Edgar Filing: CONNECTICUT LIGHT & POWER CO

September 2010 Form 10-Q

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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 September 30, 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

	ü

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 October 31, 2010
Northeast Utilities Common shares, $5.00 par value	176,317,768 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 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
NGS	Northeast Generation Services Company and subsidiaries
NGS Mechanical	NGS Mechanical, Inc.
NPT	Northern Pass Transmission LLC, a jointly owned limited liability company, held by NUTV and NSTAR on a 75 percent and 25 percent basis, respectively
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, NGS Mechanical, 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 activities of PSNH and WMECO, Yankee Gas, a natural gas local distribution company, and NPT
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
CERCLA	The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980
CfD	Contract for Differences
CSC	Connecticut Siting Council
CTA	Competitive Transition Assessment
CWIP	Construction work in progress
CYAPC	Connecticut Yankee Atomic Power Company
EFSB	Massachusetts Energy Facilities Siting Board
EPS	Earnings Per Share
ERISA	Employee Retirement Income Security Act of 1974
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, a municipal department of the town of Holyoke
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
HQ Hydro Renewable Energy	H.Q. Hydro Renewable Energy, Inc., a wholly-owned subsidiary of Hydro-Québec
IPP	Independent Power Producers
ISO-NE	ISO New England, Inc., the New England Independent System Operator
KV	Kilovolt
KWh	Kilowatt-Hours
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
MYAPC	Maine Yankee Atomic Power Company
NEEWS	New England East-West Solution
Northern Pass	The high voltage direct current transmission line project from Canada to New Hampshire
NU supplemental benefit trust	The NU Trust Under Supplemental Executive Retirement Plan
NWPP	Northern Wood Power Project
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
RMR	Reliability Must Run
RRB	Rate Reduction Bond or Rate Reduction Certificate
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 Service Agreement
UI	The United Illuminating Company
VIE	Variable interest entity
WWL Project	The construction of a 16-mile gas pipeline between Waterbury and Wallingford, Connecticut and the increase of vaporization output of Yankee Gas' LNG plant
YAEC	Yankee Atomic Electric Company
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) - September 30, 2010 and December 31, 2009	2

Condensed Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2010 and 2009	4

Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2010 and 2009	5

The Connecticut Light and Power Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2010 and December 31, 2009	8

Condensed Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2010 and 2009	10

Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2010 and 2009	11

Public Service Company of New Hampshire and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2010 and December 31, 2009	14

Condensed Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2010 and 2009	16

Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2010 and 2009	17

Western Massachusetts Electric Company and Subsidiary

Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2010 and December 31, 2009	20

Condensed Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2010 and 2009	22

Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2010 and 2009	23

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

Report of Independent Registered Public Accounting Firm	52

iii


	Page

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

Northeast Utilities and Subsidiaries		53

The Connecticut Light and Power Company and Subsidiaries		72

Public Service Company of New Hampshire and Subsidiaries		76

Western Massachusetts Electric Company and Subsidiary		79

ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk		82

ITEM 4 - Controls and Procedures		82

PART II - OTHER INFORMATION

ITEM 1 - Legal Proceedings		83

ITEM 1A - Risk Factors		83

ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds		84

ITEM 6 – Exhibits		85

SIGNATURES		87

NORTHEAST UTILITIES AND SUBSIDIARIES


NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash and Cash Equivalents	$	41,179	$	26,952
Receivables, Net		526,280		512,770
Unbilled Revenues		151,923		229,326
Fuel, Materials and Supplies		247,254		277,085
Marketable Securities		79,969		66,236
Derivative Assets		10,651		31,785
Prepayments and Other Current Assets		178,739		123,700
Total Current Assets		1,235,995		1,267,854

Property, Plant and Equipment, Net		9,318,017		8,839,965

Deferred Debits and Other Assets:
Regulatory Assets		3,085,019		3,244,931
Goodwill		287,591		287,591
Marketable Securities		45,727		54,905
Derivative Assets		134,704		189,751
Other Long-Term Assets		190,535		172,682
Total Deferred Debits and Other Assets		3,743,576		3,949,860



