared with [removed: $909.1 million,] [added: $1.21 billion,] or [removed: $2.81] [added: $3.55] per share, in [removed: 2019.][added: 2020.]

Our 2020 results include after-tax acquisition [added: and transition] costs [removed: related to our purchase] of [removed: the assets of Columbia Gas of Massachusetts (CMA) of] $32.1 million, or $0.09 per [removed: share.][added: share, recorded primarily at Eversource parent.]

Excluding those [removed: acquisition] costs, [removed: we earned] [added: our non-GAAP earnings were $1.33 billion, or $3.86 per share, in 2021, compared with] $1.24 billion, or $3.64 per share, in 2020.

- We currently project [removed: 2021] [added: 2022] non-GAAP earning guidance of between [removed: $3.81] [added: $4.00] per share and [removed: $3.93] [added: $4.17] per share, which excludes the impact of [added: remaining] integration costs [removed: related to our purchase of the natural gas distribution assets] [added: as a result] of [removed: CMA.][added: transitioning EGMA onto Eversource’s systems.]

We also project that our long-term EPS growth rate through [removed: 2025] [added: 2026] from our regulated utility businesses will be in the upper half of [removed: the] [added: a] 5 to 7 percent range.

[removed: We believe that we have in place, or are developing, successful mechanisms with] [added: The future impact will also depend on the outcome of future proceedings before] our state regulatory commissions [removed: that allow, or will allow, us] to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses.

- Cash flows provided by operating activities totaled [removed: $1.68] [added: $1.96] billion in [removed: 2020,] [added: 2021,] compared with [removed: $2.01] [added: $1.68] billion in [removed: 2019.][added: 2020.]

Investments in property, plant and equipment totaled [removed: $2.94] [added: $3.18] billion in [removed: 2020] [added: 2021] and [removed: $2.91] [added: $2.94] billion in [removed: 2019.][added: 2020.]

[added: -] Cash totaled [removed: $106.6] [added: $66.8] million as of December 31, [removed: 2020,] [added: 2021,] compared with [removed: $15.4] [added: $106.6] million as of December 31, [removed: 2019.][added: 2020.]

Our available borrowing capacity under our commercial paper programs totaled [removed: $1.40] [added: $1.14] billion as of December 31, [removed: 2020.][added: 2021.]

- In [removed: 2020,] [added: 2021,] we issued dividends totaling [removed: $2.27] [added: $2.41] per common share, compared with dividends of [removed: $2.14] [added: $2.27] per common share in [removed: 2019.][added: 2020.]

On February [removed: 9, 2021,] [added: 2, 2022,] our Board of Trustees approved a common share dividend payment of [removed: $0.6025] [added: $0.6375] per share, payable on March 31, [removed: 2021] [added: 2022] to shareholders of record as of March [removed: 4, 2021.][added: 3, 2022.]

- We project to make capital expenditures of [removed: $17.03] [added: $18.14] billion from [removed: 2021] [added: 2022] through [removed: 2025,] [added: 2026,] of which we expect [removed: $10.90] [added: $7.02] billion to be in our electric [removed: and] [added: distribution segment, $4.53 billion to be in our] natural gas distribution [removed: segments, $4.31] [added: segment, $4.60] billion to be in our electric transmission [removed: segment] [added: segment,] and [removed: $0.78] [added: $0.89] billion to be in our water distribution segment.

We also project to invest [removed: $1.05] [added: $1.10] billion in information technology and facilities upgrades and enhancements.

[removed: - On December 15, 2020, the NHPUC approved] [added: PSNH Distribution Rates: In connection with] an October 9, 2020 settlement [removed: agreement that included] [added: agreement, the NHPUC approved] a permanent rate increase of $45.0 million effective January 1, [removed: 2021 at PSNH.][added: 2021.]

[removed: - On October 30, 2020,] [added: For NSTAR Gas,] the DPU approved [removed: an NSTAR Gas] [added: a $13.6 million increase to] base distribution [removed: rate increase of $23.0 million] [added: rates on October 29, 2021,] effective November 1, [removed: 2020.][added: 2021.]

[removed: -] In January 2021, BOEM released its Draft [removed: Environmental Impact Statement (EIS)] [added: EIS] for the South Fork Wind [removed: project, which assessed the environmental, social,] [added: project] and [removed: economic impacts of constructing the project.][added: in August 2021, BOEM released its Final EIS.]

COVID-19 has adversely affected [added: customers,] workers and the [removed: economy and caused volatility in the financial markets.][added: U.S. economy.]

[removed: Due] [added: We continue] to [added: address] the [removed: inherent uncertainty] [added: impacts] of the [removed: unprecedented] [added: COVID-19 pandemic] and [removed: evolving situation, we continue to closely monitor] how [removed: COVID-19] [added: the] related developments affect Eversource.

[removed: Based on available information, we] [added: We] have not experienced significant impacts directly related to the pandemic that have [removed: adversely] [added: materially] affected our current [removed: operations] [added: operations, our workforce,] or results of operations.

The extent of the impact to us in the future will [removed: vary] [added: vary,] and depend [removed: in large part] on the duration, scope and severity of the pandemic and the [removed: timing and extent of COVID-19 relief legislation, and the] resulting impact on economic, health care and capital market conditions.

[removed: *Operational:*] We provide a critical service to our customers and have taken extensive measures to maintain its safety and reliability.

[removed: *Financial:* Overall, our] [added: The current and expected] future financial [removed: position, results] [added: impacts] of [removed: operations, and cash flows could be negatively impacted by] COVID-19 as it relates to [removed: the] [added: our businesses primarily relate to] collectability of customer receivables and customer payment [removed: plans, elimination of late payment revenues, lower sales volumes primarily from PSNH's commercial and industrial customers, energy efficiency spending levels and incentives earned,] [added: plans] and increased expenses for cleaning and supplies for personal protective equipment.

As of December 31, [removed: 2020,] [added: 2021,] our allowance for uncollectible customer receivable balance of [removed: $358.9] [added: $417.4] million, of which [removed: $194.8] [added: $226.1] million relates to hardship accounts that are specifically recovered in rates charged to customers, adequately reflected the collection risk and net realizable value for our receivables.

[removed: This] [added: Our] evaluation [added: of the uncollectible allowance] has shown that our operating companies have experienced an increase in aged receivables and [removed: some] lower cash collections from customers because of the [added: length of the] moratorium on disconnections [added: in Connecticut] and [added: Massachusetts, and] the economic slowdown resulting from the COVID-19 pandemic.

Based upon the evaluation performed, [removed: in 2020, we] [added: for the year ended December 31, 2021, management] increased the allowance for uncollectible accounts for amounts incurred as a result of COVID-19 by [removed: $31.5] [added: $24.1] million for Eversource [removed: ($2.8 million for CL&P, $11.0 million for NSTAR Electric, $2.3] [added: (increase of $20.1] million for [removed: PSNH] [added: CL&P] and [removed: $15.4] [added: $6.6] million at our natural gas [removed: businesses).][added: businesses, and decrease of $1.3 million at NSTAR Electric).]

[removed: These] [added: The] COVID-19 related uncollectible amounts were deferred either as incremental regulatory costs [added: at our Connecticut and Massachusetts utilities] or deferred through existing regulatory tracking mechanisms that recover uncollectible energy supply costs, as [removed: we believe] [added: management believes] it is probable that these costs will ultimately be recovered from customers in [added: future] rates.

[removed: We believe that we have in place, or are developing, successful mechanisms] [added: Based on the status of our COVID-19 regulatory dockets, communications] with our state regulatory [added: commissions, and policies and practices in the jurisdictions in which we operate, we believe our state regulatory] commissions [removed: that allow, or] [added: in Connecticut and Massachusetts] will [removed: allow,] [added: allow] us to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses, while balancing the impact on our customers’ bills and our operating cash flows.

In Massachusetts, the moratorium on [removed: commercial utility] disconnections [added: of commercial customers and residential customers] ended [removed: on] [added: in] September [removed: 1,] 2020 and [removed: the moratorium on residential non-hardship disconnections was extended to April 1, 2021.][added: July 2021, respectively.]

We [removed: continue to work] [added: worked] closely with our state regulatory commissions and consumer advocates on customer assistance measures, including payment plan options [added: as well as financial hardship and arrearage management programs,] in order to mitigate the impact on customer rates in the [removed: future, as well as financial hardship and arrearage management programs for those customers who are unable to pay their utility bills.][added: future.]

For the year ended December 31, [removed: 2020,] [added: 2021,] net incremental costs incurred as a result of COVID-19 totaled [removed: $35.2 million] [added: $20.8 million,] and related to uncollectible expense that impacts earnings, facilities and fleet cleaning, sanitizing costs and supplies for personal protective equipment, net of cost [removed: savings.][added: savings and benefits under the CARES Act.]

[removed: We have deferred $24.0] [added: As of December 31, 2021, a total of $39.8] million of [removed: these] net [added: deferred] incremental COVID-19 costs [added: were recorded] on the balance sheet, of which [removed: $15.8] [added: $33.0] million of that deferral related to uncollectible expense that impacts earnings and [removed: $8.2] [added: $6.8] million related to cleaning and supplies for personal protective equipment.

[removed: Incremental] [added: Net incremental] COVID-19 expenses that reduced pre-tax earnings totaled [removed: $11.1] [added: $5.0] million on the statement of [removed: income.][added: income in 2021.]

Our earnings discussion also includes non-GAAP financial measures referencing our 2021 earnings and EPS excluding charges at CL&P related to a settlement agreement that included credits to customers and funding of various customer assistance initiatives and a storm performance penalty imposed on CL&P by the PURA and our 2021 and 2020 earnings and EPS excluding certain acquisition and transition costs.

This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods.

We view these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance.

Eversource Energy is a public utility holding company primarily engaged, through its wholly-owned regulated utility subsidiaries, in the energy delivery business.

Eversource Energy's wholly-owned regulated utility subsidiaries consist of CL&P, NSTAR Electric and PSNH (electric utilities), Yankee Gas, NSTAR Gas and Eversource Gas Company of Massachusetts (EGMA) (natural gas utilities) and Aquarion (water utilities).

Eversource is organized into the electric distribution, electric transmission, natural gas distribution, and water distribution reportable segments.

- Our 2021 results include after-tax costs recorded within the electric distribution segment resulting from a PURA-approved CL&P settlement agreement and an after-tax charge at CL&P for a PURA assessment as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020.

Our 2021 results also include after-tax acquisition and transition costs recorded at Eversource parent.

In total, these after-tax costs were $109.7 million, or $0.32 per share in 2021.

In 2021, we issued $3.23 billion of new long-term debt and we repaid $1.14 billion of long-term debt.

Additionally, we currently expect to make investments in our offshore wind business between $0.9 billion and $1.0 billion in 2022 and expect to make investments for our three projects in total between $3.0 billion and $3.6 billion from 2023 through 2026.

These estimates assume that the three projects are completed and are in-service by the end of 2025, as planned.

- On January 18, 2022, South Fork Wind received BOEM’s final approval of its Construction and Operations Plan (COP), following BOEM’s November 2021 issuance of the Record of Decision, which concluded BOEM’s environmental review of the project.

The COP approval outlines the project’s one nautical mile turbine spacing, the requirements on the construction methodology for all work occurring in federal ocean waters, and mitigation measures to protect marine habitats and species.

The final decision from BOEM was needed to move the project toward the start of construction, and with the decision received, South Fork has now entered the construction phase.

- On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel (OCC), Office of the Attorney General (AG) and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in then-pending regulatory proceedings initiated by the PURA.

PURA approved the settlement agreement on October 27, 2021.

In the settlement agreement, CL&P agreed to provide a total of $65 million of customer credits, which were distributed based on customer sales over a two-month billing period from December 1, 2021 to January 31, 2022.

CL&P also agreed to irrevocably set aside $10 million in a fund to provide bill payment assistance to certain existing non-hardship and hardship customers carrying arrearages, as approved by the PURA.

In exchange for the $75 million of customer credits and assistance, PURA’s interim rate reduction docket was resolved without findings.

As a result of the settlement agreement, neither the 90 basis point reduction to CL&P’s return on equity introduced in PURA’s storm-related decision issued April 28, 2021, nor the 45 basis point reduction to CL&P’s return on equity included in PURA’s decision issued September 14, 2021 in the interim rate reduction docket, will be implemented.

Additionally, CL&P agreed to withdraw its pending appeals related to the $28.6 million storm performance penalty imposed in PURA’s April 28, 2021 and July 14, 2021 decisions.

CL&P has also agreed to freeze its current base distribution rates until no earlier than January 1, 2024.

