Edgar Filing: CONNECTICUT LIGHT & POWER CO

March 2010 Form 10-Q

________________________________________________________________________________

[march2010form10qedgar002.gif]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended March 31, 2010
	OR
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ____________ to ____________


Commission File Number	Registrant; State of Incorporation; Address; and Telephone Number	I.R.S. Employer Identification No.

1-5324	NORTHEAST UTILITIES (a Massachusetts voluntary association) One Federal Street Building 111-4 Springfield, Massachusetts 01105 Telephone: (413) 785-5871	04-2147929

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

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

0-7624	WESTERN MASSACHUSETTS ELECTRIC COMPANY (a Massachusetts corporation) One Federal Street Building 111-4 Springfield, Massachusetts 01105 Telephone: (413) 785-5871	04-1961130

______________________________________________________________________________

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


	Yes	No

	ü

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


	Yes	No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (check one):


	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer

Northeast Utilities	ü
The Connecticut Light and Power Company			ü
Public Service Company of New Hampshire			ü
Western Massachusetts Electric Company			ü

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


	Yes	No

Northeast Utilities		ü
The Connecticut Light and Power Company		ü
Public Service Company of New Hampshire		ü
Western Massachusetts Electric Company		ü

Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:


Company - Class of Stock	Outstanding as of April 30, 2010
Northeast Utilities Common shares, $5.00 par value	175,995,600 shares

The Connecticut Light and Power Company Common stock, $10.00 par value	6,035,205 shares

Public Service Company of New Hampshire Common stock, $1.00 par value	301 shares

Western Massachusetts Electric Company Common stock, $25.00 par value	434,653 shares

Northeast Utilities holds all of the 6,035,205 shares, 301 shares, and 434,653 shares of the outstanding common stock of The Connecticut Light and Power Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company, respectively.

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


GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found in this report.

CURRENT OR FORMER NU COMPANIES, SEGMENTS OR INVESTMENTS:

Boulos	E.S. Boulos Company
CL&P	The Connecticut Light and Power Company
HWP	HWP Company, formerly the Holyoke Water Power Company
NAESCO	North Atlantic Energy Service Corporation
NGS	Northeast Generation Services Company and subsidiaries
NPT	Northern Pass Transmission, LLC
NUTV	NU Transmission Ventures, Inc.
NU or the Company	Northeast Utilities and subsidiaries
NU Enterprises	NU Enterprises, Inc., the parent company of Select Energy, NGS, SECI and Boulos
NUSCO	Northeast Utilities Service Company
NU parent and other companies	NU parent and other companies is comprised of NU parent, NUSCO and other subsidiaries, including HWP, RRR (a real estate subsidiary), and the non-energy-related subsidiaries of Yankee (Yankee Energy Services Company, and Yankee Energy Financial Services Company)
PSNH	Public Service Company of New Hampshire
Regulated companies	NU's Regulated companies, comprised of the electric distribution and transmission segments of CL&P, PSNH and WMECO, the generation segment of PSNH, and Yankee Gas, a natural gas local distribution company
RRR	The Rocky River Realty Company
SECI	Select Energy Contracting, Inc.
Select Energy	Select Energy, Inc.
SESI	Select Energy Services, Inc., a former subsidiary of NU Enterprises
WMECO	Western Massachusetts Electric Company
Yankee	Yankee Energy System, Inc.
Yankee Gas	Yankee Gas Services Company

REGULATORS:

DOE	U.S. Department of Energy
DPU	Massachusetts Department of Public Utilities
DPUC	Connecticut Department of Public Utility Control
FERC	Federal Energy Regulatory Commission
NHPUC	New Hampshire Public Utilities Commission
SEC	Securities and Exchange Commission


OTHER:

2009 Form 10-K	The Northeast Utilities and subsidiaries combined 2009 Annual Report on Form 10-K as filed with the SEC
2010 Healthcare Act	Patient Protection and Affordable Care Act
AFUDC	Allowance For Funds Used During Construction
AMI	Advanced metering infrastructure
ARO	Asset Retirement Obligation
C&LM	Conservation and Load Management
CfD	Contract for Differences
CSC	Connecticut Siting Council
CTA	Competitive Transition Assessment
CWIP	Construction work in progress
EFSB	Energy Facilities Siting Board
EPS	Earnings Per Share
ES	Default Energy Service
ESOP	Employee Stock Ownership Plan
FASB	Financial Accounting Standards Board
Fitch	Fitch Ratings
FMCC	Federally Mandated Congestion Charge
FTR	Financial Transmission Rights
GAAP	Accounting principles generally accepted in the United States of America
GSC	Generation Service Charge


GSRP	Greater Springfield Reliability Project
GWh	Gigawatt Hours
HG&E	Holyoke Gas and Electric
HQ	Hydro-Québec, a corporation wholly-owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada
HVDC	High voltage direct current
IPP	Independent Power Producers
ISO-NE	New England Independent System Operator or ISO New England, Inc.
KV	Kilovolt
KWh	Kilowatt-Hours
LBCB	Lehman Brothers Commercial Bank, Inc.
LNG	Liquefied natural gas
LOC	Letter of Credit
LRS	Last resort service
MA DEP	Massachusetts Department of Environmental Protection
MGP	Manufactured Gas Plant
MMBtu	One million British thermal units
Money Pool	Northeast Utilities Money Pool
Moody's	Moody's Investors Services, Inc.
MW	Megawatt
MWh	Megawatt-Hours
NEEWS	New England East-West Solutions
Northern Pass	A high voltage direct current transmission line project from Canada to New Hampshire
NU supplemental benefit trust	The NU Trust Under Supplemental Executive Retirement Plan
NYMEX	New York Mercantile Exchange
PBOP	Postretirement Benefits Other Than Pension
PBOP Plan	Postretirement Benefits Other Than Pension Plan that provides certain retiree health care benefits, primarily medical and dental, and life insurance benefits
PCRBs	Pollution Control Revenue Bonds
Pension Plan	Single uniform noncontributory defined benefit retirement plan
PGA	Purchased Gas Adjustment
PPA	Pension Protection Act
Regulatory ROE	The average cost of capital method for calculating the return on equity related to the distribution and generation business segments excluding the wholesale transmission segment
ROE	Return on Equity
RFP	Request for Proposal
RRB	Rate Reduction Bond
RSUs	Restricted share units
S&P	Standard & Poor's Financial Services LLC
SBC	Systems Benefits Charge
SCRC	Stranded Cost Recovery Charge
SERP	Supplemental Executive Retirement Plan
SS	Standard service
TCAM	Transmission Cost Adjustment Mechanism
TSA	Transmission Services Agreement
UI	The United Illuminating Company
VIE	Variable interest entity
Yankee Companies	Connecticut Yankee Atomic Power Company, Yankee Atomic Electric Company and Maine Yankee Atomic Power Company