Total Assets	$	14,297,588	$	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)


		September 30,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Banks	$	156,000	$	100,313
Long-Term Debt - Current Portion		66,286		66,286
Accounts Payable		379,184		457,582
Obligations to Third Party Suppliers		71,995		44,978
Accrued Taxes		69,870		50,246
Accrued Interest		107,828		83,763
Derivative Liabilities		61,317		37,617
Other Current Liabilities		144,668		138,627
Total Current Liabilities		1,057,148		979,412

Rate Reduction Bonds		246,711		442,436

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		1,546,255		1,380,143
Regulatory Liabilities		434,498		485,706
Derivative Liabilities		996,209		955,646
Accrued Pension		759,263		781,431
Other Long-Term Liabilities		781,246		845,868
Total Deferred Credits and Other Liabilities		4,517,471		4,448,794

Capitalization:
Long-Term Debt		4,635,960		4,492,935

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

Equity:
Common Shareholders' Equity:
Common Shares		978,677		977,276
Capital Surplus, Paid In		1,772,959		1,762,097
Deferred Contribution Plan		-		(2,944)
Retained Earnings		1,368,956		1,246,543
Accumulated Other Comprehensive Loss		(40,979)		(43,467)
Treasury Stock		(356,950)		(361,603)
Common Shareholders' Equity		3,722,663		3,577,902
Noncontrolling Interest		1,435		-
Total Equity		3,724,098		3,577,902
Total Capitalization		8,476,258		8,187,037



Total Liabilities and Capitalization	$	14,297,588	$	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 September 30,				Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)	2010		2009		2010		2009

Operating Revenues	$	1,243,337	$	1,306,173	$	3,694,182	$	4,124,087

Operating Expenses:
Fuel, Purchased and Net Interchange Power		494,125		611,632		1,539,703		2,034,151
Other Operating Expenses		233,472		250,296		688,409		732,562
Maintenance		49,951		61,609		162,405		166,812
Depreciation		70,954		77,074		228,685		231,825
Amortization of Regulatory Assets, Net		50,341		10,542		50,908		19,194
Amortization of Rate Reduction Bonds		60,434		56,669		175,000		163,871
Taxes Other Than Income Taxes		84,427		75,798		244,431		216,651
Total Operating Expenses		1,043,704		1,143,620		3,089,541		3,565,066
Operating Income		199,633		162,553		604,641		559,021

Interest Expense:
Interest on Long-Term Debt		57,802		55,733		173,594		168,191
Interest on Rate Reduction Bonds		4,661		8,657		16,985		28,889
Other Interest		3,435		5,245		9,778		8,490
Interest Expense		65,898		69,635		200,357		205,570
Other Income, Net		10,118		9,490		19,726		26,081
Income Before Income Tax Expense		143,853		102,408		424,010		379,532
Income Tax Expense		41,918		36,230		161,126		130,047
Net Income		101,935		66,178		262,884		249,485
Net Income Attributable to Noncontrolling Interests		1,411		1,390		4,204		4,169
Net Income Attributable to Controlling Interests	$	100,524	$	64,788	$	258,680	$	245,316

Basic Earnings Per Common Share	$	0.57	$	0.37	$	1.47	$	1.43

Fully Diluted Earnings Per Common Share	$	0.57	$	0.37	$	1.46	$	1.43

Dividends Declared Per Common Share	$	0.26	$	0.24	$	0.77	$	0.71

Weighted Average Common Shares Outstanding:
Basic		176,752,714		175,358,776		176,557,889		170,958,396
Fully Diluted		177,012,278		175,995,506		176,762,088		171,532,913

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)