The cumulative pre-tax impact of the October 1, 2021 settlement agreement and the Storm Isaias penalty imposed by PURA totaled $103.6 million, and the after-tax earnings impact was $86.1 million, or $0.25 per share, in 2021.

| CL&P Settlement Impacts (after-tax) (1) | | | (86.1) | | | | | | (0.25) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Acquisition and Transition Costs (after-tax) (2) | | | (23.6) | | | | | | (0.07) | | | | | | (32.1) | | | | | | (0.09) | | | | | | — | | | | | | — | | |

| Net Income Attributable to Common Shareholders (GAAP) | | | $ | 1,220.5 | | | | | $ | 3.54 | | | | | $ | 1,205.2 | | | | | $ | 3.55 | | | | | $ | 909.1 | | | | | $ | 2.81 | |

| CL&P Settlement Impacts (after-tax) (1) | | | (86.1) | | | | | | (0.25) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Net Income - Regulated Companies (GAAP) | | | $ | 1,256.3 | | | | | $ | 3.64 | | | | | $ | 1,221.8 | | | | | $ | 3.60 | | | | | $ | 900.9 | | | | | $ | 2.79 | |

(1) The 2021 after-tax costs are associated with the CL&P settlement agreement approved by PURA on October 27, 2021, which included a pre-tax $65 million charge to earnings for customer credits provided to customers over a two-month billing period from December 1, 2021 to January 31, 2022 and a $10 million charge to earnings to establish a fund to provide bill payment assistance to certain existing non-hardship and hardship customers carrying arrearages.

The 2021 after-tax costs also include charges recorded at CL&P as a result of the April 28, 2021 and July 14, 2021 PURA decisions, which included a $28.4 million penalty for storm performance results and is currently being provided as credits to customer bills and a $0.2 million fine to the State of Connecticut’s general fund.

As a result of the October 1, 2021 settlement agreement, CL&P agreed to withdraw its pending appeals related to the storm performance penalty imposed in PURA’s April 28, 2021 and July 14, 2021 decisions.

Management views these collective charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance.

(2) The 2021 costs are for the transition of systems as a result of our purchase of the assets of CMA on October 9, 2020 and costs associated with our December 1, 2021 water business acquisition.

We expect integration costs in 2022 as a result of continuing to transition the CMA assets onto Eversource’s systems.

Our electric distribution segment earnings decreased $73.9 million in 2021, as compared to 2020, due primarily to CL&P’s settlement agreement on October 1, 2021 resulting in a $75 million pre-tax charge to earnings and a $28.6 million pre-tax charge to earnings at CL&P for a storm performance penalty imposed by PURA as a result of CL&P’s preparation for and response to Tropical Storm Isaias in August 2020 that was recorded in 2021.

The after-tax impact of the CL&P settlement agreement and CL&P storm performance penalty imposed by the PURA was $86.1 million, or $0.25 per share.

Our electric transmission segment earnings increased $42.1 million in 2021, as compared to 2020, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure.

Our natural gas distribution segment earnings increased $70.7 million in 2021, as compared to 2020, due primarily to the incremental impact of EGMA earnings of $43.0 million.

*Eversource Parent and Other Companies:* Eversource parent and other companies had an increased loss of $19.2 million in 2021, as compared to 2020, due primarily to a higher effective tax rate and higher employee-related costs.

Our earnings discussion also includes non-GAAP financial measures referencing our 2020 earnings and EPS excluding certain acquisition costs related to our purchase of the assets of Columbia Gas of Massachusetts and our 2019 earnings and EPS excluding the impairment charge for the NPT project.

Our 2019 results include an after-tax impairment charge of $204.4 million, or $0.64 per share, related to our former investment in the NPT project.

Excluding the NPT impairment charge, we earned $1.11 billion, or $3.45 per share, in 2019.

- Our electric distribution segment earned $544.0 million, or $1.60 per share, in 2020, compared with $513.3 million, or $1.59 per share, in 2019.

Our natural gas distribution segment earned $134.1 million, or $0.40 per share, in 2020, compared with $96.2 million, or $0.30 per share, in 2019.

Our water distribution segment earned $41.2 million, or $0.12 per share, in 2020, compared with $34.9 million, or $0.11 per share, in 2019.

- Our electric transmission segment earned $502.5 million, or $1.48 per share, in 2020, compared with $256.5 million, or $0.79 per share, in 2019.

Excluding the after-tax NPT impairment charge of $204.4 million, or $0.64 per share, our electric transmission segment earned $460.9 million, or $1.43 per share, in 2019.

- Eversource parent and other companies had a net loss of $16.6 million, or $0.05 per share, in 2020, compared with earnings of $8.2 million, or $0.02 per share, in 2019.

Excluding acquisition costs, Eversource parent and other companies earned $14.0 million, or $0.04 per share, in 2020.

- The outbreak of COVID-19 has not resulted in significant operational or earnings impacts.

We are continuing to closely monitor the COVID-19 pandemic, and we continue to operate under our pandemic response plan.

- In 2020, we issued 11,960,000 common shares, which resulted in proceeds of $929.0 million, net of issuance costs.

- In 2020, we issued $2.76 billion of new long-term debt, consisting of $1.55 billion by Eversource parent, $400 million by CL&P, $400 million by NSTAR Electric, $150 million by PSNH, $190 million by NSTAR Gas, and $70 million by Yankee Gas.

Proceeds from these new issuances were used primarily to fund a portion of the purchase price for the CMA asset acquisition and to pay short-term borrowings at Eversource parent, refinance investments in eligible green expenditures at NSTAR Electric, and to refinance existing indebtedness, fund capital expenditures and for general corporate purposes at CL&P, PSNH, NSTAR Gas and Yankee Gas.

The 2021 dividend represents an increase of 6.2 percent over the dividend paid in December 2020.

These projections do not include any expected investments related to offshore wind projects.

- On October 9, 2020, Eversource completed the acquisition of certain assets and liabilities that comprised NiSource’s natural gas distribution business in Massachusetts, CMA, for a cash purchase price of $1.1 billion, plus a target working capital amount of $69.6 million, which is subject to adjustment to reflect actual working capital as of the closing date.

On October 7, 2020, the DPU approved the rate plan related to the acquisition.

The approved rate stabilization plan includes base distribution rate increases of $13 million on November 1, 2021 and $10 million on November 1, 2022.

The settlement agreement includes two rate base resets during an eight-year rate plan, occurring on November 1, 2024 and November 1, 2027.

PSNH was also permitted three step increases, effective January 1, 2021, August 1, 2021, and August 1, 2022, to reflect plant additions in calendar years 2019, 2020 and 2021, respectively.

The settlement agreement allowed for the effect of the permanent rate increase to be extended back to the temporary rate period.

In lieu of a customer rate increase for this recoupment of revenue, the NHPUC directed a portion of the total EDIT regulatory liability to offset bill impacts to customers.

NSTAR Gas' 2019 plant additions are allowed recovery beginning on November 1, 2021.

The future impact will also depend on the outcome of planned proceedings before our state regulatory commissions to recover our incremental costs associated with COVID-19, which include uncollectible customer receivable expenses.

We have implemented our company-wide pandemic plan, which guides our emergency response, business continuity, and the precautionary measures we are taking to ensure the safety, health, and well-being of our employees, our customers, and our communities.

We continue to adjust our company-wide pandemic plan to address various scenarios, including reduced workforce levels and limited mutual aid in the event of a significant storm event, and have implemented protective measures to mitigate the impact of COVID-19 on our workforce.

We have implemented work from home policies where appropriate, resulting in nearly half of our employees working remotely.

For our employees performing essential functions that are required onsite, such as field crews and system operations, we have taken significant safety measures, including establishing social distancing measures, the use of personal protective equipment, increasing facility sanitization efforts, and enabling critical operations to be shifted to different control center locations if necessary.

At this time, our workforce staffing levels continue to enable us to safely and reliably deliver our critical services to customers.

We continue to prepare for the re-entry of our employees working remotely.

Our re-entry plan includes a multi-phase approach that is measured and gradual.

The plan is informed by public health guidance with the safety of our employees and customers as our highest priority.

We are in the early phase of our re-entry plan and have returned fewer than 100 remote employees to the workplace.

We have had increased short duration return to work for critical business needs, such as storm response and essential training.

State and federal guidelines, external conditions, and critical business priorities continue to inform the pace of our re-entry plan.

Significant health and safety measures and pandemic protocols will remain in place, including social distancing requirements, the use of personal protective equipment, sanitization efforts and employee training, for all employees currently working onsite and specific plans have been developed for our eventual re-entry to the workplace.

In mid-March, we suspended non-critical work inside customer premises, which included energy audits inside our customers’ homes and businesses.

These activities resumed in early July with the implementation of new health and safety guidelines for the restart of energy efficiency services to customers.

As of December 31, [removed: 2020,] [added: 2021,] our regulated companies held collateral (letters of credit or cash) of [removed: $10.0] [added: $210.9] million from counterparties related to our standard service contracts.

As of December 31, [removed: 2020,] [added: 2021,] Eversource had $34.6 million of cash posted with ISO-NE related to energy transactions.

As of December 31, 2021, approximately 98 percent of our long-term debt was at a fixed interest rate.

The remaining long-term debt is at variable interest rates and is subject to interest rate risk that could result in earnings volatility.

Assuming a one percentage point increase in our variable interest rates, annual interest expense would have increased by a pre-tax amount of $3.5 million.

As of December 31, 2020, all of our long-term debt except for $11.7 million of fees and interest due for CYAPC's spent nuclear fuel disposal costs, was at a fixed interest rate.

- [removed: Eversource] Aquarion [removed: Holdings, Inc.] [added: Company] (Aquarion), a utility holding company that owns [removed: three] [added: four] separate regulated water utility subsidiaries and collectively serves residential, commercial, industrial, and municipal and fire protection customers in parts of Connecticut, Massachusetts and New Hampshire.

The LNG assets acquired from CMA were assigned to Hopkinton LNG [removed: Corp.][added: Corp, also a subsidiary of Eversource.]

As of December 31, [removed: 2020,] [added: 2021,] CL&P furnished retail franchise electric service to approximately 1.27 million customers in 149 cities and towns in Connecticut, covering an area of approximately 4,400 square miles.

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

- An electric [removed: GSC,] [added: generation service charge,] 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 [removed: GSC] [added: generation service charge] is adjusted periodically and reconciled annually in accordance with the policies and procedures of the PURA, with any differences refunded to, or recovered from, customers.

- A revenue decoupling adjustment that reconciles annual base distribution rate recovery amounts recovered from customers to the pre-established level of baseline distribution delivery service revenue requirement approved by the [removed: PURA of $1.099 billion effective May 1, 2018, $1.127 billion effective May 1, 2019, and $1.158 billion effective May 1, 2020.][added: PURA.]

[removed: These] [added: The] pre-established [removed: levels] [added: level] of baseline distribution delivery service revenue [removed: requirements are] [added: requirement is] also subject to adjustment [removed: at each of these dates] in accordance with provisions of the [removed: April] 2018 rate case settlement agreement.

- 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, any costs approved by the PURA to reduce these charges, as well as other costs approved by [added: the] PURA.

- A [removed: CTA] [added: Competitive Transition Assessment (CTA)] charge, assessed to recover stranded costs associated with electric industry restructuring such as various IPP contracts.

- [removed: An SBC,] [added: A Systems Benefits Charge (SBC),] established to fund expenses associated with various hardship and low-income programs.

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

During [removed: 2020,] [added: 2021,] CL&P supplied approximately [removed: 51] [added: 49] percent of its customer load at SS or LRS rates while the other [removed: 49] [added: 51] percent of its customer load had migrated to competitive energy suppliers.

In terms of the total number of CL&P customers, this equates to [removed: 23] [added: 19] percent being on competitive supply, while [removed: 77] [added: 81] percent remain with SS or LRS.

[added: As approved by the PURA,] CL&P periodically enters into full requirements [added: supply] contracts for SS loads for periods of up to one year.

CL&P typically enters into full requirements [added: supply] contracts for LRS loads every three months.

Currently, CL&P has full requirements [added: supply] contracts in place for 100 percent of its SS [removed: loads] [added: load] for the first half of [removed: 2021.][added: 2022.]

For the second half of [removed: 2021,] [added: 2022,] CL&P has [removed: 40] [added: 70] percent of its SS load under full requirements [added: supply] contracts and intends to purchase an additional [removed: 60] [added: 30] percent of full requirements.

None of the SS load for [removed: 2022] [added: 2023] has been procured.

CL&P has full requirements [added: supply] contracts in place for its LRS [removed: loads] [added: load] through [removed: March 2021] [added: June 2022] and intends to purchase 100 percent of full requirements for the remainder of [removed: 2021.][added: 2022.]

As of December 31, [removed: 2020,] [added: 2021,] NSTAR Electric furnished retail franchise electric service to approximately [removed: 1.45] [added: 1.46] million customers in [removed: Boston and 139] [added: 140] cities and towns in eastern and western Massachusetts, including [added: Boston,] Cape Cod, Martha's Vineyard and the greater Springfield metropolitan area, covering an aggregate area of approximately 3,200 square miles.

- A revenue decoupling adjustment that reconciles annual base distribution rate recovery amounts recovered from customers to the pre-established level of baseline distribution delivery service revenue requirement approved by the [removed: DPU of $956 million on an annualized basis for 2018, $988 million for 2019, and $1.022 billion for 2020.][added: DPU.]