NORTHEAST UTILITIES AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

TABLE OF CONTENTS


	Page

PART I - FINANCIAL INFORMATION

ITEM 1 – Unaudited Condensed Consolidated Financial Statements for the Following Companies:

Northeast Utilities and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2010 and December 31, 2009	2

Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended March 31, 2010 and 2009	4

Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2010 and 2009	5

The Connecticut Light and Power Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2010 and December 31, 2009	8

Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended March 31, 2010 and 2009	10

Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2010 and 2009	11

Public Service Company of New Hampshire and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2010 and December 31, 2009	14

Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended March 31, 2010 and 2009	16

Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2010 and 2009	17

Western Massachusetts Electric Company and Subsidiary

Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2010 and December 31, 2009	20

Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended March 31, 2010 and 2009	22

Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2010 and 2009	23

Combined Notes to Condensed Consolidated Financial Statements (Unaudited - all companies)	24

Report of Independent Registered Public Accounting Firm	48

iii


	Page

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations for the following companies:

Northeast Utilities and Subsidiaries		49

The Connecticut Light and Power Company and Subsidiaries		64

Public Service Company of New Hampshire and Subsidiaries		66

Western Massachusetts Electric Company and Subsidiary		68

ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk		70

ITEM 4 - Controls and Procedures		70

PART II - OTHER INFORMATION

ITEM 1 - Legal Proceedings		71

ITEM 1A - Risk Factors		71

ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds		71

ITEM 6 - Exhibits		72

SIGNATURES		74

NORTHEAST UTILITIES AND SUBSIDIARIES


NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash and Cash Equivalents	$	30,012	$	26,952
Receivables, Net		570,870		512,770
Unbilled Revenues		161,872		229,326
Fuel, Materials and Supplies		229,837		277,085
Marketable Securities		81,960		66,236
Derivative Assets		17,379		31,785
Prepayments and Other Current Assets		151,641		123,700
Total Current Assets		1,243,571		1,267,854

Property, Plant and Equipment, Net		8,957,713		8,839,965

Deferred Debits and Other Assets:
Regulatory Assets		3,207,971		3,244,931
Goodwill		287,591		287,591
Marketable Securities		41,763		54,905
Derivative Assets		153,651		189,751
Other Long-Term Assets		213,186		172,682
Total Deferred Debits and Other Assets		3,904,162		3,949,860



Total Assets	$	14,105,446	$	14,057,679



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


NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Banks	$	100,313	$	100,313
Long-Term Debt - Current Portion		66,286		66,286
Accounts Payable		385,181		457,582
Accrued Taxes		64,236		50,246
Accrued Interest		92,879		83,763
Derivative Liabilities		44,208		37,617
Other Current Liabilities		166,138		183,605
Total Current Liabilities		919,241		979,412

Rate Reduction Bonds		375,866		442,436

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		1,450,931		1,380,143
Accumulated Deferred Investment Tax Credits		21,466		22,145
Regulatory Liabilities		426,687		485,706
Derivative Liabilities		972,041		955,646
Accrued Pension		786,195		781,431
Other Long-Term Liabilities		822,759		823,723
Total Deferred Credits and Other Liabilities		4,480,079		4,448,794

Capitalization:
Long-Term Debt		4,588,862		4,492,935

Noncontrolling Interest in Consolidated Subsidiary:
Preferred Stock Not Subject to Mandatory Redemption		116,200		116,200

Common Shareholders' Equity:
Common Shares		978,381		977,276
Capital Surplus, Paid In		1,763,894		1,762,097
Deferred Contribution Plan		(67)		(2,944)
Retained Earnings		1,287,271		1,246,543
Accumulated Other Comprehensive Loss		(42,740)		(43,467)
Treasury Stock		(361,541)		(361,603)
Common Shareholders' Equity		3,625,198		3,577,902
Total Capitalization		8,330,260		8,187,037

Total Liabilities and Capitalization	$	14,105,446	$	14,057,679


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


NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)		2010		2009

Operating Revenues	$	1,339,420	$	1,593,483

Operating Expenses:
Fuel, Purchased and Net Interchange Power		603,349		838,920
Other Operating Expenses		248,273		247,445
Maintenance		45,637		48,836
Depreciation		78,656		76,983
Amortization of Regulatory (Liabilities)/Assets, Net		(8,327)		21,691
Amortization of Rate Reduction Bonds		59,570		55,897
Taxes Other Than Income Taxes		85,599		86,429
Total Operating Expenses		1,112,757		1,376,201
Operating Income		226,663		217,282

Interest Expense:
Interest on Long-Term Debt		57,270		55,684
Interest on Rate Reduction Bonds		6,690		10,625
Other Interest		3,302		4,668
Interest Expense		67,262		70,977
Other Income, Net		8,057		4,182
Income Before Income Tax Expense		167,458		150,487
Income Tax Expense		79,857		51,423
Net Income		87,601		99,064
Net Income Attributable to Noncontrolling Interest:
Preferred Dividends of Subsidiary		1,390		1,390
Net Income Attributable to Controlling Interest	$	86,211	$	97,674

Basic and Fully Diluted Earnings Per Common Share	$	0.49	$	0.60

Dividends Declared Per Common Share	$	0.26	$	0.24

Weighted Average Common Shares Outstanding:
Basic		176,349,762		162,340,475
Fully Diluted		176,537,472		162,925,167

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


NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	87,601	$	99,064
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		9,556		9,507
Depreciation		78,656		76,983
Deferred Income Taxes		33,248		17,178
Pension and PBOP Expense, Net of Capitalized Portion and PBOP Contributions		23,331		6,703
Regulatory Overrecoveries/(Underrecoveries), Net		6,066		(14,694)
Amortization of Regulatory (Liabilities)/Assets, Net		(8,327)		21,691
Amortization of Rate Reduction Bonds		59,570		55,897
Deferred Contractual Obligations		(6,274)		(8,666)
Derivative Assets and Liabilities		(2,594)		(14,769)
Other		(35,160)		(3,450)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		(7,258)		10,483
Fuel, Materials and Supplies		48,431		51,171
Taxes Receivable/Accrued		4,639		43,270
Other Current Assets		(279)		(1,541)
Accounts Payable		(46,188)		(174,497)
Counterparty Deposits and Margin Special Deposits		(12,946)		(10,582)
Other Current Liabilities		(6,369)		(23,795)
Net Cash Flows Provided by Operating Activities		225,703		139,953

Investing Activities:
Investments in Property and Plant		(202,487)		(208,896)
Proceeds from Sales of Marketable Securities		21,331		52,933
Purchases of Marketable Securities		(21,825)		(54,557)
Rate Reduction Bond Escrow and Other Deposits		(322)		(1,480)
Other Investing Activities		(156)		2,853
Net Cash Flows Used in Investing Activities		(203,459)		(209,147)

