Item 8. Financial Statements and Supplementary Data

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Item 8. Financial Statements and Supplementary Data


Eversource
			Management’s Report on Internal Controls Over Financial Reporting
			Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
			Consolidated Financial Statements

CL&P
			Management’s Report on Internal Controls Over Financial Reporting
			Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
			Financial Statements

NSTAR Electric
			Management’s Report on Internal Controls Over Financial Reporting
			Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
			Consolidated Financial Statements

PSNH
			Management’s Report on Internal Controls Over Financial Reporting
			Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
			Consolidated Financial Statements

Management’s Report on Internal Controls Over Financial Reporting

Eversource Energy

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of Eversource Energy and subsidiaries (Eversource or the Company) and of other sections of this annual report. Eversource's internal controls over financial reporting were audited by Deloitte & Touche LLP.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting. The Company's internal control framework and processes have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. There are inherent limitations of internal controls over financial reporting that could allow material misstatements due to error or fraud to occur and not be prevented or detected on a timely basis by employees during the normal course of business. Additionally, internal controls over financial reporting may become inadequate in the future due to changes in the business environment.

Under the supervision and with the participation of the principal executive officer and principal financial officer, Eversource conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2023.

February 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of Eversource Energy:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Eversource Energy and subsidiaries (the “Company”) as of December 31, 2023, 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, 2023, 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, 2023, of the Company and our report dated February 14, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controls Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of Eversource Energy:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Eversource Energy and subsidiaries (the “Company”) as of December 31, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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 14, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Regulatory Accounting - Impact of Rate Regulation on the Financial Statements - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company’s utility companies are subject to rate regulation by the Federal Energy Regulatory Commission and by their respective state public utility authorities in Connecticut, Massachusetts, or New Hampshire (the “Commissions”). The rate regulation by these Commissions is based on cost recovery. The regulated companies’ financial statements reflect the effects of the rate-making process. The rates charged to the customers of the Company’s regulated companies are designed to collect each company’s cost to provide service, plus a return on investment.

The application of accounting guidance for rate-regulated enterprises results in recording regulatory assets and liabilities. Regulatory assets represent the deferral of incurred costs that are probable of future recovery in customer rates. Regulatory assets are amortized as the incurred costs are recovered through customer rates. In some cases, the Company records regulatory assets before approval for recovery has been received from the applicable regulatory commission. The Company must use judgment to conclude that costs deferred as regulatory assets are probable of future recovery. The Company bases its conclusion on certain factors, including, but not limited to, regulatory precedent. Regulatory liabilities represent either revenues received from customers to fund expected costs that have not yet been incurred or probable future refunds to customers.

The Company uses judgment when recording regulatory assets and liabilities; however, regulatory commissions can reach different conclusions about the recovery of costs, and those conclusions could have a material impact on the Company’s financial statements. Management believes it is probable that each of the regulated companies will recover its respective investment in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the regulated companies’ operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

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. While management has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve full recovery of such costs or full recovery of all amounts invested in the utility business and a reasonable return on that investment. We identified the impact of rate-regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impact of future regulatory orders on the financial statements. Management judgments include assessing the probability of recovery in future rates of incurred costs and of a refund to customers. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates, a refund, or a future reduction in rates.
We evaluated the Company’s disclosures related to the applicability and impacts of rate regulation, including the balances recorded and regulatory developments disclosed in the financial statements.
We read relevant regulatory orders issued by the Commissions for 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 evaluated the external information and compared it to management’s recorded regulatory asset and liability balances for completeness.
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions*.*
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 to assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

Investments in Unconsolidated Affiliates – Impact of Offshore Wind Impairment and Offshore Wind Divestiture - Refer to Note 6 to the Financial Statements

Critical Audit Matter Description

Eversource’s offshore wind business includes 50 percent ownership interests in each of North East Offshore and South Fork Class B Member, LLC, which collectively hold three offshore wind projects. North East Offshore holds the Revolution Wind project and the Sunrise Wind project. South Fork Class B Member, LLC holds the South Fork Wind project. Eversource’s offshore wind business also includes a noncontrolling tax equity investment in South Fork Wind through a 100 percent ownership in South Fork Wind Holdings, LLC Class A shares. The offshore wind projects are being developed and constructed through joint and equal partnerships with Ørsted.

In the second quarter of 2023, the Company announced that it had completed the strategic review of its offshore wind investments and determined that it would continue to pursue the sale of its offshore wind investments. The Company also entered into a purchase and sale agreement with Ørsted for its 50% interest in an uncommitted lease area and committed to provide tax equity for the South Fork Wind project through a new tax equity ownership interest. In connection with the conclusion of the strategic review, Eversource evaluated its aggregate investment in the projects, uncommitted lease area, and other related capitalized costs and determined that the carrying value of the equity method offshore wind investment exceeded the fair value of the investment and that the decline was other-than-temporary. The estimate of fair value was based on the expected sale price of the Company’s 50 percent interest in the three contracted projects based on the most recent bid value, the sale price of the uncommitted lease area included in the purchase and sale agreement, expected investment tax credits and potential investment tax credit adder amounts, the value of the tax equity ownership interest, and the expectation of a successful repricing of the Sunrise Wind Offshore Renewable Energy Credit (“OREC”) contract. As a result, the Company recognized an other-than temporary impairment charge in the second quarter of 2023.

In the fourth quarter of 2023, The New York State Public Service Commission denied Sunrise Wind’s petition to amend its OREC contract to increase the contract price to cover increased costs and inflation. Also during the fourth quarter, project construction forecasts were updated, and these new forecasts reflected additional expenditures for construction and scheduling related pressures, including the availability and increased cost of installation vessels and supply chain cost increases related to foundation fabrication. In determining the current fair value of the investments, these updated projections exceeded the previously estimated projections for construction expenditures, which resulted in a revised sales price that is now significantly lower than the previous bid value. Accordingly, the Company also recognized an other-than temporary impairment charge in the fourth quarter of 2023.

We identified the evaluation of other-than-temporary impairment charge for the offshore wind investment as a critical audit matter. It involves a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist at the equity method investment level, selecting discount rates used to determine fair values, and developing an estimate of discounted future cash flows expected from

investment operations or the sale of the investment. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the price and the discount rate used in the discounted future cash flow method.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the discount rate used to determine fair market values and the estimates of discounted future cash flows expected from the sale of the investment.

We tested the effectiveness of management’s controls over impairment considerations including the aggregate investment in the projects, the sale price of the uncommitted lease area, and other related capitalized costs, as well as the discounted cash flow analysis for the offshore wind investments. We tested the effectiveness of management’s controls over the initial recognition of the impairment charge.
We evaluated the Company’s disclosures related to the impairment charges disclosed in the financial statements.
We evaluated the assumptions utilized within the discounted cash flow model used in the Company’s impairment analysis.
We made inquiries of management and evaluated the full impairment analysis from management that supported the other-than-temporary impairment charge in accordance with ASC 323-10-35-32A “Equity Method and Joint Ventures – Subsequent Measurement”.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 14, 2024

We have served as the Company’s auditor since 2002.

EVERSOURCE ENERGY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of December 31,
(Thousands of Dollars)	2023		2022

ASSETS
Current Assets:
Cash	$	53,873	$	47,597
Cash Equivalents	—		327,006
Receivables, Net (net of allowance for uncollectible accounts of $554,455 and $486,297 as of December 31, 2023 and 2022, respectively)	1,431,531		1,517,138
Unbilled Revenues	225,325		238,968
Materials, Supplies, Natural Gas and REC Inventory	507,307		374,395
Regulatory Assets	1,674,196		1,335,491
Prepayments and Other Current Assets	355,762		382,603
Total Current Assets	4,247,994		4,223,198
Property, Plant and Equipment, Net	39,498,607		36,112,820
Deferred Debits and Other Assets:
Regulatory Assets	4,714,970		4,242,794
Goodwill	4,532,100		4,522,632
Investments in Unconsolidated Affiliates	660,473		2,176,080
Prepaid Pension and PBOP	1,028,207		1,045,524
Marketable Securities	337,814		366,508
Other Long-Term Assets	592,080		541,344
Total Deferred Debits and Other Assets	11,865,644		12,894,882
Total Assets	$	55,612,245	$	53,230,900

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	1,930,422	$	1,442,200
Long-Term Debt – Current Portion	824,847		1,320,129
Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	1,869,187		2,113,905
Regulatory Liabilities	591,750		890,786
Other Current Liabilities	1,081,981		989,053
Total Current Liabilities	6,341,397		6,799,283
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	5,303,730		5,067,902
Regulatory Liabilities	4,022,923		3,930,305
Derivative Liabilities	67,999		143,929
Asset Retirement Obligations	505,844		502,713
Accrued Pension, SERP and PBOP	123,754		135,473
Other Long-Term Liabilities	961,239		888,081
Total Deferred Credits and Other Liabilities	10,985,489		10,668,403
Long-Term Debt	23,588,616		19,723,994
Rate Reduction Bonds	367,282		410,492
Noncontrolling Interest - Preferred Stock of Subsidiaries	155,569		155,570
Common Shareholders' Equity:
Common Shares	1,799,920		1,799,920
Capital Surplus, Paid In	8,460,876		8,401,731
Retained Earnings	4,142,515		5,527,153
Accumulated Other Comprehensive Loss	(33,737)		(39,421)
Treasury Stock	(195,682)		(216,225)
Common Shareholders' Equity	14,173,892		15,473,158
Commitments and Contingencies (Note 13)
Total Liabilities and Capitalization	$	55,612,245	$	53,230,900

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF (LOSS)/INCOME


	For the Years Ended December 31,
(Thousands of Dollars, Except Share Information)	2023		2022		2021

Operating Revenues	$	11,910,705	$	12,289,336	$	9,863,085

Operating Expenses:
Purchased Power, Purchased Natural Gas and Transmission	5,168,241		5,014,074		3,372,344
Operations and Maintenance	1,895,703		1,865,328		1,739,685
Depreciation	1,305,840		1,194,246		1,103,008
Amortization	(490,117)		448,892		231,965
Energy Efficiency Programs	691,344		658,051		592,775
Taxes Other Than Income Taxes	940,359		910,591		829,987

Total Operating Expenses	9,511,370		10,091,182		7,869,764
Operating Income	2,399,335		2,198,154		1,993,321
Interest Expense	855,441		678,274		582,334
Impairments of Offshore Wind Investments	2,167,000		—		—
Other Income, Net	348,069		346,088		161,282
(Loss)/Income Before Income Tax Expense	(275,037)		1,865,968		1,572,269
Income Tax Expense	159,684		453,574		344,223
Net (Loss)/Income	(434,721)		1,412,394		1,228,046
Net Income Attributable to Noncontrolling Interests	7,519		7,519		7,519
Net (Loss)/Income Attributable to Common Shareholders	$	(442,240)	$	1,404,875	$	1,220,527

Basic (Loss)/Earnings Per Common Share	$	(1.27)	$	4.05	$	3.55

Diluted (Loss)/Earnings Per Common Share	$	(1.26)	$	4.05	$	3.54

Weighted Average Common Shares Outstanding:
Basic	349,580,638		346,783,444		343,972,926
Diluted	349,840,481		347,246,768		344,631,056

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Net (Loss)/Income	$	(434,721)	$	1,412,394	$	1,228,046
Other Comprehensive Income, Net of Tax:
Qualified Cash Flow Hedging Instruments	20		20		972
Changes in Unrealized Gains/(Losses) on Marketable Securities	1,252		(1,636)		(671)
Changes in Funded Status of Pension, SERP and PBOP Benefit Plans	4,412		4,470		33,835
Other Comprehensive Income, Net of Tax	5,684		2,854		34,136
Comprehensive Income Attributable to Noncontrolling Interests	(7,519)		(7,519)		(7,519)
Comprehensive (Loss)/Income Attributable to Common Shareholders	$	(436,556)	$	1,407,729	$	1,254,663

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY


	Common Shares			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Common Shareholders' Equity
(Thousands of Dollars, Except Share Information)	Shares	Amount
Balance as of January 1, 2021	342,954,023	$	1,789,092	$	8,015,663	$	4,613,201	$	(76,411)	$	(277,979)	$	14,063,566
Net Income						1,228,046						1,228,046
Dividends on Common Shares - $2.41 Per Share						(828,337)						(828,337)
Dividends on Preferred Stock						(7,519)						(7,519)

Long-Term Incentive Plan Activity				3,537								3,537
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


Other Comprehensive Income								34,136				34,136
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						1,412,394						1,412,394
Dividends on Common Shares - $2.55 Per Share						(883,113)						(883,113)
Dividends on Preferred Stock						(7,519)						(7,519)
Issuance of Common Shares - $5 par value	2,165,671	10,828		189,077								199,905
Long-Term Incentive Plan Activity				8,335								8,335
Issuance of Treasury Shares	949,724			53,822						17,350		71,172
Capital Stock Expense				(2,847)								(2,847)
Issuance of Treasury Shares for Acquisition of The Torrington Water Company	925,264			54,830						17,303		72,133
Other Comprehensive Income								2,854				2,854
Balance as of December 31, 2022	348,443,855	1,799,920		8,401,731		5,527,153		(39,421)		(216,225)		15,473,158
Net Loss						(434,721)						(434,721)
Dividends on Common Shares - $2.70 Per Share						(942,398)						(942,398)
Dividends on Preferred Stock						(7,519)						(7,519)

Long-Term Incentive Plan Activity				1,375								1,375
Issuance of Treasury Shares	1,096,411			57,770						20,543		78,313

Other Comprehensive Income								5,684				5,684
Balance as of December 31, 2023	349,540,266	$	1,799,920	$	8,460,876	$	4,142,515	$	(33,737)	$	(195,682)	$	14,173,892

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

EVERSOURCE ENERGY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Activities:
Net (Loss)/Income	$	(434,721)	$	1,412,394	$	1,228,046
Adjustments to Reconcile Net (Loss)/Income to Net Cash Flows Provided by Operating Activities:
Depreciation	1,305,840		1,194,246		1,103,008
Deferred Income Taxes	85,405		346,779		347,056
Uncollectible Expense	72,468		61,876		60,886
Pension, SERP and PBOP Income, Net	(90,706)		(160,857)		(14,693)
Pension and PBOP Contributions	(6,860)		(83,148)		(182,344)
Regulatory Under Recoveries, Net	(151,548)		(205,294)		(314,211)
(Customer Credits)/Reserve at CL&P related to PURA Settlement Agreement and Storm Performance Penalty	—		(72,041)		81,274
Amortization	(490,117)		448,892		231,965
Cost of Removal Expenditures	(315,699)		(303,755)		(242,130)
Payment in 2022 of Withheld Property Taxes	—		(78,446)		—
Impairments of Offshore Wind Investments	2,167,000		—		—
Other	(53,026)		(39,192)		(64,640)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(124,393)		(470,593)		(135,505)

Taxes Receivable/Accrued, Net	36,357		18,358		(110,621)
Accounts Payable	(287,637)		377,657		(29,201)
Other Current Assets and Liabilities, Net	(66,202)		(45,583)		3,710
Net Cash Flows Provided by Operating Activities	1,646,161		2,401,293		1,962,600

Investing Activities:
Investments in Property, Plant and Equipment	(4,336,849)		(3,441,852)		(3,175,080)
Proceeds from Sales of Marketable Securities	395,604		457,612		447,893

Purchases of Marketable Securities	(336,779)		(424,174)		(414,980)

Investments in Unconsolidated Affiliates	(1,680,473)		(742,496)		(327,385)

Proceeds from Unconsolidated Affiliates	1,090,662		—		—
Other Investing Activities	(2,897)		20,420		22,178
Net Cash Flows Used in Investing Activities	(4,870,732)		(4,130,490)		(3,447,374)

Financing Activities:
Issuance of Common Shares, Net of Issuance Costs	—		197,058		—
Cash Dividends on Common Shares	(918,995)		(860,033)		(805,439)
Cash Dividends on Preferred Stock	(7,519)		(7,519)		(7,519)
Increase/(Decrease) in Notes Payable	695,552		(78,170)		256,125
Repayment of Rate Reduction Bonds	(43,210)		(43,210)		(43,210)
Issuance of Long-Term Debt	5,198,345		4,045,000		3,230,000
Retirement of Long-Term Debt	(2,008,470)		(1,175,000)		(1,142,500)
Other Financing Activities	(46,466)		(48,185)		(46,625)
Net Cash Flows Provided by Financing Activities	2,869,237		2,029,941		1,440,832
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash	(355,334)		300,744		(43,942)
Cash, Cash Equivalents and Restricted Cash - Beginning of Year	521,752		221,008		264,950
Cash, Cash Equivalents and Restricted Cash - End of Year	$	166,418	$	521,752	$	221,008

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

Management’s Report on Internal Controls Over Financial Reporting

The Connecticut Light and Power Company

Management is responsible for the preparation, integrity, and fair presentation of the accompanying financial statements of The Connecticut Light and Power Company (CL&P or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, CL&P conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2023.

February 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of The Connecticut Light and Power Company:

Opinion on the Financial Statements

We have audited the accompanying balance sheets of The Connecticut Light and Power Company (the “Company”) as of December 31, 2023 and 2022, the related statements of income, comprehensive income, common stockholder’s equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Regulatory Accounting - Impact of Rate Regulation on the Financial Statements - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Federal Energy Regulatory Commission and the state public utility authority in Connecticut (the “Commissions”). The rate regulation by these Commissions is based on cost recovery. The Company’s financial statements reflect the effects of the rate-making process. The rates charged to the customers are designed to collect the Company’s cost to provide service, plus a return on investment.

The Company uses judgment when recording regulatory assets and liabilities; however, regulatory commissions can reach different conclusions about the recovery of costs, and those conclusions could have a material impact on the Company’s financial statements. Management believes it is probable that the Company will recover its investment in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to the Company’s operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

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. While management has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve full recovery of such costs or full recovery of all amounts invested in the Company and a reasonable return on that investment. We identified the impact of rate-regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impact of future regulatory orders on the financial statements. Management judgments include assessing the probability of recovery in future rates of incurred costs and of a refund to customers. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates, a refund, or a future reduction in rates.
We evaluated the Company’s disclosures related to the applicability and impacts of rate regulation, including the balances recorded and regulatory developments disclosed in the financial statements.
We read relevant regulatory orders issued by the Commissions for 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 evaluated the external information and compared it to management’s recorded regulatory asset and liability balances for completeness.
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions*.*
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 to assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 14, 2024

We have served as the Company’s auditor since 2002.

THE CONNECTICUT LIGHT AND POWER COMPANY

BALANCE SHEETS


	As of December 31,
(Thousands of Dollars)	2023		2022

ASSETS
Current Assets:
Cash	$	10,213	$	11,312
Receivables, Net (net of allowance for uncollectible accounts of $296,030 and $225,320 as of December 31, 2023 and 2022, respectively)	558,993		612,052
Accounts Receivable from Affiliated Companies	60,450		46,439
Unbilled Revenues	57,403		59,363
Materials, Supplies and REC Inventory	156,467		88,157
Taxes Receivable	41,253		65,785
Regulatory Assets	480,369		314,089

Prepayments and Other Current Assets	53,536		62,524
Total Current Assets	1,418,684		1,259,721
Property, Plant and Equipment, Net	12,340,192		11,467,024
Deferred Debits and Other Assets:
Regulatory Assets	1,662,778		1,593,693
Prepaid Pension and PBOP	129,801		147,914
Other Long-Term Assets	298,169		290,444
Total Deferred Debits and Other Assets	2,090,748		2,032,051
Total Assets	$	15,849,624	$	14,758,796

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	249,670	$	—

Accounts Payable	622,055		710,500
Accounts Payable to Affiliated Companies	134,726		136,277
Obligations to Third Party Suppliers	75,753		40,704
Regulatory Liabilities	102,239		336,048
Derivative Liabilities	81,944		81,588
Other Current Liabilities	127,703		123,171
Total Current Liabilities	1,394,090		1,428,288
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,860,122		1,640,034
Regulatory Liabilities	1,315,928		1,263,396
Derivative Liabilities	67,999		143,929

Other Long-Term Liabilities	190,186		166,081
Total Deferred Credits and Other Liabilities	3,434,235		3,213,440
Long-Term Debt	4,814,429		4,216,488
Preferred Stock Not Subject to Mandatory Redemption	116,200		116,200
Common Stockholder's Equity:
Common Stock	60,352		60,352
Capital Surplus, Paid In	3,384,265		3,260,765
Retained Earnings	2,645,868		2,463,094
Accumulated Other Comprehensive Income	185		169
Common Stockholder's Equity	6,090,670		5,784,380
Commitments and Contingencies (Note 13)
Total Liabilities and Capitalization	$	15,849,624	$	14,758,796

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

THE CONNECTICUT LIGHT AND POWER COMPANY

STATEMENTS OF INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Revenues	$	4,578,804	$	4,817,744	$	3,637,412

Operating Expenses:
Purchased Power and Transmission	2,612,949		2,110,253		1,392,969
Operations and Maintenance	733,287		707,162		644,175
Depreciation	376,904		355,511		338,915
Amortization of Regulatory (Liabilities)/Assets, Net	(500,367)		335,636		99,009
Energy Efficiency Programs	133,453		134,222		129,564
Taxes Other Than Income Taxes	401,135		384,746		363,862
Total Operating Expenses	3,757,361		4,027,530		2,968,494
Operating Income	821,443		790,214		668,918
Interest Expense	193,361		169,348		166,107
Other Income, Net	61,560		83,252		30,187
Income Before Income Tax Expense	689,642		704,118		532,998
Income Tax Expense	170,909		171,198		131,273
Net Income	$	518,733	$	532,920	$	401,725

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

STATEMENTS OF COMPREHENSIVE INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Net Income	$	518,733	$	532,920	$	401,725
Other Comprehensive Income/(Loss), Net of Tax:
Qualified Cash Flow Hedging Instruments	(26)		(26)		(26)
Changes in Unrealized Gains/(Loss) on Marketable Securities	42		(56)		(25)
Other Comprehensive Income/(Loss), Net of Tax	16		(82)		(51)
Comprehensive Income	$	518,749	$	532,838	$	401,674

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

THE CONNECTICUT LIGHT AND POWER COMPANY

STATEMENTS OF COMMON STOCKHOLDER'S EQUITY


	Common Stock			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount
Balance as of January 1, 2021	6,035,205	$	60,352	$	2,810,765	$	2,173,367	$	302	$	5,044,786
Net Income						401,725				401,725
Dividends on Preferred Stock						(5,559)				(5,559)
Dividends on Common Stock						(341,400)				(341,400)
Capital Contributions from Eversource Parent				200,000						200,000
Other Comprehensive Loss								(51)		(51)
Balance as of December 31, 2021	6,035,205	60,352		3,010,765		2,228,133		251		5,299,501
Net Income						532,920				532,920
Dividends on Preferred Stock						(5,559)				(5,559)
Dividends on Common Stock						(292,400)				(292,400)
Capital Contributions from Eversource Parent				250,000						250,000

Other Comprehensive Loss								(82)		(82)
Balance as of December 31, 2022	6,035,205	60,352		3,260,765		2,463,094		169		5,784,380
Net Income						518,733				518,733
Dividends on Preferred Stock						(5,559)				(5,559)
Dividends on Common Stock						(330,400)				(330,400)
Capital Contributions from Eversource Parent				123,500						123,500
Other Comprehensive Income								16		16
Balance as of December 31, 2023	6,035,205	$	60,352	$	3,384,265	$	2,645,868	$	185	$	6,090,670

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

THE CONNECTICUT LIGHT AND POWER COMPANY

STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Activities:
Net Income	$	518,733	$	532,920	$	401,725
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	376,904		355,511		338,915
Deferred Income Taxes	184,037		45,381		123,889
Uncollectible Expense	11,675		15,578		13,495
Pension, SERP and PBOP (Income)/Expense, Net	(18,316)		(28,971)		5,295
Pension Contributions	—		—		(98,913)
Regulatory Over/(Under) Recoveries, Net	157,200		(144,793)		(152,775)
(Customer Credits)/Reserve related to PURA Settlement Agreement and Storm Performance Penalty	—		(72,041)		81,274
Amortization of Regulatory (Liabilities)/Assets, Net	(500,367)		335,636		99,009
Cost of Removal Expenditures	(80,479)		(71,596)		(95,792)
Other	(16,194)		(25,927)		(10,194)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(100,684)		(256,338)		(75,881)

Taxes Receivable/Accrued, Net	25,633		897		(25,162)
Accounts Payable	(88,040)		207,698		24,895
Other Current Assets and Liabilities, Net	(20,535)		(24,308)		(16,925)
Net Cash Flows Provided by Operating Activities	449,567		869,647		612,855

Investing Activities:
Investments in Property, Plant and Equipment	(1,093,121)		(876,740)		(790,083)
Other Investing Activities	173		591		329
Net Cash Flows Used in Investing Activities	(1,092,948)		(876,149)		(789,754)

Financing Activities:
Cash Dividends on Common Stock	(330,400)		(292,400)		(341,400)
Cash Dividends on Preferred Stock	(5,559)		(5,559)		(5,559)
Increase in Notes Payable to Eversource Parent	457,000		—		—
Issuance of Long-Term Debt	800,000		—		425,000
Retirement of Long-Term Debt	(400,000)		—		(120,500)
Capital Contributions from Eversource Parent	123,500		250,000		200,000
Other Financing Activities	(9,244)		—		(5,663)
Net Cash Flows Provided by/(Used In) Financing Activities	635,297		(47,959)		151,878
Net Decrease in Cash and Restricted Cash	(8,084)		(54,461)		(25,021)
Cash and Restricted Cash - Beginning of Year	20,327		74,788		99,809
Cash and Restricted Cash - End of Year	$	12,243	$	20,327	$	74,788

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

Management’s Report on Internal Controls Over Financial Reporting

NSTAR Electric Company

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of NSTAR Electric Company and subsidiary (NSTAR Electric or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, NSTAR Electric conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2023.

February 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of NSTAR Electric Company:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of NSTAR Electric Company and subsidiary (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, common stockholder’s equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Critical Audit Matter

Regulatory Accounting - Impact of Rate Regulation on the Financial Statements - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Federal Energy Regulatory Commission and the state public utility authority in Massachusetts (the “Commissions”). The rate regulation by these Commissions is based on cost recovery. The Company’s financial statements reflect the effects of the rate-making process. The rates charged to the customers are designed to collect the Company’s cost to provide service, plus a return on investment.

The Company uses judgment when recording regulatory assets and liabilities; however, regulatory commissions can reach different conclusions about the recovery of costs, and those conclusions could have a material impact on the Company’s financial statements. Management believes it is probable that the Company will recover its investment in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to the Company’s operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

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. While management has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve full recovery of such costs or full recovery of all amounts invested in the Company and a reasonable return on that investment. We identified the impact of rate-regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impact of future regulatory orders on the financial statements. Management judgments include assessing the probability of recovery in future rates of incurred costs and of a refund to customers. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates, a refund, or a future reduction in rates.
We evaluated the Company’s disclosures related to the applicability and impacts of rate regulation, including the balances recorded and regulatory developments disclosed in the financial statements.
We read relevant regulatory orders issued by the Commissions for 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 evaluated the external information and compared it to management’s recorded regulatory asset and liability balances for completeness.
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions*.*
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 to assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 14, 2024

We have served as the Company’s auditor since 2012.

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS


	As of December 31,
(Thousands of Dollars)	2023		2022

ASSETS
Current Assets:
Cash	$	6,740	$	738
Cash Equivalents	—		327,006
Receivables, Net (net of allowance for uncollectible accounts of $97,026 and $94,958 as of December 31, 2023 and 2022, respectively)	487,707		453,371
Accounts Receivable from Affiliated Companies	74,634		35,196
Unbilled Revenues	49,897		39,680
Materials, Supplies and REC Inventory	173,770		138,352

Regulatory Assets	676,083		492,759
Prepayments and Other Current Assets	41,464		71,276
Total Current Assets	1,510,295		1,558,378
Property, Plant and Equipment, Net	12,753,787		11,626,968
Deferred Debits and Other Assets:
Regulatory Assets	1,281,836		1,221,619
Prepaid Pension and PBOP	608,617		576,809
Other Long-Term Assets	116,978		111,846
Total Deferred Debits and Other Assets	2,007,431		1,910,274
Total Assets	$	16,271,513	$	15,095,620

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable	$	365,847	$	—

Long-Term Debt – Current Portion	—		80,000
Accounts Payable	599,696		559,676
Accounts Payable to Affiliated Companies	144,622		108,907
Obligations to Third Party Suppliers	139,823		142,628
Renewable Portfolio Standards Compliance Obligations	116,010		120,239
Regulatory Liabilities	368,070		373,221
Other Current Liabilities	84,688		83,925
Total Current Liabilities	1,818,756		1,468,596
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	1,849,613		1,700,875
Regulatory Liabilities	1,585,311		1,548,081

Other Long-Term Liabilities	327,388		289,313
Total Deferred Credits and Other Liabilities	3,762,312		3,538,269
Long-Term Debt	4,496,947		4,345,085
Preferred Stock Not Subject to Mandatory Redemption	43,000		43,000
Common Stockholder's Equity:
Common Stock	—		—
Capital Surplus, Paid In	3,013,842		2,778,942
Retained Earnings	3,136,612		2,921,444
Accumulated Other Comprehensive Income	44		284
Common Stockholder's Equity	6,150,498		5,700,670
Commitments and Contingencies (Note 13)
Total Liabilities and Capitalization	$	16,271,513	$	15,095,620

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Revenues	$	3,515,539	$	3,583,070	$	3,056,350

Operating Expenses:
Purchased Power and Transmission	1,154,013		1,264,824		932,530
Operations and Maintenance	668,466		640,834		563,172
Depreciation	372,578		361,969		337,451
Amortization of Regulatory Assets, Net	16,150		83,855		55,774
Energy Efficiency Programs	325,593		332,247		288,612
Taxes Other Than Income Taxes	256,090		246,705		216,703
Total Operating Expenses	2,792,890		2,930,434		2,394,242
Operating Income	722,649		652,636		662,108
Interest Expense	189,254		162,892		146,048
Other Income, Net	164,129		142,661		74,844
Income Before Income Tax Expense	697,524		632,405		590,904
Income Tax Expense	152,996		139,977		114,335
Net Income	$	544,528	$	492,428	$	476,569

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Net Income	$	544,528	$	492,428	$	476,569
Other Comprehensive (Loss)/Income, Net of Tax:
Changes in Funded Status of SERP Benefit Plan	(272)		(221)		(100)
Qualified Cash Flow Hedging Instruments	20		20		298
Changes in Unrealized Gains/(Losses) on Marketable Securities	12		(16)		(6)
Other Comprehensive (Loss)/Income, Net of Tax	(240)		(217)		192
Comprehensive Income	$	544,288	$	492,211	$	476,761

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY


	Common Stock			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount
Balance as of January 1, 2021	200	$	—	$	1,993,942	$	2,527,167	$	309	$	4,521,418
Net Income						476,569				476,569
Dividends on Preferred Stock						(1,960)				(1,960)
Dividends on Common Stock						(283,200)				(283,200)
Capital Contributions from Eversource Parent				260,000						260,000

Other Comprehensive Income								192		192
Balance as of December 31, 2021	200	—		2,253,942		2,718,576		501		4,973,019
Net Income						492,428				492,428
Dividends on Preferred Stock						(1,960)				(1,960)
Dividends on Common Stock						(287,600)				(287,600)
Capital Contributions from Eversource Parent				525,000						525,000

Other Comprehensive Loss								(217)		(217)
Balance as of December 31, 2022	200	—		2,778,942		2,921,444		284		5,700,670
Net Income						544,528				544,528
Dividends on Preferred Stock						(1,960)				(1,960)
Dividends on Common Stock						(327,400)				(327,400)
Capital Contributions from Eversource Parent				234,900						234,900
Other Comprehensive Loss								(240)		(240)
Balance as of December 31, 2023	200	$	—	$	3,013,842	$	3,136,612	$	44	$	6,150,498

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

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Activities:
Net Income	$	544,528	$	492,428	$	476,569
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	372,578		361,969		337,451
Deferred Income Taxes	96,224		78,039		57,507
Uncollectible Expense	22,791		21,550		16,649
Pension, SERP and PBOP Income, Net	(41,554)		(55,830)		(26,120)
Pension Contributions	—		(15,000)		(30,000)
Regulatory Under Recoveries, Net	(141,865)		(88,220)		(79,075)
Amortization of Regulatory Assets, Net	16,150		83,855		55,774
Cost of Removal Expenditures	(68,290)		(57,339)		(58,967)
Payment in 2022 of Withheld Property Taxes	—		(76,311)		—
Other	(2,123)		(14,294)		(32,447)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(82,659)		(23,757)		(45,774)

Taxes Receivable/Accrued, Net	27,394		35,143		(16,219)
Accounts Payable	11,357		8,815		31,650
Other Current Assets and Liabilities, Net	(40,974)		20,430		13,944
Net Cash Flows Provided by Operating Activities	713,557		771,478		700,942

Investing Activities:
Investments in Property, Plant and Equipment	(1,376,135)		(954,281)		(960,949)


Other Investing Activities	48		165		91
Net Cash Flows Used in Investing Activities	(1,376,087)		(954,116)		(960,858)

Financing Activities:
Cash Dividends on Common Stock	(327,400)		(287,600)		(283,200)
Cash Dividends on Preferred Stock	(1,960)		(1,960)		(1,960)
Increase/(Decrease) in Notes Payable	365,847		(162,500)		(32,500)
Decrease in Notes Payable to Eversource Parent	—		—		(21,300)
Capital Contributions from Eversource Parent	234,900		525,000		260,000
Issuance of Long-Term Debt	150,000		850,000		600,000
Retirement of Long-Term Debt	(80,000)		(400,000)		(250,000)
Other Financing Activities	(1,365)		(13,188)		(10,355)
Net Cash Flows Provided by Financing Activities	340,022		509,752		260,685
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash	(322,508)		327,114		769
Cash, Cash Equivalents and Restricted Cash - Beginning of Year	345,293		18,179		17,410
Cash, Cash Equivalents and Restricted Cash - End of Year	$	22,785	$	345,293	$	18,179

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

Management’s Report on Internal Controls Over Financial Reporting

Public Service Company of New Hampshire

Management is responsible for the preparation, integrity, and fair presentation of the accompanying consolidated financial statements of Public Service Company of New Hampshire and subsidiaries (PSNH or the Company) and of other sections of this annual report.