The transmission charge is reconciled annually to actual costs [removed: incurred] [added: incurred,] and reviewed by the DPU, with any difference refunded to, or recovered from, customers.

The transition charge is reconciled annually to actual costs [removed: incurred] [added: incurred,] and reviewed by the DPU, with any difference refunded to, or recovered from, customers.

The energy efficiency charge is reconciled annually to actual costs [removed: incurred] [added: incurred,] and reviewed by the DPU, with any difference refunded to, or recovered from, customers.

These charges are reconciled annually to actual costs [removed: incurred] [added: incurred,] and reviewed by the DPU, with any difference refunded to, or recovered from, customers.

[added: As approved by the DPU,] NSTAR Electric has signed long-term commitments for the purchase of energy from renewable energy facilities.

DPU-approved inflation-based adjustments to annual base distribution amounts were effective [removed: January] [added: annually beginning November] 1, [removed: 2019, 2020 and] 2021.

NSTAR Electric will not be required to pay a SQ charge for its [removed: 2020] [added: 2021] performance as the company achieved results at or above target for all of its SQ metrics in [removed: 2020.][added: 2021.]

As noted above, NSTAR Electric does not own any generation assets (other than 70 MW of solar power facilities that produce energy that is sold into the ISO-NE market) and purchases its energy [added: supply] requirements from a variety of competitive sources through requests for proposals issued periodically, consistent with DPU regulations.

[added: As approved by the DPU,] NSTAR Electric enters into supply contracts for basic service for approximately [removed: 45] [added: 30] percent of its residential and [added: 23 percent of its] small commercial and industrial (C&I) customers twice per year for twelve-month terms.

NSTAR Electric enters into supply contracts for basic service for [removed: 18] [added: 13] percent of [added: its] large C&I customers every three months.

During [removed: 2020,] [added: 2021,] NSTAR Electric supplied approximately [removed: 42 percent of its residential customer load, 29 percent of its small C&I customer load, and 6] [added: 17] percent of its [removed: large C&I] [added: overall] customer load at basic service rates.

The [removed: remainder] [added: remaining 83 percent] of its [added: overall] customer load was [removed: distributed between] [added: served either by] municipal aggregation [removed: and] [added: or] competitive supply.

As of December 31, [removed: 2020,] [added: 2021,] PSNH furnished retail franchise electric service to approximately [removed: 528,000] [added: 532,000] retail customers in 211 cities and towns in New Hampshire, covering an area of approximately 5,630 square miles.

[removed: As of December 31, 2020,] PSNH does not own any electric generation facilities.

- [removed: An SCRC,] [added: A Stranded Cost Recovery Charge (SCRC),] which allows PSNH to recover its stranded costs, including above-market expenses incurred under mandated power purchase obligations, other long-term investments and obligations, and the remaining costs associated with the 2018 sales of its generation facilities.

- [removed: An SBC,] [added: A Systems Benefits Charge (SBC),] which funds energy efficiency programs for all customers, as well as assistance programs for residential customers within certain income guidelines.

- A [removed: new] Regulatory Reconciliation Adjustment (RRA) that reconciles the difference between certain estimated and actual costs included in base distribution rates, including costs related to regulatory assessments, vegetation management program expenses, property tax expenses, storm cost amortization updated for the actual cost of long-term debt and lost base revenues related to net metering.

[added: As approved by the NHPUC,] PSNH has signed long-term commitments for the purchase of energy from renewable energy facilities.

Eversource Energy also has an offshore wind business, which includes a 50 percent ownership interest in offshore wind projects that are being developed and constructed through a joint and equal partnership with Ørsted.

The ESI also recovers costs associated with CL&P’s system resiliency program.

CL&P Settlement Agreement: On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel (OCC), Office of the Attorney General (AG) and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in then-pending regulatory proceedings initiated by the PURA.

PURA approved the settlement agreement on October 27, 2021.

In accordance with the settlement agreement, CL&P has agreed that its current base distribution rates shall be frozen, subject to certain customer credits, until no earlier than January 1, 2024.

The rate freeze applies only to base distribution rates (including storm costs) and not to other rate mechanisms such as the retail rate components, rate reconciling mechanisms, formula rates and any other adjustment mechanisms.

The rate freeze also does not apply to any cost recovery mechanism outside of the base distribution rates with regard to grid-modernization initiatives or any other proceedings, either currently pending or that may be initiated during the rate freeze period, that may place additional obligations on CL&P.

The approval of the settlement agreement satisfies the Connecticut statute of rate review requirements that requires electric utilities to file a distribution rate case within four years of the last rate case.

DPU-approved inflation-based adjustments to annual base distribution amounts were effective annually beginning in 2019 and last through 2022.

On January 14, 2022, NSTAR Electric filed an application with the DPU for new base distribution rates to be effective January 1, 2023.

For those customers who do not choose a competitive energy supplier, PSNH purchases power on behalf of, and passes the related cost through to, those customers (default energy service).

Distribution Rate Case: PSNH’s distribution rates were established in a December 2020 NHPUC-approved settlement agreement, with rates effective January 1, 2021.

FERC Opinion Nos. 569-A and 569-B are currently under appeal with the Court.

The cash purchase price was $1.1 billion, plus a working capital amount of $68.6 million, as finalized in the first quarter of 2021.

The LNG assets acquired from CMA were assigned to Hopkinton LNG Corp, also a subsidiary of Eversource.

The PGA is evaluated monthly.

NSTAR Gas: NSTAR Gas distribution rates were established in an October 2020 DPU-approved rate case, with rates effective November 1, 2020.

In October 2020, the DPU opened Docket “DPU 20-80 The Future of Gas” to examine the role of Massachusetts natural gas local distribution companies (LDCs) in helping to meet the state’s 2050 climate goals.

The DPU will consider new policies and structures that would protect ratepayers as Massachusetts works to decarbonize the building sector, potentially recasting the role of LDCs in Massachusetts, which may require significant changes to the LDCs planning processes and business models.

At this time, Eversource cannot predict the ultimate outcome of this proceeding and the resulting impact to its natural gas businesses, however the Company does not believe there is any indication of an inability to recover costs or risk of impairment of our natural gas assets at this time.

Yankee Gas files its GSI reconciliation annually on March 1st for rates effective April 1st.

For information regarding short-term and long-term debt agreements, see "Liquidity" in the accompanying Item 7, *Management's Discussion and Analysis of Financial Condition and Results of Operations,* and Note 8, "Short-Term Debt," and Note 9, "Long-Term Debt," of the Combined Notes to Financial Statements.

For 2021, the RPS and Clean Energy Standard (CES) requirements were 49.26 percent, and will ultimately reach 57.30 percent in 2025.

Massachusetts electric suppliers were also required to meet Alternative Energy Portfolio Standards (APS) of 5.25 percent and Clean Peak Energy Standards (CPS) of 3.0 percent in 2021.

Those requirements will reach 6.25 and 9.00 percent in 2025, respectively.

Our environmental policy includes formal procedures and a task-scheduling system in place to help ensure environmental compliance.

The Board’s Governance, Environmental and Social Responsibility Committee also provides oversight of environmental matters and compliance.

We also identify and address potential environmental risks through our Enterprise Risk Management (ERM) program in addition to rigorous audits of our facilities, vendors, and processes.

Many of our construction projects require the submission of comprehensive permitting applications to various local, state and federal agencies.

The permits we receive outline various best management practices and restoration requirements to address any construction period-impacts.

When planning environmental investigations and remediation of impacted properties, we work closely with the municipalities and environmental regulators to ensure that our plans adhere to applicable regulations while protecting human health and the environment.

Projects that may be located in the vicinity of regulated resource areas (wetlands, waterways) are permitted to address local, state and federal requirements.

In many cases, these projects are designed to address opportunities for beneficial reuse of the property.

We assess the regulatory, physical and transitional impacts related to climate change to develop mitigation strategies including evaluating the impacts of more severe weather events, financial risks, changing customer behaviors, and opportunities to reduce emissions in our operations and for the region through clean energy and emerging technologies investments.

*Regulatory Impacts of Climate Change:* Global climate change continues to receive increasing focus from the federal government and state governments.

The Biden Administration has communicated a renewed focus on addressing climate change by setting a U.S. target of reducing greenhouse gas (GHG) emissions by 50 percent by 2030, compared to 2005 levels, and achieving net-zero emissions by 2050 economy-wide.

The plan calls for aggressive measures focused on clean transportation, clean energy and climate investments targeted at environmental justice communities.

Similarly, the states in which we operate have aggressive climate goals and implementation plans.

In Massachusetts, climate legislation was passed in 2021 requiring aggressive measures across all sectors to meet the state’s goal of achieving net-zero emissions by 2050 and Connecticut legislation includes a target to achieve zero-carbon electricity by 2040.

Potential future environmental statutes and regulations, such as additional greenhouse gas reduction regulation to address global climate change, could impose significant additional costs and there can be no assurance that regulators will approve the recovery of those costs.

The ESI also recovers costs associated with CL&P’s system resiliency program, which was implemented as part of CL&P's rate case settlement agreement that was approved by PURA in April 2018.

The Cape Light Compact, an inter-governmental organization consisting of the 21 towns and two counties on Cape Cod and Martha's Vineyard, serves 200,000 customers through the delivery of energy efficiency programs, consumer advocacy, competitive electricity supply and green power options.

NSTAR Electric continues to provide electric service to these customers including the delivery of power, maintenance of infrastructure, capital investment, meter reading, billing, and customer service.

On January 10, 2018, PSNH completed the sale of its thermal generation assets pursuant to a 2017 purchase and sale agreement.

The thermal generation facilities included approximately 1,100 MW of coal, natural gas, biomass and oil-fired electricity generation facilities.

On August 26, 2018, PSNH completed the sale of its hydroelectric generation assets pursuant to a separate 2017 purchase and sale agreement.

For further information, see "Generation Divestiture" below.

During 2020, approximately 21 percent of all of PSNH's customers (approximately 53 percent of load) were taking service from competitive energy suppliers.

Distribution Rate Case: On June 27, 2019, the NHPUC approved a settlement agreement that was reached by PSNH, the NHPUC Staff, the Office of the Consumer Advocate, and another settling party, to implement a temporary annual base distribution rate increase of $28.3 million.

Although new rates were implemented on August 1, 2019 to customers, the provisions of the temporary base distribution rate increase were effective July 1, 2019.

The settlement agreement also permitted PSNH to recover approximately $68.5 million in unrecovered storm costs over a five-year period beginning August 1, 2019, with debt carrying charges, which is included in the temporary rate increase.

On May 28, 2019, PSNH filed an application with the NHPUC for a permanent increase in base distribution rates of approximately $70 million, effective July 1, 2020, which included the temporary rate increase request.

Temporary rates remained in effect with a reconciliation of permanent rates retroactive to July 1, 2019 once permanent rates were set.

On December 15, 2020, the NHPUC approved an October 9, 2020 settlement agreement on permanent rates between PSNH and all parties to the proceeding.

The NHPUC approved a permanent rate increase of $45.0 million effective January 1, 2021, inclusive of the temporary rate increase referenced above.

On December 23, 2020, the NHPUC approved the first step adjustment for 2019 plant in service to recover a revenue requirement of $10.6 million, subject to reconciliation after completion of an audit, effective January 1, 2021.

The settlement agreement also established an authorized regulatory ROE of 9.3 percent with a 54.4 percent common equity ratio in PSNH’s capital structure and provided for a new tracker to recover regulatory assessments, vegetation management costs, property tax costs, and lost distribution revenue attributable to net metering.

Generation Divestiture

On January 10, 2018, PSNH completed the sale of its thermal generation assets.

The original purchase price of $175 million was adjusted to reflect working capital adjustments, closing date adjustments and proration of taxes and fees prior to closing.

As a result of these adjustments, net proceeds from the sale of the thermal assets totaled $116.8 million.

On August 26, 2018, PSNH completed the sale of its hydroelectric generation assets.

The original purchase price of $83 million was adjusted to reflect contractual adjustments, resulting in net proceeds of $77.2 million.

The difference between the carrying value of the hydroelectric generation assets and the sale proceeds resulted in a gain of $17.3 million.

An estimated gain from the sale of these assets was included as an offset to the total remaining costs associated with the sale of generation assets that were securitized on May 8, 2018.

On May 8, 2018, PSNH Funding issued $635.7 million of securitized RRBs pursuant to a finance order issued by the NHPUC on January 30, 2018 to recover remaining costs resulting from the divestiture of PSNH’s generation assets, which included the deferred costs resulting from the sale of the thermal generation assets.

These RRBs are secured by a non-bypassable charge recoverable from PSNH customers.

PSNH recorded regulatory assets and other deferred costs in connection with the generation asset divestiture and the securitization of remaining costs, which are probable of recovery through collection of the non-bypassable charge.

On May 15, 2020, the NHPUC Audit Staff issued a final report on the audit of PSNH’s generation asset divestiture-related costs and resulting securitized and stranded costs.

The findings in the audit report as well as other aspects of the divestiture process were further investigated by NHPUC Staff through the discovery phase, which was completed in July 2020.