Financing Activities:
Issuance of Common Shares		-		387,350
Cash Dividends on Common Shares		(45,088)		(37,207)
Cash Dividends on Preferred Stock		(1,390)		(1,390)
Decrease in Short-Term Debt		-		(124,909)
Issuance of Long-Term Debt		95,000		250,000
Retirements of Rate Reduction Bonds		(66,569)		(62,451)
Financing Fees		(1,124)		(15,205)
Other Financing Activities		(13)		18
Net Cash Flows (Used in)/Provided by Financing Activities		(19,184)		396,206
Net Increase in Cash and Cash Equivalents		3,060		327,012
Cash and Cash Equivalents - Beginning of Period		26,952		89,816
Cash and Cash Equivalents - End of Period	$	30,012	$	416,828

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

This Page Intentionally Left Blank

THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES


THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	3,527	$	45
Receivables, Net		349,152		327,969
Accounts Receivable from Affiliated Companies		4,552		2,362
Notes Receivable from Affiliated Companies		34,675		97,775
Unbilled Revenues		94,134		140,632
Materials and Supplies		62,917		65,623
Derivative Assets		8,132		24,593
Prepayments and Other Current Assets		40,807		18,385
Total Current Assets		597,896		677,384

Property, Plant and Equipment, Net		5,386,314		5,340,561

Deferred Debits and Other Assets:
Regulatory Assets		2,041,668		2,068,778
Derivative Assets		137,825		183,231
Other Long-Term Assets		106,623		94,610
Total Deferred Debits and Other Assets		2,286,116		2,346,619



Total Assets	$	8,270,326	$	8,364,564



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


THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		March 31,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Long-Term Debt - Current Portion	$	62,000	$	62,000
Accounts Payable		197,199		242,853
Accounts Payable to Affiliated Companies		53,042		48,795
Accrued Taxes		46,063		36,860
Accrued Interest		46,572		49,867
Derivative Liabilities		13,488		9,770
Other Current Liabilities		94,168		100,846
Total Current Liabilities		512,532		550,991

Rate Reduction Bonds		144,901		195,587

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		942,858		901,527
Accumulated Deferred Investment Tax Credits		15,791		16,355
Regulatory Liabilities		263,124		316,160
Derivative Liabilities		922,977		913,349
Accrued Pension		47,338		51,319
Other Long-Term Liabilities		399,526		409,532
Total Deferred Credits and Other Liabilities		2,591,614		2,608,242

Capitalization:
Long-Term Debt		2,520,518		2,520,361

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		1,601,879		1,601,792
Retained Earnings		725,383		714,210
Accumulated Other Comprehensive Loss		(3,053)		(3,171)
Common Stockholder's Equity		2,384,561		2,373,183
Total Capitalization		5,021,279		5,009,744

Total Liabilities and Capitalization	$	8,270,326	$	8,364,564


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


THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Revenues	$	794,980	$	954,503

Operating Expenses:
Fuel, Purchased and Net Interchange Power		362,820		514,386
Other Operating Expenses		134,813		139,411
Maintenance		21,838		27,115
Depreciation		47,525		46,433
Amortization of Regulatory Assets, Net		1,671		13,007
Amortization of Rate Reduction Bonds		43,283		40,557
Taxes Other Than Income Taxes		57,531		58,189
Total Operating Expenses		669,481		839,098
Operating Income		125,499		115,405

Interest Expense:
Interest on Long-Term Debt		33,632		31,686
Interest on Rate Reduction Bonds		3,032		5,799
Other Interest		1,863		209
Interest Expense		38,527		37,694
Other Income, Net		4,933		2,708
Income Before Income Tax Expense		91,905		80,419
Income Tax Expense		43,493		27,284
Net Income	$	48,412	$	53,135


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


THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	48,412	$	53,135
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		2,832		2,644
Depreciation		47,525		46,433
Deferred Income Taxes		18,956		19,240
Pension and PBOP Expense/(Income), Net of Capitalized Portion and PBOP Contributions		3,602		(2,437)
Regulatory Underrecoveries, Net		(230)		(25,050)
Amortization of Regulatory Assets, Net		1,671		13,007
Amortization of Rate Reduction Bonds		43,283		40,557
Deferred Contractual Obligations		(4,304)		(5,730)
Other		(17,127)		(3,062)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		8,773		29,919
Materials and Supplies		2,706		(974)
Taxes Receivable/Accrued		340		33,199
Other Current Assets		(10,122)		(9,736)
Accounts Payable		(25,350)		(55,938)
Other Current Liabilities		2,872		(13,638)
Net Cash Flows Provided by Operating Activities		123,839		121,569

Investing Activities:
Investments in Property and Plant		(97,725)		(116,325)
Decrease/(Increase) in NU Money Pool Lending		63,100		(28,488)
Rate Reduction Bond Escrow and Other Deposits		2,289		(2,185)
Other Investing Activities		(14)		1,491
Net Cash Flows Used in Investing Activities		(32,350)		(145,507)

Financing Activities:
Cash Dividends on Common Stock		(35,849)		(28,462)
Cash Dividends on Preferred Stock		(1,390)		(1,390)
Decrease in Short-Term Debt		-		(74,001)
Decrease in NU Money Pool Borrowings		-		(102,725)
Capital Contributions from NU Parent		-		39,000
Issuance of Long-Term Debt		-		250,000
Retirements of Rate Reduction Bonds		(50,686)		(47,493)
Other Financing Activities		(82)		(2,784)
Net Cash Flows (Used in)/Provided by Financing Activities		(88,007)		32,145
Net Increase in Cash		3,482		8,207
Cash - Beginning of Period		45		-
Cash - End of Period	$	3,527	$	8,207

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

This Page Intentionally Left Blank

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		March 31,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	2,247	$	1,974
Receivables, Net		93,481		89,337
Accounts Receivable from Affiliated Companies		1,583		286
Unbilled Revenues		41,043		49,358
Taxes Receivable		16,325		22,600
Fuel, Materials and Supplies		113,660		127,447
Prepayments and Other Current Assets		29,050		36,387
Total Current Assets		297,389		327,389

Property, Plant and Equipment, Net		1,856,891		1,814,714

Deferred Debits and Other Assets:
Regulatory Assets		497,709		494,077
Other Long-Term Assets		83,458		61,011
Total Deferred Debits and Other Assets		581,167		555,088



Total Assets	$	2,735,447	$	2,697,191



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Affiliated Companies	$	12,400	$	26,700
Accounts Payable		103,778		109,521
Accounts Payable to Affiliated Companies		23,824		20,083
Accrued Interest		16,803		10,255
Derivative Liabilities		25,484		18,785
Other Current Liabilities		25,263		27,983
Total Current Liabilities		207,552		213,327