Under the supervision and with the participation of the principal executive officer and principal financial officer, PSNH conducted an evaluation of the effectiveness of internal controls over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation under the framework in COSO, management concluded that internal controls over financial reporting were effective as of December 31, 2023.

February 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Public Service Company of New Hampshire:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Public Service Company of New Hampshire and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, common stockholder’s equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Critical Audit Matter

Regulatory Accounting - Impact of Rate Regulation on the Financial Statements - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Federal Energy Regulatory Commission and the state public utility authority in New Hampshire (the “Commissions”). The rate regulation by these Commissions is based on cost recovery. The Company’s financial statements reflect the effects of the rate-making process. The rates charged to the customers are designed to collect the Company’s cost to provide service, plus a return on investment.

The Company uses judgment when recording regulatory assets and liabilities; however, regulatory commissions can reach different conclusions about the recovery of costs, and those conclusions could have a material impact on the Company’s financial statements. Management believes it is probable that the Company will recover its investment in long-lived assets, including regulatory assets. If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to the Company’s operations, or if management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.

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. While management has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve full recovery of such costs or full recovery of all amounts invested in the Company and a reasonable return on that investment. We identified the impact of rate-regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impact of future regulatory orders on the financial statements. Management judgments include assessing the probability of recovery in future rates of incurred costs and of a refund to customers. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates, a refund, or a future reduction in rates.
We evaluated the Company’s disclosures related to the applicability and impacts of rate regulation, including the balances recorded and regulatory developments disclosed in the financial statements.
We read relevant regulatory orders issued by the Commissions for 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 evaluated the external information and compared it to management’s recorded regulatory asset and liability balances for completeness.
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions*.*
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 to assess management’s assertion that amounts are probable of recovery, refund, or a future reduction in rates.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

February 14, 2024

We have served as the Company’s auditor since 2002.

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of December 31,
(Thousands of Dollars)	2023		2022

ASSETS
Current Assets:
Cash	$	240	$	136
Receivables, Net (net of allowance for uncollectible accounts of $14,322 and $29,236 as of December 31, 2023 and 2022, respectively)	152,276		173,337
Accounts Receivable from Affiliated Companies	18,214		8,193
Unbilled Revenues	55,012		72,713
Taxes Receivable	27,146		27,978
Materials, Supplies and REC Inventory	77,066		34,521
Regulatory Assets	189,450		102,240
Special Deposits	31,586		33,140

Prepayments and Other Current Assets	18,489		13,297
Total Current Assets	569,479		465,555
Property, Plant and Equipment, Net	4,574,652		4,060,224
Deferred Debits and Other Assets:
Regulatory Assets	773,783		593,974
Prepaid Pension and PBOP	58,979		66,384
Other Long-Term Assets	16,558		16,517
Total Deferred Debits and Other Assets	849,320		676,875
Total Assets	$	5,993,451	$	5,202,654

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Eversource Parent	$	233,000	$	173,300
Long-Term Debt – Current Portion	—		29,668
Rate Reduction Bonds – Current Portion	43,210		43,210
Accounts Payable	205,744		291,556
Accounts Payable to Affiliated Companies	41,272		36,231
Regulatory Liabilities	117,515		161,963

Other Current Liabilities	72,328		59,616
Total Current Liabilities	713,069		795,544
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes	691,532		562,802
Regulatory Liabilities	393,574		391,628

Other Long-Term Liabilities	42,484		37,087
Total Deferred Credits and Other Liabilities	1,127,590		991,517
Long-Term Debt	1,431,591		1,134,914
Rate Reduction Bonds	367,282		410,492
Common Stockholder's Equity:
Common Stock	—		—
Capital Surplus, Paid In	1,698,134		1,298,134
Retained Earnings	655,785		572,126
Accumulated Other Comprehensive Loss	—		(73)
Common Stockholder's Equity	2,353,919		1,870,187
Commitments and Contingencies (Note 13)
Total Liabilities and Capitalization	$	5,993,451	$	5,202,654

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Revenues	$	1,447,873	$	1,474,799	$	1,177,248

Operating Expenses:
Purchased Power and Transmission	604,983		665,478		370,271
Operations and Maintenance	284,442		255,991		237,659
Depreciation	140,417		127,962		120,065
Amortization of Regulatory (Liabilities)/Assets, Net	(16,343)		42,867		86,832
Energy Efficiency Programs	39,618		37,434		38,752
Taxes Other Than Income Taxes	93,894		95,301		91,465
Total Operating Expenses	1,147,011		1,225,033		945,044
Operating Income	300,862		249,766		232,204
Interest Expense	72,786		59,548		56,998
Other Income, Net	26,597		32,666		14,565
Income Before Income Tax Expense	254,673		222,884		189,771
Income Tax Expense	59,014		51,314		39,433
Net Income	$	195,659	$	171,570	$	150,338

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Net Income	$	195,659	$	171,570	$	150,338
Other Comprehensive Income/(Loss), Net of Tax:
Qualified Cash Flow Hedging Instruments	—		—		673
Changes in Unrealized Gains/(Loss) on Marketable Securities	73		(96)		(37)
Other Comprehensive Income/(Loss), Net of Tax	73		(96)		636
Comprehensive Income	$	195,732	$	171,474	$	150,974

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY


	Common Stock			Capital Surplus, Paid In		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Total Common Stockholder's Equity
(Thousands of Dollars, Except Stock Information)	Stock	Amount
Balance as of January 1, 2021	301	$	—	$	928,134	$	615,018	$	(613)	$	1,542,539
Net Income						150,338				150,338
Dividends on Common Stock						(260,800)				(260,800)
Capital Contributions from Eversource Parent				160,000						160,000

Other Comprehensive Income								636		636
Balance as of December 31, 2021	301	—		1,088,134		504,556		23		1,592,713
Net Income						171,570				171,570
Dividends on Common Stock						(104,000)				(104,000)
Capital Contributions from Eversource Parent				210,000						210,000

Other Comprehensive Loss								(96)		(96)
Balance as of December 31, 2022	301	—		1,298,134		572,126		(73)		1,870,187
Net Income						195,659				195,659
Dividends on Common Stock						(112,000)				(112,000)
Capital Contributions from Eversource Parent				400,000						400,000

Other Comprehensive Income								73		73
Balance as of December 31, 2023	301	$	—	$	1,698,134	$	655,785	$	—	$	2,353,919

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

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
(Thousands of Dollars)	2023		2022		2021

Operating Activities:
Net Income	$	195,659	$	171,570	$	150,338
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation	140,417		127,962		120,065
Deferred Income Taxes	118,970		15,765		(14,530)
Uncollectible Expense	3,989		9,211		13,113
Pension, SERP and PBOP Income, Net	(10,484)		(16,421)		(3,296)

Regulatory (Under)/Over Recoveries, Net	(273,472)		53,181		32,587
Amortization of Regulatory (Liabilities)/Assets, Net	(16,343)		42,867		86,832
Cost of Removal Expenditures	(39,976)		(39,895)		(30,804)
Other	10,391		8,691		(1,370)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net	(5,434)		(62,078)		(32,003)

Taxes Receivable/Accrued, Net	916		(23,492)		3,952
Accounts Payable	(55,957)		81,046		(3,256)
Other Current Assets and Liabilities, Net	(36,637)		(6,908)		14,454
Net Cash Flows Provided by Operating Activities	32,039		361,499		336,082

Investing Activities:
Investments in Property, Plant and Equipment	(605,109)		(485,611)		(326,379)


Other Investing Activities	296		1,013		562
Net Cash Flows Used in Investing Activities	(604,813)		(484,598)		(325,817)

Financing Activities:
Cash Dividends on Common Stock	(112,000)		(104,000)		(260,800)
Increase in Notes Payable to Eversource Parent	59,700		62,700		64,300
Issuance of Long-Term Debt	600,000		—		350,000
Retirement of Long-Term Debt	(325,000)		—		(282,000)
Repayment of Rate Reduction Bonds	(43,210)		(43,210)		(43,210)

Capital Contributions from Eversource Parent	400,000		210,000		160,000
Other Financing Activities	(8,524)		(705)		(2,984)
Net Cash Flows Provided by/(Used In) Financing Activities	570,966		124,785		(14,694)
Net (Decrease)/Increase in Cash and Restricted Cash	(1,808)		1,686		(4,429)
Cash and Restricted Cash - Beginning of Year	36,812		35,126		39,555
Cash and Restricted Cash - End of Year	$	35,004	$	36,812	$	35,126

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

EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

COMBINED NOTES TO FINANCIAL STATEMENTS

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. About Eversource, CL&P, NSTAR Electric and PSNH

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 EGMA (natural gas utilities), and Aquarion (water utilities). Eversource provides energy delivery and/or water service to approximately 4.4 million electric, natural gas and water customers through twelve regulated utilities in Connecticut, Massachusetts and New Hampshire.

Eversource, CL&P, NSTAR Electric and PSNH are reporting companies under the Securities Exchange Act of 1934. Eversource Energy is a public utility holding company under the Public Utility Holding Company Act of 2005. Arrangements among the regulated electric companies and other Eversource companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility property are subject to regulation by the FERC. Eversource's regulated companies are subject to regulation of rates, accounting and other matters by the FERC and/or applicable state regulatory commissions (the PURA for CL&P, Yankee Gas and Aquarion, the DPU for NSTAR Electric, NSTAR Gas, EGMA and Aquarion, and the NHPUC for PSNH and Aquarion).

CL&P, NSTAR Electric and PSNH furnish franchised retail electric service in Connecticut, Massachusetts and New Hampshire, respectively. NSTAR Gas and EGMA are engaged in the distribution and sale of natural gas to customers within Massachusetts and Yankee Gas is engaged in the distribution and sale of natural gas to customers within Connecticut. Aquarion is engaged in the collection, treatment and distribution of water in Connecticut, Massachusetts and New Hampshire. CL&P, NSTAR Electric and PSNH's results include the operations of their respective distribution and transmission businesses. The distribution business also includes the results of NSTAR Electric's solar power facilities.

Eversource Service, Eversource's service company, and several wholly-owned real estate subsidiaries of Eversource, provide support services to Eversource, including its regulated companies.

B. Basis of Presentation

The consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries. Intercompany transactions have been eliminated in consolidation. The accompanying 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."

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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

Eversource holds several equity ownership interests that are not consolidated and are accounted for under the equity method, including 50 percent ownership interests in three offshore wind projects and a tax equity investment in one of the projects. See Note 6, “Investments in Unconsolidated Affiliates,” for further information on Eversource’s equity method investments and impairment charges recorded in 2023 to the offshore wind investments carrying value.

In accordance with accounting guidance on noncontrolling interests in consolidated financial statements, the Preferred Stock of CL&P and the Preferred Stock of NSTAR Electric, which are not owned by Eversource or its consolidated subsidiaries and are not subject to mandatory redemption, have been presented as noncontrolling interests in the financial statements of Eversource. The Preferred Stock of CL&P and the Preferred Stock of NSTAR Electric are considered to be temporary equity and have been classified between liabilities and permanent shareholders' equity on the balance sheets of Eversource, CL&P and NSTAR Electric due to a provision in the preferred stock agreements of both CL&P and NSTAR Electric that grant preferred stockholders the right to elect a majority of the CL&P and NSTAR Electric Boards of Directors, respectively, should certain conditions exist, such as if preferred dividends are in arrears for a specified amount of time. The Net Income reported in the statements of income and cash flows represents net income prior to apportionment to noncontrolling interests, which is represented by dividends on preferred stock of CL&P and NSTAR Electric.

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

As of December 31, 2023 and 2022, Eversource's carrying amount of goodwill was $4.53 billion and $4.52 billion, respectively. Eversource performs an assessment for possible impairment of its goodwill at least annually. Eversource completed its annual goodwill impairment assessment for each of its reporting units as of October 1, 2023 and determined that no impairment exists. See Note 24, "Goodwill," for further information.

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

C. Cash and Cash Equivalents

Cash includes cash on hand. At the end of each reporting period, any overdraft amounts are reclassified from Cash to Accounts Payable on the balance sheets. Cash Equivalents include short-term cash investments that are highly liquid in nature and have original maturities of three months or less.

D. Allowance for Uncollectible Accounts

Receivables, Net on the balance sheets primarily includes trade receivables from retail customers and customers related to wholesale transmission contracts, wholesale market sales, sales of RECs, and property rentals. Receivables, Net also includes customer receivables for the purchase of electricity from a competitive third party supplier, the current portion of customer energy efficiency loans, property damage receivables and other miscellaneous receivables. There is no material concentration of receivables.

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

The allowance for uncollectible accounts is determined based upon a variety of judgments and factors, including an aging-based quantitative assessment that applies an estimated uncollectible percentage to each receivable aging category. Factors in determining credit loss include historical collection, write-off experience, analysis of delinquency statistics, and management's assessment of collectability from customers, including current economic conditions, customer payment trends, the impact on customer bills because of energy usage trends and changes in rates, flexible payment plans and financial hardship arrearage management programs offered to customers, reasonable forecasts, and expectations of future collectability and collection efforts. Management continuously assesses the collectability of receivables and adjusts estimates based on actual experience and future expectations based on economic conditions, collection efforts and other factors. Management also monitors the aging analysis of receivables to determine if there are changes in the collections of accounts receivable. Receivable balances are written off against the allowance for uncollectible accounts when the customer accounts are no longer in service and these balances are deemed to be uncollectible. Management concluded that the reserve balance as of December 31, 2023 adequately reflected the collection risk and net realizable value for its receivables.

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

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


	Eversource						CL&P						NSTAR Electric						PSNH
(Millions of Dollars)	Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Hardship Accounts		Retail (Non-Hardship), Wholesale, and Other		Total Allowance		Total Allowance (2)
Balance as of January 1, 2021	$	194.8	$	164.1	$	358.9	$	129.1	$	28.3	$	157.4	$	39.7	$	51.9	$	91.6	$	17.2
Uncollectible Expense	—		60.9		60.9		—		13.5		13.5		—		16.6		16.6		13.1
Uncollectible Costs Deferred (1)	51.9		58.7		110.6		32.3		25.5		57.8		4.3		15.8		20.1		3.1
Write-Offs	(22.0)		(107.7)		(129.7)		(18.0)		(36.2)		(54.2)		(0.7)		(36.3)		(37.0)		(10.0)
Recoveries Collected	1.4		15.3		16.7		1.2		5.6		6.8		—		5.7		5.7		0.9
Balance as of December 31, 2021	$	226.1	$	191.3	$	417.4	$	144.6	$	36.7	$	181.3	$	43.3	$	53.7	$	97.0	$	24.3
Uncollectible Expense	—		61.9		61.9		—		15.6		15.6		—		21.6		21.6		9.2
Uncollectible Costs Deferred (1)	77.8		34.7		112.5		58.3		1.2		59.5		1.5		10.9		12.4		2.5
Write-Offs	(21.3)		(102.7)		(124.0)		(15.3)		(23.0)		(38.3)		(1.1)		(41.2)		(42.3)		(7.7)
Recoveries Collected	1.8		16.7		18.5		1.3		5.9		7.2		—		6.3		6.3		0.9
Balance as of December 31, 2022	$	284.4	$	201.9	$	486.3	$	188.9	$	36.4	$	225.3	$	43.7	$	51.3	$	95.0	$	29.2
Uncollectible Expense	—		72.5		72.5		—		11.7		11.7		—		22.8		22.8		4.0
Uncollectible Costs Deferred (1)	137.0		21.2		158.2		114.4		12.0		126.4		1.5		16.0		17.5		(8.7)
Write-Offs	(55.9)		(122.2)		(178.1)		(44.7)		(28.5)		(73.2)		(1.6)		(41.7)		(43.3)		(10.9)
Recoveries Collected	1.3		14.3		15.6		1.1		4.7		5.8		—		5.0		5.0		0.7
Balance as of December 31, 2023	$	366.8	$	187.7	$	554.5	$	259.7	$	36.3	$	296.0	$	43.6	$	53.4	$	97.0	$	14.3

(1) These expected credit losses are deferred as regulatory costs on the balance sheets, as these amounts are ultimately recovered in rates. Amounts include uncollectible costs for hardship accounts and other customer receivables, including uncollectible amounts related to uncollectible energy supply costs and COVID-19. The increase in the allowance for uncollectible hardship accounts in both 2023 and 2022 at Eversource and CL&P primarily relates to increased customer enrollment in disconnection prevention programs in Connecticut.

(2) In connection with PSNH’s pole purchase agreement on May 1, 2023, the purchase price included the forgiveness of previously reserved receivables for reimbursement of operation and maintenance and vegetation management costs.

E. Transfer of Energy Efficiency Loans

CL&P transferred a portion of its energy efficiency customer loan portfolio to outside lenders in order to make additional loans to customers. CL&P remains the servicer of the loans and will transmit customer payments to the lenders, with a maximum amount outstanding under this program of $55 million. The amounts of the loans are included in Receivables, Net and Other Long-Term Assets, and are offset by Other Current Liabilities and Other Long-Term Liabilities on CL&P’s balance sheet. The current and long-term portions totaled $8.5 million and $14.5 million, respectively, as of December 31, 2023, and $9.1 million and $13.0 million, respectively, as of December 31, 2022.

F. Materials, Supplies, Natural Gas and REC Inventory

Materials, Supplies, Natural Gas and REC Inventory include materials and supplies purchased primarily for construction or operation and maintenance purposes, natural gas purchased for delivery to customers, and RECs. Inventory is valued at the lower of cost or net realizable value. RECs are purchased from suppliers of renewable sources of generation and are used to meet state mandated Renewable Portfolio Standards requirements. The carrying amounts of materials and supplies, natural gas inventory, and RECs, which are included in Current Assets on the balance sheets, were as follows:


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Materials and Supplies	$	397.9	$	156.2	$	130.8	$	76.5	$	221.0	$	88.2	$	81.0	$	34.4
Natural Gas	65.5		—		—		—		95.9		—		—		—
RECs	43.9		0.3		43.0		0.6		57.5		—		57.4		0.1
Total	$	507.3	$	156.5	$	173.8	$	77.1	$	374.4	$	88.2	$	138.4	$	34.5

G. Fair Value Measurements

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

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

The levels of the fair value hierarchy are described below:

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

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

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

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

Determination of Fair Value: The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," Note 6, "Investments in Unconsolidated Affiliates," Note 7, "Asset Retirement Obligations," Note 11A, "Employee Benefits – Pension Benefits and Postretirement Benefits Other Than Pension," Note 15, "Fair Value of Financial Instruments," and Note 24, “Goodwill,” to the financial statements.

H. Derivative Accounting

Many of the electric and natural gas companies' contracts for the purchase and sale of energy or energy-related products are derivatives. The accounting treatment for energy contracts entered into varies and depends on the intended use of the particular contract and on whether or not the contract is a derivative.

The application of derivative accounting is complex and requires management judgment in the following respects: identification of derivatives and embedded derivatives, election and designation of a contract as normal, and determination of the fair value of derivative contracts. All of these judgments can have a significant impact on the financial statements. The judgment applied in the election of a contract as normal (and resulting accrual accounting) includes the conclusion that it is probable at the inception of the contract and throughout its term that it will result in physical delivery of the underlying product and that the quantities will be used or sold by the business in the normal course of business. If facts and circumstances change and management can no longer support this conclusion, then a contract cannot be considered normal, accrual accounting is terminated, and fair value accounting is applied prospectively.

The fair value of derivative contracts is based upon the contract terms and conditions and the underlying market price or fair value per unit. When quantities are not specified in the contract, the Company determines whether the contract has a determinable quantity by using amounts referenced in default provisions and other relevant sections of the contract. The fair value of derivative assets and liabilities with the same counterparty are offset and recorded as a net derivative asset or liability on the balance sheets.

Regulatory assets or regulatory liabilities are recorded to offset the fair values of these derivative contracts related to energy and energy-related products, as contract settlements are recovered from, or refunded to, customers in future rates. All changes in the fair value of these derivative contracts are recorded as regulatory assets or liabilities and do not impact net income.

For further information regarding derivative contracts, see Note 4, "Derivative Instruments," to the financial statements.

I. Operating Expenses

The cost of natural gas included in Purchased Power, Purchased Natural Gas and Transmission on the statements of income were as follows:


	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Eversource - Cost of Natural Gas	$	792.2	$	1,010.2	$	718.6

J. Allowance for Funds Used During Construction

AFUDC represents the cost of borrowed and equity funds used to finance construction and is included in the cost of the electric, natural gas and water companies' utility plant on the balance sheet. The portion of AFUDC attributable to borrowed funds is recorded as a reduction of Interest Expense, and the AFUDC related to equity funds is recorded as Other Income, Net on the statements of income. AFUDC costs are recovered from customers over the service life of the related plant in the form of increased revenue collected as a result of higher depreciation expense.

The average AFUDC rate is based on a FERC-prescribed formula using the cost of a company's short-term financings and capitalization (preferred stock, long-term debt and common equity), as appropriate. The average rate is applied to average eligible CWIP amounts to calculate AFUDC.

AFUDC costs and the weighted-average AFUDC rates were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars, except percentages)	2023			2022			2021
Borrowed Funds	$	44.6		$	21.8		$	18.4
Equity Funds	78.1			47.3			37.3
Total AFUDC	$	122.7		$	69.1		$	55.7
Average AFUDC Rate	5.8		%	4.7		%	4.2		%


	For the Years Ended December 31,
	2023									2022									2021
(Millions of Dollars, except percentages)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Borrowed Funds	$	7.7		$	17.2		$	6.1		$	4.8		$	10.7		$	1.4		$	2.9		$	9.0		$	0.8
Equity Funds	20.0			45.7			5.4			13.6			24.6			2.5			7.7			20.4			1.6
Total AFUDC	$	27.7		$	62.9		$	11.5		$	18.4		$	35.3		$	3.9		$	10.6		$	29.4		$	2.4
Average AFUDC Rate	6.7		%	5.9		%	5.1		%	6.6		%	5.4		%	2.6		%	5.0		%	4.9		%	2.5		%

K. Other Income, Net

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


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Pension, SERP and PBOP Non-Service Income Components, Net of Deferred Portion (1)	$	132.9	$	219.8	$	84.4
AFUDC Equity	78.1		47.3		37.3
Equity in Earnings of Unconsolidated Affiliates (2)	15.5		22.9		14.2
Investment (Loss)/Income	(4.9)		1.9		(0.2)
Interest Income	94.2		50.5		25.6

Other (2)	32.3		3.7		—
Total Other Income, Net	$	348.1	$	346.1	$	161.3


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Pension, SERP and PBOP Non-Service Income Components, Net of Deferred Portion (1)	$	34.9	$	57.4	$	16.2	$	64.4	$	85.5	$	26.8	$	15.2	$	40.2	$	10.3
AFUDC Equity	20.0		45.7		5.4		13.6		24.6		2.5		7.7		20.4		1.6

Investment (Loss)/Income	(2.4)		(0.2)		(0.7)		(1.3)		1.2		0.2		1.3		0.1		0.1
Interest Income	9.0		60.6		5.3		6.5		30.7		3.1		5.9		13.4		2.4
Other	0.1		0.6		0.4		0.1		0.7		0.1		0.1		0.7		0.2
Total Other Income, Net	$	61.6	$	164.1	$	26.6	$	83.3	$	142.7	$	32.7	$	30.2	$	74.8	$	14.6

(1) See Note 11A, "Employee Benefits – Pension Benefits and Postretirement Benefits Other Than Pension," for the components of net periodic benefit income/expense for the Pension, SERP and PBOP Plans. The non-service related components of pension, SERP and PBOP benefit income/expense, after capitalization or deferral, are presented as non-operating income and recorded in Other Income, Net on the statements of income.

(2) Eversource’s equity method investment in a renewable energy fund was liquidated in March 2023. Liquidation proceeds in excess of the carrying value were recorded in 2023 within Other in the table above. See Note 6, “Investments in Unconsolidated Affiliates,” for further information. For the years ended December 31, 2022 and 2021, pre-tax income of $12.2 million and $2.1 million, respectively, associated with this investment was included in Equity in Earnings of Unconsolidated Affiliates within Other Income, Net in the table above.

L. Other Taxes

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


	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Eversource	$	202.9	$	194.7	$	181.9
CL&P	174.9		166.1		158.1

As agents for state and local governments, Eversource's companies that serve customers in Connecticut and Massachusetts collect certain sales taxes that are recorded on a net basis with no impact on the statements of income.

M. Supplemental Cash Flow Information


Eversource (Millions of Dollars)	As of and For the Years Ended December 31,
2023			2022			2021
Cash Paid During the Year for:
Interest, Net of Amounts Capitalized	$	783.2		$	636.2		$	568.7
Income Taxes	39.2			77.9			121.6
Non-Cash Investing Activities:
Plant Additions Included in Accounts Payable (As of)	564.1			586.9			467.9


	As of and For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Cash Paid/(Received) During the Year for:
Interest, Net of Amounts Capitalized	$	176.8	$	182.8	$	62.8	$	167.2	$	152.8	$	58.3	$	161.5	$	141.6	$	56.5
Income Taxes	(44.1)		31.3		(59.9)		117.6		23.8		58.3		38.4		74.2		51.1
Non-Cash Investing Activities:
Plant Additions Included in Accounts Payable (As of)	139.8		178.9		65.9		131.8		184.3		76.2		110.6		120.0		68.7

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


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Cash and Cash Equivalents as reported on the Balance Sheets	$	53.9	$	10.2	$	6.7	$	0.2	$	374.6	$	11.3	$	327.7	$	0.1
Restricted cash included in:
Special Deposits	81.5		2.0		16.1		31.6		102.2		8.8		17.5		33.1
Marketable Securities	13.7		—		—		—		25.4		0.2		0.1		0.4
Other Long-Term Assets	17.3		—		—		3.2		19.6		—		—		3.2
Cash, Cash Equivalents and Restricted Cash as reported on the Statements of Cash Flows	$	166.4	$	12.2	$	22.8	$	35.0	$	521.8	$	20.3	$	345.3	$	36.8

Special Deposits represent cash collections related to the PSNH RRB customer charges that are held in trust, required ISO-NE cash deposits, cash held in escrow accounts, and CYAPC and YAEC cash balances. Special Deposits are included in Current Assets on the balance sheets. As of both December 31, 2023 and December 31, 2022, restricted cash included in Marketable Securities represented money market funds held in restricted trusts to fund CYAPC and YAEC's spent nuclear fuel storage obligations. As of December 31, 2022, restricted cash included in Marketable Securities also included money market funds held in trusts to fund certain non-qualified executive benefits.

Eversource’s restricted cash includes an Energy Relief Fund for energy efficiency and clean energy measures in the Merrimack Valley established under the terms of the EGMA 2020 settlement agreement. This restricted cash held in escrow accounts included $20.0 million recorded as short-term in Special Deposits as of both December 31, 2023 and December 31, 2022, and $14.1 million and $15.9 million recorded in Other Long-Term Assets on the balance sheets as of December 31, 2023 and December 31, 2022, respectively.

N. Related Parties

Eversource Service, Eversource's service company, provides centralized accounting, administrative, engineering, financial, information technology, legal, operational, planning, purchasing, tax, and other services to Eversource's companies. The Rocky River Realty Company and Properties, Inc., two other Eversource subsidiaries, construct, acquire or lease some of the property and facilities used by Eversource's companies.

As of December 31, 2022, CL&P, NSTAR Electric and PSNH had long-term receivables from Eversource Service in the amounts of $25.0 million, $5.5 million and $3.8 million, which were included in Other Long-Term Assets on the balance sheets. These amounts related to the funding of investments held in trust by Eversource Service in connection with certain postretirement benefits for CL&P, NSTAR Electric and PSNH employees and were eliminated in consolidation on the Eversource financial statements. As of December 31, 2023, these intercompany balances were settled.