		Nine Months Ended September 30,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	262,884	$	249,485
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		24,632		31,519
Depreciation		228,685		231,825
Deferred Income Taxes		105,070		77,617
Pension and PBOP Expense, Net of PBOP Contributions		41,709		10,197
Pension Contribution		(45,000)		-
Regulatory Overrecoveries, Net		44,479		44,519
Amortization of Regulatory Assets, Net		50,908		19,194
Amortization of Rate Reduction Bonds		175,000		163,871
Derivative Assets and Liabilities		(9,228)		(18,519)
Other		(46,190)		(13,485)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		20,905		122,700
Fuel, Materials and Supplies		33,337		18,900
Taxes Receivable/Accrued		(12,904)		59,641
Other Current Assets		(6,379)		(7,490)
Accounts Payable		(59,601)		(242,179)
Other Current Liabilities		35,340		13,335
Net Cash Flows Provided by Operating Activities		843,647		761,130

Investing Activities:
Investments in Property and Plant		(677,579)		(634,446)
Proceeds from Sales of Marketable Securities		146,305		182,131
Purchases of Marketable Securities		(148,075)		(183,814)
Other Investing Activities		(10,412)		4,298
Net Cash Flows Used in Investing Activities		(689,761)		(631,831)

Financing Activities:
Issuance of Common Shares		-		388,529
Cash Dividends on Common Shares		(135,349)		(120,647)
Cash Dividends on Preferred Stock		(4,169)		(4,169)
Increase/(Decrease) in Short-Term Debt		55,687		(293,663)
Issuance of Long-Term Debt		145,000		312,000
Retirements of Long-Term Debt		(4,286)		(54,286)
Retirements of Rate Reduction Bonds		(195,724)		(183,208)
Other Financing Activities		(818)		(14,694)
Net Cash Flows (Used In)/Provided by Financing Activities		(139,659)		29,862
Net Increase in Cash and Cash Equivalents		14,227		159,161
Cash and Cash Equivalents - Beginning of Period		26,952		89,816
Cash and Cash Equivalents - End of Period	$	41,179	$	248,977

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

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THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES


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

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	7,118	$	45
Receivables, Net		350,738		327,969
Accounts Receivable from Affiliated Companies		1,646		2,362
Notes Receivable from Affiliated Companies		-		97,775
Unbilled Revenues		91,434		140,632
Materials and Supplies		62,292		65,623
Derivative Assets		1,930		24,593
Prepayments and Other Current Assets		79,116		18,385
Total Current Assets		594,274		677,384

Property, Plant and Equipment, Net		5,487,899		5,340,561

Deferred Debits and Other Assets:
Regulatory Assets		1,965,529		2,068,778
Derivative Assets		118,761		183,231
Other Long-Term Assets		87,032		94,610
Total Deferred Debits and Other Assets		2,171,322		2,346,619



Total Assets	$	8,253,495	$	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)

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Affiliated Companies	$	26,325	$	-
Long-Term Debt - Current Portion		62,000		62,000
Accounts Payable		178,654		242,853
Accounts Payable to Affiliated Companies		41,816		48,795
Obligations to Third Party Suppliers		65,907		39,609
Accrued Taxes		48,417		36,860
Accrued Interest		46,784		49,867
Derivative Liabilities		33,544		9,770
Other Current Liabilities		42,729		61,237
Total Current Liabilities		546,176		550,991

Rate Reduction Bonds		48,054		195,587

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		994,504		901,527
Regulatory Liabilities		278,168		316,160
Derivative Liabilities		960,228		913,349
Accrued Pension		42,706		51,319
Other Long-Term Liabilities		396,850		425,887
Total Deferred Credits and Other Liabilities		2,672,456		2,608,242

Capitalization:
Long-Term Debt		2,520,914		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		1,602,412		1,601,792
Retained Earnings		689,744		714,210
Accumulated Other Comprehensive Loss		(2,813)		(3,171)
Common Stockholder's Equity		2,349,695		2,373,183
Total Capitalization		4,986,809		5,009,744