Rate Reduction Bonds		176,151		188,113

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		290,724		275,669
Accumulated Deferred Investment Tax Credits		190		211
Regulatory Liabilities		69,732		69,872
Derivative Liabilities		9,691		7,635
Accrued Pension		277,885		272,905
Other Long-Term Liabilities		113,104		105,759
Total Deferred Credits and Other Liabilities		761,326		732,051

Capitalization:
Long-Term Debt		836,282		836,255

Common Stockholder's Equity:
Common Stock		-		-
Capital Surplus, Paid In		443,660		420,169
Retained Earnings		311,153		307,988
Accumulated Other Comprehensive Loss		(677)		(712)
Common Stockholder's Equity		754,136		727,445
Total Capitalization		1,590,418		1,563,700

Total Liabilities and Capitalization	$	2,735,447	$	2,697,191


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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Revenues	$	258,568	$	307,653

Operating Expenses:
Fuel, Purchased and Net Interchange Power		103,771		146,225
Other Operating Expenses		63,125		62,728
Maintenance		16,002		15,522
Depreciation		15,968		15,171
Amortization of Regulatory (Liabilities)/Assets, Net		(5,694)		7,947
Amortization of Rate Reduction Bonds		12,391		11,686
Taxes Other Than Income Taxes		13,079		12,244
Total Operating Expenses		218,642		271,523
Operating Income		39,926		36,130

Interest Expense:
Interest on Long-Term Debt		9,512		8,104
Interest on Rate Reduction Bonds		2,721		3,658
Other Interest		179		792
Interest Expense		12,412		12,554
Other Income, Net		2,412		1,425
Income Before Income Tax Expense		29,926		25,001
Income Tax Expense		14,116		7,506
Net Income	$	15,810	$	17,495



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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	15,810	$	17,495
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		2,496		1,628
Depreciation		15,968		15,171
Deferred Income Taxes		8,474		(7,981)
Pension and PBOP Expense, Net of Capitalized Portion and PBOP Contributions		6,911		4,143
Regulatory (Underrecoveries)/Overrecoveries, Net		(2,073)		3,413
Amortization of Regulatory (Liabilities)/Assets, Net		(5,694)		7,947
Amortization of Rate Reduction Bonds		12,391		11,686
Deferred Contractual Obligations		(782)		(1,394)
Other		(14,937)		886
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		378		(13,111)
Fuel, Materials and Supplies		14,971		4,921
Taxes Receivable/Accrued		6,275		19,279
Other Current Assets		11,078		8,170
Accounts Payable		(1,599)		(66,171)
Other Current Liabilities		3,007		5,990
Net Cash Flows Provided by Operating Activities		72,674		12,072

Investing Activities:
Investments in Property and Plant		(54,139)		(52,531)
Decrease in NU Money Pool Lending		-		48,200
Other Investing Activities		(2,760)		(378)
Net Cash Flows Used in Investing Activities		(56,899)		(4,709)

Financing Activities:
Cash Dividends on Common Stock		(12,645)		(10,211)
Decrease in NU Money Pool Borrowings		(14,300)		-
Capital Contributions from NU Parent		23,456		15,000
Retirements of Rate Reduction Bonds		(11,962)		(11,278)
Other Financing Activities		(51)		(113)
Net Cash Flows Used in Financing Activities		(15,502)		(6,602)
Net Increase in Cash		273		761
Cash - Beginning of Period		1,974		195
Cash - End of Period	$	2,247	$	956

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

This Page Intentionally Left Blank

WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY


WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	1	$	1
Receivables, Net		41,030		38,415
Accounts Receivable from Affiliated Companies		1,164		191
Notes Receivable from Affiliated Companies		5,700		-
Unbilled Revenues		13,175		16,090
Taxes Receivable		4,321		4,192
Materials and Supplies		9,363		8,314
Marketable Securities		41,576		28,261
Prepayments and Other Current Assets		1,462		1,774
Total Current Assets		117,792		97,238

Property, Plant and Equipment, Net		721,435		705,760

Deferred Debits and Other Assets:
Regulatory Assets		235,240		240,804
Marketable Securities		15,252		28,500
Other Long-Term Assets		33,691		29,498
Total Deferred Debits and Other Assets		284,183		298,802



Total Assets	$	1,123,410	$	1,101,800



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Affiliated Companies	$	-	$	136,100
Accounts Payable		36,594		36,680
Accounts Payable to Affiliated Companies		9,699		7,924
Accrued Interest		2,002		5,274
Other Current Liabilities		7,716		8,873
Total Current Liabilities		56,011		194,851

Rate Reduction Bonds		54,815		58,735

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		215,571		211,391
Accumulated Deferred Investment Tax Credits		1,499		1,499
Regulatory Liabilities		19,643		21,683
Other Long-Term Liabilities		60,822		61,359
Total Deferred Credits and Other Liabilities		297,535		295,932

Capitalization:
Long-Term Debt		400,165		305,475

Common Stockholder's Equity:
Common Stock		10,866		10,866
Capital Surplus, Paid In		211,556		145,400
Retained Earnings		92,487		90,549
Accumulated Other Comprehensive Loss		(25)		(8)
Common Stockholder's Equity		314,884		246,807
Total Capitalization		715,049		552,282

Total Liabilities and Capitalization	$	1,123,410	$	1,101,800


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


WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
(Thousands of Dollars)		2010		2009

Operating Revenues	$	100,207	$	118,081

Operating Expenses:
Fuel, Purchased and Net Interchange Power		43,632		63,235
Other Operating Expenses		23,226		22,664
Maintenance		4,542		3,106
Depreciation		5,953		5,528
Amortization of Regulatory (Liabilities)/Assets, Net		(1,570)		670
Amortization of Rate Reduction Bonds		3,895		3,654
Taxes Other Than Income Taxes		4,084		3,897
Total Operating Expenses		83,762		102,754
Operating Income		16,445		15,327

Interest Expense:
Interest on Long-Term Debt		3,881		3,443
Interest on Rate Reduction Bonds		937		1,168
Other Interest		126		627
Interest Expense		4,944		5,238
Other Income/(Loss), Net		604		(154)
Income Before Income Tax Expense		12,105		9,935
Income Tax Expense		6,446		3,789
Net Income	$	5,659	$	6,146



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


WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three Months Ended March 31,
(Thousands of Dollars)			2010		2009