Included in the CL&P, NSTAR Electric and PSNH balance sheets as of December 31, 2023 and 2022 were Accounts Receivable from Affiliated Companies and Accounts Payable to Affiliated Companies relating to transactions between CL&P, NSTAR Electric and PSNH and other subsidiaries that are wholly-owned by Eversource. These amounts have been eliminated in consolidation on the Eversource financial statements.

The Eversource Energy Foundation is an independent not-for-profit charitable entity and is not included in the consolidated financial statements of Eversource as the Company does not have title to, and cannot receive contributions back from, the Eversource Energy Foundation's assets. Eversource made contributions to the Eversource Energy Foundation of $20.0 million in 2023 and $8.0 million in 2022, and did not make any contributions in 2021.

2. REGULATORY ACCOUNTING

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

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

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


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Storm Costs, Net	$	1,785.9	$	896.6	$	609.1	$	280.2	$	1,379.1	$	799.3	$	484.4	$	95.4
Regulatory Tracking Mechanisms	1,319.2		354.5		482.9		182.2		1,075.3		216.8		391.5		73.7
Benefit Costs	1,117.3		197.4		336.7		79.3		921.7		156.7		299.5		56.6
Income Taxes, Net	912.4		512.6		128.6		16.4		853.3		491.1		115.6		16.0
Securitized Stranded Costs	392.5		—		—		392.5		435.7		—		—		435.7
Goodwill-related	264.1		—		226.7		—		281.0		—		241.2		—
Asset Retirement Obligations	137.9		38.5		72.3		4.7		127.9		35.9		68.2		4.4
Derivative Liabilities	120.9		120.9		—		—		181.8		181.8		—		—
Other Regulatory Assets	339.0		22.7		101.6		8.0		322.5		26.2		114.0		14.4
Total Regulatory Assets	6,389.2		2,143.2		1,957.9		963.3		5,578.3		1,907.8		1,714.4		696.2
Less: Current Portion	1,674.2		480.4		676.1		189.5		1,335.5		314.1		492.8		102.2
Total Long-Term Regulatory Assets	$	4,715.0	$	1,662.8	$	1,281.8	$	773.8	$	4,242.8	$	1,593.7	$	1,221.6	$	594.0

Storm Costs, Net: The storm cost deferrals relate to costs incurred for storm events at CL&P, NSTAR Electric and PSNH that each company expects to recover from customers. A storm must meet certain criteria to qualify for deferral and recovery with the criteria specific to each state jurisdiction and utility company. Once a storm qualifies for recovery, all qualifying expenses incurred during storm restoration efforts are deferred and recovered from customers. Costs for storms that do not meet the specific criteria are expensed as incurred. In addition to storm restoration costs, CL&P and PSNH are each allowed to recover pre-staging storm costs. Management believes all storm costs deferred were prudently incurred and meet the criteria for specific cost recovery in Connecticut, Massachusetts and New Hampshire, and that recovery from customers is probable through the applicable regulatory recovery processes. Each electric utility company either recovers a carrying charge on its deferred storm cost regulatory asset balance or the regulatory asset balance is included in rate base.

Multiple tropical and severe storms over the past several years have caused extensive damage to Eversource’s electric distribution systems resulting in significant numbers and durations of customer outages, along with significant pre-staging costs. Storms in 2023 that qualified for future recovery resulted in deferred storm restoration costs and pre-staging costs totaling $542 million at Eversource, including $178 million at CL&P, $192 million at NSTAR Electric, and $172 million at PSNH. Management believes that all of these storm costs were prudently incurred and meet the criteria for specific cost recovery. Of Eversource’s total deferred storm costs, $1.75 billion either have yet to be filed with the applicable regulatory commission, are pending regulatory approval, or are subject to prudency review (including $975 million at CL&P, $526 million at NSTAR Electric and $246 million at PSNH) as of December 31, 2023. These storm cost totals exclude storm funding amounts that are collected in rates, which are recorded as a reduction to the deferred storm cost regulatory asset balance.

CL&P, NSTAR Electric and PSNH are seeking approval of their deferred storm restoration costs through the applicable regulatory recovery process. As part of CL&P’s October 1, 2021 settlement agreement, CL&P agreed to freeze its current base distribution rates (including storm costs) until no earlier than January 1, 2024. On December 22, 2023, CL&P initiated a docket seeking a prudency review of approximately $634 million of catastrophic storm costs for twenty-four weather events from January 1, 2018 to December 31, 2021. In the filing, CL&P requested PURA establish a rate to collect $50 million annually from customers from the date of the final decision in this proceeding. This rate

would be effective until the next distribution rate case and would replenish the under-collected storm reserve and reduce future carrying charges for customers.

CL&P’s storm events include the August 4, 2020 Tropical Storm Isaias, which resulted in deferred storm restoration costs of approximately $232 million at CL&P as of December 31, 2023. Although in 2021 PURA found that CL&P’s performance in its preparation for, and response to, Tropical Storm Isaias fell below applicable performance standards in certain instances, CL&P believes it presented in its 2023 storm filing, credible evidence demonstrating there is no reasonably close causal connection between the alleged sub-standard performance and the storm costs incurred. While it is possible that some amount of storm costs may be disallowed by PURA, any such amount cannot be estimated at this time. CL&P continues to believe that these storm restoration costs associated with Tropical Storm Isaias were prudently incurred and meet the criteria for cost recovery; and as a result, management does not expect the storm cost review by PURA to have a material impact on the financial position or results of operations of CL&P.

Regulatory Tracking Mechanisms: The regulated companies' approved rates are designed to recover costs incurred to provide service to customers. The regulated companies recover certain of their costs on a fully-reconciling basis through regulatory commission-approved tracking mechanisms. The differences between the costs incurred (or the rate recovery allowed) and the actual revenues are recorded as regulatory assets (for undercollections) or as regulatory liabilities (for overcollections) to be included in future customer rates each year. Carrying charges are recovered in rates on all material regulatory tracking mechanisms.

The electric and natural gas distribution companies recover, on a fully reconciling basis, the costs associated with the procurement of energy and natural gas supply, electric transmission related costs from FERC-approved transmission tariffs, energy efficiency programs, low income assistance programs, certain uncollectible accounts receivable for hardship customers, restructuring and stranded costs as a result of deregulation (including securitized RRB charges), certain capital tracking mechanisms for infrastructure improvements, and additionally for the Massachusetts utilities, pension and PBOP benefits, net metering for distributed generation, and solar-related programs.

CL&P, NSTAR Electric, Yankee Gas, NSTAR Gas, EGMA and the Aquarion Water Company of Connecticut each have a regulatory commission approved revenue decoupling mechanism. Distribution revenues are decoupled from customer sales volumes, where applicable, which breaks the relationship between sales volumes and revenues. Each company reconciles its annual base distribution rate recovery amount to the pre-established levels of baseline distribution delivery service revenues. Any difference between the allowed level of distribution revenue and the actual amount realized during a 12-month period is adjusted through rates in the following period.

Benefit Costs: Deferred benefit costs represent unrecognized actuarial losses and gains and unrecognized prior service costs and credits attributable to Eversource's Pension, SERP and PBOP Plans. The regulated companies record actuarial losses and gains and prior service costs and credits arising at the December 31st remeasurement date of the funded status of the benefit plans as a regulatory asset or regulatory liability in lieu of a charge to Accumulated Other Comprehensive Income/(Loss), reflecting ultimate recovery from customers through rates. The regulatory asset or regulatory liability is amortized with the recognition of actuarial losses and gains and prior service costs and credits to net periodic benefit expense/income over the estimated average future employee service period using the corridor approach. Regulatory accounting is also applied to the portions of Eversource's service company costs that support the regulated companies, as these amounts are also recoverable. As these regulatory assets or regulatory liabilities do not represent a cash outlay for the regulated companies, no carrying charge is recovered from customers. See Note 11A, "Employee Benefits - Pension Benefits and Postretirement Benefits Other Than Pension," for further information on regulatory benefit plan amounts arising and amortized during the year.

Eversource, CL&P, NSTAR Electric, and PSNH recover benefit costs related to their distribution and transmission operations from customers in rates as allowed by their applicable regulatory commissions. NSTAR Electric, NSTAR Gas and EGMA recover qualified pension and PBOP expenses related to their distribution operations through a rate reconciling mechanism that fully tracks the change in net pension and PBOP expenses each year. The electric transmission companies' rates provide for an annual true-up of estimated to actual costs, which include pension and PBOP expenses.

Income Taxes, Net: The tax effect of temporary book-tax differences (differences between the periods in which transactions affect income in the financial statements and the periods in which they affect the determination of taxable income, including those differences relating to uncertain tax positions) is accounted for in accordance with the rate-making treatment of the applicable regulatory commissions and accounting guidance for income taxes. Differences in income taxes between the accounting guidance and the rate-making treatment of the applicable regulatory commissions are recorded as regulatory assets. As these assets are offset by deferred income tax liabilities, no carrying charge is collected. The amortization period of these assets varies depending on the nature and/or remaining life of the underlying assets and liabilities. For further information regarding income taxes, see Note 12, "Income Taxes," to the financial statements.

Securitized Stranded Costs: In 2018, a subsidiary of PSNH issued $635.7 million of securitized RRBs to finance PSNH's unrecovered remaining costs associated with the divestiture of its generation assets. Securitized regulatory assets, which are not earning an equity return, are being recovered over the amortization period of the associated RRBs. The PSNH RRBs are expected to be repaid by February 1, 2033. For further information, see Note 10, "Rate Reduction Bonds and Variable Interest Entities," to the financial statements.

Goodwill-related: The goodwill regulatory asset originated from a 1999 transaction, and the DPU allowed its recovery in NSTAR Electric and NSTAR Gas rates. This regulatory asset is currently being amortized and recovered from customers in rates without a carrying charge over a 40-year period, and as of December 31, 2023, there were 16 years of amortization remaining.

Asset Retirement Obligations: The costs associated with the depreciation of the regulated companies' ARO assets and accretion of the ARO liabilities are recorded as regulatory assets in accordance with regulatory accounting guidance. The regulated companies' ARO assets, regulatory assets, and ARO liabilities offset and are excluded from rate base. These costs are being recovered over the life of the underlying property, plant and equipment.

Derivative Liabilities: Regulatory assets are recorded as an offset to derivative liabilities and relate to the fair value of contracts used to purchase energy and energy-related products that will be recovered from customers in future rates. These assets are excluded from rate base and are being recovered as the actual settlements occur over the duration of the contracts. See Note 4, "Derivative Instruments," to the financial statements for further information on these contracts.

Other Regulatory Assets: Other Regulatory Assets primarily include environmental remediation costs, certain uncollectible accounts receivable for hardship customers, certain exogenous property taxes and merger-related costs allowed for recovery, contractual obligations associated with the spent nuclear fuel storage costs of the CYAPC, YAEC and MYAPC decommissioned nuclear power facilities, water tank painting costs, losses associated with the reacquisition or redemption of long-term debt, removal costs incurred that exceed amounts collected from customers, and various other items.

Regulatory Costs in Other Long-Term Assets: Eversource's regulated companies had $241.7 million (including $166.7 million for CL&P, $21.9 million for NSTAR Electric and $1.2 million for PSNH) and $210.8 million (including $135.9 million for CL&P, $19.8 million for NSTAR Electric and $1.0 million for PSNH) of additional regulatory costs not yet specifically approved as of December 31, 2023 and 2022, respectively, that were included in Other Long-Term Assets on the balance sheets. These amounts will be reclassified to Regulatory Assets upon approval by the applicable regulatory agency. Based on regulatory policies or past precedent on similar costs, management believes it is probable that these costs will ultimately be approved and recovered from customers in rates. As of December 31, 2023 and 2022, these regulatory costs included $82.1 million (including $64.0 million for CL&P and $7.3 million for NSTAR Electric) and $64.0 million (including $52.8 million for CL&P and $3.5 million for NSTAR Electric), respectively, of deferred uncollectible hardship costs.

Equity Return on Regulatory Assets: For rate-making purposes, the regulated companies recover the carrying costs related to their regulatory assets. For certain regulatory assets, the carrying cost recovered includes an equity return component. This equity return is not recorded on the balance sheets. The equity return for PSNH was $10.2 million and $4.1 million as of December 31, 2023 and 2022, respectively. These carrying costs will be recovered from customers in future rates.

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


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
EDIT due to Tax Cuts and Jobs Act of 2017	$	2,548.6	$	969.2	$	905.1	$	339.3	$	2,619.3	$	983.6	$	944.3	$	348.6
Cost of Removal	666.6		157.9		420.9		16.2		670.6		130.8		405.3		14.7
Regulatory Tracking Mechanisms	668.3		154.0		347.2		114.4		890.8		361.0		336.1		155.0
Deferred Portion of Non-Service Income Components of Pension, SERP and PBOP	354.0		49.9		175.9		36.6		270.9		34.5		139.7		28.8
AFUDC - Transmission	124.3		56.1		68.2		—		98.2		48.2		50.0		—
Benefit Costs	51.0		0.6		22.2		—		55.4		0.7		31.4		—
Other Regulatory Liabilities	201.9		30.4		13.9		4.6		215.9		40.6		14.5		6.5
Total Regulatory Liabilities	4,614.7		1,418.1		1,953.4		511.1		4,821.1		1,599.4		1,921.3		553.6
Less: Current Portion	591.8		102.2		368.1		117.5		890.8		336.0		373.2		162.0
Total Long-Term Regulatory Liabilities	$	4,022.9	$	1,315.9	$	1,585.3	$	393.6	$	3,930.3	$	1,263.4	$	1,548.1	$	391.6

EDIT due to Tax Cuts and Jobs Act of 2017: Pursuant to the Tax Cuts and Jobs Act of 2017, Eversource had remeasured its existing deferred federal income tax balances to reflect the decrease in the U.S. federal corporate income tax rate from 35 percent to 21 percent. The remeasurement resulted in provisional regulated excess accumulated deferred income tax (excess ADIT or EDIT) liabilities that will benefit customers in future periods and were recognized as regulatory liabilities on the balance sheet. EDIT liabilities related to property, plant, and equipment are subject to IRS normalization rules and will be returned to customers using the same timing as the remaining useful lives of the underlying assets that gave rise to the ADIT liabilities. Eversource's regulated companies (except for the Connecticut water business) are in the process of refunding the EDIT liabilities to customers based on orders issued by applicable state and federal regulatory commissions.

Cost of Removal: Eversource's regulated companies currently recover amounts in rates for future costs of removal of plant assets over the lives of the assets. The estimated cost to remove utility assets from service is recognized as a component of depreciation expense, and the cumulative amount collected from customers but not yet expended is recognized as a regulatory liability. Expended removal costs that exceed amounts collected from customers are recognized as regulatory assets, as they are probable of recovery in future rates.

Deferred Portion of Non-Service Income Components of Pension, SERP and PBOP: Regulatory liabilities were recorded for the deferred portion of the non-service related components of net periodic benefit expense/(income) for the Pension, SERP and PBOP Plans. These regulatory liabilities will be amortized over the remaining useful lives of the various classes of utility property, plant and equipment.

AFUDC - Transmission: Regulatory liabilities were recorded by CL&P and NSTAR Electric for AFUDC accrued on certain reliability-related transmission projects to reflect local rate base recovery. These regulatory liabilities will be amortized over the depreciable life of the related transmission assets.

Other Regulatory Liabilities: Other Regulatory Liabilities primarily include EGMA’s acquired regulatory liability as a result of the 2020 DPU-approved rate settlement agreement and the CMA asset acquisition on October 9, 2020, and various other items.

FERC ROE Complaints: As of December 31, 2023 and 2022, Eversource has a reserve established for the second ROE complaint period in the pending FERC ROE complaint proceedings, which was recorded as a regulatory liability and is reflected within Regulatory Tracking Mechanisms in the table above. The cumulative pre-tax reserve (excluding interest) as of December 31, 2023 and 2022 totaled $39.1 million for Eversource (including $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH). See Note 13E, "Commitments and Contingencies – FERC ROE Complaints," for further information on developments in the pending ROE complaint proceedings.

Regulatory Developments:

2022 CL&P Rate Relief Plan: On November 28, 2022, Governor Lamont, DEEP, Office of Consumer Counsel, and CL&P jointly developed a rate relief plan for electric customers for the winter peak season of January 1, 2023 through April 30, 2023. On December 16, 2022, PURA approved the rate relief plan. As part of the rate relief plan, CL&P reduced the Non-Bypassable Federally Mandated Congestion Charge (NBFMCC) rate effective January 1, 2023 to provide customers with an average $10 monthly bill credit from January through April 2023. This rate reduction accelerated the return to customers of net revenues generated by long-term state-approved energy contracts with the Millstone and Seabrook nuclear power plants of approximately $90 million. The rate relief plan also included instituting a temporary, flat monthly discount for qualifying low-income hardship customers effective January 1, 2023. This flat-rate credit will continue until a new low-income discount rate that was approved by PURA in an October 19, 2022 decision is implemented in 2024. These aspects of the rate relief plan do not impact CL&P’s earnings but do impact its future cash flows. Also as part of the rate relief plan, CL&P committed to contribute $10 million to an energy assistance program for qualifying hardship customers, which was distributed as a bill credit to those customers during 2023. CL&P recorded a current liability of $10 million on the balance sheet and a charge to expense on the statement of income for the year ended December 31, 2022 associated with the customer assistance program.

2022 NSTAR Electric Distribution Rate Case: On November 30, 2022, the DPU issued its decision in the NSTAR Electric distribution rate case and approved a base distribution rate increase of $64 million effective January 1, 2023. The DPU approved a renewal of the PBR plan originally authorized in its previous rate case for a five-year term, with a corresponding stay out provision. The PBR plan term has the possibility of a five-year extension. The PBR mechanism allows for an annual adjustment to base distribution rates for inflation and exogenous events. The DPU also allowed for adjustments to the PBR mechanism for the recovery of future capital additions based on a historical five-year average of total capital additions, beginning with the January 1, 2024 PBR adjustment. The decision allows an authorized regulatory ROE of 9.80 percent on a capital structure including 53.2 percent equity.

Among other items, the DPU approved an increase to the annual storm fund contribution collected through base distribution rates from $10 million to $31 million, and allowed for the recovery of storm threshold costs of $1.3 million per storm event subsequent to the eighth storm in a calendar year (six recovered in base rates plus two additional storms). The DPU approved cost recovery of a portion of NSTAR Electric’s outstanding storm costs beginning on January 1, 2023 and January 1, 2024, subject to reconciliation from future prudency reviews. In a subsequent compliance filing, the DPU allowed recovery to commence for outstanding storm costs occurring between 2018 and 2022 and interest in a total of $162.1 million over a five-year period starting January 1, 2023. In addition, NSTAR Electric will begin to recover 2021 exogenous storms and interest in a total of $220.9 million over a five-year period beginning January 1, 2024. The DPU also approved the recovery of historical exogenous property taxes of $30.8 million incurred from 2020 through 2022 over a two-year period and $8.3 million incurred from 2012 through 2015 over a five-year period effective January 1, 2023. As a result of this decision, these deferred property taxes were reclassified from Other Long-Term Assets to Regulatory Assets on the NSTAR Electric December 31, 2022 balance sheet.

2023 NSTAR Electric Distribution Rates: NSTAR Electric submitted its first annual PBR Adjustment filing on September 15, 2023 and on December 26, 2023, the DPU approved a $104.9 million increase to base distribution rates effective January 1, 2024. The base distribution rate increase was comprised of a $50.6 million inflation-based adjustment and a $54.3 million K-bar adjustment for capital additions based on the difference between the historical five-year average of total capital additions and the base capital revenue requirement.

2022 NSTAR Gas Distribution Rates: NSTAR Gas’ PBR mechanism allows for an annual adjustment to base distribution rates for inflation and exogenous events. NSTAR Gas submitted its second annual PBR Adjustment filing on September 15, 2022 and on October 31, 2022, the DPU approved a $21.7 million increase to base distribution rates for effect on November 1, 2022. The increase is inclusive of a $4.5 million permanent increase related to exogenous property taxes and a $5.4 million increase related to an October 6, 2021 mitigation plan filing that delayed recovery of a portion of a base distribution rate increase originally scheduled to take effect November 1, 2021. The DPU also approved the recovery of historical exogenous property taxes incurred from November 1, 2020 through October 31, 2022 of $8.2 million over a two-year period through a separate reconciling mechanism effective November 1, 2022. As a result of this decision, these deferred property taxes were reclassified from Other Long-Term Assets to Regulatory Assets on the Eversource December 31, 2022 balance sheet.

2023 NSTAR Gas Distribution Rates: NSTAR Gas submitted its third annual PBR Adjustment filing on September 15, 2023 and on October 30, 2023, the DPU approved a $25.4 million increase to base distribution rates, of which, $15.5 million was associated with a base rate adjustment and the remainder for a prior period exogenous cost adjustment, for effect on November 1, 2023.

2022 EGMA Distribution Rates: As established in an October 7, 2020 EGMA Rate Settlement Agreement approved by the DPU, on September 16, 2022 EGMA filed for its second base distribution rate increase and on October 31, 2022, the DPU approved a $6.7 million increase to base distribution rates and a $3.3 million increase to the Tax Act Credit Factor for effect on November 1, 2022. The DPU also approved the recovery of historical exogenous property taxes incurred from November 1, 2020 through October 31, 2022 of $8.6 million over a two-year period through a separate reconciling mechanism effective November 1, 2022. EGMA will request recovery of incremental property taxes incurred after October 31, 2022 in future exogenous filings. As a result of this decision, these deferred property taxes were reclassified from Other Long-Term Assets to Regulatory Assets on the Eversource December 31, 2022 balance sheet.

2023 PSNH Pole Acquisition Approval: On November 18, 2022, the NHPUC issued a decision that approved a proposed purchase agreement between PSNH and Consolidated Communications, in which, PSNH would acquire both jointly-owned and solely-owned poles and pole assets. The NHPUC also authorized PSNH to recover certain expenses associated with the operation and maintenance of the transferred poles, pole inspections, and vegetation management expenses through a new cost recovery mechanism, the Pole Plant Adjustment Mechanism (PPAM), subject to consummation of the purchase agreement. The purchase agreement was finalized on May 1, 2023 for a purchase price of $23.3 million. Upon consummation of the purchase agreement, PSNH established a regulatory asset of $16.9 million for operation and maintenance expenses and vegetation management expenses associated with the purchased poles incurred from February 10, 2021 through April 30, 2023 that PSNH is authorized to collect through the PPAM regulatory tracking mechanism. The establishment of the PPAM regulatory asset resulted in a pre-tax benefit recorded in Amortization expense on the PSNH statement of income in 2023.

3. PROPERTY, PLANT AND EQUIPMENT AND ACCUMULATED DEPRECIATION

Utility property, plant and equipment is recorded at original cost. Original cost includes materials, labor, construction overheads and AFUDC for regulated property. The cost of repairs and maintenance is charged to Operations and Maintenance expense as incurred.

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


Eversource	As of December 31,
(Millions of Dollars)	2023		2022
Distribution - Electric	$	19,656.5	$	18,326.2
Distribution - Natural Gas	8,155.3		7,443.8
Transmission - Electric	14,666.8		13,709.3
Distribution - Water	2,280.1		2,112.6
Solar	201.1		200.8
Utility	44,959.8		41,792.7
Other (1)	2,006.8		1,738.1
Property, Plant and Equipment, Gross	46,966.6		43,530.8
Less: Accumulated Depreciation
Utility	(9,670.1)		(9,167.4)
Other	(869.6)		(706.1)
Total Accumulated Depreciation	(10,539.7)		(9,873.5)
Property, Plant and Equipment, Net	36,426.9		33,657.3
Construction Work in Progress	3,071.7		2,455.5
Total Property, Plant and Equipment, Net	$	39,498.6	$	36,112.8


	As of December 31,
	2023						2022
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Distribution - Electric	$	7,897.1	$	9,000.5	$	2,799.2	$	7,370.1	$	8,410.0	$	2,586.4
Transmission - Electric	6,548.2		5,630.8		2,489.5		6,165.1		5,333.8		2,212.0
Solar	—		201.1		—		—		200.8		—
Property, Plant and Equipment, Gross	14,445.3		14,832.4		5,288.7		13,535.2		13,944.6		4,798.4
Less: Accumulated Depreciation	(2,670.5)		(3,585.9)		(984.0)		(2,567.1)		(3,381.2)		(912.3)
Property, Plant and Equipment, Net	11,774.8		11,246.5		4,304.7		10,968.1		10,563.4		3,886.1
Construction Work in Progress	565.4		1,507.3		270.0		498.9		1,063.6		174.1
Total Property, Plant and Equipment, Net	$	12,340.2	$	12,753.8	$	4,574.7	$	11,467.0	$	11,627.0	$	4,060.2

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

Depreciation: Depreciation of utility assets is calculated on a straight-line basis using composite rates based on the estimated remaining useful lives of the various classes of property (estimated useful life for PSNH distribution and the water utilities). The composite rates, which are subject to approval by the appropriate state regulatory agency, include a cost of removal component, which is collected from customers over the lives of the plant assets and is recognized as a regulatory liability. Depreciation rates are applied to property from the time it is placed in service.

Upon retirement from service, the cost of the utility asset is charged to the accumulated provision for depreciation. The actual incurred removal costs are applied against the related regulatory liability.

The depreciation rates for the various classes of utility property, plant and equipment aggregate to composite rates as follows:


(Percent)	2023		2022		2021
Eversource	3.1	%	3.0	%	3.1	%
CL&P	2.8	%	2.8	%	2.8	%
NSTAR Electric	2.7	%	2.7	%	2.8	%
PSNH	3.0	%	3.0	%	3.1	%

The following table summarizes average remaining useful lives of depreciable assets:


	As of December 31, 2023
(Years)	Eversource	CL&P	NSTAR Electric	PSNH
Distribution - Electric	34.0	35.3	34.5	29.6
Distribution - Natural Gas	35.7	—	—	—
Transmission - Electric	40.6	37.1	45.3	41.4
Distribution - Water	40.0	—	—	—
Solar	22.8	—	22.8	—
Other (1)	10.4	—	—	—

(1)The estimated useful life of computer software, hardware and equipment primarily ranges from 5 to 15 years and of buildings is 40 years.

4. DERIVATIVE INSTRUMENTS

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

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

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

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


	As of December 31,
	2023							2022
CL&P (Millions of Dollars)	Fair Value Hierarchy	Commodity Supply and Price Risk Management		Netting (1)		Net Amount Recorded as a Derivative		Fair Value Hierarchy	Commodity Supply and Price Risk Management		Netting (1)		Net Amount Recorded as a Derivative
Current Derivative Assets	Level 2	$	16.4	$	(0.5)	$	15.9	Level 3	$	16.3	$	(0.5)	$	15.8
Long-Term Derivative Assets	Level 2	13.6		(0.5)		13.1		Level 3	28.8		(0.9)		27.9
Current Derivative Liabilities	Level 2	(81.9)		—		(81.9)		Level 3	(81.6)		—		(81.6)
Long-Term Derivative Liabilities	Level 2	(68.0)		—		(68.0)		Level 3	(143.9)		—		(143.9)

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

The business activities that result in the recognition of derivative assets also create exposure to various counterparties. As of December 31, 2023, CL&P's derivative assets were exposed to counterparty credit risk and contracted with investment grade entities.

Derivative Contracts at Fair Value with Offsetting Regulatory Amounts

Commodity Supply and Price Risk Management: As required by regulation, CL&P, along with UI, has capacity-related contracts with generation facilities. CL&P has a sharing agreement with UI, with 80 percent of the costs or benefits of each contract borne by or allocated to CL&P and 20 percent borne by or allocated to UI. The combined capacities of these contracts as of December 31, 2023 and 2022 were 682 MW and 674 MW, respectively. The capacity contracts extend through 2026 and obligate both CL&P and UI to make or receive payments on a monthly basis to or from the generation facilities based on the difference between a set capacity price and the capacity market price received in the ISO-NE capacity markets.

For the years ended December 31, 2023, 2022 and 2021, there were losses of $3.9 million, gains of $10.1 million and losses of $7.1 million, respectively, deferred as regulatory costs, which reflect the change in fair value associated with Eversource's derivative contracts.

Fair Value Measurements of Derivative Instruments

The fair value of derivative contracts utilizes both observable and unobservable inputs. The fair value is modeled using income techniques, such as discounted cash flow valuations adjusted for assumptions related to exit price. Valuations of derivative contracts using a discounted cash flow methodology include assumptions regarding the timing and likelihood of scheduled capacity payments and also reflect non-performance risk, including credit, using the default probability approach based on the counterparty’s credit rating for assets and the Company’s credit rating for liabilities. Significant observable inputs for valuations of these contracts include energy-related product prices in future years for which quoted prices in an active market exist. Valuations incorporate estimates of premiums or discounts that would be required by a market participant to arrive at an exit price, using historical market transactions adjusted for the terms of the contract. Fair value measurements were prepared by individuals with expertise in valuation techniques, pricing of energy-related products, and accounting requirements. All derivative contracts were classified as Level 2 in the fair value hierarchy as of December 31, 2023, and were classified as Level 3 as of December 31, 2022.

Exit price premiums are unobservable inputs applied to these contracts and reflect the uncertainty and illiquidity premiums that would be required based on the most recent market activity available for similar type contracts. The risk premium was weighted by the relative fair value of the net derivative instruments. As of December 31, 2022, these exit price premiums were a Level 3 significant unobservable input and ranged from 2.9 percent through 7.1 percent, or a weighted average of 6.1 percent. As of December 31, 2023, exit price premiums are no longer considered significant in the valuation of the derivative contracts.

As of December 31, 2022, Level 3 significant unobservable inputs also utilized in the valuation of CL&P’s capacity-related contracts included forward reserve prices of $0.44 per kW-Month through $0.50 per kW-Month, or a weighted average of $0.47 per kW-Month, over the period 2023 through 2024. As of December 31, 2023, these forward reserve price inputs are now observable.

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

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


CL&P (Millions of Dollars)	For the Years Ended December 31,
2023			2022
Derivatives, Net:
Fair Value as of Beginning of Period	$	(181.8)		$	(249.2)
Net Realized/Unrealized (Losses)/Gains Included in Regulatory Assets	(3.9)			10.1
Settlements	64.8			57.3
Transfers out of Level 3 (1)	120.9			—
Fair Value as of End of Period	$	—		$	(181.8)

(1) Transfers out of Level 3 pertain to certain significant valuation inputs becoming observable as well as certain unobservable inputs no longer being significant to the fair value of the derivative contracts. Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period.

5. MARKETABLE SECURITIES

Eversource’s marketable securities include the CYAPC and YAEC legally restricted trusts that each hold equity and available-for-sale debt securities to fund the spent nuclear fuel removal obligations of their nuclear fuel storage facilities. Eversource also holds trusts that are not subject to regulatory oversight by state or federal agencies that are primarily used to fund certain non-qualified executive benefits. The marketable securities within these non-qualified executive benefit trusts were sold in 2023. Equity and available-for-sale debt marketable securities are recorded at fair value, with the current portion recorded in Prepayments and Other Current Assets and the long-term portion recorded in Marketable Securities on the balance sheets.