On September 30, 2020, PSNH filed a settlement agreement on the generation asset divestiture-related costs with the NHPUC Audit Staff.

The settlement agreement resolved all issues with respect to PSNH’s divestiture of its generating assets and the recovery of $12.0 million of divestiture-related costs incurred above the $635.7 million amount previously securitized.

On December 17, 2020, the NHPUC approved the additional $12.0 million proposed in the settlement agreement to be recovered over a one-year period through the SCRC rate beginning February 1, 2021.

Various parties appealed the MISO transmission owners' opinion.

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

As a result of a final decision received on July 19, 2019 from the New Hampshire Supreme Court, whereby the court denied Northern Pass’ appeal and affirmed the NHSEC’s denial of Northern Pass’ siting application on NPT, Eversource concluded that construction of NPT was no longer probable and that there was no constructive path forward for the project.

In 2019, Eversource terminated the project and permanently abandoned any further development.

As a result, substantially all of the capitalized project costs, which totaled $318 million, certain of which were subject to cost reimbursement agreements, were impaired.

In total, this resulted in a pre-tax impairment charge of $239.6 million within Operating Income on the statement of income for the year ended December 31, 2019, and was reflected in the Electric Transmission segment.

For further information, see "Critical Accounting Policies - Impairment of Northern Pass Transmission" in the accompanying Item 7, *Management's Discussion and Analysis of Financial Condition and Results of Operations.*

For information regarding material lawsuits and proceedings, see [removed: [N](#ifc5688e05dc842768d42691df7ce3cf3_241)[ote](#ifc5688e05dc842768d42691df7ce3cf3_241) [13](#ifc5688e05dc842768d42691df7ce3cf3_241)[,](#ifc5688e05dc842768d42691df7ce3cf3_241) [“](#ifc5688e05dc842768d42691df7ce3cf3_241)[Commitments] [added: [Note 13, “Commitments] and [removed: Contingencies](#ifc5688e05dc842768d42691df7ce3cf3_241)[,](#ifc5688e05dc842768d42691df7ce3cf3_241)[”](#ifc5688e05dc842768d42691df7ce3cf3_241)] [added: Contingencies,”](#i7a9f81f64ed54027a984e1718e341283_217)] of the Combined Notes to Financial Statements.

[removed: For further discussion of legal proceedings,] [added: In addition,] see Item 1, *Business:* "– Electric Distribution Segment," "– Electric Transmission Segment," [removed: and] "– Natural Gas Distribution [added: Segment," and "– Water 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; "– Nuclear Fuel Storage" for information related to nuclear waste; and "– Other Regulatory and Environmental Matters" for information about toxic substances and hazardous [removed: waste, electric and magnetic fields,] [added: materials, climate change,] and other matters.

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

| | | | For the fiscal year ended | | | December 31, [removed: 2020] [added: 2021] | | |

Commission File Number: [removed: 1-5324][added: 001-05324]

Commission File Number: [removed: 0-00404][added: 000-00404]

Commission File Number: [removed: 1-02301][added: 001-02301]

Commission File Number: [removed: 1-6392][added: 001-06392]

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

The aggregate market value of Eversource 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: 2020)] [added: 2021)] was [removed: $28,496,151,703] [added: $27,528,070,961] based on a closing market price of [removed: $83.27] [added: $80.24] per share for the [removed: 342,213,903] [added: 343,071,672] common shares outstanding held by non-affiliates on June 30, [removed: 2020.][added: 2021.]

| Company - Class of Stock | | | Outstanding as of January 31, [removed: 2021] [added: 2022] | | | | | |

| Eversource Energy Common Shares, $5.00 par value | | | [removed: 343,003,366] [added: 344,439,905] | | | shares | | |

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

Portions of the Eversource Energy and Subsidiaries [removed: 2019] [added: 2020] combined Annual Report on Form 10-K and portions of the Proxy Statement relating to the Annual Meeting of Shareholders to be held on May [removed: 5, 2021,] [added: 4, 2022,] are incorporated by reference into Parts II and III of this Report.

| ES parent and other companies | | | ES parent and other companies are comprised of Eversource parent, Eversource Service, [removed: Eversource Water Ventures, Inc. (parent company of Aquarion),] and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), the consolidated operations of CYAPC and YAEC, and Eversource parent's equity ownership interests that are not consolidated | | |

| Aquarion | | | [removed: Eversource] Aquarion [removed: Holdings, Inc.] [added: Company] and its subsidiaries | | |

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

| [removed: Bay State Wind] [added: North East Offshore] | | | [removed: Bay State Wind] [added: North East Offshore,] LLC, an offshore wind business being developed jointly by Eversource and Denmark-based [removed: Ørsted, which holds the Sunrise Wind project] [added: Ørsted] | | |

| Regulated companies | | | The Eversource regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric and PSNH, the natural gas distribution businesses of Yankee Gas, NSTAR Gas and EGMA, [removed: NPT, Aquarion,] [added: Aquarion’s water distribution businesses,] and the solar power facilities of NSTAR Electric | | |

| Eversource [removed: 2019] [added: 2020] Form 10-K | | | The Eversource Energy and Subsidiaries [removed: 2019] [added: 2020] combined Annual Report on Form 10-K as filed with the SEC | | |

[removed: 2020] [added: 2021] FORM 10-K ANNUAL REPORT

| Item 1. | | | [removed: [Business](#ifc5688e05dc842768d42691df7ce3cf3_19)] [added: [Business](#i7a9f81f64ed54027a984e1718e341283_19)] | | | [removed: [2](#ifc5688e05dc842768d42691df7ce3cf3_19)] [added: [2](#i7a9f81f64ed54027a984e1718e341283_19)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ifc5688e05dc842768d42691df7ce3cf3_22)] [added: Factors](#i7a9f81f64ed54027a984e1718e341283_22)] | | | [removed: [16](#ifc5688e05dc842768d42691df7ce3cf3_22)] [added: [16](#i7a9f81f64ed54027a984e1718e341283_22)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ifc5688e05dc842768d42691df7ce3cf3_25)] [added: Comments](#i7a9f81f64ed54027a984e1718e341283_25)] | | | [removed: [21](#ifc5688e05dc842768d42691df7ce3cf3_25)] [added: [21](#i7a9f81f64ed54027a984e1718e341283_25)] | | |

| Item 2. | | | [removed: [Properties](#ifc5688e05dc842768d42691df7ce3cf3_28)] [added: [Properties](#i7a9f81f64ed54027a984e1718e341283_28)] | | | [removed: [21](#ifc5688e05dc842768d42691df7ce3cf3_28)] [added: [21](#i7a9f81f64ed54027a984e1718e341283_28)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ifc5688e05dc842768d42691df7ce3cf3_31)] [added: Proceedings](#i7a9f81f64ed54027a984e1718e341283_31)] | | | [removed: [24](#ifc5688e05dc842768d42691df7ce3cf3_31)] [added: [24](#i7a9f81f64ed54027a984e1718e341283_31)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ifc5688e05dc842768d42691df7ce3cf3_34)] [added: Disclosures](#i7a9f81f64ed54027a984e1718e341283_34)] | | | [removed: [24](#ifc5688e05dc842768d42691df7ce3cf3_34)] [added: [24](#i7a9f81f64ed54027a984e1718e341283_34)] | | |

| Item 5. | | | [Market for the Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ifc5688e05dc842768d42691df7ce3cf3_37)] [added: Securities](#i7a9f81f64ed54027a984e1718e341283_37)] | | | [removed: [24](#ifc5688e05dc842768d42691df7ce3cf3_37)] [added: [25](#i7a9f81f64ed54027a984e1718e341283_37)] | | |

| Item 6. | | | [removed: [R](#ifc5688e05dc842768d42691df7ce3cf3_40)[emoved] [added: [Removed] and [removed: Reserved](#ifc5688e05dc842768d42691df7ce3cf3_40)] [added: Reserved](#i7a9f81f64ed54027a984e1718e341283_40)] | | | [removed: [25](#ifc5688e05dc842768d42691df7ce3cf3_40)] [added: [26](#i7a9f81f64ed54027a984e1718e341283_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ifc5688e05dc842768d42691df7ce3cf3_43)] [added: Operations](#i7a9f81f64ed54027a984e1718e341283_43)] | | | [removed: [26](#ifc5688e05dc842768d42691df7ce3cf3_43)] [added: [27](#i7a9f81f64ed54027a984e1718e341283_43)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#ifc5688e05dc842768d42691df7ce3cf3_82)] [added: Risk](#i7a9f81f64ed54027a984e1718e341283_85)] | | | [removed: [55](#ifc5688e05dc842768d42691df7ce3cf3_82)] [added: [56](#i7a9f81f64ed54027a984e1718e341283_85)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ifc5688e05dc842768d42691df7ce3cf3_85)] [added: Data](#i7a9f81f64ed54027a984e1718e341283_88)] | | | [removed: [56](#ifc5688e05dc842768d42691df7ce3cf3_85)] [added: [58](#i7a9f81f64ed54027a984e1718e341283_88)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: Disclosure](#i7a9f81f64ed54027a984e1718e341283_271)] | | | [removed: [138](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: [140](#i7a9f81f64ed54027a984e1718e341283_271)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: Procedures](#i7a9f81f64ed54027a984e1718e341283_271)] | | | [removed: [138](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: [140](#i7a9f81f64ed54027a984e1718e341283_271)] | | |

| Item 9B. | | | [Other [removed: Information](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: Information](#i7a9f81f64ed54027a984e1718e341283_271)] | | | [removed: [138](#ifc5688e05dc842768d42691df7ce3cf3_319)] [added: [140](#i7a9f81f64ed54027a984e1718e341283_271)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ifc5688e05dc842768d42691df7ce3cf3_322)] [added: Governance](#i7a9f81f64ed54027a984e1718e341283_274)] | | | [removed: [139](#ifc5688e05dc842768d42691df7ce3cf3_322)] [added: [141](#i7a9f81f64ed54027a984e1718e341283_274)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ifc5688e05dc842768d42691df7ce3cf3_325)] [added: Compensation](#i7a9f81f64ed54027a984e1718e341283_277)] | | | [removed: [140](#ifc5688e05dc842768d42691df7ce3cf3_325)] [added: [142](#i7a9f81f64ed54027a984e1718e341283_277)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ifc5688e05dc842768d42691df7ce3cf3_328)] [added: Matters](#i7a9f81f64ed54027a984e1718e341283_280)] | | | [removed: [171](#ifc5688e05dc842768d42691df7ce3cf3_328)] [added: [175](#i7a9f81f64ed54027a984e1718e341283_280)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ifc5688e05dc842768d42691df7ce3cf3_331)] [added: Independence](#i7a9f81f64ed54027a984e1718e341283_283)] | | | [removed: [172](#ifc5688e05dc842768d42691df7ce3cf3_331)] [added: [176](#i7a9f81f64ed54027a984e1718e341283_283)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#ifc5688e05dc842768d42691df7ce3cf3_334)] [added: Services](#i7a9f81f64ed54027a984e1718e341283_286)] | | | [removed: [173](#ifc5688e05dc842768d42691df7ce3cf3_334)] [added: [177](#i7a9f81f64ed54027a984e1718e341283_286)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#ifc5688e05dc842768d42691df7ce3cf3_337)] [added: Schedules](#i7a9f81f64ed54027a984e1718e341283_289)] | | | [removed: [174](#ifc5688e05dc842768d42691df7ce3cf3_337)] [added: [178](#i7a9f81f64ed54027a984e1718e341283_289)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#ifc5688e05dc842768d42691df7ce3cf3_340)] [added: Summary](#i7a9f81f64ed54027a984e1718e341283_292)] | | | [removed: [174](#ifc5688e05dc842768d42691df7ce3cf3_340)] [added: [178](#i7a9f81f64ed54027a984e1718e341283_292)] | | |

| | | | [Information About Our Executive Officers](#i7a9f81f64ed54027a984e1718e341283_2503) | | | [24](#i7a9f81f64ed54027a984e1718e341283_2503) | | |

| [Signatures](#i7a9f81f64ed54027a984e1718e341283_304) | | | | | | E-[9](#i7a9f81f64ed54027a984e1718e341283_304) | | |

| North East Offshore | | | North East Offshore, LLC, an offshore wind business holding company being developed jointly by Eversource and Denmark-based Ørsted, which holds the Revolution Wind and South Fork Wind projects | | |

| SJC | | | Supreme Judicial Court of Massachusetts | | |

| C&LM | | | Conservation and Load Management | | |

| CTA | | | Competitive Transition Assessment | | |

| FTR | | | Financial Transmission Rights | | |

| GSC | | | Generation Service Charge | | |

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

| HVDC | | | High-voltage direct current | | |

| Hydro Renewable Energy | | | Hydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec | | |

| SBC | | | Systems Benefits Charge | | |

| SCRC | | | Stranded Cost Recovery Charge | | |

| TCAM | | | Transmission Cost Adjustment Mechanism | | |

| [Signatures](#ifc5688e05dc842768d42691df7ce3cf3_352) | | | | | | E-[9](#ifc5688e05dc842768d42691df7ce3cf3_352) | | |