Operating Activities:
Net Income	$		5,659	$	6,146
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by/(Used in) Operating Activities:
Bad Debt Expense			1,567		2,217
Depreciation			5,953		5,528
Deferred Income Taxes			2,935		2,033
Pension and PBOP Expense/(Income), Net of Capitalized Portion and PBOP Contributions			565		(621)
Regulatory Underrecoveries, Net			(2,748)		(1,099)
Amortization of Regulatory (Liabilities)/Assets, Net			(1,570)		670
Amortization of Rate Reduction Bonds			3,895		3,654
Deferred Contractual Obligations			(1,187)		(1,543)
Other			722		(1,353)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net			(1,768)		(1,981)
Materials and Supplies			(1,049)		(59)
Taxes Receivable/Accrued			(129)		4,016
Accounts Payable			(75)		(20,148)
Other Current Assets and Liabilities			(4,019)		(5,348)
Net Cash Flows Provided by/(Used in) Operating Activities			8,751		(7,888)

Investing Activities:
Investments in Property and Plant			(19,111)		(19,230)
Proceeds from Sales of Marketable Securities			11,086		35,722
Purchases of Marketable Securities			(11,175)		(36,517)
Increase in NU Money Pool Lending			(5,700)		-
Other Investing Activities			(123)		369
Net Cash Flows Used in Investing Activities			(25,023)		(19,656)

Financing Activities:
Cash Dividends on Common Stock			(3,721)		(7,550)
Increase in Short-Term Debt			-		45,227
Issuance of Long-Term Debt			95,000		-
Decrease in NU Money Pool Borrowings			(136,100)		(4,800)
Retirements of Rate Reduction Bonds			(3,921)		(3,679)
Capital Contributions from NU Parent			66,143		-
Financing Fees			(1,124)		-
Other Financing Activities			(5)		(10)
Net Cash Flows Provided by Financing Activities			16,272		29,188
Net Increase in Cash			-		1,644
Cash - Beginning of Period			1		-
Cash - End of Period	$		1	$	1,644

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

NORTHEAST UTILITIES AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Presentation

Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the entirety of this combined Quarterly Report on Form 10-Q and the combined 2009 Annual Report on Form 10-K of Northeast Utilities (NU or the Company), CL&P, PSNH, and WMECO, which was filed with the SEC (NU 2009 Form 10-K). The accompanying unaudited condensed consolidated financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly NU's and the above companies' financial positions as of March 31, 2010 and December 31, 2009, and the results of operations and cash flows for the three months ended March 31, 2010 and 2009. The results of operations and cash flows for the three months ended March 31, 2010 and 2009 are not necessarily indicative of the results expected for a full year.

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

The unaudited condensed consolidated financial statements of NU, CL&P, PSNH and WMECO include the accounts of all their respective subsidiaries. Intercompany transactions have been eliminated in consolidation.

In accordance with accounting guidance on the consolidation of VIEs, the Company evaluates its variable interests to determine if it has a controlling financial interest in a VIE that would require consolidation. The Company’s variable interests primarily include contracts with developers of power plants that are required by regulation and provide for regulatory recovery of contract costs and benefits through customer rates. The Company would consolidate a VIE if it had both the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of or receive benefits from the entity that could potentially be significant to the VIE.

For each variable interest, NU evaluates the activities of the power plant that most significantly impact the VIE’s economic performance to determine whether it has control over those activities. NU’s assessment of control includes an analysis of who operates and maintains the power plant including dispatch rights and who controls the activities of the power plant after the expiration of its power purchase agreement with NU. NU also evaluates its exposure to potentially significant losses and benefits of the VIE. As of March 31, 2010, NU held variable interests in VIEs through agreements with certain entities that are single power plant owners of renewable energy, peaking generation and other independent power producers. NU does not control the activities that are economically significant to these VIEs or provide financial or other support to these VIEs. NU does not have financial exposure because the costs and benefits of all of these arrangements are fully recoverable from or refundable to NU’s customers. As of March 31, 2010, NU was not identified as the primary beneficiary of any power plant VIEs. Therefore, the company does not consolidate any VIEs. The Company does not have any variable interest in a VIE that is material to the accompanying unaudited condensed consolidated financial statements.

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

Certain reclassifications of prior period data were made in the accompanying unaudited condensed consolidated balance sheets for CL&P, PSNH, and WMECO and the statements of cash flows for NU, PSNH, and WMECO. These reclassifications were made to conform to the current period's presentation.

NU evaluates events and transactions that occur after the balance sheet date but before financial statements are issued and recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed as of the balance sheet date and discloses but does not recognize in the financial statements subsequent events that provide evidence about the conditions that arose after the balance sheet date but before the financial statements are issued. See Note 12, "Subsequent Events," for further information.

Fair Value Measurements

NU, including CL&P, PSNH, and WMECO, applies fair value measurement guidance to the Regulated and unregulated companies' derivative contracts recorded at fair value and to the marketable securities held in the NU supplemental benefit trust and WMECO's spent nuclear fuel trust. Fair value measurement guidance is also applied to investment valuations used to calculate the funded status

of NU's Pension and PBOP plans and non-recurring fair value measurements of NU's non-financial assets and liabilities, such as AROs and Yankee Gas' goodwill.

Fair Value Hierarchy: In measuring fair value, NU uses observable market data when available and minimizes the use of unobservable inputs. Unobservable inputs are needed to value certain derivative contracts due to complexities in the terms of the contracts. 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. NU evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and NU’s policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. The three 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. Significant unobservable inputs are used in the valuations, including items such as energy and energy-related product prices in future years for which observable prices are not yet available, future contract quantities under full-requirements or supplemental sales contracts, and market volatilities. Items valued using these valuation techniques are classified according to the lowest level for which there is at least one input that is significant to the valuation. Therefore, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

Determination of Fair Value: The valuation techniques and inputs used in NU's fair value measurements are described in Note 2, "Derivative Instruments," and Note 9, "Marketable Securities," to the unaudited condensed consolidated financial statements. There were no changes to the valuation methodologies for derivative instruments or marketable securities for the three months ended March 31, 2010 and December 31, 2009.

Regulatory Accounting

The transmission and distribution segments of CL&P, PSNH (including its generation business) and WMECO, along with Yankee Gas' distribution segment (collectively, the Regulated companies), continue to be rate-regulated on a cost-of-service basis, therefore, the accounting policies of the Regulated companies conform to GAAP applicable to rate-regulated enterprises and historically reflect the effects of the rate-making process.

Management believes it is probable that the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets. All material net regulatory assets are earning an equity return, except for the majority of deferred benefit cost assets, regulatory assets offsetting derivative liabilities, securitized regulatory assets and income tax assets, which are not supported by equity. Amortization and deferrals of regulatory assets/(liabilities) are primarily included on a net basis in Amortization of regulatory assets/(liabilities), net on the accompanying unaudited condensed consolidated statements of income.