Equity Securities: Unrealized gains and losses on equity securities held in Eversource's trusts are recorded in Other Income, Net on the statements of income. The fair value of these equity securities as of December 31, 2023 and 2022 was $3.3 million and $20.0 million, respectively. Eversource’s non-qualified executive benefits equity securities were sold during 2023 and resulted in a $1.1 million gain recorded in Other Income, Net for the year ended December 31, 2023. For the years ended December 31, 2022 and 2021, there were unrealized losses of $9.7 million and unrealized gains of $4.4 million recorded in Other Income, Net related to these equity securities, respectively.

Eversource's equity securities also include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts, which had fair values of $173.6 million and $170.1 million as of December 31, 2023 and 2022, respectively. Unrealized gains and losses for these spent nuclear fuel trusts are subject to regulatory accounting treatment and are recorded in long-term Marketable Securities with the corresponding offset to long-term liabilities on the balance sheets, with no impact on the statements of income.

Available-for-Sale Debt Securities: The following is a summary of the available-for-sale debt securities:


	As of December 31,
	2023								2022
Eversource (Millions of Dollars)	Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses		Fair Value		Amortized Cost		Pre-Tax Unrealized Gains		Pre-Tax Unrealized Losses		Fair Value
Debt Securities	$	169.5	$	1.4	$	(6.6)	$	164.3	$	201.6	$	0.1	$	(16.2)	$	185.5

Unrealized gains and losses on available-for-sale debt securities held in Eversource's non-qualified executive benefit trust are recorded in Accumulated Other Comprehensive Income, excluding amounts related to credit losses or losses on securities intended to be sold, which are recorded in Other Income, Net. These debt securities were sold during 2023 and resulted in $1.2 million of realized losses for the year ended December 31, 2023 that were reclassified out of Accumulated Other Comprehensive Income and recorded in Other Income, Net. There were no credit losses for the years ended December 31, 2023 and 2022, and no allowance for credit losses as of December 31, 2023. Factors considered in determining whether a credit loss exists include adverse conditions specifically affecting the issuer, the payment history, ratings and rating changes of the security, and the severity of the impairment. For asset-backed debt securities, underlying collateral and expected future cash flows are also evaluated. Debt securities included in Eversource's non-qualified benefit trust portfolio were investment-grade bonds with a lower default risk based on their credit quality.

Eversource's debt securities also include CYAPC's and YAEC's marketable securities held in spent nuclear fuel trusts in the amounts of $164.3 million and $163.2 million as of December 31, 2023 and 2022, respectively. Unrealized gains and losses for available-for-sale debt securities included in the CYAPC and YAEC spent nuclear fuel trusts are subject to regulatory accounting treatment and are recorded in Marketable Securities with the corresponding offset to long-term liabilities on the balance sheets, with no impact on the statements of income. Pre-tax unrealized gains and losses as of December 31, 2023 and 2022 primarily relate to the debt securities included in CYAPC's and YAEC's spent nuclear fuel trusts.

CYAPC and YAEC’s spent nuclear fuel trusts are restricted and are classified in long-term Marketable Securities on the balance sheets.

As of December 31, 2023, the contractual maturities of available-for-sale debt securities were as follows:


Eversource (Millions of Dollars)	Amortized Cost		Fair Value

Less than one year	$	15.9	$	15.9
One to five years	30.9		30.9
Six to ten years	38.1		37.8
Greater than ten years	84.6		79.7
Total Debt Securities	$	169.5	$	164.3

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

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


Eversource (Millions of Dollars)	As of December 31,
2023			2022
Level 1:
Mutual Funds and Equities	$	176.9		$	190.1
Money Market Funds	13.7			25.4
Total Level 1	$	190.6		$	215.5
Level 2:
U.S. Government Issued Debt Securities (Agency and Treasury)	$	90.1		$	82.3
Corporate Debt Securities	34.0			46.1
Asset-Backed Debt Securities	5.6			8.6
Municipal Bonds	9.8			12.7
Other Fixed Income Securities	11.1			10.4
Total Level 2	$	150.6		$	160.1
Total Marketable Securities	$	341.2		$	375.6

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

6. INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Investments in entities that are not consolidated are included in long-term assets on the balance sheets and earnings impacts from these equity investments are included in Other Income, Net on the statements of income. Eversource's investments included the following:


				Investment Balance as of December 31,
(Millions of Dollars)	Ownership Interest			2023		2022
Offshore Wind Business	50%	-	100%	$	515.5	$	1,947.1


Natural Gas Pipeline - Algonquin Gas Transmission, LLC	15%			116.0		118.8
Renewable Energy Investment Fund	90%			—		84.1
Other	various			29.0		26.1
Total Investments in Unconsolidated Affiliates				$	660.5	$	2,176.1

For the years ended December 31, 2023, 2022 and 2021, Eversource had equity in earnings of unconsolidated affiliates of $15.5 million, $22.9 million, and $14.2 million, respectively. Eversource received dividends from its equity method investees (excluding proceeds received from sale or liquidation of investments) of $20.1 million, $26.2 million, and $21.6 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

Investments in affiliates where Eversource has the ability to exercise significant influence, but not control, over an investee are initially recognized as an equity method investment at cost. Eversource’s offshore wind investments, which include 50 percent ownership interests in two offshore wind joint ventures and a 100 percent ownership in a tax equity investment, do not represent controlling financial interests. Eversource’s offshore wind investments, its share of the natural gas pipeline and other investments included in the table above are accounted for under the equity method.

Offshore Wind Business: Eversource’s offshore wind business includes 50 percent ownership interests in each of North East Offshore and South Fork Class B Member, LLC, which collectively hold three offshore wind projects. North East Offshore holds the Revolution Wind project and the Sunrise Wind project. South Fork Class B Member, LLC holds the South Fork Wind project. Eversource’s offshore wind business also includes a noncontrolling tax equity investment in South Fork Wind through a 100 percent ownership in South Fork Wind Holdings, LLC Class A shares. The offshore wind projects are being developed and constructed through joint and equal partnerships with Ørsted.

Expected Sales of Offshore Wind Investments*:* On May 25, 2023, Eversource announced that it had completed a strategic review of its offshore wind investments and determined that it would pursue the sale of its offshore wind investments. On September 7, 2023, Eversource completed the sale of its 50 percent interest in an uncommitted lease area consisting of approximately 175,000 developable acres located 25 miles off the south coast of Massachusetts to Ørsted for $625 million in an all-cash transaction.

In September of 2023, Eversource made a contribution of $528 million using the proceeds from the lease area sale to invest in a tax equity interest for South Fork Wind. South Fork Wind was restructured as a tax equity investment, with Eversource purchasing 100 percent ownership of a new Class A tax equity membership interest. As a result of this investment, Eversource expects to receive investment tax credits after the turbines are placed in service for South Fork Wind and meet the requirements to qualify for the ITC. These credits will be utilized to reduce Eversource’s federal tax liability or generate tax refunds over the next 24 months. All of South Fork Wind’s twelve turbines are expected to be installed and placed into service by the end of March 2024.

On January 24, 2024, Ørsted signed an agreement with Eversource to acquire Eversource’s 50 percent share of Sunrise Wind. The sale is subject to the successful selection of Sunrise Wind in the ongoing New York fourth solicitation for offshore wind capacity, signing of an OREC contract with NYSERDA, finalization of sale agreements, receipt of final federal construction permits, and relevant regulatory approvals. If Sunrise Wind is not successful in the solicitation, then the existing OREC contract for Sunrise Wind will be cancelled according to the state’s requirements, and Eversource and Ørsted’s joint venture for Sunrise Wind will remain in place. In that scenario, Ørsted and Eversource would then assess their options in determining the best path forward for Sunrise Wind and its assets, which include the BOEM offshore lease area. If Sunrise Wind’s revised bid is successful in the new solicitation, Sunrise Wind would have 90 days to negotiate a new OREC agreement at the re-bid price. In a successful re-bid, Ørsted would become the sole owner of Sunrise Wind, while Eversource would remain contracted to lead the project’s onshore construction. If Sunrise Wind is successful in the re-bid, Ørsted would pay Eversource 50 percent of the negotiated purchase price upon closing the sale transaction, with the remaining 50 percent paid when onshore construction is completed and certain other milestones are achieved. On January 25, 2024, Eversource and Ørsted submitted a new proposal for Sunrise Wind in the New York fourth offshore wind solicitation.

On February 13, 2024, Eversource announced that it has executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP). As part of this transaction, Eversource expects to receive approximately $1.1 billion of cash proceeds upon closing, which includes the sales value related to the 10 percent energy community ITC adder of approximately $170 million related to Revolution Wind, and to exit these projects while retaining certain cost sharing obligations for the construction of Revolution Wind. The purchase price is subject to future post-closing adjustment payments based on, among other things, the progress, timing and expense of construction at each project. The cost sharing obligations provide that Eversource would share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for the Revolution Wind project, after which GIP’s obligations for any additional capital expenditure overruns would be shared equally by Eversource and Ørsted. Additionally, Eversource’s financial exposure will be adjusted by certain purchase price adjustments to be made following commercial operation of the Revolution Wind project and closing of South Fork as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. Eversource currently expects that South Fork Wind will reach full commercial operation prior to closing of the sale with GIP and Eversource does not expect any material cost sharing or other purchase price adjustment payments for South Fork Wind.

Factors that could result in Eversource’s total net proceeds from the transaction to be lower or higher include Revolution Wind’s eligibility for federal investment tax credits at other than the anticipated 40 percent level; the ultimate cost of construction and extent of cost overruns for Revolution Wind; delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment; and a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation date of the Revolution Wind project.

Closing a transaction with GIP would be subject to customary conditions, including certain regulatory approvals under the Hart Scott Rodino Act and by the New York Public Service Commission and the FERC, as well as other conditions, among which is the completion and execution of the partnership agreements between GIP and Ørsted that will govern GIP’s new ownership interest in those projects following Eversource’s divestiture. Closing of the transaction is currently expected to occur in mid-2024. If closing of the sale is delayed, additional capital contributions made by Eversource would be recovered in the sales price. Under the agreement, Eversource’s existing credit support obligations are expected to roll off for each project around the time that each project completes its expected capital spend.

Impairment: Equity method investments are assessed for impairment when conditions exist as of the balance sheet date that indicate that the fair value of the investment may be less than book value. Eversource continually monitors and evaluates its equity method investments to determine if there are indicators of an other-than-temporary impairment. If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. Subsequent declines or recoveries after the reporting date are not considered in the impairment recognized. Investments that are other-than-temporarily impaired and written down to their estimated fair value cannot subsequently be written back up for increases in estimated fair value. Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist at the equity method investment level, selecting discount rates used to determine fair values, and developing an estimate of discounted future cash flows expected from investment operations or the sale of the investment.

In connection with the process to divest its offshore wind business, Eversource identified indicators for impairment in both the second and fourth quarters of 2023. In each impairment assessment, Eversource evaluated its investments and determined that the carrying value of the equity method offshore wind investments exceeded the fair value of the investments and that the decline in fair value was other-than-temporary. The completion of the strategic review in the second quarter of 2023 resulted in Eversource recording a pre-tax other-than-temporary impairment charge of $401 million ($331 million after-tax) to reflect the investment at estimated fair value based on the expected sales price at that time. This established a new cost basis in the investments. Negative developments in the fourth quarter of 2023, including a lower expected sales price, additional projected construction cost increases, and the October 2023 OREC pricing denial for Sunrise Wind, resulted in Eversource conducting an impairment evaluation and recognizing an additional pre-tax other-than-temporary impairment charge of $1.77 billion ($1.62 billion after-tax) and establishing a new cost basis in the investments as of December 31, 2023. The Eversource statement of income reflects a total pre-tax other-than-temporary impairment charge of $2.17 billion ($1.95 billion after-tax) in its offshore wind investments for the year ended 2023.

The impairment evaluations involved judgments in developing the estimates and timing of the future cash flows arising from the expected sales price of Eversource’s 50 percent interest in the wind projects, including expected sales value from investment tax credit adder amounts, less estimated costs to sell, and uncertainties related to the Sunrise Wind re-bid process in New York’s offshore wind solicitation. Additional assumptions in the fourth quarter assessment included revised projected construction costs and estimated project cost overruns, estimated termination costs, salvage values of Sunrise Wind assets, and the value of the tax equity ownership interest. The assumptions used in the discounted cash flow analyses are subject to inherent uncertainties and subjectivity. The use of different assumptions, estimates, or judgments with respect to the estimation of future cash flows could materially change the impairment charges. The impairment evaluations were based on best information available at the impairment assessment dates. New information from events or circumstances arising after the balance sheet date, such as the January 25, 2024 re-bid of Sunrise Wind in the New York solicitation, are not included in the December 31, 2023 impairment evaluation. All significant inputs into the impairment evaluations were Level 3 fair value measurements.

The expected cash flows arising from the anticipated sales are a significant input in the impairment evaluation. In the fourth quarter of 2023, project construction forecasts were updated, and these new forecasts reflected additional expenditures for construction and scheduling related pressures, including the availability and increased cost of installation vessels and supply chain cost increases related to foundation fabrication. In determining the current fair value of the investments, these updated projections exceeded the previously estimated projections for construction expenditures, which resulted in a revised sales price that was significantly lower than the previous bid value. Another significant assumption in the impairment evaluation includes the probability of payment of future cost overruns on the three wind projects through each project's respective commercial operation date, which would not be recovered in the expected sales price. This assumption was based on construction projections updated in the fourth quarter of 2023 exceeding prior estimates. An increase in expected cost overruns could result in a significant impairment in a future period.

Another key assumption in the impairment model of our offshore wind investments was investment tax credit (“ITC”) adders that were included in the Inflation Reduction Act and were a separate part of the sales price value offered by GIP. An ITC adder is an additional 10 percent of credit value for ITC eligible costs and include two distinct qualifications related to either using domestic sourced materials (domestic content) or construction of an onshore substation in a designated community (energy community). Similar to the base ITC of 30 percent of the eligible costs, any ITC adders generated would be used to reduce an owner’s federal tax liability and could be used to receive tax refunds from prior years as well. Management believes there is a high likelihood that the 10 percent energy community ITC adder is realizable, and that ITC adder would amount to approximately $170 million of additional sales value related to Revolution Wind and that it would qualify for the ITC adder after it reaches commercial operation in 2025. Although management believes the ITC adder value is realizable, there is some uncertainty at this time as to whether or not those ITC adders can be achieved, and management continues to evaluate the project’s qualifications and to monitor guidance issued by the United States Treasury Department. A change in the expected value or qualification of ITC adders could result in a significant impairment in a future period.

Another fourth quarter 2023 development included in the impairment evaluation is the key judgment regarding the probability of future cash inflows and outflows associated with the sale or abandonment of the Sunrise Wind project and the expected outcome of the New York fourth offshore wind solicitation in 2024. In June 2023, Sunrise Wind filed a petition with the New York State Public Service Commission for an order authorizing NYSERDA to amend the Sunrise Wind OREC contract to increase the contract price to cover increased costs and inflation. At that time, management expected the contract repricing would be successful given NYSERDA’s public support for pricing adjustments. On October 12, 2023, the New York State Public Service Commission denied this petition. Subsequent to the denial, on November 30, 2023, the general terms of an expedited offshore wind renewable energy solicitation in New York were released. A primary condition for Sunrise Wind to participate in this new solicitation was to agree to terminate its existing OREC agreement. As of December 31, 2023, Eversource and Ørsted were considering whether to submit a new bid for Sunrise Wind, the price at which a new bid would be made, and the probability of success in the new bidding process. The December 31, 2023 impairment evaluation included management’s judgment of the likelihood of possible future scenarios that included the Sunrise Wind project continuing with its existing OREC contract, the project re-bidding and being selected in the new solicitation, the project re-bidding and not being selected, or the project not moving forward. The unfavorable development of the October 2023 denial of the OREC pricing petition, management’s assessment of the likelihood of success in the competitive New York re-bidding process, and the increased costs to build the project, have resulted in management’s assumption that the Sunrise Wind project will ultimately be abandoned, and therefore, no sales value was modeled in the impairment evaluation. Additionally, in the abandonment assumption, management has assumed the loss of contingent sales value associated with any related ITC adders and has estimated future cash outflows for Eversource’s share of cancellation costs required under Sunrise Wind’s supplier contracts, partially offset by expected salvage value and expected cost overruns not incurred in the case of abandonment that are included in the fourth quarter 2023 impairment charge. An increase in expected cancellation costs could result in a significant impairment in a future period.

A summary of the significant estimates and assumptions included in the 2023 impairment charges is as follows:


	Second Quarter 2023		Fourth Quarter 2023		Total
(Millions of Dollars)
Lower expected sales proceeds across all three wind projects	$	401	$	525	$	926
Expected cost overruns not recovered in the sales price	—		441		441
Loss of sales value from the sale price offered by GIP, including loss of ITC adders value, cancellation costs and other impacts assuming Sunrise Wind project is abandoned	—		800		800
Impairment Charges, pre-tax	401		1,766		2,167
Tax Benefit	(70)		(144)		(214)
Impairment Charges, after-tax	$	331	$	1,622	1,953

A summary of the carrying value by investee and by project as of December 31, 2023 is as follows:


	Investments Expected to be Disposed of						Investment to be Held
	North East Offshore				South Fork Class B Member, LLC		South Fork Wind Holdings, LLC Class A		Total Offshore Wind Investments
(Millions of Dollars)	Sunrise Wind		Revolution Wind
Carrying Value as of December 31, 2023, before Impairment Charge	$	699	$	799	$	299	$	485	$	2,282
Fourth Quarter 2023 Impairment Charge	(1,218)		(544)		—		(4)		(1,766)
Carrying Value as of December 31, 2023	$	(519)	$	255	$	299	$	481	$	516

Management will continue to monitor and evaluate all facts and circumstances in the offshore wind sales process and the impact on its investment balance. Adverse changes in facts and circumstances of estimates and timing of future cash flows and the factors described above could result in the recognition of additional, significant impairment charges that could be material to the financial statements.

The impairment charge was a non-cash charge and did not impact Eversource’s cash position. Eversource will continue to make future cash expenditures for required cash contributions to its offshore wind investments up to the time of disposition of each of the offshore wind projects. Capital contributions are expected until the sales are completed and changes in the timing and amounts of these contributions would be adjusted in the sales prices and therefore not result in an additional impairment charge. Proceeds from the transactions will be used to pay off parent company debt. Eversource’s offshore wind investments do not meet the criteria to qualify for presentation as a discontinued operation.

Capital contributions in the offshore wind investments, including the 2023 contribution for the tax equity investment in South Fork Wind, are included in Investments in Unconsolidated Affiliates on the statements of cash flows. Proceeds received from the 2023 sale of the uncommitted lease area and from an October 2023 distribution of $318 million received primarily as a result of being a 50 percent joint owner in the Class B shares of South Fork Wind which was restructured as a tax equity investment, are included in Proceeds from Unconsolidated Affiliates on the statement of cash flows.

As of December 31, 2023, Eversource’s share of underlying equity in net assets of the offshore wind business exceeded the carrying amount of the offshore wind investments as a result of the 2023 impairments. As of December 31, 2022, the carrying amount of Eversource’s offshore wind investments exceeded its share of underlying equity in net assets by $343.1 million. The basis differences as of December 31, 2022 were primarily comprised of $168.9 million of equity method goodwill that was not being amortized, intangible assets for PPAs, and capitalized interest.

Liquidation of Renewable Energy Investment Fund: On March 21, 2023, Eversource’s equity method investment in a renewable energy investment fund was liquidated by the fund’s general partner in accordance with the partnership agreement. Proceeds received from the liquidation totaled $147.6 million and are included in Proceeds from Unconsolidated Affiliates on the statement of cash flows for the year ended December 31, 2023. A portion of the proceeds was used to make a charitable contribution to the Eversource Energy Foundation (a related party) of $20.0 million in 2023. The liquidation benefit received in excess of the investment’s carrying value and the charitable contribution are included in Other Income, Net on the statement of income.

NSTAR Electric: As of December 31, 2023 and 2022, NSTAR Electric's investments included a 14.5 percent ownership interest in two companies that transmit hydro-electricity imported from the Hydro-Quebec system in Canada of $9.6 million and $9.3 million, respectively.

7. ASSET RETIREMENT OBLIGATIONS

Eversource, including CL&P, NSTAR Electric and PSNH, recognizes a liability for the fair value of an ARO on the obligation date if the liability's fair value can be reasonably estimated, even if it is conditional on a future event. Settlement dates and future costs are reasonably estimated when sufficient information becomes available. Management has identified various categories of AROs, primarily CYAPC's and YAEC's obligation to dispose of spent nuclear fuel and high level waste, and also certain assets containing asbestos and hazardous contamination. Management has performed fair value calculations reflecting expected probabilities for settlement scenarios.

The fair value of an ARO is recorded as a long-term liability with a corresponding amount included in Property, Plant and Equipment, Net on the balance sheets. The ARO assets are depreciated, and the ARO liabilities are accreted over the estimated life of the obligation and the corresponding credits are recorded as accumulated depreciation and ARO liabilities, respectively. As the electric and natural gas companies are rate-regulated on a cost-of-service basis, these companies apply regulatory accounting guidance and both the depreciation and accretion costs associated with these companies' AROs are recorded as increases to Regulatory Assets on the balance sheets.

A reconciliation of the beginning and ending carrying amounts of ARO liabilities is as follows:


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Balance as of Beginning of Year	$	502.7	$	37.4	$	101.3	$	4.9	$	500.1	$	35.0	$	97.5	$	4.7

Liabilities Settled During the Year	(24.9)		—		—		—		(22.3)		—		—		—
Accretion	29.2		2.5		4.3		0.3		28.9		2.4		4.1		0.2
Revisions in Estimated Cash Flows	(1.2)		—		(0.8)		—		(4.0)		—		(0.3)		—
Balance as of End of Year	$	505.8	$	39.9	$	104.8	$	5.2	$	502.7	$	37.4	$	101.3	$	4.9

Eversource's amounts include CYAPC and YAEC's AROs of $315.8 million and $320.5 million as of December 31, 2023 and 2022, respectively. The fair value of the ARO for CYAPC and YAEC includes uncertainties of the fuel off-load dates related to the DOE's timing of performance regarding its obligation to dispose of the spent nuclear fuel and high level waste and other assumptions, including discount rates. The incremental asset recorded as an offset to the ARO liability was fully depreciated since the plants have no remaining useful life. Any changes in the ARO liability are recorded with a corresponding offset to the related regulatory asset. The assets held in the CYAPC and YAEC spent nuclear fuel trusts are restricted for settling the ARO and all other nuclear fuel storage obligations. For further information on the assets held in the spent nuclear fuel trusts, see Note 5, "Marketable Securities," to the financial statements.

8. SHORT-TERM DEBT

Short-Term Debt - Borrowing Limits: The amount of short-term borrowings that may be incurred by CL&P and NSTAR Electric is subject to periodic approval by the FERC. Because the NHPUC has jurisdiction over PSNH's short-term debt, PSNH is not currently required to obtain FERC approval for its short-term borrowings. On November 30, 2023, the FERC granted authorization that allows CL&P to issue total short-term borrowings in an aggregate principal amount not to exceed $600 million outstanding at any one time, through December 31, 2025. On December 18, 2023, the FERC granted authorization that allows NSTAR Electric to issue total short-term borrowings in an aggregate principal amount not to exceed $655 million outstanding at any one time, through December 31, 2025.

PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional $60 million until further ordered by the NHPUC. As of December 31, 2023, PSNH's short-term debt authorization under the 10 percent of net fixed plant test plus $60 million totaled $483.2 million.

CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur, including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. As of December 31, 2023, CL&P had $625.7 million of unsecured debt capacity available under this authorization.

Yankee Gas, NSTAR Gas and EGMA are not required to obtain approval from any state or federal authority to incur short-term debt.

Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $2.00 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas, Yankee Gas, EGMA and Aquarion Water Company of Connecticut are parties to a five-year $2.00 billion revolving credit facility, which terminates on October 13, 2028. This revolving credit facility serves to backstop Eversource parent's $2.00 billion commercial paper program.

NSTAR Electric has a $650 million commercial paper program allowing NSTAR Electric to issue commercial paper as a form of short-term debt. NSTAR Electric is also a party to a five-year $650 million revolving credit facility, which terminates on October 13, 2028, and serves to backstop NSTAR Electric's $650 million commercial paper program.

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


	Borrowings Outstanding as of December 31,				Available Borrowing Capacity as of December 31,				Weighted-Average Interest Rate as of December 31,
(Millions of Dollars)	2023		2022		2023		2022		2023		2022
Eversource Parent Commercial Paper Program	$	1,771.9	$	1,442.2	$	228.1	$	557.8	5.60	%	4.63	%
NSTAR Electric Commercial Paper Program	365.8		—		284.2		650.0		5.40	%	—	%

There were no borrowings outstanding on the revolving credit facilities as of December 31, 2023 or 2022.

CL&P and PSNH have uncommitted line of credit agreements totaling $375 million and $250 million, respectively, which will expire in 2024. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of December 31, 2023.

Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified as Long-Term Debt on Eversource parent’s balance sheet as of December 31, 2023.

Under the credit facilities described above, Eversource and its subsidiaries, including CL&P, NSTAR Electric, PSNH, NSTAR Gas, EGMA, Yankee Gas, and Aquarion Water Company of Connecticut, must comply with certain financial and non-financial covenants, including a consolidated debt to total capitalization ratio. As of December 31, 2023 and 2022, Eversource and its subsidiaries were in compliance with these covenants. If Eversource or its subsidiaries were not in compliance with these covenants, an event of default would occur requiring all outstanding borrowings by such borrower to be repaid, and additional borrowings by such borrower would not be permitted under its respective credit facility.

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of December 31, 2023, there were intercompany loans from Eversource parent to CL&P of $457.0 million and to PSNH of $233.0 million. As of December 31, 2022, there were intercompany loans from Eversource parent to PSNH of $173.3 million. Eversource parent charges interest on these intercompany loans at the same weighted-average interest rate as its commercial paper program. Intercompany loans from Eversource parent are included in Notes Payable to Eversource parent and classified in current liabilities on the respective subsidiary's balance sheets, as these intercompany borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of CL&P’s intercompany borrowings were reclassified to Long-Term Debt on CL&P’s balance sheet as of December 31, 2023.

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

9. LONG-TERM DEBT

Details of long-term debt outstanding are as follows:


CL&P(Millions of Dollars)				As of December 31,
Interest Rate			2023			2022
First Mortgage Bonds:
1994 Series D due 2024	7.875	%		$	139.8		$	139.8
2004 Series B due 2034	5.750	%		130.0			130.0
2005 Series B due 2035	5.625	%		100.0			100.0
2006 Series A due 2036	6.350	%		250.0			250.0
2007 Series B due 2037	5.750	%		150.0			150.0
2007 Series D due 2037	6.375	%		100.0			100.0
2013 Series A due 2023	2.500	%		—			400.0
2014 Series A due 2044	4.300	%		475.0			475.0
2015 Series A due 2045	4.150	%		350.0			350.0
2017 Series A due 2027	3.200	%		500.0			500.0
2018 Series A due 2048	4.000	%		800.0			800.0
2020 Series A due 2025	0.750	%		400.0			400.0
2021 Series A due 2031	2.050	%		425.0			425.0
2023 Series A due 2053	5.250	%		500.0			—
2023 Series B due 2033	4.900	%		300.0			—
Total First Mortgage Bonds				4,619.8			4,219.8
Less Amounts due Within One Year				(139.8)			(400.0)
Current Portion Classified as Long-Term Debt (1)				139.8			400.0
Commercial Paper Classified as Long-Term Debt (See Note 8, Short-Term Debt)				207.3			—
Unamortized Premiums and Discounts, Net				18.0			21.5
Unamortized Debt Issuance Costs				(30.7)			(24.8)
CL&P Long-Term Debt				$	4,814.4		$	4,216.5


NSTAR Electric(Millions of Dollars)				As of December 31,
Interest Rate			2023			2022
Debentures:
2006 Debentures due 2036	5.750	%		$	200.0		$	200.0
2010 Debentures due 2040	5.500	%		300.0			300.0
2014 Debentures due 2044	4.400	%		300.0			300.0
2015 Debentures due 2025	3.250	%		250.0			250.0
2016 Debentures due 2026	2.700	%		250.0			250.0
2017 Debentures due 2027	3.200	%		700.0			700.0
2019 Debentures due 2029	3.250	%		400.0			400.0
2020 Debentures due 2030	3.950	%		400.0			400.0
2021 Debentures due 2051	3.100	%		300.0			300.0
2021 Debentures due 2031	1.950	%		300.0			300.0
2022 Debentures due 2052	4.550	%		450.0			450.0
2022 Debentures due 2052	4.950	%		400.0			400.0
2023 Debentures due 2028	5.600	%		150.0			—
Total Debentures				4,400.0			4,250.0
Notes:
2004 Senior Notes Series B due 2034	5.900	%		50.0			50.0
2007 Senior Notes Series D due 2037	6.700	%		40.0			40.0

2013 Senior Notes Series G due 2023	3.880	%		—			80.0
2016 Senior Notes Series H due 2026	2.750	%		50.0			50.0
Total Notes				140.0			220.0
Less Amounts due Within One Year				—			(80.0)
Unamortized Premiums and Discounts, Net				(14.0)			(14.8)
Unamortized Debt Issuance Costs				(29.1)			(30.1)
NSTAR Electric Long-Term Debt				$	4,496.9		$	4,345.1


PSNH(Millions of Dollars)				As of December 31,
Interest Rate			2023			2022
First Mortgage Bonds:
2005 Series M due 2035	5.600	%		$	50.0		$	50.0


2013 Series S due 2023	3.500	%		—			325.0
2019 Series T due 2049	3.600	%		300.0			300.0
2020 Series U due 2050	2.400	%		150.0			150.0
2021 Series V due 2031	2.200	%		350.0			350.0
2023 Series W due 2053	5.150	%		300.0			—
2023 Series X due 2033	5.350	%		300.0			—
Total First Mortgage Bonds				1,450.0			1,175.0
Less Amounts due Within One Year				—			(325.0)
Current Portion Classified as Long-Term Debt (1)				—			295.3
Unamortized Premiums and Discounts, Net				(4.9)			(2.5)
Unamortized Debt Issuance Costs				(13.5)			(7.9)
PSNH Long-Term Debt				$	1,431.6		$	1,134.9


OTHER(Millions of Dollars)						As of December 31,
Interest Rate					2023			2022
Eversource Parent - Senior Notes due 2024 - 2050	0.800	%	-	5.950%		$	10,300.0		$	8,150.0
Yankee Gas - First Mortgage Bonds due 2024 - 2051	1.380	%	-	5.510%		1,015.0			845.0
NSTAR Gas - First Mortgage Bonds due 2025 - 2051	2.250	%	-	7.110%		705.0			705.0
EGMA - First Mortgage Bonds due 2028 - 2052	2.110	%	-	5.730%		708.0			650.0
Aquarion - Senior Notes due 2024	4.000%					360.0			360.0
Aquarion - Unsecured Notes due 2028 - 2052	3.000	%	-	6.430%		527.0			464.7
Aquarion - Secured Debt due 2027 - 2044	1.550	%	-	9.290%		39.0			34.4
Pre-1983 Spent Nuclear Fuel Obligation (CYAPC)						12.5			11.9
Fair Value Adjustment (2)						19.3			26.2
Less Fair Value Adjustment - Current Portion (2)						(5.5)			(7.0)
Less Amounts due in One Year						(1,810.2)			(1,203.4)
Current Portion Classified as Long-Term Debt (1)						990.9			—
Unamortized Premiums and Discounts, Net						49.7			40.1
Unamortized Debt Issuance Costs						(65.0)			(49.4)
Total Other Long-Term Debt						$	12,845.7		$	10,027.5

Total Eversource Long-Term Debt						$	23,588.6		$	19,724.0

(1) As a result of the CL&P and Eversource parent long-term debt issuances in January 2024, $139.8 million and $990.9 million, respectively, of current portion of long-term debt were reclassified as Long-Term Debt on CL&P’s and Eversource parent’s balance sheets as of December 31, 2023. As a result of the CL&P and PSNH long-term debt issuances in January 2023, $400 million and $295.3 million, respectively, of current portion of long-term debt were reclassified as Long-Term Debt on CL&P’s and PSNH’s balance sheets as of December 31, 2022.