As of December 31, [removed: 2020,] [added: 2021,] Eversource and our electric operating subsidiaries owned the following:

| Number of substations owned | | | [removed: 485] [added: 478] | | | | | | [removed: 78] [added: 75] | | |

| Transformer capacity (in kVa) | | | [removed: 43,431,000] [added: 44,361,360] | | | | | | [removed: 16,149,000] [added: 20,299,000] | | |

| Overhead lines (in circuit miles) | | | [removed: 40,623] [added: 40,515] | | | | | | [removed: 3,975] [added: 3,980] | | |

| Underground lines (in circuit miles) | | | [removed: 17,926] [added: 18,050] | | | | | | [removed: 418] [added: 421] | | |

| Transformer capacity (in kVa) | | | [removed: 21,946,000] [added: 21,890,000] | | | | | | 3,633,000 | | | | | | [removed: 17,040,000] [added: 18,027,360] | | | | | | [removed: 7,465,000] [added: 11,615,000] | | | | | | [removed: 4,445,000] [added: 4,444,000] | | | | | | 5,051,000 | | |

| Overhead lines (in circuit miles) | | | [removed: 16,935] [added: 16,770] | | | | | | 1,677 | | | | | | [removed: 11,440] [added: 11,469] | | | | | | [removed: 1,244] [added: 1,249] | | | | | | [removed: 12,248] [added: 12,276] | | | | | | 1,054 | | |

| Underground and overhead line transformers in service | | | [removed: 632,114] [added: 634,839] | | | | | | [removed: 292,030] [added: 292,902] | | | | | | [removed: 172,134] [added: 172,876] | | | | | | [removed: 167,950] [added: 169,061] | | |

As of December 31, [removed: 2020,] [added: 2021,] NSTAR Electric owned the following solar power facilities:

| Type of Plant | | | | | | Number of Sites | | | | | | Year Installed | | | | | | Claimed Capability [removed: (kilowatts)] [added: (kilowatts, dc)] | | |

As of December 31, [removed: 2020,] [added: 2021,] NSTAR Gas owned [removed: 21] [added: 22] active gate stations, [removed: 151] [added: 148] district regulator stations, and approximately [removed: 3,318] [added: 3,322] miles of natural gas main pipeline.

As of December 31, [removed: 2020,] [added: 2021,] EGMA owned 14 active gate stations, [removed: 194] [added: 193] district regulator stations, and approximately [removed: 5,010] [added: 5,014] miles of natural gas main pipeline.

In addition, Hopkinton owns [removed: four] [added: three] propane peak shaving plants at [removed: four] [added: three] locations throughout Massachusetts with an aggregate storage capacity equivalent to [removed: 0.2 Bcf, or 1.8 million gallons of propane.][added: 0.1 Bcf.]

As of December 31, [removed: 2020,] [added: 2021,] Yankee Gas owned 28 active gate stations, [removed: 209] [added: 207] district regulator stations, and approximately [removed: 3,501] [added: 3,530] miles of natural gas main pipeline.

As of December 31, [removed: 2020,] [added: 2021,] Aquarion owned and operated sources of water supply with a combined yield of approximately [removed: 118] [added: 127] million gallons per day; [removed: 3,434] [added: 3,573] miles of transmission and distribution mains; 9 surface water treatment plants; 29 dams; and [removed: 110] [added: 123] wellfields.

[added: Eversource Gas Company of Massachusetts] Eversource Gas Company of Massachusetts holds valid franchises to sell natural gas in the areas in which it supplies natural gas [removed: service, which it acquired either directly or from Bay State Gas Company.][added: service.]

Yankee Gas Yankee Gas holds valid franchises to sell natural gas in the areas in which Yankee Gas supplies natural gas [removed: service, which it acquired either directly or from its predecessors in interest.][added: service.]

| Number of substations owned | | | 181 | | | | | | 21 | | | | | | 173 | | | | | | 32 | | | | | | 124 | | | | | | 22 | | |

| Underground lines (in circuit miles) | | | 6,834 | | | | | | 143 | | | | | | 9,163 | | | | | | 275 | | | | | | 2,053 | | | | | | 3 | | |

| Aggregate capacity (in kVa) | | | 38,386,798 | | | | | | 16,443,711 | | | | | | 14,842,428 | | | | | | 7,100,659 | | |

Natural Gas Transmission System

As of December 31, 2021, NSTAR Gas and EGMA owned 1.0 and 2.36 miles of intrastate transmission natural gas pipeline, respectively.

Abenaki Water Systems territory encompasses the towns of Belmont, Bow, Carroll, and Gilford.

| Number of substations owned | | | 182 | | | | | | 20 | | | | | | 169 | | | | | | 36 | | | | | | 134 | | | | | | 22 | | |

| Underground lines (in circuit miles) | | | 6,812 | | | | | | 143 | | | | | | 9,082 | | | | | | 272 | | | | | | 2,032 | | | | | | 3 | | |

| Aggregate capacity (in kVa) | | | 37,838,471 | | | | | | 16,239,772 | | | | | | 14,595,704 | | | | | | 7,002,995 | | |

Eversource Gas Company of Massachusetts Eversource acquired the natural gas distribution and LNG business of Bay State Gas Company, doing business as Columbia Gas of Massachusetts, in an asset purchase transaction that closed on October 9, 2020.

The natural gas distribution assets were transferred to Eversource Gas Company of Massachusetts, a Massachusetts corporation formed in May 2020, and an indirect subsidiary of Eversource parent.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following sets forth the executive officers of Eversource Energy as of February 16, 2022.

All of Eversource Energy’s officers serve terms of one year and until their successors elected and qualified.

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

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

| Name | | | | | | Age | | | | | | Title | | |

| James J. Judge | | | | | | 66 | | | | | | Executive Chairman of the Board | | |

| Joseph R. Nolan, Jr. | | | | | | 57 | | | | | | President and Chief Executive Officer | | |

| Philip J. Lembo | | | | | | 66 | | | | | | Executive Vice President and Chief Financial Officer | | |

| Gregory B. Butler | | | | | | 64 | | | | | | Executive Vice President and General Counsel | | |

| Christine M. Carmody | | | | | | 59 | | | | | | Executive Vice President-Human Resources and Information Technology | | |

| Penelope M. Conner | | | | | | 58 | | | | | | Executive Vice President-Customer Experience and Energy Strategy | | |

| James W. Hunt, III | | | | | | 50 | | | | | | Executive Vice President-Corporate Relations and Sustainability and Secretary | | |

| Werner J. Schweiger | | | | | | 62 | | | | | | Executive Vice President and Chief Operating Officer | | |

| Jay S. Buth | | | | | | 52 | | | | | | Vice President, Controller and Chief Accounting Officer | | |

*James J.

Judge.* Mr. Judge has served as Executive Chairman of the Board of Eversource Energy since May 5, 2021 and as a Trustee of Eversource Energy since May 4, 2016.

Previously, Mr. Judge served as Chairman of the Board, President and Chief Executive Officer of Eversource Energy from May 3, 2017 until May 5, 2021, and as President and Chief Executive Officer of Eversource Energy from May 4, 2016 until May 3, 2017.

Based on his experience described above, Mr. Judge has the skills and qualifications necessary to serve as a Trustee of Eversource Energy.

*Joseph R.

Nolan, Jr.* Mr. Nolan has served as President and Chief Executive Officer and a Trustee of Eversource Energy.

Previously, Mr. Nolan served as Executive Vice President-Strategy, Customer and Corporate Relations of Eversource Energy from February 5, 2020 until May 5, 2021, and as Executive Vice President-Customer and Corporate Relations of Eversource Energy from August 8, 2016 to February 5, 2020.

Based on his experience described above, Mr. Nolan has the skills and qualifications necessary to serve as a Trustee of Eversource Energy.

*Philip J.

Lembo.* Mr. Lembo has served as Chief Financial Officer of Eversource Energy since May 4, 2016.

He previously served as Treasurer of Eversource Energy from April 10, 2012 until May 3, 2017.

Mr. Lembo has served as Executive Vice President of Eversource Energy since August 8, 2016.

*Gregory B.

Butler*.

Mr. Butler has served as General Counsel of Eversource Energy since May 1, 2001.

He has served as Executive Vice President of Eversource Energy since August 8, 2016.

*Christine M.

Carmody.* Ms. Carmody has served as Executive Vice President-Human Resources and Information Technology of Eversource Energy since August 8, 2016.

*Penelope M.

Conner.* Ms. Conner has served as Executive Vice President-Customer Experience and Energy Strategy of Eversource Energy since May 5, 2021.

Previously, Ms. Conner served as Senior Vice President and Chief Customer Officer of Eversource Service from March 2, 2013 until May 5, 2021.

*James W.

Hunt, III.* Mr. Hunt has served as Executive Vice President-Corporate Relations and Sustainability of Eversource Energy since May 5, 2021 and as Secretary of Eversource Energy since July 9, 2021.

Previously Mr. Hunt served as Senior Vice President-Communications, External Affairs and Sustainability of Eversource Service from December 17, 2019 until May 5, 2021 and as Senior Vice President-Regulatory Affairs and Chief Communications Officer of Eversource Service from October 3, 2016 until December 17, 2019.

*Werner J.

As of January 31, [removed: 2021,] [added: 2022,] there were [removed: 32,340] [added: 31,020] registered common shareholders of our company on record.

As of the same date, there were a total of [removed: 343,003,366] [added: 344,439,905] shares outstanding.

The performance graph below illustrates a five-year comparison of cumulative total returns based on an initial investment of $100 in [removed: 2015] [added: 2016] in Eversource Energy common stock, as compared with the S&P 500 Stock Index and the EEI Index for the period [removed: 2015] [added: 2016] through [removed: 2020,] [added: 2021,] assuming all dividends are reinvested.

[removed: ][added: ]

| | | | [removed: 2015 | | |] 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | |]

| Eversource Energy | | | $100 | | | $118 | | | $126 | | | $169 | | | $176 | | | $191 | | |

| EEI Index | | | $100 | | | $112 | | | $116 | | | $146 | | | $144 | | | $169 | | |

| S&P 500 | | | $100 | | | $122 | | | $116 | | | $153 | | | $181 | | | $233 | | |

| October 1 - October 31, 2021 | | | — | | | | | | $ | — | | | | | — | | | | | | — | | |

| November 1 - November 30, 2021 | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| December 1 - December 31, 2021 | | | 2,081 | | | | | | 90.70 | | | | | | — | | | | | | — | | |

| Total | | | 2,081 | | | | | | $ | 90.70 | | | | | — | | | | | | — | | |

| Eversource Energy | | | $100 | | | $112 | | | $132 | | | $140 | | | $188 | | | $197 | | |

| EEI Index | | | $100 | | | $117 | | | $131 | | | $136 | | | $171 | | | $169 | | |

| S&P 500 | | | $100 | | | $112 | | | $136 | | | $130 | | | $172 | | | $203 | | |

| October 1 - October 31, 2020 | | | — | | | | | | $ | — | | | | | — | | | | | | — | | |

| November 1 - November 30, 2020 | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| December 1 - December 31, 2020 | | | 2,218 | | | | | | 85.26 | | | | | | — | | | | | | — | | |

| Total | | | 2,218 | | | | | | $ | 85.26 | | | | | — | | | | | | — | | |

*Recent Sales of Unregistered Securities*

In January 2020, we determined that during 2019 and early 2020, the Savings Plan for Employees of Aquarion Water Company, a 401(k) retirement plan (Plan), offered Eversource common shares (Shares) as an investment alternative for participants.

The Plan trustee purchased Shares in the open market and allocated the Shares to participants’ Plan accounts at the election of participants.

During this period, the Plan sold 5,990 Shares to 35 participants, which Shares were not registered on Form S-8.

The investment alternative to purchase Shares under the Plan has been terminated, and we did not receive any proceeds from such sales, which were funded with participants' contributions to the Plan.

| | | | Reports of Independent Registered Public Accounting Firm [added: (PCAOB ID No. 34)] | | | | | |

| | | | Report of Independent Registered Public Accounting Firm [added: (PCAOB ID No. 34)] | | | | | |

Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, [removed: 2020.][added: 2021.]

On October 9, 2020, Eversource [removed: completed the acquisition of] [added: acquired] certain assets and liabilities that comprised [removed: NiSource’s] [added: the NiSource Inc. (NiSource)] natural gas distribution business in Massachusetts, which was previously doing business as Columbia Gas of Massachusetts [removed: (CMA).][added: (CMA), pursuant to an asset purchase agreement (the Agreement) entered into on February 26, 2020 between Eversource and NiSource.]

We have audited the internal control over financial reporting of Eversource Energy and subsidiaries (the “Company”) as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2020,] [added: 2021,] of the Company and our report dated February [removed: 17, 2021,] [added: 16, 2022,] expressed an unqualified opinion on those financial statements.