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


	As of March 31, 2010		As of December 31, 2009
(Millions of Dollars)	NU		NU
Deferred benefit costs	$	1,111.0	$	1,132.1
Regulatory assets offsetting derivative liabilities		872.2		855.6
Securitized assets		366.0		432.9
Income taxes, net		372.7		363.2
Unrecovered contractual obligations		144.2		149.5
Regulatory tracker deferrals		131.0		104.1
Storm cost deferral		64.9		60.0
Asset retirement obligations		43.7		42.9
Losses on reacquired debt		23.3		24.0
Environmental costs		31.6		24.6
Other regulatory assets		47.4		56.0
Totals	$	3,208.0	$	3,244.9


	As of March 31, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Deferred benefit costs	$	493.3	$	150.7	$	103.1	$	502.4	$	154.2	$	104.9
Regulatory assets offsetting derivative liabilities		836.3		35.2		-		828.6		26.4		-
Securitized assets		144.8		167.7		53.5		195.4		180.1		57.4
Income taxes, net		309.0		25.2		17.2		304.1		21.9		16.9
Unrecovered contractual obligations		113.8		-		30.4		118.0		-		31.5
Regulatory tracker deferrals		90.8		22.0		15.2		70.3		19.0		11.3
Storm cost deferral		5.7		48.7		10.5		-		50.8		9.2
Asset retirement obligations		24.4		14.2		2.8		23.8		14.0		2.8
Losses on reacquired debt		12.3		9.0		0.4		12.7		9.2		0.4
Environmental costs		-		8.7		-		-		1.3		-
Other regulatory assets		11.3		16.3		2.1		13.5		17.2		6.4
Totals	$	2,041.7	$	497.7	$	235.2	$	2,068.8	$	494.1	$	240.8

Additionally, the Regulated companies had $72.6 million ($24.8 million for CL&P, $25.3 million for PSNH, and $11.5 million for WMECO) and $27.1 million ($9.9 million for CL&P and $9.1 million for WMECO) of regulatory costs as of March 31, 2010 and December 31, 2009, respectively, which were included in Other long-term assets on the accompanying unaudited condensed consolidated balance sheets. These amounts represent incurred costs that have not yet been approved for recovery by the applicable regulatory agency. Of the total March 31, 2010 amount, $24.4 million ($13.7 million for CL&P, $5.3 million for PSNH, and $2.8 million for WMECO) relates to the 2010 Healthcare Act. For further information, see Note 1I, "Summary of Significant Accounting Policies - Income Taxes," to the unaudited condensed consolidated financial statements. The $25.3 million at PSNH also includes $20 million of costs incurred for the February 2010 winter storm restorations that met the NHPUC specified criteria for deferral to a major storm cost reserve. Management believes these costs are probable of recovery in future cost-of-service regulated rates.

CL&P deferred $14.2 million of costs for the March 2010 winter storm restorations that met the DPUC criteria for a major storm. CL&P is allowed to collect from customers $3 million per year for major storm costs. Of the $14.2 million, CL&P had previously collected $8.5 million from customers and has established a regulatory asset for the remaining $5.7 million of storm costs.

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


	As of March 31, 2010		As of December 31, 2009
(Millions of Dollars)	NU		NU
Cost of removal	$	209.6	$	209.2
Regulatory liabilities offsetting derivative assets		42.9		109.4
Regulatory tracker deferrals		72.6		62.5
AFUDC transmission incentive (Note 1F)		52.4		51.1
Pension and PBOP liabilities - Yankee Gas acquisition		14.4		15.0
Overrecovered natural gas costs		7.4		7.1
Other regulatory liabilities		27.4		31.4
Totals	$	426.7	$	485.7


	As of March 31, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Cost of removal	$	82.5	$	61.0	$	16.1	$	82.2	$	60.5	$	16.6
Regulatory liabilities offsetting derivative assets		42.9		-		-		109.0		0.4		-
Regulatory tracker deferrals		66.9		5.7		-		56.0		4.4		2.1
AFUDC transmission incentive (Note 1F)		51.6		-		0.8		50.4		-		0.7
WMECO provision for rate refunds		-		-		2.0		-		-		2.0
Other regulatory liabilities		19.2		3.0		0.7		18.6		4.6		0.3
Totals	$	263.1	$	69.7	$	19.6	$	316.2	$	69.9	$	21.7

Property, Plant and Equipment and Accumulated Depreciation

The following tables summarize the NU, CL&P, PSNH, and WMECO investments in utility plant as of March 31, 2010 and December 31, 2009:


	As of March 31,		As of December 31,
	2010		2009
(Millions of Dollars)	NU		NU
Distribution – electric	$	5,963.7	$	5,893.9
Distribution - natural gas		1,081.8		1,071.1
Transmission		3,227.5		3,219.2
Generation		658.1		660.1
Electric and natural gas utility		10,931.1		10,844.3
Other ⁽¹⁾		269.7		265.6
Total property, plant and equipment, gross		11,200.8		11,109.9
Less: accumulated depreciation
Electric and natural gas utility		(2,765.6)		(2,721.3)
Other		(123.7)		(120.3)
Total accumulated depreciation		(2,889.3)		(2,841.6)
Net property, plant and equipment		8,311.5		8,268.3
Construction work in progress		646.2		571.7
Total property, plant and equipment, net	$	8,957.7	$	8,840.0

⁽¹⁾

These assets primarily relate to RRR ($144.4 million and $143.8 million) and NUSCO ($112.5 million and $109 million) as of March 31, 2010 and December 31, 2009, respectively.


	As of March 31, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Distribution	$	4,012.8	$	1,317.1	$	664.6	$	3,960.1	$	1,309.2	$	654.9
Transmission		2,578.1		449.6		199.8		2,573.2		450.2		195.7
Generation		-		658.1		-		-		660.1		-
Total property, plant and equipment, gross		6,590.9		2,424.8		864.4		6,533.3		2,419.5		850.6
Less: accumulated depreciation		(1,452.3)		(811.4)		(225.8)		(1,426.6)		(805.5)		(218.2)
Net property, plant and equipment		5,138.6		1,613.4		638.6		5,106.7		1,614.0		632.4
Construction work in progress		247.7		243.5		82.8		233.9		200.7		73.4
Total property, plant and equipment, net	$	5,386.3	$	1,856.9	$	721.4	$	5,340.6	$	1,814.7	$	705.8

Provision for Uncollectible Accounts

NU, including CL&P, PSNH and WMECO, maintain a provision for uncollectible accounts to record their receivables at an estimated net realizable value. This provision is determined based upon a variety of factors, including applying an estimated uncollectible account percentage to each receivable aging category, historical collection and write-off experience and management’s assessment of collectibility from individual customers. Management reviews at least quarterly the collectibility of the receivables, and if circumstances change, collectibility estimates are adjusted accordingly. Receivable balances are written-off against the provision for uncollectible accounts when these balances are deemed to be uncollectible and the accounts are terminated.