Total Liabilities and Capitalization	$	8,253,495	$	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 September 30,				Nine Months Ended September 30,
(Thousands of Dollars)	2010		2009		2010		2009

Operating Revenues	$	789,249	$	859,283	$	2,292,146	$	2,598,723

Operating Expenses:
Fuel, Purchased and Net Interchange Power		334,230		419,620		987,604		1,317,159
Other Operating Expenses		127,779		149,302		382,884		419,887
Maintenance		21,056		31,215		75,715		86,113
Depreciation		38,100		46,519		133,568		140,000
Amortization of Regulatory Assets, Net		32,997		7,911		55,308		24,551
Amortization of Rate Reduction Bonds		43,778		40,976		125,985		117,725
Taxes Other Than Income Taxes		59,884		53,648		168,001		149,736
Total Operating Expenses		657,824		749,191		1,929,065		2,255,171
Operating Income		131,425		110,092		363,081		343,552

Interest Expense:
Interest on Long-Term Debt		33,656		33,514		100,918		99,486
Interest on Rate Reduction Bonds		1,529		4,455		6,805		15,342
Other Interest		1,496		2,838		4,692		1,420
Interest Expense		36,681		40,807		112,415		116,248
Other Income, Net		6,938		7,070		12,616		17,948
Income Before Income Tax Expense		101,682		76,355		263,282		245,252
Income Tax Expense		32,636		29,818		101,739		87,178
Net Income	$	69,046	$	46,537	$	161,543	$	158,074

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)

		Nine Months Ended September 30,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	161,543	$	158,074
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		7,088		11,170
Depreciation		133,568		140,000
Deferred Income Taxes		49,636		34,458
Pension and PBOP Expense, Net of PBOP Contributions		388		(4,329)
Regulatory Overrecoveries, Net		57,696		51,378
Amortization of Regulatory Assets, Net		55,308		24,551
Amortization of Rate Reduction Bonds		125,985		117,725
Other		(38,073)		(25,452)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		2,653		52,715
Materials and Supplies		3,331		(6,205)
Taxes Receivable/Accrued		(13,016)		63,404
Other Current Assets		(16,990)		(15,395)
Accounts Payable		(55,383)		(121,852)
Other Current Liabilities		17,026		1,421
Net Cash Flows Provided by Operating Activities		490,760		481,663

Investing Activities:
Investments in Property and Plant		(274,193)		(331,644)
Decrease/(Increase) in NU Money Pool Lending		97,775		(89,975)
Other Investing Activities		205		1,630
Net Cash Flows Used in Investing Activities		(176,213)		(419,989)

Financing Activities:
Cash Dividends on Common Stock		(181,841)		(85,386)
Cash Dividends on Preferred Stock		(4,169)		(4,169)
Decrease in Short-Term Debt		-		(154,982)
Issuance of Long-Term Debt		-		312,000
Increase/(Decrease) in NU Money Pool Borrowings		26,325		(102,725)
Retirements of Rate Reduction Bonds		(147,533)		(137,859)
Capital Contributions from NU Parent		-		116,591
Other Financing Activities		(256)		(2,923)
Net Cash Flows Used in Financing Activities		(307,474)		(59,453)
Net Increase in Cash		7,073		2,221
Cash - Beginning of Period		45		-
Cash - End of Period	$	7,118	$	2,221

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

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PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES


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

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	643	$	1,974
Receivables, Net		97,930		89,337
Accounts Receivable from Affiliated Companies		917		286
Unbilled Revenues		41,870		49,358
Taxes Receivable		7,534		22,600
Fuel, Materials and Supplies		102,765		127,447
Prepayments and Other Current Assets		14,591		36,387
Total Current Assets		266,250		327,389

Property, Plant and Equipment, Net		1,986,903		1,814,714

Deferred Debits and Other Assets:
Regulatory Assets		454,988		494,077
Other Long-Term Assets		88,853		61,011
Total Deferred Debits and Other Assets		543,841		555,088