(2) The fair value adjustment amount is the purchase price adjustments, net of amortization, required to record long-term debt at fair value on the dates of the 2012 merger with NSTAR and the 2017 acquisition of Aquarion.

Availability under Long-Term Debt Issuance Authorizations: On June 14, 2022, the DPU approved NSTAR Gas’ request for authorization to issue up to $325 million in long-term debt through December 31, 2024. On November 30, 2022, the PURA approved CL&P's request for authorization to issue up to $1.15 billion in long-term debt through December 31, 2024. As a result of CL&P’s January 2024 long-term debt issuance, CL&P has now fully utilized this authorization. On June 7, 2023, PURA approved Yankee Gas’ request for authorization to issue up to $350 million in long-term debt through December 31, 2024. On November 21, 2023, NSTAR Electric petitioned the DPU requesting authorization to issue up to $2.4 billion in long-term debt through December 31, 2026. On February 8, 2024, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt through December 31, 2024.

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


(Millions of Dollars)	Interest Rate		Issuance/ (Repayment)		Issue Date or Repayment Date	Maturity Date	Use of Proceeds for Issuance/ Repayment Information
CL&P 2023 Series A First Mortgage Bonds	5.25	%	$	500.0	January 2023	January 2053	Repaid 2013 Series A Bonds at maturity and short-term debt, and paid capital expenditures and working capital
CL&P 2013 Series A First Mortgage Bonds	2.50	%	(400.0)		January 2023	January 2023	Paid at maturity
CL&P 2023 Series B First Mortgage Bonds	4.90	%	300.0		July 2023	July 2033	Repaid short-term debt, paid capital expenditures and working capital
CL&P 2024 Series A First Mortgage Bonds	4.65	%	350.0		January 2024	January 2029	Repaid short-term debt, paid capital expenditures and working capital
NSTAR Electric 2023 Debentures	5.60	%	150.0		September 2023	October 2028	Repaid Series G Senior Notes at maturity and short-term debt and for general corporate purposes
NSTAR Electric 2013 Series G Senior Notes	3.88	%	(80.0)		November 2023	November 2023	Paid at maturity
PSNH Series W First Mortgage Bonds	5.15	%	300.0		January 2023	January 2053	Repaid short-term debt, paid capital expenditures and working capital
PSNH Series X First Mortgage Bonds	5.35	%	300.0		September 2023	October 2033	Repaid Series S Bonds at maturity and for general corporate purposes
PSNH Series S First Mortgage Bonds	3.50	%	(325.0)		November 2023	November 2023	Paid at maturity
Eversource Parent Series Z Senior Notes	5.45	%	750.0		March 2023	March 2028	Repaid Series F Senior Notes at maturity and short-term debt
Eversource Parent Series F Senior Notes	2.80	%	(450.0)		May 2023	May 2023	Paid at maturity
Eversource Parent Series Z Senior Notes	5.45	%	550.0		May 2023	March 2028	Repaid Series T Senior Notes and Series N Senior Notes at maturity and short-term debt
Eversource Parent Series AA Senior Notes	4.75	%	450.0		May 2023	May 2026	Repaid Series T Senior Notes and Series N Senior Notes at maturity and short-term debt
Eversource Parent Series BB Senior Notes	5.125	%	800.0		May 2023	May 2033	Repaid Series T Senior Notes and Series N Senior Notes at maturity and short-term debt
Eversource Parent Variable Rate Series T Senior Notes	SOFR plus 0.25%		(350.0)		August 2023	August 2023	Paid at maturity
Eversource Parent Series CC Senior Notes	5.95	%	800.0		November 2023	February 2029	Repaid Series N Senior Notes at maturity and short-term debt
Eversource Parent Series N Senior Notes	3.80	%	(400.0)		December 2023	December 2023	Paid at maturity
Eversource Parent Series DD Senior Notes	5.00	%	350.0		January 2024	January 2027	Repaid short-term debt
Eversource Parent Series EE Senior Notes	5.50	%	650.0		January 2024	January 2034	Repaid short-term debt
Yankee Gas Series V First Mortgage Bonds	5.51	%	170.0		August 2023	August 2030	Repaid short-term debt and general corporate purposes
EGMA Series D First Mortgage Bonds	5.73	%	58.0		November 2023	November 2028	Repaid short-term debt, paid capital expenditures and working capital
Aquarion Water Company of Connecticut Senior Notes	5.89	%	50.0		September 2023	October 2043	Repaid existing indebtedness, paid capital expenditures and general corporate purposes

Long-Term Debt Provisions: The utility plant of CL&P, PSNH, Yankee Gas, NSTAR Gas, EGMA and a portion of Aquarion is subject to the lien of each company's respective first mortgage bond indenture. The Eversource parent, NSTAR Electric and a portion of Aquarion debt is unsecured. Additionally, the long-term debt agreements provide that Eversource and certain of its subsidiaries must comply with certain covenants as are customarily included in such agreements, including equity requirements for NSTAR Electric, NSTAR Gas and Aquarion. Under the equity requirements, NSTAR Electric's and Aquarion's senior notes must maintain a certain consolidated indebtedness to capitalization ratio as of the end of any fiscal quarter and NSTAR Gas' outstanding long-term debt must not exceed equity.

Certain secured and unsecured long-term debt securities are callable at redemption price or are subject to make-whole provisions.

No long-term debt defaults have occurred as of December 31, 2023.

CYAPC's Pre-1983 Spent Nuclear Fuel Obligation: Under the Nuclear Waste Policy Act of 1982, the DOE is responsible for the selection and development of repositories for, and the disposal of, spent nuclear fuel and high-level radioactive waste. CYAPC is obligated to pay the DOE for the costs to dispose of spent nuclear fuel and high-level radioactive waste generated prior to April 7, 1983 (pre-1983 Spent Nuclear Fuel). CYAPC has partially paid this obligation and recorded an accrual for its remaining liability to the DOE. This liability accrues interest costs at the 3-month Treasury bill yield rate. For nuclear fuel used to generate electricity prior to April 7, 1983, payment may be made any time prior to the first delivery of spent fuel to the DOE. As of December 31, 2023 and 2022, as a result of consolidating CYAPC, Eversource has consolidated $12.5 million and $11.9 million, respectively, in pre-1983 spent nuclear fuel obligations to the DOE. The obligation includes accumulated interest costs of $9.5 million and $8.8 million as of December 31, 2023 and 2022, respectively. CYAPC maintains a trust to fund amounts due to the DOE for the disposal of pre-1983 spent nuclear fuel. For further information, see Note 5, "Marketable Securities," to the financial statements. Fees for disposal of nuclear fuel burned on or after April 7, 1983 were billed to member companies and paid to the DOE.

Long-Term Debt Maturities: Long-term debt maturities on debt outstanding for the years 2024 through 2028 and thereafter are shown below. These amounts exclude PSNH rate reduction bonds, CYAPC pre-1983 spent nuclear fuel obligation, net unamortized premiums, discounts and debt issuance costs, and other fair value adjustments as of December 31, 2023:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2024	$	1,950.0	$	139.8	$	—	$	—
2025	1,400.2		400.0		250.0		—
2026	1,390.2		—		300.0		—
2027	2,539.2		500.0		700.0		—
2028	1,978.5		—		150.0		—
Thereafter	15,005.7		3,580.0		3,140.0		1,450.0
Total	$	24,263.8	$	4,619.8	$	4,540.0	$	1,450.0

10. RATE REDUCTION BONDS AND VARIABLE INTEREST ENTITIES

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

The proceeds were used by PSNH Funding to purchase PSNH’s stranded cost asset-recovery property, including its vested property right to bill, collect and adjust a non-bypassable stranded cost recovery charge from PSNH’s retail customers. The collections are used to pay principal, interest and other costs in connection with the RRBs. The RRBs are secured by the stranded cost asset-recovery property. Cash collections from the stranded cost recovery charges and funds on deposit in trust accounts are the sole source of funds to satisfy the debt obligation. PSNH is not the owner of the RRBs, and PSNH Funding’s assets and revenues are not available to pay PSNH’s creditors. The RRBs are non-recourse senior secured obligations of PSNH Funding and are not insured or guaranteed by PSNH or Eversource Energy.

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


(Millions of Dollars)	As of December 31,
PSNH Balance Sheets:	2023		2022
Restricted Cash - Current Portion (included in Current Assets)	$	30.0	$	32.4
Restricted Cash - Long-Term Portion (included in Other Long-Term Assets)	3.2		3.2
Securitized Stranded Cost (included in Regulatory Assets)	392.5		435.7
Other Regulatory Liabilities (included in Regulatory Liabilities)	5.3		6.0
Accrued Interest (included in Other Current Liabilities)	6.3		6.9
Rate Reduction Bonds - Current Portion	43.2		43.2
Rate Reduction Bonds - Long-Term Portion	367.3		410.5


(Millions of Dollars) PSNH Income Statements:	For the Years Ended December 31,
2023			2022			2021
Amortization of RRB Principal (included in Amortization of Regulatory (Liabilities)/Assets, Net)	$	43.2		$	43.2		$	43.2
Interest Expense on RRB Principal (included in Interest Expense)	15.7			17.0			18.4

Estimated principal payments on RRBs as of December 31, 2023, is summarized annually through 2028 and thereafter as follows:


(Millions of Dollars)			2024						2025						2026						2027						2028						Thereafter						Total
PSNH			$	43.2					$	43.2					$	43.2					$	43.2					$	43.2					$	194.5					$	410.5

Variable Interest Entities - Other: The Company's variable interests outside of the consolidated group include contracts that are required by regulation and provide for regulatory recovery of contract costs and benefits through customer rates. Eversource, CL&P and NSTAR Electric hold variable interests in VIEs through agreements with certain entities that own single renewable energy or peaking generation power plants, with other independent power producers and with transmission businesses. Eversource, CL&P and NSTAR Electric do not control the activities that are economically significant to these VIEs or provide financial or other support to these VIEs. Therefore, Eversource, CL&P and NSTAR Electric do not consolidate these VIEs.

11. EMPLOYEE BENEFITS

A. Pension Benefits and Postretirement Benefits Other Than Pension

Eversource provides defined benefit retirement plans (Pension Plans) that cover eligible employees and are subject to the provisions of ERISA, as amended by the Pension Protection Act of 2006. Eversource's policy is to annually fund the Pension Plans in an amount at least equal to an amount that will satisfy all federal funding requirements. In addition to the Pension Plans, Eversource maintains non-qualified defined benefit retirement plans (SERP Plans), which provide benefits in excess of Internal Revenue Code limitations to eligible participants consisting of current and retired employees.

Eversource also provides defined benefit postretirement plans (PBOP Plans) that provide life insurance and a health reimbursement arrangement created for the purpose of reimbursing retirees and dependents for health insurance premiums and certain medical expenses to eligible employees that meet certain age and service eligibility requirements. The benefits provided under the PBOP Plans are not vested, and the Company has the right to modify any benefit provision subject to applicable laws at that time. Eversource annually funds postretirement costs through tax deductible contributions to external trusts.

Funded Status: The Pension, SERP and PBOP Plans are accounted for under the multiple-employer approach, with each operating company's balance sheet reflecting its share of the funded status of the plans. Although Eversource maintains marketable securities in a benefit trust, the SERP Plans do not contain any assets. For further information, see Note 5, "Marketable Securities," to the financial statements. The following tables provide information on the plan benefit obligations, fair values of plan assets, and funded status:


	Pension and SERP
	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Change in Benefit Obligation:
Benefit Obligation as of Beginning of Year	$	(5,220.1)	$	(1,030.0)	$	(1,110.4)	$	(556.2)	$	(6,729.7)	$	(1,330.9)	$	(1,448.4)	$	(721.0)
Service Cost	(43.1)		(12.3)		(7.8)		(4.3)		(70.1)		(18.7)		(13.8)		(6.9)
Interest Cost	(254.0)		(50.5)		(53.9)		(27.3)		(154.5)		(31.3)		(32.8)		(16.9)
Actuarial (Loss)/Gain	(110.4)		(19.7)		(17.6)		(11.6)		1,385.8		284.1		295.5		156.7
Benefits Paid - Pension	317.3		66.1		76.7		35.7		302.5		63.3		68.4		33.9
Benefits Paid - Lump Sum	28.9		—		5.3		1.0		33.0		—		14.8		1.0
Benefits Paid - SERP	43.0		0.3		0.2		0.4		12.9		0.3		0.2		0.4
Employee Transfers	—		(2.4)		0.5		—		—		3.2		5.7		(3.4)
Benefit Obligation as of End of Year	$	(5,238.4)	$	(1,048.5)	$	(1,107.0)	$	(562.3)	$	(5,220.1)	$	(1,030.0)	$	(1,110.4)	$	(556.2)
Change in Pension Plan Assets:
Fair Value of Pension Plan Assets as of Beginning of Year	$	5,806.4	$	1,172.0	$	1,418.8	$	618.0	$	6,495.5	$	1,323.8	$	1,596.0	$	694.6
Employer Contributions	5.0		—		—		—		80.0		—		15.0		—
Actual Return on Pension Plan Assets	309.8		61.7		75.3		32.7		(433.6)		(85.3)		(103.3)		(45.1)
Benefits Paid - Pension	(317.3)		(66.1)		(76.7)		(35.7)		(302.5)		(63.3)		(68.4)		(33.9)
Benefits Paid - Lump Sum	(28.9)		—		(5.3)		(1.0)		(33.0)		—		(14.8)		(1.0)
Employee Transfers	—		2.4		(0.5)		—		—		(3.2)		(5.7)		3.4
Fair Value of Pension Plan Assets as of End of Year	$	5,775.0	$	1,170.0	$	1,411.6	$	614.0	$	5,806.4	$	1,172.0	$	1,418.8	$	618.0
Funded Status as of December 31st	$	536.6	$	121.5	$	304.6	$	51.7	$	586.3	$	142.0	$	308.4	$	61.8

Actuarial (Loss)/Gain: For the year ended December 31, 2023, the actuarial loss was primarily attributable to a decrease in the discount rate, which resulted in an increase to Eversource's Pension and SERP Plans’ projected benefit obligation of $98.9 million. For the year ended December 31, 2022, the actuarial gain was primarily attributable to an increase in the discount rate, which resulted in a decrease to Eversource's Pension and SERP Plans’ projected benefit obligation of $1.48 billion.

As of December 31, 2023 and 2022, the accumulated benefit obligation for the Pension and SERP Plans is as follows:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2023	$	4,936.8	$	977.8	$	1,051.9	$	522.1
2022	4,911.6		960.7		1,055.1		516.9


	PBOP
	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Change in Benefit Obligation:
Benefit Obligation as of Beginning of Year	$	(693.7)	$	(127.9)	$	(189.5)	$	(74.6)	$	(884.3)	$	(165.5)	$	(238.4)	$	(92.3)
Service Cost	(7.6)		(1.3)		(1.2)		(0.7)		(11.6)		(2.0)		(2.0)		(1.1)
Interest Cost	(33.8)		(6.2)		(9.2)		(3.7)		(20.2)		(3.7)		(5.3)		(2.2)
Actuarial Gain/(Loss)	5.0		4.4		(5.8)		0.8		173.6		33.0		39.4		15.2
Benefits Paid	52.7		10.0		16.7		6.1		52.1		10.4		16.6		6.0
Employee Transfers	—		—		0.5		(0.1)		—		(0.1)		0.2		(0.2)
Plan Amendment	1.4		0.4		0.2		0.2		—		—		—		—
Impact of Acquisitions	—		—		—		—		(3.3)		—		—		—
Benefit Obligation as of End of Year	$	(676.0)	$	(120.6)	$	(188.3)	$	(72.0)	$	(693.7)	$	(127.9)	$	(189.5)	$	(74.6)
Change in Plan Assets:
Fair Value of Plan Assets as of Beginning of Year	$	970.1	$	120.6	$	456.1	$	72.3	$	1,138.3	$	145.7	$	530.0	$	88.0
Actual Return on Plan Assets	104.7		12.6		52.3		8.3		(119.6)		(15.0)		(57.0)		(9.8)
Employer Contributions	1.9		—		—		—		3.1		—		—		—
Benefits Paid	(52.3)		(10.0)		(16.7)		(6.1)		(51.7)		(10.4)		(16.6)		(6.0)
Employee Transfers	—		(0.2)		(1.3)		0.2		—		0.3		(0.3)		0.1
Fair Value of Plan Assets as of End of Year	$	1,024.4	$	123.0	$	490.4	$	74.7	$	970.1	$	120.6	$	456.1	$	72.3
Funded Status as of December 31st	$	348.4	$	2.4	$	302.1	$	2.7	$	276.4	$	(7.3)	$	266.6	$	(2.3)

Actuarial Gain/(Loss): For the year ended December 31, 2023, the actuarial gain was primarily attributable to changes to termination, retirement, and dependency rates that were updated as a result of an experience study performed in 2023, updated census data, changes to plan provisions, and other assumption changes, which resulted in a decrease to the Eversource PBOP projected benefit obligation of $17 million. The actuarial gain was partially offset by a decrease in the discount rate, which resulted in an increase to the Eversource PBOP projected benefit obligation of $12 million. For the year ended December 31, 2022, the actuarial gain was primarily attributable to an increase in the discount rate, which resulted in a decrease to the Eversource PBOP projected benefit obligation of $180.1 million.

A reconciliation of the prepaid assets and liabilities within the Eversource Pension, SERP and PBOP Plans’ funded status to the balance sheets is as follows:


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Prepaid Pension	$	672.2	$	127.4	$	306.5	$	56.3	$	756.7	$	147.9	$	310.2	$	66.4
Prepaid PBOP	356.0		2.4		302.1		2.7		288.8		—		266.6		—
Prepaid Pension and PBOP	$	1,028.2	$	129.8	$	608.6	$	59.0	$	1,045.5	$	147.9	$	576.8	$	66.4

Accrued Pension	$	—	$	—	$	—	$	—	$	3.7	$	—	$	—	$	—
Accrued SERP	135.6		5.9		1.9		4.6		166.7		5.9		1.8		4.6
Accrued PBOP	7.6		—		—		—		12.4		7.3		—		2.3
Less: Accrued SERP - current portion	(19.4)		(0.3)		(0.2)		(0.4)		(47.3)		(0.3)		(0.2)		(0.4)
Accrued Pension, SERP and PBOP	$	123.8	$	5.6	$	1.7	$	4.2	$	135.5	$	12.9	$	1.6	$	6.5

The following actuarial assumptions were used in calculating the Pension, SERP and PBOP Plans' year end funded status:


	Pension and SERP							PBOP
	As of December 31,							As of December 31,
		2023			2022			2023			2022
Discount Rate		4.9%	—	5.0%	5.1%	—	5.2%	5.0%	—	5.2%	5.2%
Compensation/Progression Rate		3.5%	—	4.0%	3.5%	—	4.0%	N/A

For the Eversource Service PBOP Plan, the health care cost trend rate is not applicable. For the Aquarion PBOP Plan, the health care cost trend rate for pre-65 retirees is 6.75 percent, with an ultimate rate of 5 percent in 2031, and for post-65 retirees, the health care trend rate and ultimate rate is 3.5 percent.

Expense: Eversource charges net periodic benefit plan expense/(income) for the Pension, SERP and PBOP Plans to its subsidiaries based on the actual participant demographic data for each subsidiary's participants. The actual investment return in the trust is allocated to each of the subsidiaries annually in proportion to the investment return expected to be earned during the year. The Company utilizes the spot rate methodology to estimate the discount rate for the service and interest cost components of benefit expense, which provides a relatively precise measurement by matching projected cash flows to the corresponding spot rates on the yield curve.

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


	Pension and SERP								PBOP
	For the Year Ended December 31, 2023								For the Year Ended December 31, 2023
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	43.1	$	12.3	$	7.8	$	4.3	$	7.6	$	1.3	$	1.2	$	0.7
Interest Cost	254.0		50.5		53.9		27.3		33.8		6.2		9.2		3.7
Expected Return on Plan Assets	(465.0)		(94.2)		(113.8)		(49.5)		(77.1)		(9.4)		(36.9)		(5.5)
Actuarial Loss	45.8		2.5		17.1		1.5		—		—		—		—
Prior Service Cost/(Credit)	1.3		—		0.3		—		(21.6)		1.1		(17.0)		0.4
Settlement Loss	12.4		—		—		—		—		—		—		—
Total Net Periodic Benefit Plan Income	$	(108.4)	$	(28.9)	$	(34.7)	$	(16.4)	$	(57.3)	$	(0.8)	$	(43.5)	$	(0.7)
Intercompany Income Allocations	N/A		$	(4.0)	$	(3.0)	$	(0.8)	N/A		$	(1.9)	$	(2.1)	$	(0.7)


	Pension and SERP								PBOP
	For the Year Ended December 31, 2022								For the Year Ended December 31, 2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	70.1	$	18.7	$	13.8	$	6.9	$	11.6	$	2.0	$	2.0	$	1.1
Interest Cost	154.5		31.3		32.8		16.9		20.2		3.7		5.3		2.2
Expected Return on Plan Assets	(523.6)		(106.3)		(128.4)		(56.1)		(89.9)		(11.4)		(42.4)		(6.7)
Actuarial Loss	116.0		16.2		32.8		7.9		—		—		—		—
Prior Service Cost/(Credit)	1.4		—		0.3		—		(21.7)		1.1		(17.0)		0.4
Total Net Periodic Benefit Plan Income	$	(181.6)	$	(40.1)	$	(48.7)	$	(24.4)	$	(79.8)	$	(4.6)	$	(52.1)	$	(3.0)
Intercompany Income Allocations	N/A		$	(16.0)	$	(12.4)	$	(3.6)	N/A		$	(3.7)	$	(3.6)	$	(1.2)


	Pension and SERP								PBOP
	For the Year Ended December 31, 2021								For the Year Ended December 31, 2021
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Service Cost	$	85.8	$	23.0	$	15.8	$	8.9	$	13.5	$	2.3	$	2.4	$	1.2
Interest Cost	130.0		27.3		26.8		14.5		17.4		3.2		4.4		1.8
Expected Return on Plan Assets	(437.5)		(86.8)		(108.1)		(47.5)		(79.1)		(10.3)		(36.9)		(6.1)
Actuarial Loss	243.9		45.5		61.6		20.7		8.9		1.8		2.4		0.7
Prior Service Cost/(Credit)	1.4		—		0.3		—		(21.2)		1.1		(17.0)		0.4
Total Net Periodic Benefit Plan Expense/(Income)	$	23.6	$	9.0	$	(3.6)	$	(3.4)	$	(60.5)	$	(1.9)	$	(44.7)	$	(2.0)
Intercompany Expense/(Income) Allocations	N/A		$	8.0	$	8.8	$	2.7	N/A		$	(1.6)	$	(1.9)	$	(0.6)

The following actuarial assumptions were used to calculate Pension, SERP and PBOP expense amounts:


	Pension and SERP									PBOP
	For the Years Ended December 31,									For the Years Ended December 31,
	2023			2022			2021			2023			2022			2021
Discount Rate	4.9%	—	5.3%	2.2%	—	3.2%	1.5%	—	3.0%	5.1%	—	5.4%	2.3%	—	3.3%	1.8%	—	3.1%
Expected Long-Term Rate of Return	8.25%			8.25%			8.25%			8.25%			8.25%			8.25%
Compensation/Progression Rate	3.5%	—	4.0%	3.5%	—	4.0%	3.5%	—	4.0%	N/A			N/A			N/A

For the Aquarion Pension Plan, the expected long-term rate of return was 7.94 percent and 7 percent for the years ended December 31, 2023 and 2022, respectively. For the Aquarion PBOP Plan the expected long-term rate of return was 7 percent for the years ended December 31, 2023 and 2022 and the health care cost trend rate was a range of 3.5 percent to 7 percent for the year ended December 31, 2023 and 3.5 percent to 6.5 percent for the year ended December 31, 2022.

Regulatory Assets and Accumulated Other Comprehensive Income/(Loss) Amounts: The Pension, SERP and PBOP Plans cover eligible employees, including, among others, employees of the regulated companies. The regulated companies record actuarial losses and gains and prior service costs and credits arising at the December 31st remeasurement date of the funded status of the benefit plans as a regulatory asset or regulatory liability in lieu of a charge to Accumulated Other Comprehensive Income/(Loss), reflecting ultimate recovery from customers through rates. Regulatory accounting is also applied to the portions of the Eversource Service retiree benefit costs that support the regulated companies, as these costs are also recovered from customers. Adjustments to the Pension, SERP and PBOP Plans' funded status for the unregulated companies are recorded on an after-tax basis to Accumulated Other Comprehensive Income/(Loss). For further information, see Note 2, "Regulatory Accounting," and Note 16, "Accumulated Other Comprehensive Income/(Loss)," to the financial statements.

The following is a summary of the changes in plan assets and benefit obligations recognized in Regulatory Assets and Other Comprehensive Income (OCI) as well as amounts in Regulatory Assets and OCI that were reclassified as net periodic benefit expense during the years presented:


	Pension and SERP								PBOP
	Regulatory Assets				OCI				Regulatory Assets				OCI
	For the Years Ended December 31,								For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2023		2022		2023		2022		2023		2022
Actuarial (Gain)/Loss Arising During the Year	$	251.1	$	(431.6)	$	14.0	$	4.6	$	(32.0)	$	36.8	$	(0.3)	$	(0.8)
Actuarial Loss Reclassified as Net Periodic Benefit Expense	(38.8)		(107.0)		(7.0)		(9.0)		—		—		—		—
Settlement Loss	—		—		(12.4)		—		—		—		—		—
Prior Service Credit Arising During the Year	—		—		—		—		(0.9)		—		—		—
Prior Service (Cost)/Credit Reclassified as Net Periodic Benefit (Expense)/Income	(1.2)		(1.2)		(0.1)		(0.2)		21.8		21.8		(0.2)		(0.1)

The following is a summary of the remaining Regulatory Assets and Accumulated Other Comprehensive Income amounts that have not been recognized as components of net periodic benefit expense as of December 31, 2023 and 2022:


	Regulatory Assets as of December 31,				AOCI as of December 31,
(Millions of Dollars)	2023		2022		2023		2022
Pension and SERP
Actuarial Loss	$	1,101.0	$	888.7	$	56.5	$	61.9
Prior Service Cost	2.9		4.1		0.3		0.4
PBOP
Actuarial Loss	$	49.8	$	81.8	$	2.4	$	2.7
Prior Service (Credit)/Cost	(87.4)		(108.3)		0.7		0.9

The difference between the actual return and calculated expected return on plan assets for the Pension and PBOP Plans, as well as changes in actuarial assumptions impacting the projected benefit obligation, are recorded as unamortized actuarial gains or losses arising during the year in Regulatory Assets or Accumulated Other Comprehensive Income/(Loss). Unamortized actuarial gains or losses are amortized as a component of pension and PBOP expense over the estimated average future employee service period using the corridor approach.

Estimated Future Benefit Payments: The following benefit payments, which reflect expected future service, are expected to be paid by the Pension, SERP and PBOP Plans:


(Millions of Dollars)	2024		2025		2026		2027		2028		2029 - 2033
Pension and SERP	$	370.2	$	367.1	$	370.8	$	373.8	$	375.0	$	1,864.3
PBOP	55.2		54.7		53.8		52.8		51.8		241.1

Eversource Contributions: Based on the current status of the Pension Plans and federal pension funding requirements, there is no minimum funding requirement for our Eversource Service Pension Plan in 2024 and we do not expect to make pension contributions in 2024. We do not expect to make any contributions to the Eversource Service PBOP Plan in 2024.

Eversource contributed $5.0 million and $1.9 million to the Aquarion Pension and PBOP Plans, respectively, in 2023. Eversource currently estimates contributing $5.0 million and $2.4 million to the Aquarion Pension and PBOP Plans, respectively, in 2024.

Fair Value of Pension and PBOP Plan Assets: Pension and PBOP funds are held in external trusts. Trust assets, including accumulated earnings, must be used exclusively for Pension and PBOP payments. Eversource's investment strategy for its Pension and PBOP Plans is to maximize the long-term rates of return on these plans' assets within an acceptable level of risk. The investment guidelines for each asset category includes a diversification of asset types, fund strategies and fund managers and it establishes target asset allocations that are routinely reviewed and periodically rebalanced. PBOP assets are comprised of assets held in the PBOP Plan trust, as well as specific assets within the Pension Plan trust (401(h) assets). The investment policy and strategy of the 401(h) assets is consistent with that of the defined benefit pension plan. Eversource's expected long-term rates of return on Pension and PBOP Plan assets are based on target asset allocation assumptions and related expected long-term rates of return. In developing its expected long-term rate of return assumptions for the Pension and PBOP Plans, Eversource evaluated input from consultants, as well as long-term inflation assumptions and historical returns. Management has assumed long-term rates of return of 8.25 percent for the Eversource Service Pension Plan assets, the Eversource Service PBOP Plan assets and the Aquarion Pension Plan assets, and a 7 percent long-term rate of return for the Aquarion PBOP Plan, to estimate its 2024 Pension and PBOP costs.