The provision for uncollectible accounts as of March 31, 2010 and December 31, 2009, which are included in Receivables, net on the accompanying unaudited condensed consolidated balance sheets, were as follows:


(Millions of Dollars)	As of March 31, 2010		As of December 31, 2009
NU	$	57.2	$	55.3
CL&P		27.1		26.1
PSNH		5.7		5.1
WMECO		7.5		7.2

Allowance for Funds Used During Construction

AFUDC is included in the cost of the Regulated companies' utility plant and represents the cost of borrowed and equity funds used to finance construction. The portion of AFUDC attributable to borrowed funds is recorded as a reduction of Other interest expense, and the AFUDC related to equity funds is recorded as Other income, net on the accompanying unaudited condensed consolidated statements of income.


	For the Three Months Ended
	March 31, 2010		March 31, 2009
(Millions of Dollars, except percentages)	NU		NU
AFUDC:
Borrowed funds	$	1.9	$	2.1
Equity funds		3.1		0.9
Totals	$	5.0	$	3.0
Average AFUDC rates		6.5%		5.2%


	For the Three Months Ended
	March 31, 2010						March 31, 2009
(Millions of Dollars, except percentages)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
AFUDC:
Borrowed funds	$	0.7	$	1.2	$	-	$	0.9	$	0.9	$	0.1
Equity funds		1.2		1.9		-		-		0.9		-
Totals	$	1.9	$	3.1	$	-	$	0.9	$	1.8	$	0.1
Average AFUDC rates		8.0%		6.3%		0.4%		3.2%		8.1%		3.8%

The Regulated companies' average AFUDC rate is based on a FERC-prescribed formula that produces an average rate using the cost of a company's short-term financings as well as a company's capitalization (preferred stock, long-term debt and common equity). The average rate is applied to average eligible CWIP amounts to calculate AFUDC. AFUDC is recorded on 100 percent of CL&P's and WMECO's CWIP for their NEEWS projects, all of which is being reserved as a regulatory liability to reflect current rate base recovery for 100 percent of the CWIP as a result of FERC-approved transmission incentives.

Other Income, Net

The pre-tax components of other income/(loss) items are as follows:


	For the Three Months Ended
	March 31, 2010		March 31, 2009
(Million of Dollars)	NU		NU
Other Income:
Investment income	$	1.9	$	1.3
Interest income		0.8		0.8
AFUDC - equity funds		3.1		0.9
Energy Independence Act incentives		1.3		3.6
Other		1.0		0.9
Total Other Income		8.1		7.5
Other Loss:
Investment losses		-		(3.2)
Rental expense		-		(0.1)
Total Other Loss		-		(3.3)
Total Other Income, Net	$	8.1	$	4.2


	For the Three Months Ended
	March 31, 2010						March 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Other Income:
Investment income	$	1.3	$	0.3	$	0.3	$	1.0	$	0.2	$	0.2
Interest income		0.6		0.2		0.1		-		0.8		-
AFUDC - equity funds		1.2		1.9		-		-		0.9		-
Energy Independence Act incentives		1.3		-		-		3.6		-		-
Other		0.5		-		0.2		0.3		-		0.1
Total Other Income		4.9		2.4		0.6		4.9		1.9		0.3
Investment losses		-		-		-		(2.2)		(0.5)		(0.5)
Total Other Income/(Loss), Net	$	4.9	$	2.4	$	0.6	$	2.7	$	1.4	$	(0.2)

Other income - other includes equity in earnings of the Yankee companies and regional transmission companies of $0.3 million and $0.5 million for NU (de minimis amount and $0.1 million for CL&P and de minimis amounts for PSNH and WMECO in both periods) for the three months ended March 31, 2010 and 2009, respectively. Equity in earnings relates to the Company's investments, including investments of CL&P, PSNH and WMECO in Connecticut Yankee Atomic Power Company, Maine Yankee Atomic Power Company, and Yankee Atomic Electric Company, and NU's investments in two regional transmission companies. For the three months ended March 31, 2010 and 2009, income tax expense associated with the equity in earnings was $0.1 million and $0.2 million, respectively, for NU (de minimis amounts for CL&P, PSNH and WMECO in both periods).

Dividends received from the Yankee Companies and the regional transmission companies investments were recorded as a reduction to NU's, including CL&P, PSNH and WMECO, investment. There was a de minimis amount of dividends received for the three months ended March 31, 2010. Dividends received were $2.8 million ($1.5 million for CL&P, $0.2 million for PSNH and $0.4 million for WMECO) for the three months ended March 31, 2009.

Special Deposits and Counterparty Deposits

To the extent NU Enterprises, through Select Energy, requires collateral from counterparties, or the counterparties require collateral from Select Energy, cash is held on deposit by Select Energy or with unaffiliated counterparties and brokerage firms as a part of the total collateral required based on Select Energy's position in transactions with the counterparty. Select Energy's right to use cash collateral is determined by the terms of the related agreements. Key factors affecting the unrestricted status of a portion of this cash collateral include the financial standing of Select Energy and of NU as its credit supporter.

NU, including CL&P, PSNH, and WMECO, records special deposits and counterparty deposits posted under master netting agreements as an offset to a Derivative asset or liability if the related derivatives are recorded in a net position. As of March 31, 2010, Select Energy had $9.5 million of collateral posted under master netting agreements and netted against the fair value of the derivatives. As of December 31, 2009, CL&P and Select Energy had $0.5 million and $2.1 million, respectively, of collateral posted under master netting agreements and netted against the fair value of the derivatives.

Special deposits paid by Select Energy to unaffiliated counterparties and brokerage firms not subject to master netting agreements totaled $33.3 million and $28.1 million as of March 31, 2010 and December 31, 2009, respectively. These amounts are included in Prepayments and other current assets on the accompanying unaudited condensed consolidated balance sheets. There were no counterparty deposits for Select Energy as of March 31, 2010 and December 31, 2009.

NU, CL&P, PSNH and WMECO have established credit policies regarding counterparties to minimize overall credit risk. These policies require an evaluation of potential counterparties, financial condition, collateral requirements and the use of standardized agreements that allow for the netting of positive and negative exposures associated with a single counterparty. These evaluations result in established credit limits prior to entering into a contract. As of March 31, 2010 and December 31, 2009, there were no counterparty deposits for these companies.

Income Taxes

On March 23, 2010, President Obama signed into law the 2010 Healthcare Act. The 2010 Healthcare Act was amended by a Reconciliation Bill signed into law on March 30, 2010. The 2010 Healthcare Act includes a provision that eliminated the tax deductibility of certain PBOP contributions equal to the amount of the federal subsidy received by companies like NU, which sponsor retiree health care benefit plans with a prescription drug benefit that is actuarially equivalent to Medicare Part D. NU recorded approximately $18 million in charges to Income tax expense on the accompanying unaudited condensed consolidated statement of income for the three months ended March 31, 2010 as a result of the 2010 Healthcare Act. This represented the loss of previously recognized Accumulated deferred income tax assets. Since the electric and natural gas distribution companies are cost-of-service and rate regulated, some of these costs are able to be deferred and recovered through future rates. As a result, NU recognized approximately $15 million in after-tax deferrals ($24.4 million pre-tax) in Other long-term assets on the accompanying unaudited condensed consolidated balance sheet as of March 31, 2010 with an offset to Amortization of regulatory (liabilities)/assets, net on the accompanying unaudited condensed consolidated statement of income, which reflects the probable recovery in future rates of these previously recognized lost tax benefits. Therefore, only the net amount of approximately $3 million resulted in an impact to Net income for the three months ended March 31, 2010.