We have audited the accompanying consolidated balance sheets of Eversource Energy and subsidiaries (the “Company”) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, common shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and the schedules listed in the Index at Item 15 of Part IV (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 17, 2021,] [added: 16, 2022,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

Accounting for the economics of rate-regulation impacts multiple financial statement line items and disclosures, such as regulated property, plant, and equipment, regulatory assets and liabilities, operating [removed: revenues and] [added: revenues,] depreciation [removed: expense.][added: expense and amortization of regulatory assets.]

Management judgments include assessing the probability of recovery in future rates of incurred costs and [added: of] a refund to customers.

[removed: -] We [added: also] read [removed: relevant regulatory] orders issued by the Commissions for [removed: the Company and] other public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future refund or reduction in rates based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

- We made inquiries of management, including legal counsel, and obtained the regulatory orders and analysis from management that support the probability of recovery, refund, or future reductions in rates for regulatory assets and [removed: liabilities] [added: liabilities, including amounts related] to [added: Tropical Storm Isaias restoration costs and associated regulatory proceedings, to] assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

| (Thousands of Dollars) | | | [added: 2021 | | | | | |] 2020 | | | | | | 2019 | | |

| Cash | | | $ | [removed: 106,599] [added: 66,773] | | | | | $ | [removed: 15,432] [added: 106,599] | |

| Receivables, Net (net of allowance for uncollectible accounts of [removed: $358,851] [added: $417,406] and [removed: $224,821] [added: $358,851] as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively) | | | [removed: 1,195,925] [added: 1,226,069] | | | | | | [removed: 989,383] [added: 1,195,925] | | |

| Unbilled Revenues | | | [removed: 233,025] [added: 210,879] | | | | | | [removed: 181,006] [added: 233,025] | | |

| Fuel, Materials, Supplies and REC Inventory | | | [removed: 265,599] [added: 267,547] | | | | | | [removed: 235,471] [added: 265,599] | | |

| Regulatory Assets | | | [removed: 1,076,556] [added: 1,129,093] | | | | | | [removed: 651,112] [added: 1,076,556] | | |

| Prepayments and Other Current Assets | | | [removed: 252,439] [added: 369,759] | | | | | | [removed: 342,135] [added: 252,439] | | |

| Total Current Assets | | | [removed: 3,130,143] [added: 3,270,120] | | | | | | [removed: 2,414,539] [added: 3,130,143] | | |

| Property, Plant and Equipment, Net | | | [removed: 30,882,523] [added: 33,377,650] | | | | | | [removed: 27,585,470] [added: 30,882,523] | | |

| Regulatory Assets | | | [removed: 5,493,330] [added: 4,586,709] | | | | | | [removed: 4,863,639] [added: 5,493,330] | | |

| Goodwill | | | [removed: 4,445,988] [added: 4,477,269] | | | | | | [removed: 4,427,266] [added: 4,445,988] | | |

| Investments in Unconsolidated Affiliates | | | [removed: 1,107,143] [added: 1,436,293] | | | | | | [removed: 871,633] [added: 1,107,143] | | |

| Marketable Securities | | | [removed: 456,617] [added: 460,347] | | | | | | [removed: 449,130] [added: 456,617] | | |

| Other Long-Term Assets | | | [removed: 583,854] [added: 883,756] | | | | | | [removed: 512,238] [added: 583,854] | | |

| Total Deferred Debits and Other Assets | | | [removed: 12,086,932] [added: 11,844,374] | | | | | | [removed: 11,123,906] [added: 12,086,932] | | |

| Total Assets | | | $ | [removed: 46,099,598] [added: 48,492,144] | | | | | $ | [removed: 41,123,915] [added: 46,099,598] | |

| Notes Payable | | | $ | [removed: 1,249,325] [added: 1,505,450] | | | | | $ | [removed: 889,084] [added: 1,249,325] | |

| Long-Term Debt – Current Portion | | | [removed: 1,053,186] [added: 1,193,097] | | | | | | [removed: 327,411] [added: 1,053,186] | | |

| Accounts Payable | | | [removed: 1,370,647] [added: 1,672,230] | | | | | | [removed: 1,147,872] [added: 1,370,647] | | |

| Regulatory Liabilities | | | [removed: 389,430] [added: 602,432] | | | | | | [removed: 361,152] [added: 389,430] | | |

| Other Current Liabilities | | | [removed: 809,214] [added: 830,620] | | | | | | [removed: 836,834] [added: 809,214] | | |

| Total Current Liabilities | | | [removed: 4,915,012] [added: 5,847,039] | | | | | | [removed: 3,605,563] [added: 4,915,012] | | |

| Accumulated Deferred Income Taxes | | | [removed: 4,095,339] [added: 4,597,120] | | | | | | [removed: 3,755,777] [added: 4,095,339] | | |

| Regulatory Liabilities | | | [removed: 3,850,781] [added: 3,866,251] | | | | | | [removed: 3,658,042] [added: 3,850,781] | | |

| Derivative Liabilities | | | [removed: 294,535] [added: 235,387] | | | | | | [removed: 338,710] [added: 294,535] | | |

| Asset Retirement Obligations | | | [removed: 499,713] [added: 500,111] | | | | | | [removed: 488,511] [added: 499,713] | | |

| | | | Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | | | | | |

| | | | Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | | | | | |

February 16, 2022

February 16, 2022

This included an evaluation of disclosures related to Tropical Storm Isaias costs and other associated regulatory proceedings in Connecticut.

- We read relevant regulatory orders issued by the Commissions for the Company, including orders in Connecticut associated with the Tropical Storm Isaias Response Investigation and associated settlement agreement.

- We made inquiries of management, including legal counsel, and obtained the regulatory orders and analysis from management that support the probability of recovery, refund, or future reductions in rates for regulatory assets and liabilities, including amounts related to Tropical Storm Isaias restoration costs and associated regulatory proceedings in Connecticut, to assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

February 16, 2022

| (Thousands of Dollars) | | | 2021 | | | | | | 2020 | | |

| Adoption of Accounting Standards Update 2016-13 | | | | | | | | | | | | (1,514) | | | | | | | | | (1,514) | | |

| Net Income | | | | | | | | | | | | 1,228,046 | | | | | | | | | 1,228,046 | | |

| Issuance of Treasury Shares | | | 986,656 | | | | | | 49,913 | | | | | | | | | 18,451 | | | 68,364 | | |

| Issuance of Treasury Shares for Acquisition of New England Service Company | | | 462,517 | | | | | | 29,401 | | | | | | | | | 8,650 | | | 38,051 | | |

| Balance as of December 31, 2021 | | | 344,403,196 | | | $ | 1,789,092 | | $ | 8,098,514 | | $ | 5,005,391 | | $ | (42,275) | | $ | (250,878) | | $ | 14,599,844 | |

| Net Income | | | $ | 1,228,046 | | | | | $ | 1,212,686 | | | | | $ | 916,572 | |

| Depreciation | | | 1,103,008 | | | | | | 981,380 | | | | | | 885,278 | | |

| Reserve at CL&P related to PURA Settlement Agreement and Storm Performance Penalty | | | 81,274 | | | | | | — | | | | | | — | | |

| Amortization | | | 231,965 | | | | | | 177,679 | | | | | | 195,380 | | |

| Impairment of Northern Pass Transmission | | | — | | | | | | — | | | | | | 239,644 | | |

| Cost of Removal Expenditures | | | (242,130) | | | | | | (148,332) | | | | | | (153,477) | | |

| Other | | | (64,640) | | | | | | (25,957) | | | | | | (42,610) | | |

Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2021.

February 16, 2022

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Accounting for the economics of rate-regulation impacts multiple financial statement line items and disclosures, such as regulated property, plant, and equipment, regulatory assets and liabilities, operating revenues, depreciation expense and amortization of regulatory assets.

Management judgments include assessing the probability of recovery in future rates of incurred costs and of a refund to customers.

This included an evaluation of disclosures related to Tropical Storm Isaias costs and associated regulatory proceedings.

- We read relevant regulatory orders issued by the Commissions for the Company, including orders associated with the Tropical Storm Isaias Response Investigation and associated settlement agreement.

We also read orders issued by the Commissions for other public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future refund or reduction in rates based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

February 16, 2022

| (Thousands of Dollars) | | | 2021 | | | | | | 2020 | | |

| (Thousands of Dollars) | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| (Thousands of Dollars) | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Net Income | | | $ | 401,725 | | | | | $ | 457,934 | | | | | $ | 410,852 | |

| Adoption of Accounting Standards Update 2016-13 | | | | | | | | | | | | | | | | | | | | | (900) | | | | | | | | | | | | (900) | | |

| Net Income | | | | | | | | | | | | | | | | | | | | | 401,725 | | | | | | | | | | | | 401,725 | | |

| Balance as of December 31, 2021 | | | 6,035,205 | | | | | | $ | 60,352 | | | | | $ | 3,010,765 | | | | | $ | 2,228,133 | | | | | $ | 251 | | | | | $ | 5,299,501 | |

| (Thousands of Dollars) | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Net Income | | | $ | 401,725 | | | | | $ | 457,934 | | | | | $ | 410,852 | |

| Depreciation | | | 338,915 | | | | | | 320,709 | | | | | | 301,188 | | |

Management has excluded from our assessment of and conclusion on the effectiveness of internal controls over financial reporting the internal

controls of Eversource Gas Company of Massachusetts (EGMA).

The natural gas distribution assets acquired from CMA were assigned to EGMA, and are included in the consolidated financial statements of the Company as of and for the year ended December 31, 2020, constituting 3.4 percent and 5.8 percent of total and net assets, respectively, as of December 31, 2020, and 1.7 percent and 1.2 percent of revenues and net income attributable to common shareholders, respectively, for the year ended December 31, 2020.

February 17, 2021

As described in the Management’s Report on Internal Controls Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Eversource Gas Company of Massachusetts (previously doing business as Columbia Gas of Massachusetts), which was acquired on October 9, 2020, and whose financial statements constitute 3.4% and 5.8% of total and net assets, respectively, 1.7% of revenues, and 1.2% of net income attributable to common shareholders of the consolidated financial statement amounts as of and for the year ended December 31, 2020.

Accordingly, our audit did not include the internal control over financial reporting at Eversource Gas Company of Massachusetts.

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

| Balance as of January 1, 2018 | | | 316,885,808 | | | $ | 1,669,392 | | $ | 6,239,940 | | $ | 3,561,084 | | $ | (66,403) | | $ | (317,771) | | $ | 11,086,242 | |

| Net Income | | | | | | | | | | | | 1,040,519 | | | | | | | | | 1,040,519 | | |

| Other Changes in Shareholders' Equity | | | | | | | | | 1,825 | | | | | | | | | | | | 1,825 | | |

| Adoption of New Accounting Standard (See Note 1C) | | | | | | | | | | | | (1,514) | | | | | | | | | (1,514) | | |

| Other | | | (174,289) | | | | | | (196,087) | | | | | | (111,225) | | |

| Proceeds from Sales of Marketable Securities Used to Pay Pre-1983 Spent Nuclear Fuel Obligation | | | — | | | | | | — | | | | | | 145,000 | | |

| Proceeds from the Sale of PSNH Generation Assets | | | — | | | | | | — | | | | | | 193,924 | | |

| Balance as of January 1, 2018 | | | 6,035,205 | | | | | | $ | 60,352 | | | | | $ | 2,110,765 | | | | | $ | 1,415,741 | | | | | $ | 269 | | | | | $ | 3,587,127 | |

| Net Income | | | | | | | | | | | | | | | | | | | | | 377,717 | | | | | | | | | | | | 377,717 | | |

| Adoption of New Accounting Standard (See Note 1C) | | | | | | | | | | | | | | | | | | | | | (900) | | | | | | | | | | | | (900) | | |

| Other | | | (115,213) | | | | | | (80,266) | | | | | | (69,786) | | |

| Balance as of January 1, 2018 | | | 200 | | | | | | $ | — | | | | | $ | 1,502,942 | | | | | $ | 1,944,961 | | | | | $ | (1,823) | | | | | $ | 3,446,080 | |

| Net Income | | | | | | | | | | | | | | | | | | | | | 383,090 | | | | | | | | | | | | 383,090 | | |

| Adoption of New Accounting Standard (See Note 1C) | | | | | | | | | | | | | | | | | | | | | (161) | | | | | | | | | | | | (161) | | |

| Other | | | (62,054) | | | | | | (78,220) | | | | | | (65,523) | | |

| Accrued Interest | | | 19,671 | | | | | | 19,138 | | |

| Balance as of January 1, 2018 | | | 301 | | | | | | $ | — | | | | | $ | 843,134 | | | | | $ | 511,382 | | | | | $ | (3,922) | | | | | $ | 1,350,594 | |

| Net Income | | | | | | | | | | | | | | | | | | | | | 115,876 | | | | | | | | | | | | 115,876 | | |

| Return of Capital | | | | | | | | | | | | | | | (530,000) | | | | | | | | | | | | | | | | | | (530,000) | | |

| Adoption of New Accounting Standard (See Note 1C) | | | | | | | | | | | | | | | | | | | | | (300) | | | | | | | | | | | | (300) | | |

| Other | | | (4,842) | | | | | | (28,228) | | | | | | (15,363) | | |

| Proceeds from the Sale of Generation Assets | | | — | | | | | | — | | | | | | 193,924 | | |

| Proceeds from the Sale of Property | | | — | | | | | | — | | | | | | 4,782 | | |

| Increase/(Decrease) in Notes Payable to Eversource Parent | | | 19,300 | | | | | | (30,000) | | | | | | (205,900) | | |

| Return of Capital | | | — | | | | | | — | | | | | | (530,000) | | |

PSNH completed the sales of all its thermal and hydroelectric generation assets in 2018.