These long-term rates of return are based on the assumed rates of return for the target asset allocations as follows:


	As of December 31,
	2023						2022
	Target Asset Allocation				Assumed Rate of Return		Target Asset Allocation		Assumed Rate of Return
	Eversource Pension Plan		Eversource PBOP Plan		Eversource Pension Plan and PBOP Plan		Eversource Pension Plan and PBOP Plan

Equity Securities:
United States	—	%	20.0	%	8.5	%	15.0	%	8.5	%
Global	20.0	%	—	%	8.75	%	10.0	%	8.75	%
Non-United States	—	%	11.0	%	8.5	%	8.0	%	8.5	%
Emerging Markets	—	%	6.0	%	10.0	%	4.0	%	10.0	%
Debt Securities:
Fixed Income	16.0	%	17.0	%	5.5	%	13.0	%	4.0	%
Public High Yield Fixed Income	5.0	%	—	%	7.5	%	4.0	%	6.5	%
United States Treasuries	11.0	%	—	%	4.5	%	—	%	—	%
Private Debt	10.0	%	13.0	%	10.0	%	13.0	%	9.0	%
Private Equity	23.0	%	18.0	%	12.0	%	18.0	%	12.0	%
Real Assets	15.0	%	15.0	%	7.5	%	15.0	%	7.5	%

The following tables present, by asset category, the Pension and PBOP Plan assets recorded at fair value on a recurring basis by the level in which they are classified within the fair value hierarchy:


	Pension Plan
	Fair Value Measurements as of December 31,
(Millions of Dollars)	2023								2022
Asset Category:	Level 1		Level 2		Uncategorized		Total		Level 1		Level 2		Uncategorized		Total
Equity Securities	$	374.0	$	—	$	853.0	$	1,227.0	$	407.7	$	—	$	1,102.2	$	1,509.9
Fixed Income (1)	354.6		340.9		1,516.4		2,211.9		277.1		78.5		1,598.8		1,954.4
Private Equity	—		—		1,685.3		1,685.3		—		—		1,684.9		1,684.9
Real Assets	173.6		—		722.1		895.7		181.8		—		731.0		912.8
Total	$	902.2	$	340.9	$	4,776.8	$	6,019.9	$	866.6	$	78.5	$	5,116.9	$	6,062.0
Less: 401(h) PBOP Assets (2)							(244.9)								(255.6)
Total Pension Assets							$	5,775.0							$	5,806.4


	PBOP Plan
	Fair Value Measurements as of December 31,
(Millions of Dollars)	2023								2022
Asset Category:	Level 1		Level 2		Uncategorized		Total		Level 1		Level 2		Uncategorized		Total
Equity Securities	$	139.1	$	—	$	212.1	$	351.2	$	153.2	$	—	$	183.5	$	336.7
Fixed Income	33.4		43.0		159.8		236.2		18.2		40.2		141.1		199.5
Private Equity	—		—		87.7		87.7		—		—		70.9		70.9
Real Assets	70.5		—		33.9		104.4		71.2		—		36.2		107.4
Total	$	243.0	$	43.0	$	493.5	$	779.5	$	242.6	$	40.2	$	431.7	$	714.5
Add: 401(h) PBOP Assets (2)							244.9								255.6
Total PBOP Assets							$	1,024.4							$	970.1

(1) Fixed Income investments classified as Level 1 as of December 31, 2023 and 2022 include pending purchases and pending redemption settlements of $31 million and $138 million, respectively.

(2) The assets of the Pension Plan include a 401(h) account that has been allocated to provide health and welfare postretirement benefits under the PBOP Plan.

The Company values assets based on observable inputs when available. Equity securities, exchange traded funds and futures contracts classified as Level 1 in the fair value hierarchy are priced based on the closing price on the primary exchange as of the balance sheet date.

Fixed income securities, such as government issued securities and corporate bonds, are included in Level 2 and are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The pricing models utilize observable inputs such as recent trades

for the same or similar instruments, yield curves, discount margins and bond structures. Swaps are valued using pricing models that incorporate interest rates and equity and fixed income index closing prices to determine a net present value of the cash flows.

Certain investments, such as commingled funds, private equity investments, fixed income funds, real asset funds and hedge funds are valued using the net asset value (NAV) as a practical expedient. Assets valued at NAV are uncategorized in the fair value hierarchy. These investments are structured as investment companies offering shares or units to multiple investors for the purpose of providing a return. Commingled funds are recorded at NAV provided by the asset manager, which is based on the market prices of the underlying equity securities. Private Equity investments, Fixed Income partnership funds and Real Assets are valued using the NAV provided by the partnerships, which are based on discounted cash flows of the underlying investments, real estate appraisals or public market comparables of the underlying investments, or the NAV of underlying assets held in hedge funds. Equity Securities investments in United States, Global, Non-United States and Emerging Markets that are uncategorized include investments in commingled funds and hedge funds that are overlaid with equity index swaps and futures contracts. Fixed Income investments that are uncategorized include investments in commingled funds, fixed income funds that invest in a variety of opportunistic credit and private debt strategies, and hedge funds that are overlaid with fixed income futures.

B. Defined Contribution Plans

Eversource maintains defined contribution plans on behalf of eligible participants. The Eversource 401k Plan provides for employee and employer contributions up to statutory limits. For eligible employees, the Eversource 401k Plan provides employer matching contributions of either 100 percent up to a maximum of three percent of eligible compensation or 50 percent up to a maximum of eight percent of eligible compensation. The Eversource 401k Plan also contains a K-Vantage feature for the benefit of eligible participants, which provides an additional annual employer contribution based on age and years of service. K-Vantage participants are not eligible to actively participate in the Eversource Pension Plan.

The total Eversource 401k Plan employer matching contributions, including the K-Vantage contributions, were as follows:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
2023	$	67.3	$	9.0	$	13.7	$	5.4
2022	59.9		7.7		12.8		4.8
2021	55.5		7.0		12.2		4.3

C. Share-Based Payments

Share-based compensation awards are recorded using a fair-value based method at the date of grant. Eversource, CL&P, NSTAR Electric and PSNH record compensation expense related to these awards, as applicable, for shares issued to their respective employees and officers, as well as for the allocation of costs associated with shares issued to Eversource's service company employees and officers that support CL&P, NSTAR Electric and PSNH.

Eversource Incentive Plans: Eversource maintains long-term equity-based incentive plans in which Eversource, CL&P, NSTAR Electric and PSNH employees, officers and board members are eligible to participate. The incentive plans authorize Eversource to grant up to 7,400,000 new shares for various types of awards, including RSUs and performance shares, to eligible employees, officers, and board members. As of December 31, 2023 and 2022, Eversource had 4,587,376 and 903,183 common shares, respectively, available for issuance under these plans.

Eversource accounts for its various share-based plans as follows:

RSUs - Eversource records compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period based upon the fair value of Eversource's common shares at the date of grant. The par value of RSUs is reclassified to Common Stock from Capital Surplus, Paid In as RSUs become issued as common shares.
Performance Shares - Eversource records compensation expense, net of estimated forfeitures, over the requisite service period. Performance shares vest based upon the extent to which Company goals are achieved. Vesting of outstanding performance shares is based upon the Company's EPS growth over the requisite service period and level of payout is determined based on the total shareholder return as compared to the Edison Electric Institute (EEI) Index during the requisite service period. The fair value of performance shares is determined at the date of grant using a lattice model. Compensation expense is subject to volatility until payout is established.

RSUs: Eversource granted RSUs under the annual long-term incentive programs that are subject to three-year graded vesting schedules for employees, and one-year graded vesting schedules, or immediate vesting, for board members. RSUs are paid in shares, reduced by amounts sufficient to satisfy withholdings for income taxes, subsequent to vesting. A summary of RSU transactions is as follows:


	RSUs (Units)	Weighted Average Grant-Date Fair Value
Outstanding as of December 31, 2022	629,734	$	68.52
Granted	248,124	$	76.42
Shares Issued	(181,409)	$	87.09
Forfeited	(24,207)	$	83.43
Outstanding as of December 31, 2023	672,242	$	65.89

The weighted average grant-date fair value of RSUs granted for the years ended December 31, 2023, 2022 and 2021 was $76.42, $85.96 and $81.89, respectively. As of December 31, 2023 and 2022, the number and weighted average grant-date fair value of unvested RSUs was 326,581

and $80.76 per share, and 300,592 and $87.21 per share, respectively. During 2023, there were 199,145 RSUs at a weighted average grant-date fair value of $86.92 per share that vested during the year and were either paid or deferred. As of December 31, 2023, 345,661 RSUs were fully vested and deferred and an additional 310,252 are expected to vest.

Performance Shares: Eversource granted performance shares under the annual long-term incentive programs that vest based upon the extent to which Company goals are achieved at the end of three-year performance measurement periods. Performance shares are paid in shares, after the performance measurement period. A summary of performance share transactions is as follows:


	Performance Shares (Units)	Weighted Average Grant-Date Fair Value
Outstanding as of December 31, 2022	547,290	$	87.49
Granted	278,983	$	83.39
Shares Issued	(125,677)	$	90.49
Forfeited	(36,172)	$	85.13
Outstanding as of December 31, 2023	664,424	$	85.33

The weighted average grant-date fair value of performance shares granted for the years ended December 31, 2023, 2022 and 2021 was $83.39, $83.34 and $76.08, respectively. As of December 31, 2023 and 2022, the number and weighted average grant-date fair value of unvested performance shares was 485,480 and $85.20 per share, and 457,069 and $88.43 per share, respectively. During 2023, there were 214,742 performance shares at a weighted average grant-date fair value of $89.70 per share that vested during the year and were either paid or deferred. As of December 31, 2023, 178,944 performance shares were fully vested and deferred.

Compensation Expense: The total compensation expense and associated future income tax benefits recognized by Eversource, CL&P, NSTAR Electric and PSNH for share-based compensation awards were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Compensation Expense	$	27.8	$	33.4	$	28.2
Future Income Tax Benefit	7.3		8.7		7.3


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Compensation Expense	$	8.7	$	8.7	$	3.0	$	10.0	$	10.7	$	3.6	$	8.8	$	9.0	$	3.0
Future Income Tax Benefit	2.3		2.3		0.8		2.6		2.8		0.9		2.3		2.3		0.8

As of December 31, 2023, there was $31.3 million of total unrecognized compensation expense related to nonvested share-based awards for Eversource, including $5.8 million for CL&P, $8.6 million for NSTAR Electric, and $1.9 million for PSNH. This cost is expected to be recognized ratably over a weighted-average period of 1.81 years for Eversource, CL&P, NSTAR Electric and PSNH.

An income tax rate of 26 percent was used to estimate the tax effect on total share-based payments determined under the fair-value based method for all awards. The Company issues treasury shares to settle fully vested RSUs and performance shares under the Company's incentive plans.

For the year ended December 31, 2023, a tax deficiency associated with the distribution of stock compensation awards increased income tax expense by $0.5 million, which decreased cash flows from operating activities on the statements of cash flows. For the years ended December 31, 2022 and 2021, excess tax benefits associated with the distribution of stock compensation awards reduced income tax expense by $2.1 million and $4.0 million, respectively, which increased cash flows from operating activities on the statements of cash flows.

D. Other Retirement Benefits

Eversource provides retirement and other benefits for certain current and past company officers. These benefits are accounted for on an accrual basis and expensed over a period equal to the service lives of the employees. The actuarially-determined liability for these benefits is included in Other Current and Long-Term Liabilities on the balance sheets. The related expense, which includes the allocation of expense associated with Eversource's service company officers that support CL&P, NSTAR Electric and PSNH, is included in Operations and Maintenance Expense on the income statements. The liability and expense amounts are as follows:


Eversource (Millions of Dollars)	As of and For the Years Ended December 31,
2023			2022			2021
Actuarially-Determined Liability	$	32.6		$	43.4		$	42.8
Other Retirement Benefits Expense (1)	2.6			10.9			2.2


	As of and For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Actuarially-Determined Liability	$	0.2	$	—	$	1.1	$	0.2	$	0.1	$	1.3	$	0.2	$	0.1	$	1.5
Other Retirement Benefits Expense (1)	0.8		0.8		0.4		4.0		3.7		1.3		0.7		0.7		0.3

(1) Other Retirement Benefits Expense in 2022 includes a one-time special retirement benefit payable of $9.2 million, which was paid in 2023.

12. INCOME TAXES

The components of income tax expense are as follows:


Eversource (Millions of Dollars)	For the Years Ended December 31,
2023			2022			2021
Current Income Taxes:
Federal	$	75.8		$	95.8		$	21.5
State	0.6			13.6			(21.6)
Total Current	76.4			109.4			(0.1)
Deferred Income Taxes, Net:
Federal	(0.9)			198.8			199.7
State	86.3			148.0			147.4
Total Deferred	85.4			346.8			347.1
Investment Tax Credits, Net	(2.1)			(2.6)			(2.8)
Income Tax Expense	$	159.7		$	453.6		$	344.2


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Current Income Taxes:
Federal	$	(10.8)	$	50.7	$	(40.0)	$	106.2	$	55.0	$	29.6	$	15.0	$	52.3	$	43.1
State	(2.3)		7.8		(20.0)		20.1		8.7		5.9		(7.0)		6.2		10.8
Total Current	(13.1)		58.5		(60.0)		126.3		63.7		35.5		8.0		58.5		53.9
Deferred Income Taxes, Net:
Federal	130.3		50.1		81.2		17.2		35.6		5.9		76.3		16.3		(14.9)
State	53.7		46.1		37.8		28.2		42.4		9.9		47.6		41.2		0.4
Total Deferred	184.0		96.2		119.0		45.4		78.0		15.8		123.9		57.5		(14.5)
Investment Tax Credits, Net	—		(1.7)		—		(0.5)		(1.7)		—		(0.6)		(1.7)		—
Income Tax Expense	$	170.9	$	153.0	$	59.0	$	171.2	$	140.0	$	51.3	$	131.3	$	114.3	$	39.4

A reconciliation between income tax expense and the expected tax expense at the statutory rate is as follows:


Eversource (Millions of Dollars, except percentages)	For the Years Ended December 31,
2023				2022				2021
(Loss)/Income Before Income Tax Expense	$	(275.0)			$	1,866.0			$	1,572.3

Statutory Federal Income Tax Expense at 21%	(57.7)				391.9				330.2
Tax Effect of Differences:
Depreciation	(25.8)				(17.1)				(18.1)
Investment Tax Credit Amortization	(2.1)				(2.6)				(2.8)
State Income Taxes, Net of Federal Impact	(11.4)				75.9				54.4
Dividends on ESOP	(5.3)				(5.1)				(5.1)
Tax Asset Valuation Allowance/Reserve Adjustments	295.8				51.6				44.6
Tax Deficiency/(Excess Stock Benefit)	0.5				(2.1)				(4.0)
EDIT Amortization	(51.5)				(49.1)				(69.1)
Other, Net	17.2				10.2				14.1
Income Tax Expense	$	159.7			$	453.6			$	344.2
Effective Tax Rate	(58.1)		%		24.3		%		21.9		%


	For the Years Ended December 31,
	2023									2022									2021
(Millions of Dollars, except percentages)	CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH			CL&P			NSTAR Electric			PSNH
Income Before Income Tax Expense	$	689.6		$	697.5		$	254.7		$	704.1		$	632.4		$	222.9		$	533.0		$	590.9		$	189.8

Statutory Federal Income Tax Expense at 21%	144.9			146.5			53.5			147.9			132.8			46.8			111.9			124.1			39.9
Tax Effect of Differences:
Depreciation	(5.6)			(8.8)			(1.0)			(3.7)			(4.2)			0.9			(6.4)			(3.4)			(0.2)
Investment Tax Credit Amortization	—			(1.7)			—			(0.5)			(1.7)			—			(0.6)			(1.7)			—
State Income Taxes, Net of Federal Impact	(10.7)			42.5			14.1			(6.6)			40.3			12.5			(4.6)			37.5			8.9
Tax Asset Valuation Allowance/Reserve Adjustments	51.3			—			—			44.7			—			—			36.7			—			—
Tax Deficiency/(Excess Stock Benefit)	0.2			0.2			0.1			(0.7)			(0.8)			(0.3)			(1.5)			(1.4)			(0.5)
EDIT Amortization	(10.5)			(28.4)			(6.8)			(9.2)			(29.2)			(7.7)			(9.8)			(43.2)			(10.5)
Other, Net	1.3			2.7			(0.9)			(0.7)			2.8			(0.9)			5.6			2.4			1.8
Income Tax Expense	$	170.9		$	153.0		$	59.0		$	171.2		$	140.0		$	51.3		$	131.3		$	114.3		$	39.4
Effective Tax Rate	24.8		%	21.9		%	23.2		%	24.3		%	22.1		%	23.0		%	24.6		%	19.3		%	20.8		%

Eversource, CL&P, NSTAR Electric and PSNH file a consolidated federal income tax return and unitary, combined and separate state income tax returns. These entities are also parties to a tax allocation agreement under which taxable subsidiaries do not pay any more taxes than they would have otherwise paid had they filed a separate company tax return, and subsidiaries generating tax losses, if any, are paid for their losses when utilized.

Deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The tax effect of temporary differences is accounted for in accordance with the rate-making treatment of the applicable regulatory commissions and relevant accounting authoritative literature. The tax effects of temporary differences that give rise to the net accumulated deferred income tax obligations are as follows:


	As of December 31,
	2023								2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Deferred Tax Assets:
Employee Benefits	$	244.5	$	29.9	$	66.8	$	13.0	$	228.9	$	25.3	$	57.4	$	11.6
Derivative Liabilities	33.0		33.0		—		—		53.8		53.8		—		—
Regulatory Deferrals - Liabilities	452.0		94.4		291.5		23.8		529.5		146.6		285.7		42.1
Allowance for Uncollectible Accounts	143.8		79.6		21.5		3.9		125.5		60.5		20.7		7.9
Tax Effect - Tax Regulatory Liabilities	739.0		320.7		227.1		95.5		762.9		324.6		241.8		97.8
Net Operating Loss Carryforwards	13.8		—		—		—		16.7		—		—		—
Purchase Accounting Adjustment	56.7		—		—		—		62.0		—		—		—
Equity Method Wind Investments	584.9		—		—		—		—		—		—		—
Other	200.1		125.3		25.0		23.4		176.6		109.5		20.5		21.3
Total Deferred Tax Assets	2,467.8		682.9		631.9		159.6		1,955.9		720.3		626.1		180.7
Less: Valuation Allowance (1)	328.1		80.6		—		—		82.8		63.3		—		—
Net Deferred Tax Assets	$	2,139.7	$	602.3	$	631.9	$	159.6	$	1,873.1	$	657.0	$	626.1	$	180.7
Deferred Tax Liabilities:
Accelerated Depreciation and Other Plant-Related Differences	$	5,103.3	$	1,703.4	$	1,728.6	$	566.5	$	4,793.7	$	1,602.0	$	1,643.7	$	523.8
Property Tax Accruals	95.0		42.0		39.8		6.3		95.3		40.7		41.3		6.7
Regulatory Amounts:
Regulatory Deferrals - Assets	1,512.3		470.0		474.5		250.3		1,251.9		406.4		407.9		165.2
Tax Effect - Tax Regulatory Assets	284.0		191.9		10.5		8.3		271.7		185.6		10.7		7.9
Goodwill-related Regulatory Asset - 1999 Merger	72.2		—		61.9		—		76.8		—		65.9		—
Employee Benefits	282.0		38.8		146.7		16.8		305.5		45.0		140.8		18.7
Derivative Assets	6.4		6.4		—		—		10.5		10.5		—		—
Other	88.2		9.9		19.5		2.9		135.6		6.8		16.7		21.2
Total Deferred Tax Liabilities	$	7,443.4	$	2,462.4	$	2,481.5	$	851.1	$	6,941.0	$	2,297.0	$	2,327.0	$	743.5

(1) As of December 31, 2023, the Eversource Valuation Allowance of $328.1 million includes $224.0 million related to the impairment of Eversource’s offshore wind investments.

2022 Federal Legislation: On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law. This is a broad package of legislation that includes incentives and support for clean energy resource development. Most notable for Eversource, the investment tax credit (ITC) on offshore wind projects increases from 30 percent to 40 percent if certain requirements for labor and domestic content are met. The act also re-establishes the production tax credit for solar and wind energy projects, gives increased credit for projects in certain communities, and sets credits for qualifying clean energy generation and energy storage projects. The tax provisions of the IRA provide additional incentives for offshore wind projects and could reduce retail electricity costs for our customers related to those clean energy investments. The IRA includes other tax provisions focused on implementing a 15 percent minimum tax on adjusted financial statement income and a one percent excise tax on corporate share repurchases. The Department of Treasury and the Internal Revenue Service issued some guidance during 2023; however, they are expected to issue additional needed guidance with respect to the application of the newly enacted IRA provisions in the future. We will continue to monitor and evaluate impacts on our consolidated financial statements. We currently do not expect the alternative minimum tax change to have a material impact on our earnings, financial condition or cash flows.

Carryforwards: The following table provides the amounts and expiration dates of state tax credit and loss carryforwards and federal tax credit and net operating loss carryforwards:


	As of December 31,
	2023									2022
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range	Eversource		CL&P		NSTAR Electric		PSNH		Expiration Range

State Net Operating Loss	$	243.4	$	—	$	—	$	—	2023 - 2041	$	288.1	$	—	$	—	$	—	2022 - 2041
State Tax Credit	228.5		157.5		—		—		2023 - 2028	204.5		137.7		—		—		2022 - 2027
State Charitable Contribution	7.9		—		—		—		2023 - 2027	20.1		—		—		—		2022 - 2026

In 2023, the Company increased its valuation allowance reserve for state credits by $21.3 million ($17.3 million for CL&P), net of tax, to reflect an update for expiring tax credits. In 2022, the Company increased its valuation allowance reserve for state credits by $21.3 million ($18.8 million for CL&P), net of tax, to reflect an update for expiring tax credits.

For 2023, state credit and state loss carryforwards have been partially reserved by a valuation allowance of $104.1 million (net of tax) and for 2022, state credit and state loss carryforwards were partially reserved by a valuation allowance of $82.8 million (net of tax).

Unrecognized Tax Benefits: A reconciliation of the activity in unrecognized tax benefits, all of which would impact the effective tax rate if recognized, is as follows:


(Millions of Dollars)	Eversource		CL&P
Balance as of January 1, 2021	$	61.8	$	25.8
Gross Increases - Current Year	11.3		3.8
Gross Decreases - Prior Year	(0.3)		(0.6)
Lapse of Statute of Limitations	(7.0)		(2.8)
Balance as of December 31, 2021	65.8		26.2
Gross Increases - Current Year	11.5		3.5
Gross Decreases - Prior Year	(2.4)		(0.9)
Lapse of Statute of Limitations	(7.8)		(3.3)
Balance as of December 31, 2022	67.1		25.5
Gross Increases - Current Year	23.4		4.0
Gross Increases - Prior Year	0.1		0.1
Gross Decreases - Prior Year	(0.1)		—
Lapse of Statute of Limitations	(9.2)		(3.8)
Balance as of December 31, 2023	$	81.3	$	25.8

Interest and Penalties: Interest on uncertain tax positions is recorded and generally classified as a component of Other Interest Expense on the statements of income. However, when resolution of uncertainties results in the Company receiving interest income, any related interest benefit is recorded in Other Income, Net on the statements of income. No penalties have been recorded. The amount of interest expense recognized on uncertain tax positions was $0.3 million for the year ended December 31, 2023. There was no interest expense/(income) recognized on uncertain tax positions for the years ended December 31, 2022 or 2021. Accrued interest payable was $0.4 million and $0.1 million as of December 31, 2023 and 2022, respectively.

Tax Positions: During 2023 and 2022, Eversource did not resolve any of its uncertain tax positions.

Open Tax Years: The following table summarizes Eversource, CL&P, NSTAR Electric, and PSNH's tax years that remain subject to examination by major tax jurisdictions as of December 31, 2023:


Description			Tax Years
Federal			2023
Connecticut			2020 - 2023
Massachusetts			2020 - 2023
New Hampshire			2020 - 2023

Eversource does not estimate to have an earnings impact related to unrecognized tax benefits during the next twelve months.

13. COMMITMENTS AND CONTINGENCIES

A. Environmental Matters

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

Environmental reserves are accrued when assessments indicate it is probable that a liability has been incurred and an amount can be reasonably estimated. The approach used estimates the liability based on the most likely action plan from a variety of available remediation options, including no action required or several different remedies ranging from establishing institutional controls to full site remediation and monitoring. These liabilities are estimated on an undiscounted basis and do not assume that the amounts are recoverable from insurance companies or other third parties. The environmental reserves include sites at different stages of discovery and remediation and do not include any unasserted claims.

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

The amounts recorded as environmental reserves are included in Other Current Liabilities and Other Long-Term Liabilities on the balance sheets and represent management's best estimate of the liability for environmental costs, and take into consideration site assessment, remediation and long-term monitoring costs. The environmental reserves also take into account recurring costs of managing hazardous substances and pollutants, mandated expenditures to remediate contaminated sites and any other infrequent and non-recurring clean-up costs. A reconciliation of the activity in the environmental reserves is as follows:


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
Balance as of January 1, 2022	$	115.4	$	13.9	$	3.3	$	6.3
Additions	12.6		0.9		0.4		0.5
Payments/Reductions	(5.4)		(0.9)		(0.3)		(0.7)
Balance as of December 31, 2022	122.6		13.9		3.4		6.1
Additions	16.8		2.6		2.5		1.7
Payments/Reductions	(11.2)		(2.7)		(0.5)		(0.2)
Balance as of December 31, 2023	$	128.2	$	13.8	$	5.4	$	7.6

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


	Eversource	CL&P	NSTAR Electric	PSNH
2023	65	16	12	8
2022	59	13	10	8

The increase in the reserve balance was due primarily to the addition of one environmental site at NSTAR Gas, two additional sites at NSTAR Electric, three additional sites at CL&P, and changes in cost estimates at certain MGP sites at our natural gas companies and PSNH for which additional remediation will be required.

Included in the number of sites and reserve amounts above are former MGP sites that were operated several decades ago and manufactured natural gas from coal and other processes, which resulted in certain by-products remaining in the environment that may pose a potential risk to human health and the environment, for which Eversource may have potential liability. The reserve balances related to these former MGP sites were $117.1 million and $112.6 million as of December 31, 2023 and 2022, respectively, and related primarily to the natural gas business segment.

As of December 31, 2023, for 19 environmental sites (11 for CL&P and 1 for NSTAR Electric) that are included in the Company's reserve for environmental costs, management cannot reasonably estimate the exposure to loss in excess of the reserve, or range of loss, as these sites are under investigation and/or there is significant uncertainty as to what remedial actions, if any, the Company may be required to undertake. As of December 31, 2023, $39.9 million (including $12.6 million for CL&P and $0.3 million for NSTAR Electric) had been accrued as a liability for these sites.

As of December 31, 2023, for 7 environmental sites (1 for CL&P) that are included in the Company's reserve for environmental costs, the information known and the nature of the remediation options allow for the Company to estimate the range of losses for environmental costs. As of December 31, 2023, $29.4 million (including $0.4 million for CL&P) has been accrued as a liability for these sites, which represents the low end of the range of the liabilities for environmental costs. Management believes that additional losses of up to approximately $17.7 million ($0.5 million at CL&P) may be incurred in executing current remediation plans for these sites.

As of December 31, 2023, for the remaining 39 environmental sites (including 4 for CL&P, 11 for NSTAR Electric and 8 for PSNH) that are included in the Company's reserve for environmental costs, the $58.9 million accrual (including $0.8 million for CL&P, $5.1 million for NSTAR Electric and $7.6 million for PSNH) represents management's best estimate of the probable liability and no additional loss is estimable at this time.

PSNH, NSTAR Gas, EGMA and Yankee Gas have rate recovery mechanisms for MGP related environmental costs, therefore, changes in their respective environmental reserves do not impact Net Income. CL&P is allowed to defer certain environmental costs for future recovery. NSTAR Electric does not have a separate environmental cost recovery regulatory mechanism.

B. Long-Term Contractual Arrangements

Estimated Future Annual Costs: The estimated future annual costs of significant executed, non-cancelable, long-term contractual arrangements in effect as of December 31, 2023 are as follows:


Eversource
(Millions of Dollars)	2024		2025		2026		2027		2028		Thereafter		Total
Renewable Energy Purchase Contracts	$	769.4	$	863.0	$	867.9	$	897.6	$	893.1	$	5,368.8	$	9,659.8
Natural Gas Procurement	423.2		402.3		317.8		264.8		236.0		1,211.8		2,855.9
Purchased Power and Capacity	86.7		75.2		2.9		2.7		2.7		4.5		174.7
Peaker CfDs	17.2		14.1		12.8		9.1		6.8		43.7		103.7
Transmission Support Commitments	19.3		22.2		27.4		31.1		31.1		31.1		162.2
Total	$	1,315.8	$	1,376.8	$	1,228.8	$	1,205.3	$	1,169.7	$	6,659.9	$	12,956.3


CL&P
(Millions of Dollars)	2024		2025		2026		2027		2028		Thereafter		Total
Renewable Energy Purchase Contracts	$	618.8	$	628.3	$	628.0	$	631.2	$	632.2	$	2,087.8	$	5,226.3
Purchased Power and Capacity	83.8		72.4		0.1		—		—		—		156.3
Peaker CfDs	17.2		14.1		12.8		9.1		6.8		43.7		103.7
Transmission Support Commitments	7.6		8.8		10.8		12.3		12.3		12.3		64.1
Total	$	727.4	$	723.6	$	651.7	$	652.6	$	651.3	$	2,143.8	$	5,550.4


NSTAR Electric
(Millions of Dollars)	2024		2025		2026		2027		2028		Thereafter		Total
Renewable Energy Purchase Contracts	$	123.0	$	202.9	$	206.5	$	209.3	$	205.1	$	2,983.5	$	3,930.3
Purchased Power and Capacity	2.9		2.8		2.8		2.7		2.7		4.5		18.4
Transmission Support Commitments	7.6		8.7		10.8		12.3		12.3		12.3		64.0
Total	$	133.5	$	214.4	$	220.1	$	224.3	$	220.1	$	3,000.3	$	4,012.7


PSNH
(Millions of Dollars)	2024		2025		2026		2027		2028		Thereafter		Total
Renewable Energy Purchase Contracts	$	27.6	$	31.8	$	33.4	$	57.1	$	55.8	$	297.5	$	503.2

Transmission Support Commitments	4.1		4.7		5.8		6.5		6.5		6.5		34.1
Total	$	31.7	$	36.5	$	39.2	$	63.6	$	62.3	$	304.0	$	537.3

The contractual obligations table above does not include CL&P's, NSTAR Electric's or PSNH's standard/basic service contracts for the purchase of energy supply, the amounts of which vary with customers' energy needs.

Renewable Energy Purchase Contracts: Renewable energy purchase contracts include non-cancellable commitments under contracts of CL&P, NSTAR Electric and PSNH for the purchase of energy and capacity from renewable energy facilities. Such contracts extend through 2044 for CL&P and NSTAR Electric and 2033 for PSNH.

Renewable Energy and Purchase Contracts includes long-term commitments of NSTAR Electric pertaining to the Vineyard Wind LLC contract awarded under the Massachusetts Clean Energy 83C procurement solicitation. NSTAR Electric, along with other Massachusetts distribution companies, entered into 20-year contracts to purchase electricity generated by this 800 megawatt offshore wind project. Construction on the Vineyard Wind project commenced in 2022. Estimated energy costs under this contract are expected to begin when the facilities are in service in 2024 and range between $100 million and $200 million per year under NSTAR Electric’s 20-year contract, totaling approximately $2.6 billion.