Other Taxes

Certain excise taxes levied by state or local governments are collected by CL&P and Yankee Gas from their respective customers. These excise taxes are shown on a gross basis with collections in revenues and payments in expenses. Gross receipts taxes, franchise taxes and other excise taxes were included in Operating revenues and Taxes other than income taxes on the accompanying unaudited condensed consolidated statements of income as follows:


	For the Three Months Ended
(Millions of Dollars)	March 31, 2010		March 31, 2009
NU	$	34.2	$	39.0
CL&P		27.3		30.9

Certain sales taxes are also collected by CL&P, WMECO, and Yankee Gas from their respective customers as agents for state and local governments and are recorded on a net basis with no impact on the accompanying unaudited condensed consolidated statements of income.

Common Shares

The following table provides the amount of NU common shares and the shares of CL&P, PSNH and WMECO common stock authorized and issued and the related par values as of March 31, 2010 and December 31, 2009:


			Shares
			Authorized	Issued
		Per Share Par Value	As of March 31, 2010 and December 31, 2009	As of March 31, 2010	As of December 31, 2009
NU	$	5	225,000,000	195,676,144	195,455,214
CL&P	$	10	24,500,000	6,035,205	6,035,205
PSNH	$	1	100,000,000	301	301
WMECO	$	25	1,072,471	434,653	434,653

As of March 31, 2010 and December 31, 2009, common shares held in treasury by NU were 19,704,756 and 19,708,136, respectively.

Restricted Cash

As of March 31, 2010 and December 31, 2009, PSNH had $11.4 million and $10 million, respectively, of restricted cash held with a trustee related to insurance proceeds received on bondable property, which was included in Prepayments and other current assets on the accompanying unaudited condensed consolidated balance sheets.

Supplemental Cash Flow Information

Non-cash investing activities include capital expenditures incurred but not paid as follows:


(Millions of Dollars)	As of March 31, 2010		As of December 31, 2009
NU	$	98.4	$	125.5
CL&P		30.5		48.2
PSNH		45.9		46.5
WMECO		11.8		10.3

The majority of the short-term borrowings of NU, including CL&P, PSNH, and WMECO, have original maturities of three months or less. Accordingly, borrowings and repayments are shown net on the statement of cash flows. In December 2008, NU parent borrowed $127 million under its revolving credit agreement that had original maturities in excess of 90 days. These amounts were repaid in March 2009. This activity is included in the net activity seen in the statement of cash flows. For the three month period ended March 31, 2010, NU, CL&P, PSNH, and WMECO had no such borrowings.

DERIVATIVE INSTRUMENTS

The costs and benefits of derivative contracts that meet the definition of and are designated as "normal purchases or normal sales" (normal) are recognized in Operating expenses or Operating revenues on the accompanying unaudited condensed consolidated statements of income, as applicable, as electricity or natural gas is delivered.

Derivative contracts that are not recorded as normal under the applicable accounting guidance, are recorded at fair value as current or long-term derivative assets or liabilities. Changes in fair values of NU Enterprises' derivatives are included in Net income. For the Regulated companies, including CL&P, PSNH, and Yankee Gas, regulatory assets or liabilities are recorded for the changes in fair values of derivatives, as these contracts are part of current regulated operating costs, or have an allowed recovery mechanism, and management believes that these costs will continue to be recovered from or refunded to customers in cost-of-service, regulated rates. See below for discussion of "Derivatives not designated as hedges."

CL&P, PSNH, WMECO, and Yankee Gas are exposed to the volatility of the prices of energy and energy-related products in procuring energy supply for their customers. The costs associated with supplying energy to customers are recoverable through customer rates. The Company manages the risks associated with the price volatility of energy and energy-related products through the use of derivative contracts, many of which are accounted for as normal (for WMECO all derivative contracts are accounted for as normal) and the use of nonderivative contracts.

CL&P mitigates the risks associated with the price volatility of energy and energy-related products through the use of standard or last resort service contracts, which fix the price of electricity purchased for customers for periods of time ranging from three months to three years and are accounted for as normal. CL&P has entered into derivatives, including FTR contracts and bilateral basis swaps, to manage the risk of congestion costs associated with its SS and LRS contracts. As required by regulation, CL&P has also entered into derivative and nonderivative contracts for the purchase of energy and energy-related products and contracts related to capacity. While the risks managed by these contracts are regional congestion costs and capacity price risks that are not specific to CL&P, Connecticut's electric distribution companies, including CL&P, are required to enter into these contracts. Management believes any costs or benefits from these contracts are recoverable from or refunded to CL&P's customers, and, therefore any changes in fair value are recorded as Regulatory assets and Regulatory liabilities on the accompanying unaudited condensed consolidated balance sheets.

WMECO mitigates the risks associated with the volatility of the prices of energy and energy-related products in procuring energy supply for its customers through the use of default service contracts, which fix the price of electricity purchased for customers for periods of time ranging from three months to three years and are accounted for as normal.

PSNH mitigates the risks associated with the volatility of energy prices in procuring energy supply for its customers through its generation facilities and the use of derivative contracts, including energy forward contracts, options and FTRs. PSNH enters into these contracts in order to stabilize electricity prices for customers. Management believes any costs or benefits from these contracts are recoverable from or will be refunded to PSNH's customers, and, therefore any changes in fair value are recorded as Regulatory assets and Regulatory liabilities on the accompanying unaudited condensed consolidated balance sheets.

Yankee Gas mitigates the risks associated with supply availability and volatility of natural gas prices through the use of storage facilities and long-term agreements to purchase natural gas supply for customers that include nonderivative contracts and contracts that are accounted for as normal. Yankee Gas enters into these contracts to meet required demand levels throughout the heating season. Yankee Gas also manages supply risk through the use of options contracts. Management believes any costs or benefits from these contracts are recoverable from or refundable to Yankee Gas' customers, and, therefore, any changes in fair value are recorded as Regulatory assets and Regulatory liabilities on the accompanying unaudited condensed consolidated balance sheets.

NU Enterprises, through Select Energy, has one remaining fixed price forward sales contract that is part of its wholesale energy marketing portfolio. NU Enterprises mitigates the price risk asso