An extended economic slowdown has resulted in lower demand for electricity, natural gas and/or water by our commercial and industrial customers.

However, fluctuations in retail sales volumes for CL&P, NSTAR Electric, Yankee Gas, NSTAR Gas, EGMA, and our Connecticut water distribution business do not materially impact earnings due to their respective state regulatory commission-approved distribution revenue decoupling mechanisms.

The guidance is effective in the first quarter of 2021.

*Accounting Standards Recently Adopted:* On January 1, 2020, the Company adopted ASU 2016-13, *Financial Instruments - Credit Losses (Topic 326),* which provides a model for recognizing credit losses on financial instruments based on an estimate of current expected losses, requiring immediate recognition of credit losses expected over the life of a financial instrument.

The Company determined the impacts of this standard on the allowance for credit losses on its financial instruments, primarily accounts receivable.

As of January 1, 2020, the Company recorded increases to the allowance for uncollectible accounts for late fees and other receivable amounts of $1.6 million, $0.9 million, $0.2 million and $0.3 million at Eversource, CL&P, NSTAR Electric and PSNH, respectively.

The impact to retained earnings, net of tax, was $1.5 million, $0.9 million, $0.2 million and $0.3 million at Eversource, CL&P, NSTAR Electric and PSNH, respectively.

Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting at Eversource, CL&P, NSTAR Electric and PSNH were effective as of December 31, [removed: 2020.][added: 2021.]

Management, on behalf of Eversource, CL&P, NSTAR Electric and PSNH, evaluated the design and operation of the disclosure controls and procedures as of December 31, [removed: 2020] [added: 2021] to determine whether they are effective in ensuring that the disclosure of required information is made timely and in accordance with the Securities Exchange Act of 1934 and the rules and regulations of the SEC.

There have been no changes in internal controls over financial reporting for Eversource, CL&P, NSTAR Electric and PSNH during the quarter ended December 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

On October 9, 2020, Eversource completed the acquisition of certain assets and liabilities that comprised NiSource’s natural gas distribution business in Massachusetts (formerly Columbia Gas of Massachusetts (CMA)).

The natural gas distribution assets acquired from CMA were assigned to EGMA and are part of the natural gas distribution segment.

As of December 31, 2020, Eversource management has excluded EGMA from its evaluation of disclosure controls and procedures and management’s report on internal controls over financial reporting.

No information is required to be disclosed under this item as of December 31, [removed: 2020,] [added: 2021,] as this information has been previously disclosed in applicable reports on Form 8-K during the fourth quarter of [removed: 2020.][added: 2021.]

The information in Item 10 is provided as of February [removed: 17, 2021,] [added: 16, 2022,] except where otherwise indicated.

In addition to the information provided below concerning the executive officers of Eversource Energy, incorporated herein by reference is the information to be contained in the sections captioned “Election of Trustees,” “Governance of Eversource Energy” and the related [removed: subsections,] [added: subsection,] “Selection of Trustees,” [removed: and “Delinquent Section 16(a) Reports”] of Eversource Energy’s definitive proxy statement for solicitation of proxies, expected to be filed with the SEC on or about March [removed: 26, 2021.][added: 25, 2022.]

| James J. Judge | | | | | | [removed: 65] [added: 66] | | | | | | [added: Executive] Chairman of the [removed: Board, President and Chief Executive Officer] [added: Board] and a Trustee of Eversource [removed: Energy; Chairman and director of CL&P] [added: Energy] | | |

| Philip J. Lembo | | | | | | [removed: 65] [added: 66] | | | | | | Executive Vice President and Chief Financial Officer of Eversource Energy and CL&P; director of CL&P | | |

| Gregory B. Butler | | | | | | [removed: 63] [added: 64] | | | | | | Executive Vice President and General Counsel of Eversource Energy and CL&P; director of CL&P | | |

| Christine M. Carmody [removed: 1] | | | | | | [removed: 58] [added: 59] | | | | | | Executive Vice President-Human Resources and Information Technology of Eversource Energy | | |

| [removed: Joseph R. Nolan, Jr. 1] [added: Penelope M. Conner] | | | | | | [removed: 57] [added: 58] | | | | | | Executive Vice [removed: President-Strategy, Customer] [added: President-Customer Experience] and [removed: Corporate Relations] [added: Energy Strategy] of Eversource Energy | | |

| Werner J. Schweiger | | | | | | [removed: 61] [added: 62] | | | | | | Executive Vice President and Chief Operating Officer of Eversource Energy; Chief Executive Officer and director of CL&P | | |

| Jay S. Buth | | | | | | [removed: 51] [added: 52] | | | | | | Vice President, Controller and Chief Accounting Officer of Eversource Energy and CL&P | | |

Judge.* Mr. Judge has served as [added: Executive] Chairman of the [removed: Board, President and Chief Executive Officer] [added: Board] of Eversource Energy since May [removed: 3, 2017] [added: 5, 2021] and as a Trustee [added: of Eversource Energy] since May 4, 2016.

Previously, Mr. Judge served as [added: Chairman of the Board,] President and Chief Executive Officer of Eversource Energy from May [removed: 4, 2016] [added: 3, 2017] until May [removed: 3, 2017,] [added: 5, 2021,] and as [removed: Executive Vice] President and Chief [removed: Financial] [added: Executive] Officer of Eversource Energy from [removed: April 10, 2012 until] May 4, [removed: 2016.][added: 2016 until May 3, 2017.]

Mr. Judge [removed: has] [added: previously] served as Chairman of CL&P [removed: since] [added: from] May 4, [removed: 2016,] [added: 2016 until May 5, 2021,] and as a director of CL&P [removed: since] [added: from] April 10, [removed: 2012.][added: 2012 until May 5, 2021.]

Based on his experience described above, Mr. [removed: Judge] [added: Nolan] has the skills and qualifications necessary to serve as a Trustee of Eversource Energy and as a director of CL&P.

Previously, [removed: he] [added: Mr. Nolan] served as [removed: Senior] [added: Executive] Vice [removed: President] [added: President-Strategy, Customer and Corporate Relations] of Eversource Energy [removed: and CL&P] from [removed: May 4, 2016] [added: February 5, 2020] until [removed: August 8, 2016,] [added: May 5, 2021,] and as [added: Executive] Vice [removed: President] [added: President-Customer and Corporate Relations] of Eversource Energy [removed: and CL&P] from [removed: April 10, 2012 until May 4, 2016.][added: August 8, 2016 to February 5, 2020.]

[removed: Previously] [added: Previously,] Ms. [removed: Carmody] [added: Conner] served as Senior Vice [removed: President-Human Resources of Eversource Energy from May 4, 2016 until August 8, 2016;] [added: President] and [added: Chief Customer Officer] of Eversource Service from [removed: April 10, 2012] [added: March 2, 2013] until [removed: August 8, 2016.][added: May 5, 2021.]

[removed: Nolan, Jr.*] [added: Hunt, III.*] Mr. [removed: Nolan] [added: Hunt] has served as Executive Vice [removed: President-Strategy, Customer and Corporate] [added: President-Corporate] Relations [added: and Sustainability] of Eversource Energy since [removed: February] [added: May] 5, [removed: 2020.][added: 2021 and as Secretary of Eversource Energy since July 9, 2021.]

| Joseph R. Nolan, Jr. | | | | | | 57 | | | | | | President and Chief Executive Officer and a Trustee of Eversource Energy; Chairman and director of CL&P | | |

| James W. Hunt, III | | | | | | 50 | | | | | | Executive Vice President-Corporate Relations and Sustainability and Secretary of Eversource Energy | | |

Based on his experience described above, Mr. Judge has the skills and qualifications necessary to serve as a Trustee of Eversource Energy.

Nolan, Jr.* Mr. Nolan has served as President and Chief Executive Officer and a Trustee of Eversource Energy and as Chairman and a director of CL&P since May 5, 2021.

*Penelope M.

Conner.* Ms. Conner has served as Executive Vice President-Customer Experience and Energy Strategy of Eversource Energy since May 5, 2021.

*James W.

Previously Mr. Hunt served as Senior Vice President-Communications, External Affairs and Sustainability of Eversource Service from December 17, 2019 until May 5, 2021 and as Senior Vice President-Regulatory Affairs and Chief Communications Officer of Eversource Service from October 3, 2016 until December 17, 2019.

James W.

Hunt, III

Executive Vice President and Secretary

1 Deemed an executive officer of CL&P pursuant to Rule 3b-7 under the Securities Exchange Act of 1934.

Previously, Mr. Judge served as Executive Vice President and Chief Financial Officer of CL&P from April 10, 2012 to May 4, 2016.

Previously, Mr. Butler served as Senior Vice President of Eversource Energy from August 31, 2003 to August 8, 2016, and of CL&P from March 9, 2006 until August 8, 2016.

Previously Mr. Nolan served as Executive Vice President-Customer and Corporate Relations of Eversource Energy from August 8, 2016 to February 5, 2020.

He served as Senior Vice President-Corporate Relations of Eversource Energy from May 4, 2016 until August 8, 2016, and of Eversource Service from April 10, 2012 until August 8, 2016.

He previously served as President of CL&P from June 2, 2015 until June 27, 2016.

Richard J.

Morrison

Secretary

The information required by this Item 11 for Eversource Energy is incorporated herein by reference to certain information contained in Eversource Energy's definitive proxy statement for solicitation of proxies, which is expected to be filed with the SEC on or about March [removed: 26, 2021,] [added: 25, 2022,] under the sections captioned “Compensation Discussion and Analysis,” plus related subsections, and “Compensation Committee Report,” plus related subsections following such Report.

Compensation set by the Compensation Committee of Eversource Energy (the [removed: Committee)] [added: “Committee”)] and set forth herein is for services rendered to Eversource Energy and its subsidiaries by such officers in all capacities.

This Compensation Discussion and Analysis (CD&A) provides information about Eversource Energy’s compensation principles, objectives, plans, policies and actions for [removed: the] [added: its] Named Executive Officers.

The discussion describes the specific components used in [removed: Eversource Energy’s] [added: its] compensation programs and approach to executive compensation, how Eversource Energy measures performance, and how Eversource Energy’s compensation principles were applied to compensation awards and decisions that were made by the Compensation Committee for the Named Executive Officers, as presented in the tables and narratives that follow.

While this discussion focuses primarily on [removed: 2020] [added: 2021] information, it also addresses decisions that were made in prior periods to the extent that these decisions are relevant to the full understanding of Eversource Energy’s compensation programs and the decisions that were made regarding [removed: 2020] [added: 2021] performance.

The CD&A also contains an assessment of performance measured against established [removed: 2020] [added: 2021] goals and additional accomplishments, the compensation awards made by the Compensation Committee, and other information relating to Eversource Energy’s compensation programs, including:

| \= | | | Pay for Performance Philosophy | | | \= | | | [removed: 2020 Annual] [added: Long-Term] Incentive Program [removed: Assessment] | | |

[removed: | \= | | | Executive Compensation Governance | | | \= | | |] [added: Changes to 2021] Long-Term Incentive [removed: Program | | |][added: Program]

| \= | | | [removed: Named] Executive [removed: Officers] [added: Compensation Governance] | | | \= | | | Clawback and No Hedging and No Pledging Policies | | |

| \= | | | Risk Analysis of Executive Compensation | | | [removed: \=] | | | [removed: Tax and Accounting Considerations] | | |

| \= | | | Results of [removed: 2020] [added: 2021] Say on Pay Vote | | | \= | | | Equity Grant Practices | | |

Summary of [removed: 2020] [added: 2021] Accomplishments

In [removed: addition, in Eversource Energy’s] engagement sessions with [added: Eversource] shareholders, Eversource [removed: Energy] received comments relative to the 50/50 mix of RSUs and Performance Shares in [removed: the] [added: Eversource’s] long-term incentive program.

As a result, the [added: Compensation] Committee revised the Performance Share Program in response to these shareholder comments [removed: and] to further align [removed: Eversource Energy’s] [added: our] compensation programs with the Committee’s pay for performance philosophy, such that 75 percent of the 2021 – 2023 Program’s long-term incentive opportunity [removed: will consist] [added: consists] of Performance Shares and 25 percent [removed: will consist] [added: consists] of RSUs.

[removed: 2020] [added: 2021] Financial and Operational Accomplishments

In [removed: 2020,] [added: 2021,] Eversource Energy continued to outperform its peers [removed: financially, strengthened] [added: in most financial metrics, demonstrated] its [removed: position as a leader] [added: leadership] in ESG, and [removed: met or exceeded] [added: achieved substantially] all of the [added: operational] goals [added: as] set by the Committee, [removed: all] while keeping [removed: Eversource] [added: its] employees and customers safe.