As required by 2018 regulation, CL&P and UI each entered into PURA-approved ten-year contracts in 2019 to purchase a combined total of approximately 9 million MWh annually from the Millstone Nuclear Power Station generation facility, which represents a combined amount of approximately 50 percent of the facility's output (approximately 40 percent by CL&P). Also as required by 2018 regulation, CL&P and UI each entered into PURA-approved eight-year contracts in 2019 to purchase a combined amount of approximately 18 percent of the Seabrook Nuclear Power Plant’s output (approximately 15 percent by CL&P) beginning January 1, 2022. The total estimated remaining future cost of the Millstone Nuclear Power Station and Seabrook Nuclear Power Plant energy purchase contracts are $2.4 billion and are reflected in the table above. CL&P sells the energy purchased under these contracts into the market and uses the proceeds from these energy sales to offset the contract costs. As the net costs under these contracts are recovered from customers in future rates, the contracts do not have an impact on the net income of CL&P. These contracts do not meet the definition of a derivative, and accordingly, the costs of these contracts are being accounted for as incurred.

The contractual obligations table above does not include long-term commitments signed by CL&P and NSTAR Electric, as required by the PURA and the DPU, respectively, for the purchase of renewable energy and related products that are contingent on the future construction of energy facilities, such as the long-term commitments of NSTAR Electric pertaining to the Massachusetts Clean Energy 83D contract entered into in 2018.

Natural Gas Procurement: Eversource's natural gas distribution businesses have long-term contracts for the purchase, transportation and storage of natural gas as part of its portfolio of supplies, which extend through 2045.

Purchased Power and Capacity: These contracts include capacity CfDs with generation facilities at CL&P through 2026, and various IPP contracts or purchase obligations for electricity which extend through 2024 for CL&P and 2031 for NSTAR Electric. CL&P's portion of the costs and benefits under these capacity contracts are recovered from, or refunded to, CL&P's customers.

Peaker CfDs: CL&P, along with UI, has three peaker CfDs for a total of approximately 500 MW of peaking capacity through 2042. CL&P has a sharing agreement with UI, whereby CL&P is responsible for 80 percent and UI for 20 percent of the net costs or benefits of these CfDs. The Peaker CfDs pay the generation facility owner the difference between capacity, forward reserve and energy market revenues and a cost-of-service payment stream for 30 years. The ultimate cost or benefit to CL&P under these contracts will depend on the costs of plant operation and the prices that the projects receive for capacity and other products in the ISO-NE markets. CL&P's portion of the amounts paid or received under the Peaker CfDs are recovered from, or refunded to, CL&P's customers.

Transmission Support Commitments: Along with other New England utilities, CL&P, NSTAR Electric and PSNH have entered into agreements to support the costs of, and receive rights to use, transmission and terminal facilities that import electricity from the Hydro-Québec system in Canada. CL&P, NSTAR Electric and PSNH are obligated to pay, over a 20-year period ending in 2040, their proportionate shares of the annual operation and maintenance expenses and capital costs of those facilities.

The total costs incurred under these agreements were as follows:


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Renewable Energy Purchase Contracts	$	581.4	$	678.1	$	609.2
Natural Gas Procurement	695.8		1,042.8		712.7
Purchased Power and Capacity	69.0		61.6		56.4
Peaker CfDs	20.1		13.4		24.3
Transmission Support Commitments	14.2		12.7		15.4


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Renewable Energy Purchase Contracts	$	474.1	$	60.0	$	47.3	$	513.2	$	90.8	$	74.1	$	457.1	$	84.7	$	67.4
Purchased Power and Capacity	65.5		2.9		0.6		57.7		3.0		0.9		53.1		3.0		0.3
Peaker CfDs	20.1		—		—		13.4		—		—		24.3		—		—
Transmission Support Commitments	5.6		5.6		3.0		5.0		5.0		2.7		6.1		6.0		3.3

C. Spent Nuclear Fuel Obligations - Yankee Companies

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

estimates for the respective plants. Management believes CL&P and NSTAR Electric will recover their shares of these obligations from their customers. PSNH has recovered its total share of these costs from its customers.

Spent Nuclear Fuel Litigation:

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

DOE Phase V Damages - On March 25, 2021, each of the Yankee Companies filed a fifth set of lawsuits against the DOE in the Court of Federal Claims resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal covering the years from 2017 to 2020. The Yankee Companies filed claims seeking monetary damages totaling $120.4 million for CYAPC, YAEC and MYAPC. Pursuant to a June 2, 2022 court order, the Yankee Companies were subsequently permitted to include monetary damages relating to the year 2021 in the DOE Phase V complaint. The Yankee Companies submitted a supplemental filing to include these costs of $33.1 million on June 8, 2022. The DOE Phase V trial is expected to begin in the spring of 2024.

D. Guarantees and Indemnifications

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

Guarantees issued on behalf of unconsolidated entities, including equity method offshore wind investments, for which Eversource parent is the guarantor, are recorded at fair value as a liability on the balance sheet at the inception of the guarantee. The fair value of guarantees issued on behalf of unconsolidated entities are recorded within Other Long-Term Liabilities on the balance sheet, and were $4.4 million and $4.2 million as of December 31, 2023 and 2022, respectively. Eversource regularly reviews performance risk under these guarantee arrangements, and believes the likelihood of payments being required under the guarantees is remote. In the event it becomes probable that Eversource parent will be required to perform under the guarantee, the amount of probable payment will be recorded.

The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries and affiliates to external parties, and primarily relates to its offshore wind business:


As of December 31, 2023
Company (Obligor)	Description	Maximum Exposure (in millions)
North East Offshore, LLC, Sunrise Wind LLC, Revolution Wind, LLC and South Fork Wind, LLC	Offshore wind construction-related purchase agreements with third-party contractors (1)	$	1,941.1
Eversource Investment LLC and South Fork Class B Member, LLC	Funding and indemnification obligations of South Fork Wind and North East Offshore, LLC (2)	485.9
Sunrise Wind LLC	OREC capacity production (3)	11.0




South Fork Wind, LLC	Power Purchase Agreement Security (4)	7.1



Eversource Investment LLC	Letters of Credit (5)	15.2
Eversource TEI LLC	South Fork Wind Tax Equity (6)	—
Various	Surety bonds (7)	38.8

Sunrise Wind LLC	Surety bonds (8)	20.5

(1) Eversource parent issued guarantees on behalf of its 50 percent-owned affiliates, North East Offshore, LLC (NEO), Sunrise Wind LLC, Revolution Wind, LLC and South Fork Wind, LLC, under which Eversource parent agreed to guarantee each entity’s performance of obligations under certain construction-related purchase agreements with third-party contractors, in an aggregate amount not to exceed $3.03 billion. Eversource parent’s obligations under the guarantees expire upon the earlier of (i) dates ranging between May 2024 and October 2028 and (ii) full performance of the guaranteed obligations. Eversource parent also issued a separate guarantee to Ørsted on behalf of NEO, under which Eversource parent agreed to guarantee 50 percent of NEO’s payment obligations under certain offshore wind project construction-related agreements with Ørsted in an aggregate amount not to exceed $62.5 million and expiring upon full performance of the guaranteed obligation.

(2) Eversource parent issued guarantees on behalf of its wholly-owned subsidiary Eversource Investment LLC (EI), which holds Eversource's investments in offshore wind-related equity method investments, and on behalf of its 50 percent-owned affiliate, South Fork Class B Member, LLC, whereby Eversource parent will guarantee each entity’s performance of certain capital expenditure funding obligations during the construction phases of the South Fork Wind project and NEO’s underlying offshore wind projects. Eversource parent also guaranteed certain indemnification obligations of EI associated with third party credit support for EI’s investment in NEO. These guarantees will not exceed $1.52 billion and expire upon the full performance of the guaranteed obligations.

(3) Eversource parent issued a guarantee on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guarantee Sunrise Wind LLC's performance of certain obligations, in an amount not to exceed $15.4 million, under the Offshore Wind Renewable Energy Certificate Purchase and Sale Agreement (the Agreement). The Agreement was executed by and between the New York State Energy Research and Development Authority (NYSERDA) and Sunrise Wind LLC. The guarantee expires upon the full performance of the guaranteed obligations. Effective January 1, 2024, the maximum exposure under the guarantee increased from $11.0 million to $15.4 million.

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

(5) Eversource parent entered into a guarantee on behalf of EI, under which Eversource parent would guarantee EI's obligations under a letter of credit facility with a financial institution that EI may request in an aggregate amount of up to approximately $25 million. As of December 31, 2023, EI has issued letters of credit on behalf of South Fork Wind, LLC, Sunrise Wind LLC and Revolution Wind, LLC totaling $15.2 million. In January 2024, EI issued two additional letters of credit on behalf of Sunrise Wind LLC totaling $8.0 million. The guarantee will remain in effect until full performance of the guaranteed obligations.

(6) Eversource parent issued a guarantee on behalf of its wholly-owned subsidiary, Eversource TEI LLC, whereby Eversource parent will guarantee Eversource TEI LLC’s performance of certain obligations, in an amount not to exceed $528.4 million, primarily in connection with tax equity funding obligations during the construction phase of the South Fork Wind project. Eversource parent’s obligations expire upon the full performance of the guaranteed obligations.

(7) Surety bonds expire in 2024. Expiration dates reflect termination dates, the majority of which will be renewed or extended. Certain surety bonds contain credit ratings triggers that would require Eversource parent to post collateral in the event that the unsecured debt credit ratings of Eversource parent are downgraded.

(8) In December 2023, Sunrise Wind LLC issued a surety bond related to future decommissioning obligations of certain onshore transmission assets in the amount of $20.5 million. The surety bond shall remain outstanding until full performance of the obligations.

E. FERC ROE Complaints

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

The ROE originally billed during the period October 1, 2011 (beginning of the first complaint period) through October 15, 2014 consisted of a base ROE of 11.14 percent and incentives up to 13.1 percent. On October 16, 2014, FERC issued Opinion No. 531-A and set the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint period. This was also effective for all prospective billings to customers beginning October 16, 2014. This FERC order was vacated on April 14, 2017 by the U.S. Court of Appeals for the D.C. Circuit (the Court).

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

Eversource has recorded a reserve of $39.1 million (pre-tax and excluding interest) for the second complaint period as of both December 31, 2023 and 2022. This reserve represents the difference between the billed rates during the second complaint period and a 10.57 percent base ROE and 11.74 percent incentive cap. The reserve consisted of $21.4 million for CL&P, $14.6 million for NSTAR Electric and $3.1 million for PSNH as of both December 31, 2023 and 2022.

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

The FERC order included illustrative calculations for the first complaint using FERC's proposed frameworks with financial data from that complaint. Those illustrative calculations indicated that for the first complaint period, for the NETOs, which FERC concludes are of average financial risk, the preliminary just and reasonable base ROE is 10.41 percent and the preliminary incentive cap on total ROE is 13.08 percent. If the results of the illustrative calculations were included in a final FERC order for each of the complaint periods, then a 10.41 percent base ROE and a 13.08 percent incentive cap would not have a significant impact on our financial statements for all of the complaint periods. These preliminary calculations are not binding and do not represent what we believe to be the most likely outcome of a final FERC order.

On November 21, 2019, FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners, in which FERC adopted a new methodology for determining base ROEs. Various parties sought rehearing. On December 23, 2019, the NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs' cases. On May 21, 2020, the FERC issued its order in Opinion No. 569-A on the rehearing of the MISO transmission owners' cases, in which FERC again changed its methodology for determining the MISO transmission owners' base ROEs. On November 19, 2020, the FERC issued Opinion No. 569-B denying rehearing of Opinion No. 569-A and reaffirmed the methodology previously adopted in Opinion No. 569-A. The new methodology differs significantly from the methodology proposed by FERC in its October 16, 2018 order to determine the NETOs' base ROEs in its four pending cases. FERC Opinion Nos. 569-A and 569-B were appealed to the Court. On August 9, 2022, the Court issued its decision vacating MISO ROE FERC Opinion Nos. 569, 569-A and 569-B and remanded to FERC to reopen the proceedings. The Court found that FERC’s development of the new return methodology was arbitrary and capricious due to FERC’s failure to offer a reasonable explanation for its decision to reintroduce the risk-premium financial model in its new methodology for calculating a just and reasonable return. At this time, Eversource cannot predict how and when FERC will address the Court’s findings on the remand of the MISO FERC opinions or any potential associated impact on the NETOs’ four pending ROE complaint cases.

Given the significant uncertainty regarding the applicability of the FERC opinions in the MISO transmission owners’ two complaint cases to the NETOs’ pending four complaint cases, Eversource concluded that there is no reasonable basis for a change to the reserve or recognized ROEs for any of the complaint periods at this time. As well, Eversource cannot reasonably estimate a range of loss for any of the four complaint proceedings at this time. Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

A change of 10 basis points to the base ROE used to establish the reserves would impact Eversource’s after-tax earnings by an average of approximately $3 million for each of the four 15-month complaint periods.

F. CL&P Regulatory Matters

CL&P Tropical Storm Isaias Response Investigation: On April 28, 2021, PURA issued a final decision on CL&P’s compliance with its emergency response plan that concluded CL&P failed to comply with certain storm performance standards and was imprudent in certain instances regarding its preparation for, and response to, Tropical Storm Isaias. Based on its findings, PURA ordered CL&P to adjust its future rates in a pending or future rate proceeding to reflect a monetary penalty in the form of a downward adjustment of 90 basis points in its allowed rate of return on equity (ROE), which is currently 9.25 percent. On July 14, 2021, PURA issued a final decision in a penalty proceeding that included an assessment of $28.6 million, consisting of a $28.4 million civil penalty for non-compliance with storm performance standards to be provided as credits on customer bills and a $0.2 million fine for violations of accident reporting requirements to be paid to the State of Connecticut’s general fund. The $28.4 million performance penalty was credited to customers on electric bills beginning on September 1, 2021 over a one-year period. The $28.4 million is the maximum statutory penalty amount under applicable Connecticut law in effect at the time of Tropical Storm Isaias, which is 2.5 percent of CL&P’s annual distribution revenues. The liability for the performance penalty was recorded as a current regulatory liability on CL&P’s balance sheet and as a reduction to Operating Revenues on the year ended December 31, 2021 statement of income.

CL&P Settlement Agreement: On October 1, 2021, CL&P entered into a settlement agreement with the DEEP, Office of Consumer Counsel, Office of the Attorney General and the Connecticut Industrial Energy Consumers, resolving certain issues that arose in then-pending regulatory proceedings initiated by 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 customer assistance fund to provide bill payment assistance to certain existing non-hardship and hardship customers carrying arrearages, as approved by PURA, with the objective of disbursing the funds prior to April 30, 2022. Those customers were provided with $10 million of bill forgiveness in the first quarter of 2022. CL&P recorded a current regulatory liability of $75 million on the balance sheet associated with the provisions of the settlement agreement, with a $65 million pre-tax charge as a reduction to Operating Revenues associated with the customer credits and a $10 million charge to Operations and Maintenance expense associated with the customer assistance fund on the year ended December 31, 2021 statement of income.

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. CL&P also agreed to freeze its current base distribution rates, subject to the customer credits described above, until no earlier than January 1, 2024. The rate freeze applied 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 did not apply to any cost recovery mechanism outside of the base distribution rates with regard to grid-modernization initiatives or any other proceedings that were either pending or that could be initiated during the rate freeze period, that could have placed additional obligations on CL&P. The approval of the settlement agreement satisfied 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.

As part of the settlement agreement, CL&P agreed to withdraw with prejudice its pending appeals of PURA’s decisions dated April 28, 2021 and July 14, 2021 related to Storm Isaias and agreed to waive its right to file an appeal and seek a judicial stay of the September 14, 2021 decision in the interim rate reduction docket. The settlement agreement assures that CL&P will have the opportunity to petition for and demonstrate the prudency of the storm costs incurred to respond to customer outages associated with Storm Isaias in a future ratemaking proceeding.

The cumulative pre-tax impact of the settlement agreement and the Storm Isaias assessment imposed in PURA’s April 28, 2021 and July 14, 2021 decisions totaled $103.6 million, and the after-tax earnings impact was $86.1 million, or $0.25 per share, for the year ended December 31, 2021.

G. Litigation and Legal Proceedings

Eversource, including CL&P, NSTAR Electric and PSNH, are involved in legal, tax and regulatory proceedings regarding matters arising in the ordinary course of business, which involve management's assessment to determine the probability of whether a loss will occur and, if probable, its best estimate of probable loss. The Company records and discloses losses when these losses are probable and reasonably estimable, and discloses matters when losses are probable but not estimable or when losses are reasonably possible. Legal costs related to the defense of loss contingencies are expensed as incurred.

14. LEASES

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

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

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

For leases entered into or modified after the January 1, 2019 implementation date of the leases standard under Topic 842, the discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on each company's collateralized incremental interest rate to borrow over a comparable term for an individual lease because the rate implicit in the lease is not determinable.

CL&P and PSNH entered into certain contracts for the purchase of energy that qualify as leases. These contracts do not have minimum lease payments and therefore are not recognized as a lease liability on the balance sheet and are not reflected in the future minimum lease payments table below. Expense related to these contracts is included as variable lease cost in the table below. The expense and long-term obligation for these contracts are also included in Note 13B, "Commitments and Contingencies - Long-Term Contractual Arrangements," to the financial statements.

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


Eversource	For the Years Ended December 31,
(Millions of Dollars)	2023		2022		2021
Finance Lease Cost:
Amortization of Right-of-use-Assets	$	4.8	$	8.3	$	4.6
Interest on Lease Liabilities	2.0		2.0		3.9
Total Finance Lease Cost	6.8		10.3		8.5
Operating Lease Cost	11.4		11.6		12.2
Variable Lease Cost	69.2		78.1		61.0
Total Lease Cost	$	87.4	$	100.0	$	81.7


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Finance Lease Cost:
Amortization of Right-of-use-Assets	$	—	$	0.2	$	—	$	—	$	0.2	$	0.1	$	0.5	$	0.2	$	0.1
Interest on Lease Liabilities	—		0.6		—		—		0.6		—		0.1		0.6		—
Total Finance Lease Cost	—		0.8		—		—		0.8		0.1		0.6		0.8		0.1
Operating Lease Cost	0.7		3.0		0.4		0.3		2.3		0.1		0.3		2.3		0.1
Variable Lease Cost	21.9		—		47.3		25.6		—		52.5		16.2		—		44.8
Total Lease Cost	$	22.6	$	3.8	$	47.7	$	25.9	$	3.1	$	52.7	$	17.1	$	3.1	$	45.0

Operating lease cost, net of the capitalized portion, is included in Operations and Maintenance (or Purchased Power, Purchased Natural Gas and Transmission expense for transmission leases) on the statements of income. Amortization of finance lease assets is included in Depreciation on the statements of income. Interest expense on finance leases is included in Interest Expense on the statements of income.

Supplemental balance sheet information related to leases is as follows:


		As of December 31, 2023								As of December 31, 2022
(Millions of Dollars)	Balance Sheet Classification	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Operating Leases:
Right-of-use-Assets, Net	Other Long-Term Assets	$	53.5	$	2.2	$	27.7	$	4.7	$	56.9	$	2.2	$	22.5	$	—
Operating Lease Liabilities
Current Portion	Other Current Liabilities	$	9.5	$	0.8	$	2.2	$	1.5	$	9.0	$	0.6	$	1.2	$	—
Long-Term	Other Long-Term Liabilities	44.0		1.4		25.5		3.2		47.9		1.6		21.3		—
Total Operating Lease Liabilities		$	53.5	$	2.2	$	27.7	$	4.7	$	56.9	$	2.2	$	22.5	$	—
Finance Leases:
Right-of-use-Assets, Net	Property, Plant and Equipment, Net	$	68.6	$	18.3	$	3.0	$	—	$	54.5	$	—	$	3.2	$	—
Finance Lease Liabilities
Current Portion	Other Current Liabilities	$	5.4	$	1.4	$	—	$	—	$	3.8	$	—	$	—	$	—
Long-Term	Other Long-Term Liabilities	67.3		16.9		4.9		—		54.2		—		4.9		—
Total Finance Lease Liabilities		$	72.7	$	18.3	$	4.9	$	—	$	58.0	$	—	$	4.9	$	—

The finance lease payments that NSTAR Electric will make over the next twelve months are entirely interest-related, due to escalating payments. As such, none of the finance lease payments over the next twelve months will reduce the finance lease liability.

Other information related to leases is as follows:


	As of December 31,
	2023								2022
	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric		PSNH
Weighted-Average Remaining Lease Term (Years):
Operating Leases	9		4		13		3		11		4		17		—
Finance Leases	13		9		18		—		15		—		19		—
Weighted-Average Discount Rate (Percentage):
Operating Leases	4.0	%	5.2	%	4.2	%	5.2	%	3.2	%	3.8	%	4.0	%	—	%
Finance Leases	3.3	%	5.3	%	2.9	%	—	%	2.7	%	—	%	2.9	%	—	%


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
For the Year Ended December 31, 2023
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	10.5	$	0.7	$	2.5	$	0.4
Operating Cash Flows from Finance Leases	2.0		—		0.6		—
Financing Cash Flows from Finance Leases	3.9		—		—		—
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	12.8		0.6		7.0		5.0
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	18.5		18.3		—		—


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
For the Year Ended December 31, 2022
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	11.3	$	0.3	$	2.1	$	0.1
Operating Cash Flows from Finance Leases	2.0		—		0.6		—
Financing Cash Flows from Finance Leases	3.9		—		—		0.1
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	18.9		2.4		—		—
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	3.5		—		—		—


(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH
For the Year Ended December 31, 2021
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating Cash Flows from Operating Leases	$	12.1	$	0.3	$	2.1	$	0.1
Operating Cash Flows from Finance Leases	3.4		0.1		0.6		—
Financing Cash Flows from Finance Leases	4.1		1.4		—		0.1
Supplemental Non-Cash Information on Lease Liabilities:
Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities	2.1		—		1.9		—
Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities	2.3		—		—		—

As of December 31, 2023, lease agreements executed but not having yet commenced totaled $11.5 million for Eversource, $7 million for CL&P and $4.5 million for NSTAR Electric. These amounts are not recorded as right-of-use assets and operating lease liabilities as of December 31, 2023, but will be in 2024. Also in 2023, EGMA executed an early termination of an office space lease in connection with the purchase of the same facilities from the lessor, which reduced right-of-use assets for operating leases of Eversource by $7.5 million.

Future minimum lease payments, excluding variable costs, under long-term leases, as of December 31, 2023 are as follows:


	Operating Leases								Finance Leases
(Millions of Dollars)	Eversource		CL&P		NSTAR Electric		PSNH		Eversource		CL&P		NSTAR Electric
Year Ending December 31,
2024	$	11.1	$	0.9	$	3.4	$	1.7	$	7.8	$	1.9	$	0.6
2025	8.3		0.9		3.0		1.7		8.2		2.3		0.7
2026	6.9		0.5		3.0		1.5		7.8		2.4		0.7
2027	4.3		—		2.3		0.1		7.9		2.5		0.7
2028	4.3		—		2.4		—		7.2		2.6		0.7
Thereafter	30.3		—		24.6		—		57.8		11.5		11.0
Future lease payments	65.2		2.3		38.7		5.0		96.7		23.2		14.4
Less amount representing interest	11.7		0.1		11.0		0.3		24.0		4.9		9.5
Present value of future minimum lease payments	$	53.5	$	2.2	$	27.7	$	4.7	$	72.7	$	18.3	$	4.9

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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


	Eversource				CL&P				NSTAR Electric				PSNH
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
As of December 31, 2023:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	122.2	$	116.2	$	90.4	$	43.0	$	31.8	$	—	$	—
Long-Term Debt	24,413.5		22,855.2		4,814.4		4,572.0		4,496.9		4,273.7		1,431.6		1,292.6
Rate Reduction Bonds	410.5		395.0		—		—		—		—		410.5		395.0

As of December 31, 2022:
Preferred Stock Not Subject to Mandatory Redemption	$	155.6	$	136.7	$	116.2	$	99.2	$	43.0	$	37.5	$	—	$	—
Long-Term Debt	21,044.1		18,891.3		4,216.5		3,828.3		4,425.1		4,091.8		1,164.6		970.5
Rate Reduction Bonds	453.7		424.7		—		—		—		—		453.7		424.7

Derivative Instruments and Marketable Securities: Derivative instruments and investments in marketable securities are carried at fair value. For further information, see Note 4, "Derivative Instruments," and Note 5, "Marketable Securities," to the financial statements.

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

16. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

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


	For the Year Ended December 31, 2023								For the Year Ended December 31, 2022
Eversource (Millions of Dollars)	Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total		Qualified Cash Flow Hedging Instruments		Unrealized Gains/(Losses) on Marketable Securities		Defined Benefit Plans		Total
Balance as of January 1st	$	(0.4)	$	(1.2)	$	(37.8)	$	(39.4)	$	(0.4)	$	0.4	$	(42.3)	$	(42.3)

OCI Before Reclassifications	—		—		(8.8)		(8.8)		—		(1.6)		(2.5)		(4.1)
Amounts Reclassified from AOCI	—		1.2		13.3		14.5		—		—		7.0		7.0
Net OCI	—		1.2		4.5		5.7		—		(1.6)		4.5		2.9
Balance as of December 31st	$	(0.4)	$	—	$	(33.3)	$	(33.7)	$	(0.4)	$	(1.2)	$	(37.8)	$	(39.4)

Defined benefit plan OCI amounts before reclassifications relate to actuarial gains and losses that arose during the year and were recognized in AOCI. The unamortized actuarial gains and losses and prior service costs on the defined benefit plans are amortized from AOCI into Other Income, Net over the average future employee service period, and are reflected in amounts reclassified from AOCI. The related tax effects of the defined benefit plan OCI amounts before reclassifications recognized in AOCI were net deferred tax assets of $4.9 million and $1.3 million in 2023 and 2022, respectively and were net deferred tax liabilities of $8.3 million in 2021.

The following table sets forth the amounts reclassified from AOCI by component and the impacted line item on the statements of income:


	Amounts Reclassified from AOCI
Eversource (Millions of Dollars)	For the Years Ended December 31,								Statements of Income Line Item Impacted
2023			2022			2021
Qualified Cash Flow Hedging Instruments	$	—		$	—		$	(1.7)	Interest Expense
Tax Effect	—			—			0.7		Income Tax Expense
Qualified Cash Flow Hedging Instruments, Net of Tax	—			—			(1.0)

Unrealized Gains/(Losses) on Marketable Securities	(1.6)			—			—		Other Income, Net
Tax Effect	0.4			—			—		Income Tax Expense
Unrealized Gains/(Losses) on Marketable Securities, Net of Tax	(1.2)			—			—

Defined Benefit Plan Costs:
Amortization of Actuarial Losses	(7.0)			(9.0)			(13.1)		Other Income, Net (1)
Amortization of Prior Service Cost	(0.3)			(0.3)			—		Other Income, Net (1)
Settlement Loss	(12.4)			—			—		Other Income, Net (1)
Total Defined Benefit Plan Costs	(19.7)			(9.3)			(13.1)
Tax Effect	6.4			2.3			3.4		Income Tax Expense
Defined Benefit Plan Costs, Net of Tax	(13.3)			(7.0)			(9.7)
Total Amounts Reclassified from AOCI, Net of Tax	$	(14.5)		$	(7.0)		$	(10.7)

(1) These amounts are included in the computation of net periodic Pension, SERP and PBOP costs. See Note 1K, "Summary of Significant Accounting Policies – Other Income, Net" and Note 11A, "Employee Benefits – Pension Benefits and Postretirement Benefits Other Than Pension," for further information.

17. DIVIDEND RESTRICTIONS

Eversource parent's ability to pay dividends may be affected by certain state statutes, the ability of its subsidiaries to pay common dividends and the leverage restriction tied to its consolidated total indebtedness to total capitalization ratio requirement in its revolving credit agreements. Pursuant to the joint revolving credit agreement of Eversource, CL&P, PSNH, NSTAR Gas, Yankee Gas, EGMA and Aquarion Water Company of Connecticut, and to the NSTAR Electric revolving credit agreement, Eversource is required to maintain consolidated total indebtedness to total capitalization ratio of no greater than 70 percent at the end of each fiscal quarter and each other company is required to maintain consolidated total indebtedness to total capitalization ratio of no greater than 65 percent at the end of each fiscal quarter. As of December 31, 2023, all companies were in compliance with such covenant and in compliance with all such provisions of the revolving credit agreements that may restrict the payment of dividends as of December 31, 2023.

The Retained Earnings balances subject to dividend restrictions were $4.14 billion for Eversource, $2.65 billion for CL&P, $3.14 billion for NSTAR Electric and $655.8 million for PSNH as of December 31, 2023.

CL&P, NSTAR Electric and PSNH are subject to Section 305 of the Federal Power Act that makes it unlawful for a public utility to make or pay a dividend from any funds "properly included in its capital account." Management believes that this Federal Power Act restriction, as applied to CL&P, NSTAR Electric and PSNH, would not be construed or applied by the FERC to prohibit the payment of dividends from retained earnings for lawful and legitimate business purposes. In addition, certain state statutes may impose additional limitations on such companies and, including but not limited to, on NSTAR Gas, Yankee Gas, EGMA, and Aquarion’s operating companies. Such state law restrictions do not restrict the payment of dividends from retained earnings or net income.

18. COMMON SHARES

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


	Shares
	Par Value			Authorized as of December 31,		Issued as of December 31,
2023			2022	2023	2022
Eversource	$	5		410,000,000	380,000,000	359,984,073	359,984,073
CL&P	$	10		24,500,000	24,500,000	6,035,205	6,035,205
NSTAR Electric	$	1		100,000,000	100,000,000	200	200
PSNH	$	1		100,000,000	100,000,000	301	301

Common Share Issuances and 2022 Equity Distribution Agreement: On May 11, 2022, Eversource entered into an equity distribution agreement pursuant to which it may offer and sell up to $1.2 billion of its common shares from time to time through an “at-the-market” (ATM) equity offering program. Eversource may issue and sell its common shares through its sales agents during the term of this agreement. Shares may be offered in transactions on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise. Sales may be made at either market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In 2023, no shares were issued under this agreement. In 2022, Eversource issued 2,165,671 common shares, which resulted in proceeds of $197.1 million, net of issuance costs. Eversource used the net proceeds received for general corporate purposes.

Treasury Shares: As of December 31, 2023 and 2022, there were 10,443,807 and 11,540,218 Eversource common shares held as treasury shares, respectively. As of December 31, 2023 and 2022, there were 349,540,266 and 348,443,855 Eversource common shares outstanding, respectively.

Acquisition of The Torrington Water Company: On October 3, 2022, Aquarion acquired The Torrington Water Company (TWC) following the receipt of all required approvals. The acquisition was structured as a stock-for-stock exchange, and Eversource issued 925,264 treasury shares at closing for a purchase price of $72.1 million.