The following is a summary of some of the most important accomplishments in [removed: 2020:][added: 2021:]

[removed: - FINANCIAL PERFORMANCE: 2020 earnings] [added: (1) Non-GAAP EPS presented in this Item 11 excludes $0.25] per share [removed: equaled $3.55 per share,] [added: relating to the PURA settlement agreement penalty] and [removed: non-GAAP earnings] [added: the integration costs of $0.07] per share [removed: equaled $3.64; non-GAAP earnings excludes transactional costs] relating to the [removed: highly successful] [added: integration costs of the] acquisition in 2020 of the assets of Columbia Gas.

Eversource Energy uses this non-GAAP financial measure to more fully compare and explain [removed: 2020] [added: 2021] results without including the impact of [removed: the transactional costs of the Columbia Gas acquisition.][added: these one-time costs.]

Due to the effect of [removed: the acquisition] [added: such] costs on net income attributable to [added: Eversource Energy] common shareholders, [added: Eversource’s] management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy’s financial performance and provides additional information to readers in analyzing historical and future performance of the business.

- DIVIDENDS PAID: The Board of Trustees increased the annual dividend rate by [removed: 6.1] [added: 6.2] percent for [removed: 2020] [added: 2021] to [removed: $2.27] [added: $2.41] per share, which exceeded the median dividend growth rate of [removed: 4.5] [added: 4.7] percent for the utilities that constitute the Edison Electric Institute Index (EEI Utility Index).

[removed: ][added: ]

- [removed: SHAREHOLDER] [added: SHAREHOLDER] RETURN: Eversource Energy’s Total Shareholder Return (TSR) in [removed: 2020] [added: 2021] was [removed: 4.5] [added: 8.2] percent, compared to [removed: negative 1.2] [added: 17.1] percent for the EEI [removed: Index, the 5th highest TSR in the EEI Utility] Index of 39 companies.

Eversource continued to outperform the EEI Utility Index over the last [removed: one-,] three-, five- and 10-year [removed: periods and the Standard & Poor’s 500 over the last three- and 10-year] periods.

An investment of $1,000 in Eversource’s common shares for the 10-year period beginning January 1, [removed: 2011] [added: 2012] was worth [removed: $3,726] [added: $3,452] on December 31, [removed: 2020.][added: 2021.]

The following chart represents the comparative total shareholder returns for the periods ended December 31, [removed: 2020:][added: 2021:]

[removed: ][added: ]

- CREDIT [removed: RATING:] [added: RATING:] Eversource Energy continues to hold an A- [removed: level] Corporate Credit Rating at Standard & Poor’s.

- RELIABILITY PERFORMANCE: Electric System Reliability, measured by months between interruptions, was top decile [removed: for] [added: in] the industry in [removed: 2020;] [added: 2021;] customer power interruptions were on average 19.2 months apart.

[removed: ][added: ]

- RESTORATION PERFORMANCE: The average system outage duration was [removed: 64.0] [added: 69.8] minutes, [removed: also] top [removed: decile] [added: quartile in the utility industry] for the fastest restoration time.

[removed: ][added: ]

- SAFETY: Eversource’s safety performance was [removed: 0.7,] [added: 0.9,] measured by days away, restricted or transferred (DART) per 100 workers, which continued to outperform the industry in [removed: 2020.][added: 2021.]

In addition to [removed: the] safety performance as measured by DART, the policies and procedures established at the onset of the pandemic contributed significantly to the successful overall safety performance.

[removed: ][added: ]

- GAS EMERGENCY RESPONSE: On-time response to gas customer emergency calls was [removed: 99.6] [added: 98.0] percent, [removed: meeting] [added: which continued to outperform] the [removed: industry average.][added: industry.]

[removed: ][added: ]

[removed: 2020] [added: 2021] Sustainability/ESG

- SUSTAINABILITY: Eversource’s [added: strong environmental,] social and [removed: environmental accomplishments, which] [added: governance performance] once again [removed: in 2020] received widespread [removed: recognition, are a measure of the strong] [added: recognition in 2021, which demonstrates its deep] commitment to corporate [removed: responsibility and are reflected in] [added: responsibility, evidenced by] the high ratings [added: Eversource receives] from leading sustainability rating firms.

In [removed: 2020,] [added: 2021,] Eversource was ranked [added: at the] top [removed: quartile within] [added: of] a peer group of comparably sized U.S. utilities whose ESG performance is assessed by [removed: the] two leading sustainability rating firms.

| \= | | | Summary of 2021 Accomplishments | | | \= | | | 2021 Annual Incentive Program Assessment | | |

| \= | | | Named Executive Officers | | | \= | | | Share Ownership Guidelines & Retention Requirements | | |

| \= | | | Overview of the Compensation Program | | | \= | | | Other Benefits | | |

| \= | | | Market Analysis | | | \= | | | Contractual Agreements | | |

| \= | | | Mix of Compensation Elements | | | \= | | | Tax and Accounting Considerations | | |

| \= | | | Elements of 2021 Compensation | | | \= | | | Compensation Committee Report | | |

- FINANCIAL PERFORMANCE: 2021 earnings per share equaled $3.54 per share, and non-GAAP earnings per share equaled $3.86.

Non-GAAP earnings excludes the impact from the Connecticut Public Utilities Regulatory Authority (PURA) storm settlement agreement referenced in this CD&A, and the 2021 integration costs relating to the acquisition in 2020 of the assets of Columbia Gas Company of Massachusetts (Columbia Gas).

(1)

For further information, see Exhibit A to this Item 11.

This long-term performance ranks Eversource among the top-10 companies in the Index.

- STRATEGIC INITIATIVES AND REGULATORY OUTCOMES: Eversource received the approval of a comprehensive storm settlement agreement with PURA that provided for the resolution of several pending regulatory and legal proceedings and are ahead of plan on the integration of the assets acquired from Columbia Gas Company of Massachusetts.

Eversource advanced the progress of Massachusetts Grid Modernization and successfully accelerated the recovery of 2020 investments for NSTAR Gas Company.

In addition, Eversource received approval to defer $15.6 million of additional storm related costs and successfully negotiated and completed the acquisition of NESC, a New England water distribution company.

The strong partnerships that have been developed between Eversource’s management and union leadership have been of great assistance in both helping

Eversource employees stay safe throughout the pandemic and in advancing Eversource’s business initiatives, allowing for continuing overall strong performance.

Eversource employees had less than one percent of COVID occupational contact cases in 2021.

- ELECTRIC STORM RESTORATION: Eversource successfully advanced its plan to transform its storm emergency response to enhance the customer experience by implementing internal and external staffing optimization; enhancing community portal two-way communications in real time during storm events; upgrading the information technology for the outage management and customer communication infrastructure to ensure scalability and efficiency; investing in technology and process improvements to ensure efficiency; and accuracy in the damage assessment phase.

- CLEAN ENERGY EXECUTION: Regarding Eversource’s offshore wind projects, Eversource successfully executed a ten-year agreement with the City of New London, Connecticut, to advance the New London Pier redevelopment project, giving Eversource’s partnership access to the leading offshore wind port in the Northeast, and made significant progress in advancing siting and permitting of all three of Eversource’s offshore wind projects (South Fork, Sunrise and Revolution Wind) at the federal and state levels.

Eversource continues to advance the development of its electric vehicle infrastructure in both Connecticut and Massachusetts, successfully executed its first Massachusetts Grid Modernization plan, and submitted the next round of plan investments for approval, including Advanced Metering Infrastructure.

Eversource also executed a $500 million annual energy efficiency (EE) program and filed and received Massachusetts Department of Public Utilities (MDPU) approval for a $1 billion new EE three-year program.

Eversource continues to position its gas business for long term success in many areas, including stakeholder engagement, geothermal pilot deployment, advancing RNG/hydrogen supply options, and other methane emission reductions.

Eversource outperformed its goal to be in the 85th percentile compared to its peers with a combined end of-year ranking of 97 percent.

Eversource continues to engage with

operational and business partners to advance its sustainability strategy and drive performance that addresses the evolving expectations of its shareholders, customers, employees, regulators and the communities Eversource serves.

Eversource is taking steps to mitigate climate change impacts through leading clean energy initiatives and an industry leading emissions target to achieve carbon neutrality in its operations by 2030.

In 2021, Eversource made progress toward this goal by engaging employees cross-functionally through dedicated committees focused on addressing emission reduction plans across all key emission sources, engaging internal and external stakeholders, and making preparations to offset the emissions that cannot be avoided.

Eversource has reduced its carbon footprint by 17 percent since 2018 by executing its carbon reduction initiatives associated with fleet, electric line losses, SF6 gas used in electric switchgears, energy efficiency and leak prone gas pipe replacements.

Looking beyond its operational greenhouse gas (GHG) emissions, Eversource also works with customers to reduce their impacts on the climate through solutions such as energy efficiency programs, enabling renewable energy interconnection, and advancing electric vehicle infrastructures and energy storage capabilities.

Additionally, employees and retirees also contributed a record amount during the 2021 annual United Way campaign, The Power of U.

Eversource is a signatory to the CEO Action for Inclusion Pledge to advance diversity and inclusion in its workplace and a member of the Paradigm for Parity coalition committed to addressing gender parity.

Eversource held bi-weekly listening sessions with its business resource group leaders and its Racial Equity Task Force has been focused on increasing equity through the lens of talent management, inclusion, and support for its diverse communities, including increasing business with diverse suppliers.

Eversource held a highly attended Day of Understanding virtual event on how to hold conversations that advance racial equality, and Eversource continued its Senior Leadership-led employee town hall series focused on disrupting racism.

Eversource followed the town hall series with allyship training and racial equity dialogues.

In addition, Eversource launched a D&I multicultural book club and held signature learning events to celebrate Black History Month, Hispanic Heritage Month, and Asian American Month, focusing on the history, contributions, and current challenges of each group.

Eversource also continued its webinar series on employee resilience and self-care.

An example of Eversource’s commitment to promote equity and diversity in its communities, is Eversource’s investment in Girls With Impact, a business and leadership program that funds scholarships for under-resourced young women in Connecticut and Massachusetts.

Eversource’s investment is valued at nearly $225,000 and will fund 250 scholarships.

In response to the continuing calls for racial, social and environmental justice, Eversource appointed a Vice President of Corporate Citizenship and Equity and launched a 15-member cross-functional pro-equity advisory team tasked with developing a strategy, guidelines, leadership toolkits, training materials and decision frameworks to promote equity in siting, customer-facing projects, procurement and philanthropy.

Virtual learning and development opportunities were provided to employees, including the launch of a career management series and a new hire networking series with executive overviews.

Given the unprecedented events of the past year, this discussion also describes how Eversource Energy effectively responded to the COVID-19 pandemic to safeguard Eversource Energy’s employees, customers and the communities that Eversource Energy serves, how the Compensation Committee considered the effects of the pandemic in its compensation decisions and how Eversource Energy worked to increase diversity in the workforce and raise awareness of the need for racial justice in our society.

| \= | | | Summary of 2020 Accomplishments | | | \= | | | Elements of 2020 Compensation | | |

| \= | | | Overview of the Compensation Program | | | \= | | | Share Ownership Guidelines and Retention Requirements | | |

| \= | | | Market Analysis | | | \= | | | Other Benefits | | |

| \= | | | Mix of Compensation Elements | | | \= | | | Contractual Agreements | | |

2020 and the COVID-19 Pandemic

From the beginning of the COVID-19 pandemic, Eversource Energy set out to continue to focus first and foremost on the safety and well-being of Eversource Energy stakeholders, to do for each of the groups noted below what Eversource Energy might be able to do in order to help them navigate through the effects of the pandemic and to assist Eversource Energy customers, employees, the people and organizations who live in and operate in the communities Eversource Energy serves, the society we live in, and you, Eversource Energy shareholders, in navigating the effects of the pandemic.

Eversource Energy acted boldly and decisively as COVID-19 emerged as a public health crisis, and immediately implemented many changes to the way Eversource Energy conducts business, while continuing to remain focused on operational and financial performance.

The results and actions taken that Eversource Energy reports in this CD&A relate to 2020 performance in totality, some of which were specifically in response to the pandemic, and which have hopefully made living in a pandemic environment a little more tolerable.

These include:

- For Eversource Energy customers – Eversource Energy took steps to ensure that any personal contact between Eversource Energy employees (both in the field and those working remotely) and customers was performed safely and in accordance with all public health guidelines to reduce to the greatest extent possible the risk of transmission of the virus.

Eversource Energy restored service following a substantial number of storms in a safe and effective manner, instituted a voluntary moratorium on customer shutoffs for non-payment, and offered broad payment and arrearage forgiveness plans to provide assistance from the economic pressures impacting Eversource Energy customers.

Eversource Energy also made communicating with the Company easier, including the implementation of a new 24-hour call center, a dedicated team set up to help small business customers apply for COVID-19 related federal assistance, and the continuation of industry-leading energy efficiency programs done by quickly moving to virtual energy audits.