Acquisition of New England Service Company: On December 1, 2021, Aquarion acquired New England Service Company (NESC), pursuant to a definitive agreement entered into on April 8, 2021. The acquisition was structured as a stock-for-stock merger and Eversource issued 462,517 treasury shares at closing for a purchase price of $38.1 million.

Eversource issues treasury shares to satisfy awards under the Company's incentive plans, shares issued under the dividend reinvestment and share purchase plan, and matching contributions under the Eversource 401k Plan. Eversource also issued treasury shares for its December 2021 and October 2022 water business acquisitions. The issuance of treasury shares represents a non-cash transaction, as the treasury shares were used to fulfill Eversource's obligations that require the issuance of common shares.

On May 3, 2023, shareholders voted to increase the authorized common shares from 380,000,000 shares to 410,000,000 shares.

19. PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION

The CL&P and NSTAR Electric preferred stock is not subject to mandatory redemption and is presented as a noncontrolling interest of a subsidiary in Eversource's financial statements.

CL&P is authorized to issue up to 9,000,000 shares of preferred stock, par value $50 per share, and NSTAR Electric is authorized to issue 2,890,000 shares of preferred stock, par value $100 per share. Holders of preferred stock of CL&P and NSTAR Electric are entitled to receive cumulative dividends in preference to any payment of dividends on the common stock. Upon liquidation, holders of preferred stock of CL&P and NSTAR Electric are entitled to receive a liquidation preference before any distribution to holders of common stock in an amount equal to the par value of the preferred stock plus accrued and unpaid dividends. If the net assets were to be insufficient to pay the liquidation preference in full, then the net assets would be distributed ratably to all holders of preferred stock. The preferred stock of CL&P and NSTAR Electric is subject to optional redemption by the CL&P and NSTAR Electric Boards of Directors at any time.

Details of preferred stock not subject to mandatory redemption are as follows (in millions, except in redemption price and shares):


		Redemption Price Per Share		Shares Outstanding as of December 31,		As of December 31,
Series		2023		2022	2023	2022
CL&P
$1.90	Series of 1947	$	52.50	163,912	163,912	$	8.2	$	8.2
$2.00	Series of 1947	$	54.00	336,088	336,088	16.8		16.8
$2.04	Series of 1949	$	52.00	100,000	100,000	5.0		5.0
$2.20	Series of 1949	$	52.50	200,000	200,000	10.0		10.0
3.90%	Series of 1949	$	50.50	160,000	160,000	8.0		8.0
$2.06	Series E of 1954	$	51.00	200,000	200,000	10.0		10.0
$2.09	Series F of 1955	$	51.00	100,000	100,000	5.0		5.0
4.50%	Series of 1956	$	50.75	104,000	104,000	5.2		5.2
4.96%	Series of 1958	$	50.50	100,000	100,000	5.0		5.0
4.50%	Series of 1963	$	50.50	160,000	160,000	8.0		8.0
5.28%	Series of 1967	$	51.43	200,000	200,000	10.0		10.0
$3.24	Series G of 1968	$	51.84	300,000	300,000	15.0		15.0
6.56%	Series of 1968	$	51.44	200,000	200,000	10.0		10.0
Total CL&P				2,324,000	2,324,000	$	116.2	$	116.2
NSTAR Electric
4.25%	Series of 1956	$	103.625	180,000	180,000	$	18.0	$	18.0
4.78%	Series of 1958	$	102.80	250,000	250,000	25.0		25.0
Total NSTAR Electric				430,000	430,000	$	43.0	$	43.0
Fair Value Adjustment due to Merger with NSTAR						(3.6)		(3.6)
Other
6.00%	Series of 1958	$	100.00	13	23	$	—	$	—
Total Eversource - Noncontrolling Interest - Preferred Stock of Subsidiaries						$	155.6	$	155.6

20. COMMON SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS

Dividends on the preferred stock of CL&P and NSTAR Electric totaled $7.5 million for each of the years ended December 31, 2023, 2022 and 2021. These dividends were presented as Net Income Attributable to Noncontrolling Interests on the Eversource statements of income. Noncontrolling Interest – Preferred Stock of Subsidiaries on the Eversource balance sheets totaled $155.6 million as of December 31, 2023 and 2022. On the Eversource balance sheets, Common Shareholders' Equity was fully attributable to Eversource parent and Noncontrolling Interest – Preferred Stock of Subsidiaries was fully attributable to the noncontrolling interest.

For the years ended December 31, 2023, 2022 and 2021, there was no change in ownership of the common equity of CL&P and NSTAR Electric.

21. EARNINGS/(LOSS) PER SHARE

Basic earnings/(loss) per share is computed based upon the weighted average number of common shares outstanding during each period. Diluted earnings/(loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the potential dilutive effect of certain share-based compensation awards as if they were converted into outstanding common shares. The dilutive effect of unvested RSU and performance share awards is calculated using the treasury stock method. RSU and performance share awards are included in basic weighted average common shares outstanding as of the date that all necessary vesting conditions have been satisfied.

For the years ended December 31, 2023, 2022 and 2021, there were no antidilutive share awards excluded from the computation.

The following table sets forth the components of basic and diluted earnings/(loss) per share:


Eversource (Millions of Dollars, except share information)	For the Years Ended December 31,
2023			2022			2021
Net (Loss)/Income Attributable to Common Shareholders	$	(442.2)		$	1,404.9		$	1,220.5
Weighted Average Common Shares Outstanding:
Basic	349,580,638			346,783,444			343,972,926
Dilutive Effect	259,843			463,324			658,130
Diluted	349,840,481			347,246,768			344,631,056
Basic (Loss)/Earnings Per Common Share	$	(1.27)		$	4.05		$	3.55
Diluted (Loss)/Earnings Per Common Share	$	(1.26)		$	4.05		$	3.54

22. REVENUES

Revenue is recognized when promised goods or services (referred to as performance obligations) are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. A five-step model is used for recognizing and measuring revenue from contracts with customers, which includes identifying the contract with the customer, identifying the performance obligations promised within the contract, determining the transaction price (the amount of consideration to which the company expects to be entitled), allocating the transaction price to the performance obligations and recognizing revenue when (or as) the performance obligation is satisfied.

The following tables present operating revenues disaggregated by revenue source:


	For the Year Ended December 31, 2023
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	5,054.2	$	1,145.4	$	—	$	144.7	$	—	$	—	$	6,344.3
Commercial	2,893.2		637.7		—		69.8		—		(4.8)		3,595.9
Industrial	352.4		186.8		—		4.5		—		(19.7)		524.0
Total Retail Tariff Sales Revenues	8,299.8		1,969.9		—		219.0		—		(24.5)		10,464.2
Wholesale Transmission Revenues	—		—		1,777.5		—		—		(1,310.5)		467.0
Wholesale Market Sales Revenues	625.0		206.7		—		3.9		—		—		835.6
Other Revenues from Contracts with Customers	82.6		5.6		14.6		8.1		1,636.6		(1,628.0)		119.5
Amortization of Revenues Subject to Refund	—		—		4.3		—		—		—		4.3
Total Revenues from Contracts with Customers	9,007.4		2,182.2		1,796.4		231.0		1,636.6		(2,963.0)		11,890.6
Alternative Revenue Programs	(54.3)		35.5		118.9		0.4		—		(106.5)		(6.0)
Other Revenues	20.4		4.0		0.6		1.1		—		—		26.1
Total Operating Revenues	$	8,973.5	$	2,221.7	$	1,915.9	$	232.5	$	1,636.6	$	(3,069.5)	$	11,910.7


	For the Year Ended December 31, 2022
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	4,796.1	$	1,204.9	$	—	$	141.7	$	—	$	—	$	6,142.7
Commercial	2,903.3		648.5		—		66.5		—		(4.1)		3,614.2
Industrial	374.9		199.7		—		4.7		—		(20.1)		559.2
Total Retail Tariff Sales Revenues	8,074.3		2,053.1		—		212.9		—		(24.2)		10,316.1
Wholesale Transmission Revenues	—		—		1,700.5		—		—		(1,264.5)		436.0
Wholesale Market Sales Revenues	1,190.9		140.8		—		3.8		—		—		1,335.5
Other Revenues from Contracts with Customers	72.3		5.6		14.1		8.4		1,435.5		(1,425.3)		110.6
Amortization of/(Reserve for) Revenues Subject to Refund	72.0		—		0.7		(0.7)		—		—		72.0
Total Revenues from Contracts with Customers	9,409.5		2,199.5		1,715.3		224.4		1,435.5		(2,714.0)		12,270.2
Alternative Revenue Programs	(15.4)		14.8		92.7		(2.5)		—		(84.3)		5.3
Other Revenues	11.2		1.3		0.7		0.6		—		—		13.8
Total Operating Revenues	$	9,405.3	$	2,215.6	$	1,808.7	$	222.5	$	1,435.5	$	(2,798.3)	$	12,289.3


	For the Year Ended December 31, 2021
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	3,989.8	$	1,000.3	$	—	$	133.5	$	—	$	—	$	5,123.6
Commercial	2,486.1		497.6		—		62.8		—		(5.1)		3,041.4
Industrial	345.3		167.2		—		4.3		—		(17.1)		499.7
Total Retail Tariff Sales Revenues	6,821.2		1,665.1		—		200.6		—		(22.2)		8,664.7
Wholesale Transmission Revenues	—		—		1,751.3		—		86.6		(1,384.7)		453.2
Wholesale Market Sales Revenues	575.8		82.1		—		3.9		—		—		661.8
Other Revenues from Contracts with Customers	78.1		5.1		13.6		7.5		1,267.4		(1,257.7)		114.0
Reserve for Revenues Subject to Refund	(71.1)		—		(5.0)		(2.6)		—		—		(78.7)
Total Revenues from Contracts with Customers	7,404.0		1,752.3		1,759.9		209.4		1,354.0		(2,664.6)		9,815.0
Alternative Revenue Programs	14.7		37.0		(126.1)		1.5		—		114.6		41.7
Other Revenues	4.9		0.3		0.8		0.4		—		—		6.4
Total Operating Revenues	$	7,423.6	$	1,789.6	$	1,634.6	$	211.3	$	1,354.0	$	(2,550.0)	$	9,863.1


	For the Years Ended December 31,
	2023						2022						2021
(Millions of Dollars)	CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH		CL&P		NSTAR Electric		PSNH
Revenues from Contracts with Customers
Retail Tariff Sales
Residential	$	2,597.8	$	1,691.0	$	765.4	$	2,397.2	$	1,601.8	$	797.1	$	1,994.2	$	1,375.8	$	619.8
Commercial	1,082.1		1,442.3		369.6		1,067.9		1,457.4		380.8		890.6		1,265.0		332.2
Industrial	137.2		123.2		92.0		146.4		135.8		92.7		131.4		119.1		94.8
Total Retail Tariff Sales Revenues	3,817.1		3,256.5		1,227.0		3,611.5		3,195.0		1,270.6		3,016.2		2,759.9		1,046.8
Wholesale Transmission Revenues	794.7		692.0		290.8		755.1		670.4		275.0		863.3		616.3		271.7
Wholesale Market Sales Revenues	429.1		131.8		64.1		873.7		215.0		102.2		408.8		109.2		57.8
Other Revenues from Contracts with Customers	32.4		49.1		18.1		30.2		46.9		11.8		26.7		56.2		11.3
Amortization of/(Reserve for) Revenues Subject to Refund	4.3		—		—		72.7		—		—		(76.1)		—		—
Total Revenues from Contracts with Customers	5,077.6		4,129.4		1,600.0		5,343.2		4,127.3		1,659.6		4,238.9		3,541.6		1,387.6
Alternative Revenue Programs	66.8		(52.0)		49.8		56.5		0.7		20.1		(78.9)		(15.1)		(17.4)
Other Revenues	9.6		8.4		3.0		1.8		7.2		2.9		0.4		3.4		1.9
Eliminations	(575.2)		(570.3)		(204.9)		(583.8)		(552.1)		(207.8)		(523.0)		(473.5)		(194.9)
Total Operating Revenues	$	4,578.8	$	3,515.5	$	1,447.9	$	4,817.7	$	3,583.1	$	1,474.8	$	3,637.4	$	3,056.4	$	1,177.2

Retail Tariff Sales: Regulated utilities provide products and services to their regulated customers under rates, pricing, payment terms and conditions of service, regulated by each state regulatory agency. The arrangement whereby a utility provides commodity service to a customer for a price approved by the respective state regulatory commission is referred to as a tariff sale contract, and the tariff governs all aspects of the provision of regulated services by utilities. The majority of revenue for Eversource, CL&P, NSTAR Electric and PSNH is derived from regulated retail tariff sales for the sale and distribution of electricity, natural gas and water to residential, commercial and industrial retail customers.

The utility's performance obligation for the regulated tariff sales is to provide electricity, natural gas or water to the customer as demanded. The promise to provide the commodity represents a single performance obligation, as it is a promise to transfer a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. Revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided by the utility, and the utility satisfies its performance obligation. Revenue is recognized based on the output method as there is a directly observable output to the customer (electricity, natural gas or water units delivered to the customer and immediately consumed). Each Eversource utility is entitled to be compensated for performance completed to date (service taken by the customer) until service is terminated.

In regulated tariff sales, the transaction prices are the rates approved by the respective state regulatory commissions. In general, rates can only be changed through formal proceedings with the state regulatory commissions. These rates are designed to recover the costs to provide service to customers and include a return on investment. Regulatory commission-approved tracking mechanisms are included in these rates and are also used to recover, on a fully-reconciling basis, certain costs, such as the procurement of energy supply, retail transmission charges, energy efficiency program costs, net metering for distributed generation, and restructuring and stranded costs, among others. These tracking mechanisms result in rates being changed periodically to ensure recovery of actual costs incurred and the refund of any overcollection of costs.

Electric customers may elect to purchase electricity from each Eversource electric utility or may contract separately with a competitive third party supplier. Certain eligible natural gas customers may elect to purchase natural gas from each Eversource natural gas utility or may contract separately with a gas supply operator. Revenue is not recorded for the sale of the electricity or the natural gas commodity to customers who have contracted separately with these suppliers, only the delivery to a customer, as the utility is acting as an agent on behalf of the supplier.

Wholesale Transmission Revenues: The Eversource electric transmission-owning companies (CL&P, NSTAR Electric and PSNH) each own and maintain transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England. CL&P, NSTAR Electric and PSNH, as well as most other New England utilities, are parties to a series of agreements that provide for coordinated planning and operation of the region's transmission facilities and the rules by which they acquire transmission services. The Eversource electric transmission-owning companies have a combination of FERC-approved regional and local formula rates that work in tandem to recover all their transmission costs. These rates are part of the ISO-NE Tariff. Regional rates recover the costs of higher voltage transmission facilities that benefit the region and are collected from all New England transmission customers, including the Eversource distribution businesses. Eversource's local rates recover the costs of transmission facilities that do not provide a benefit to the region, and are collected from Eversource's distribution businesses and other transmission customers. The distribution businesses of Eversource, in turn, recover the FERC approved charges from retail customers through annual tracking mechanisms, which are retail tariff sales.

The utility's performance obligation for regulated wholesale transmission sales is to provide transmission services to the customer as demanded. The promise to provide transmission service represents a single performance obligation. The transaction prices are the transmission rate formulas as defined by the ISO-NE Tariff and are regulated and established by FERC. Wholesale transmission revenue is recognized over time as the performance obligation is completed, which occurs as transmission services are provided to customers. The revenue is recognized based on the output method. Each Eversource utility is entitled to be compensated for performance completed to date (e.g., use of the transmission system by the customer).

Wholesale Market Sales Revenues: Wholesale market sales transactions include sales of energy and energy-related products into the ISO-NE wholesale electricity market, sales of natural gas to third party marketers, and also the sale of RECs to various counterparties. ISO-NE oversees the region's wholesale electricity market and administers the transactions and terms and conditions, including payment terms, which are established in the ISO-NE tariff, between the buyers and sellers in the market. Pricing is set by the wholesale market. The wholesale transactions in the ISO-NE market occur on a day-ahead basis or a real-time basis (daily) and are, therefore, short-term. Transactions are tracked and reported by ISO-NE net by the hour, which is the net hourly position of energy sales and purchases by each market participant. The performance obligation for ISO-NE energy transactions is defined to be the net by hour transaction. Revenue is recognized when the performance obligation for these energy sales transactions is satisfied, which is when the sale occurs and the energy is transferred to the customer. For sales of natural gas, transportation, and natural gas pipeline capacity to third party marketers, revenue is recognized when the performance obligation is satisfied at the point in time the sale occurs and the natural gas or related product is transferred to the marketer. RECs are sold to various counterparties, and revenue is recognized when the performance obligation is satisfied upon transfer of title to the customer through the New England Power Pool Generation Information System. Wholesale transactions also include the sale of CL&P’s, NSTAR Electric’s and PSNH’s transmission rights associated with their proportionate equity ownership share in the transmission lines of the Hydro-Québec system in Canada.

Other Revenues from Contracts with Customers: Other revenues from contracts with customers primarily include property rentals that are not deemed leases. These revenues are generally recognized on a straight-line basis over time as the service is provided to the customer. Other revenues also include revenues from Eversource's service company, which is eliminated in consolidation.

Amortization of/(Reserve for) Revenues Subject to Refund: A reserve is recorded as a reduction to revenues when future refunds to customers are deemed probable. The reserve is reversed as refunds are provided to customers in rates. Amortization of Revenues Subject to Refund within the Electric Distribution segment in 2022 represents the reversal of a 2021 reserve at CL&P established to provide bill credits to customers as a result of the settlement agreement on October 1, 2021 and a storm performance penalty assessed by PURA. The reserve was reversed as customer credits were distributed to CL&P’s customers in retail electric rates. Total customer credits as a result of the 2021 settlement and civil penalty of $93.4 million were recorded as a reserve for revenues subject to refund within current regulatory liabilities and reflected as a reduction to Operating Revenues on the 2021 income statement. The settlement amount of $65 million was refunded over a two-month billing period from December 1, 2021 to January 31, 2022 and the civil penalty of $28.4 million was refunded over a one year billing period, which began September 1, 2021.

Alternative Revenue Programs: In accordance with accounting guidance for rate-regulated operations, certain of Eversource's utilities' rate making mechanisms qualify as alternative revenue programs (ARPs) if they meet specified criteria, in which case revenues may be recognized prior to billing based on allowed levels of collection in rates. Eversource's utility companies recognize revenue and record a regulatory asset or liability once the condition or event allowing for the automatic adjustment of future rates occurs. ARP revenues include both the recognition of the deferral adjustment to ARP revenues, when the regulator-specified condition or event allowing for additional billing or refund has occurred, and an equal and offsetting reversal of the ARP deferral to revenues as those amounts are reflected in the price of service in subsequent periods.

Eversource’s ARPs include the revenue decoupling mechanism, the annual reconciliation adjustment to transmission formula rates, and certain capital tracker mechanisms. Certain Eversource electric, natural gas and water companies, including CL&P and NSTAR Electric, have revenue decoupling mechanisms approved by a regulatory commission (decoupled companies). Decoupled companies’ distribution revenues are not directly based on sales volumes. The decoupled companies reconcile their annual base distribution rate recovery to pre-established levels of baseline distribution delivery service revenues, with any difference between the allowed level of distribution revenue and the actual amount realized adjusted through subsequent rates. The transmission formula rates provide for the annual reconciliation and recovery or refund of estimated costs to actual costs. The financial impacts of differences between actual and estimated costs are deferred for future recovery from, or refund to, transmission customers. This transmission deferral reconciles billed transmission revenues to the revenue requirement for our transmission businesses.

Other Revenues: Other Revenues include certain fees charged to customers that are not considered revenue from contracts with customers. Other revenues also include lease revenues under lessor accounting guidance of $4.6 million ($0.7 million at CL&P and $2.5 million at NSTAR Electric), $4.0 million ($0.8 million at CL&P and $2.5 million at NSTAR Electric), and $4.8 million, ($0.8 million at CL&P and $3.1 million at NSTAR Electric) for the years ended December 31, 2023, 2022 and 2021, respectively.

Intercompany Eliminations: Intercompany eliminations are primarily related to the Eversource electric transmission revenues that are derived from ISO-NE regional transmission charges to the distribution businesses of CL&P, NSTAR Electric and PSNH that recover the costs of the wholesale transmission business, and revenues from Eversource's service company. Intercompany revenues and expenses between the Eversource wholesale transmission businesses and the Eversource distribution businesses and from Eversource's service company are eliminated in consolidation and included in "Eliminations" in the tables above.

Receivables: Receivables, Net on the balance sheet primarily includes trade receivables from retail customers and customers related to wholesale transmission contracts, wholesale market sales, sales of RECs, and property rentals. In general, retail tariff customers and wholesale transmission customers are billed monthly and the payment terms are generally due and payable upon receipt of the bill.

Unbilled Revenues: Unbilled Revenues on the balance sheet represent estimated amounts due from retail customers for electricity, natural gas or water delivered to customers but not yet billed. The utility company has satisfied its performance obligation and the customer has received and consumed the commodity as of the balance sheet date, and therefore, the utility company records revenue for those services in the period the services were provided. Only the passage of time is required before the company is entitled to payment for the satisfaction of the performance obligation. Payment from customers is due monthly as services are rendered and amounts are billed. Actual amounts billed to customers when meter readings become available may vary from the estimated amount.

Unbilled revenues are recognized by allocating estimated unbilled sales volumes to the respective customer classes, and then applying an estimated rate by customer class to those sales volumes. Unbilled revenue estimates reflect seasonality, weather, customer usage patterns, customer rates in effect for customer classes, and the timing of customer billing. The companies that have a decoupling mechanism record a regulatory deferral to reflect the actual allowed amount of revenue associated with their respective decoupled distribution rate design.

Practical Expedients: Eversource has elected practical expedients in the accounting guidance that allow the company to record revenue in the amount that the company has a right to invoice, if that amount corresponds directly with the value to the customer of the company's performance to date, and not to disclose related unsatisfied performance obligations. Retail and wholesale transmission tariff sales fall into this category, as these sales are recognized as revenue in the period the utility provides the service and completes the performance obligation, which is the same as the monthly amount billed to customers. There are no other material revenue streams for which Eversource has unsatisfied performance obligations.

23. SEGMENT INFORMATION

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

The remainder of Eversource's operations is presented as Other in the tables below and primarily consists of 1) the equity in earnings of Eversource parent from its subsidiaries and intercompany interest income, both of which are eliminated in consolidation, and interest expense related to the debt of Eversource parent, 2) the revenues and expenses of Eversource Service, most of which are eliminated in consolidation, 3) the operations of CYAPC and YAEC, 4) the results of other unregulated subsidiaries, which are not part of its core business, and 5) Eversource parent's equity ownership interests that are not consolidated, which primarily include the offshore wind business, a natural gas pipeline owned by Enbridge, Inc., and a renewable energy investment fund that was liquidated in 2023.

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

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

Cash flows used for investments in plant included in the segment information below are cash capital expenditures that do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP income/expense. Eversource's segment information is as follows:


	For the Year Ended December 31, 2023
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	8,973.5	$	2,221.7	$	1,915.9	$	232.5	$	1,636.6	$	(3,069.5)	$	11,910.7
Depreciation and Amortization	(18.2)		(214.2)		(371.2)		(56.0)		(158.8)		2.7		(815.7)
Other Operating Expenses	(8,104.6)		(1,662.6)		(550.5)		(117.1)		(1,329.8)		3,068.9		(8,695.7)
Operating Income	850.7		344.9		994.2		59.4		148.0		2.1		2,399.3
Interest Expense	(291.7)		(85.7)		(163.7)		(38.5)		(425.3)		149.5		(855.4)
Impairments of Offshore Wind Investments	—		—		—		—		(2,167.0)		—		(2,167.0)
Interest Income	74.5		18.2		0.4		—		150.6		(149.5)		94.2
Other Income/(Loss), Net	136.2		20.4		41.2		5.9		(261.8)		312.0		253.9
Income Tax (Expense)/Benefit	(157.1)		(73.0)		(225.8)		6.3		289.9		—		(159.7)
Net Income/(Loss)	612.6		224.8		646.3		33.1		(2,265.6)		314.1		(434.7)
Net Income Attributable to Noncontrolling Interests	(4.6)		—		(2.9)		—		—		—		(7.5)
Net Income/(Loss) Attributable to Common Shareholders	$	608.0	$	224.8	$	643.4	$	33.1	$	(2,265.6)	$	314.1	$	(442.2)
Total Assets (as of)	$	29,426.4	$	8,775.3	$	14,806.5	$	2,944.8	$	26,337.7	$	(26,678.5)	$	55,612.2
Cash Flows Used for Investments in Plant	$	1,668.1	$	844.1	$	1,406.3	$	167.0	$	251.3	$	—	$	4,336.8


	For the Year Ended December 31, 2022
Eversource (Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	9,405.3	$	2,215.6	$	1,808.7	$	222.5	$	1,435.5	$	(2,798.3)	$	12,289.3
Depreciation and Amortization	(970.4)		(157.6)		(337.4)		(50.9)		(132.6)		5.8		(1,643.1)
Other Operating Expenses	(7,663.7)		(1,727.0)		(548.4)		(111.8)		(1,189.1)		2,792.0		(8,448.0)
Operating Income	771.2		331.0		922.9		59.8		113.8		(0.5)		2,198.2
Interest Expense	(253.1)		(71.4)		(145.5)		(34.7)		(247.8)		74.2		(678.3)
Interest Income	45.1		10.2		0.5		—		66.3		(71.6)		50.5
Other Income, Net	180.4		33.6		37.9		8.5		1,600.8		(1,565.6)		295.6
Income Tax (Expense)/Benefit	(146.2)		(69.2)		(216.3)		3.2		(25.1)		—		(453.6)
Net Income	597.4		234.2		599.5		36.8		1,508.0		(1,563.5)		1,412.4
Net Income Attributable to Noncontrolling Interests	(4.6)		—		(2.9)		—		—		—		(7.5)
Net Income Attributable to Common Shareholders	$	592.8	$	234.2	$	596.6	$	36.8	$	1,508.0	$	(1,563.5)	$	1,404.9
Total Assets (as of)	$	27,365.0	$	8,084.9	$	13,369.5	$	2,783.8	$	26,365.2	$	(24,737.5)	$	53,230.9
Cash Flows Used for Investments in Plant	$	1,172.6	$	710.3	$	1,144.0	$	154.4	$	260.6	$	—	$	3,441.9


	For the Year Ended December 31, 2021
Eversource(Millions of Dollars)	Electric Distribution		Natural Gas Distribution		Electric Transmission		Water Distribution		Other		Eliminations		Total
Operating Revenues	$	7,423.6	$	1,789.6	$	1,634.6	$	211.3	$	1,354.0	$	(2,550.0)	$	9,863.1
Depreciation and Amortization	(737.8)		(142.3)		(300.3)		(46.1)		(113.1)		4.6		(1,335.0)
Other Operating Expenses	(5,970.0)		(1,345.4)		(496.2)		(101.4)		(1,170.4)		2,548.6		(6,534.8)
Operating Income	715.8		301.9		838.1		63.8		70.5		3.2		1,993.3
Interest Expense	(236.4)		(58.6)		(133.2)		(32.0)		(168.8)		46.6		(582.4)
Interest Income	20.7		4.5		2.2		—		46.0		(47.8)		25.6
Other Income, Net	78.1		17.9		19.8		3.3		1,363.9		(1,347.3)		135.7
Income Tax (Expense)/Benefit	(103.5)		(60.9)		(179.4)		1.7		(2.1)		—		(344.2)
Net Income	474.7		204.8		547.5		36.8		1,309.5		(1,345.3)		1,228.0
Net Income Attributable to Noncontrolling Interests	(4.6)		—		(2.9)		—		—		—		(7.5)
Net Income Attributable to Common Shareholders	$	470.1	$	204.8	$	544.6	$	36.8	$	1,309.5	$	(1,345.3)	$	1,220.5
Cash Flows Used for Investments in Plant	$	1,053.3	$	721.1	$	1,024.1	$	137.2	$	239.4	$	—	$	3,175.1

24. GOODWILL

In a business combination, the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed

is recognized as goodwill. The following table presents Eversource’s goodwill by reportable segment:


(Millions of Dollars)	Electric Distribution		Electric Transmission		Natural Gas Distribution		Water Distribution		Total
Balance as of January 1, 2022	$	2,543.6	$	576.8	$	451.0	$	905.9	$	4,477.3
NESC Measurement Period Adjustments	—		—		—		0.5		0.5
Acquisition of TWC	—		—		—		44.8		44.8
Balance as of December 31, 2022	$	2,543.6	$	576.8	$	451.0	$	951.2	$	4,522.6
Water Acquisitions	—		—		—		9.5		9.5
Balance as of December 31, 2023	$	2,543.6	$	576.8	$	451.0	$	960.7	$	4,532.1

Eversource completed the acquisition of TWC on October 3, 2022, resulting in the addition of $44.8 million of goodwill, all of which was allocated to the Water Distribution reporting unit. Eversource completed the acquisition of NESC on December 1, 2021, resulting in the addition of $22.2 million of goodwill, which included measurement period increases in 2022 totaling $0.5 million. Eversource completed two water acquisitions in 2023, resulting in the addition of $9.5 million of goodwill. The goodwill was allocated to the Water Distribution reporting unit. For further information on the acquisitions of TWC and NESC, see Note 18, “Common Shares,” to the financial statements.

Goodwill is evaluated for impairment at least annually and more frequently if indicators of impairment arise. In accordance with the accounting standards, if the fair value of a reporting unit is less than its carrying value (including goodwill), the goodwill is tested for impairment. Goodwill is not subject to amortization, however is subject to a fair value based assessment for impairment at least annually and whenever facts or circumstances indicate that there may be an impairment. A resulting write-down, if any, would be charged to Operating Expenses.

In assessing goodwill for impairment, an entity is permitted to first assess qualitatively whether it is more likely than not that goodwill impairment exists as of the annual impairment test date. A quantitative impairment test is required only if it is concluded that it is more likely than not that a reporting unit’s fair value is less than it’s carrying amount. The annual goodwill assessment included a qualitative evaluation of multiple factors that impact the fair value of the reporting units, including general, macroeconomic and market conditions, and entity-specific assumptions that affect the future cash flows of the reporting units. Key considerations include discount rates, utility sector market performance and merger transaction multiples, the Company's share price and credit ratings, analyst reports, financial performance, cost and risk factors, internal estimates and projections of future cash flows and net income, long-term strategy, the timing and outcome of rate cases, and recent regulatory and legislative proceedings.

Eversource's reporting units for the purpose of testing goodwill are Electric Distribution, Electric Transmission, Natural Gas Distribution and Water Distribution. These reporting units are consistent with the operating segments underlying the reportable segments identified in Note 23, "Segment Information," to the financial statements.

Eversource completed its annual goodwill impairment assessment for the Electric Distribution, Electric Transmission, Natural Gas Distribution and Water Distribution reporting units as of October 1, 2023 and determined that no impairment existed. There were no events subsequent to October 1, 2023 that indicated impairment of goodwill.

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