Total Assets	$	2,796,994	$	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)

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Affiliated Companies	$	26,600	$	26,700
Accounts Payable		92,886		109,521
Accounts Payable to Affiliated Companies		13,845		20,083
Accrued Interest		16,825		10,255
Derivative Liabilities		18,202		18,785
Other Current Liabilities		35,339		27,983
Total Current Liabilities		203,697		213,327

Rate Reduction Bonds		151,479		188,113

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		315,948		275,669
Regulatory Liabilities		68,868		69,872
Derivative Liabilities		3,577		7,635
Accrued Pension		241,287		272,905
Other Long-Term Liabilities		96,175		105,970
Total Deferred Credits and Other Liabilities		725,855		732,051

Capitalization:
Long-Term Debt		836,337		836,255

Common Stockholder's Equity:
Common Stock		-		-
Capital Surplus, Paid In		544,000		420,169
Retained Earnings		336,230		307,988
Accumulated Other Comprehensive Loss		(604)		(712)
Common Stockholder's Equity		879,626		727,445
Total Capitalization		1,715,963		1,563,700



Total Liabilities and Capitalization	$	2,796,994	$	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 September 30,				Nine Months Ended September 30,
(Thousands of Dollars)	2010		2009		2010		2009

Operating Revenues	$	276,976	$	275,135	$	773,866	$	845,719

Operating Expenses:
Fuel, Purchased and Net Interchange Power		94,137		120,437		281,161		395,156
Other Operating Expenses		53,133		55,038		172,332		176,242
Maintenance		20,933		22,327		62,560		58,701
Depreciation		17,454		15,567		49,443		46,128
Amortization of Regulatory Assets/(Liabilities), Net		14,513		3,157		(2,809)		(1,656)
Amortization of Rate Reduction Bonds		12,844		12,123		37,481		35,337
Taxes Other Than Income Taxes		14,191		12,361		40,616		34,374
Total Operating Expenses		227,205		241,010		640,784		744,282
Operating Income		49,771		34,125		133,082		101,437

Interest Expense:
Interest on Long-Term Debt		8,925		8,181		27,705		24,551
Interest on Rate Reduction Bonds		2,320		3,146		7,557		10,210
Other Interest		208		371		572		34
Interest Expense		11,453		11,698		35,834		34,795
Other Income, Net		3,667		2,239		5,882		6,469
Income Before Income Tax Expense		41,985		24,666		103,130		73,111
Income Tax Expense		13,231		8,463		36,950		22,843
Net Income	$	28,754	$	16,203	$	66,180	$	50,268

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)

		Nine Months Ended September 30,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	66,180	$	50,268
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		7,237		7,014
Depreciation		49,443		46,128
Deferred Income Taxes		31,876		16,852
Pension and PBOP Expense, Net of PBOP Contributions		14,707		13,137
Pension Contribution		(45,000)		-
Regulatory Underrecoveries, Net		(5,450)		(10,316)
Amortization of Regulatory Liabilities, Net		(2,809)		(1,656)
Amortization of Rate Reduction Bonds		37,481		35,337
Insurance Proceeds		10,000		10,066
Other		(32,525)		(6,123)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		(8,973)		(6,937)
Fuel, Materials and Supplies		28,188		878
Taxes Receivable/Accrued		15,066		1,934
Other Current Assets		12,863		10,771
Accounts Payable		(11,599)		(77,433)
Other Current Liabilities		8,989		11,256
Net Cash Flows Provided by Operating Activities		175,674		101,176

Investing Activities:
Investments in Property and Plant		(217,954)		(169,434)
Decrease in NU Money Pool Lending		-		53,800
Other Investing Activities		(7,753)		(759)
Net Cash Flows Used in Investing Activities		(225,707)		(116,393)

Financing Activities:
Cash Dividends on Common Stock		(37,938)		(30,633)
(Decrease)/Increase in NU Money Pool Borrowings		(100)		12,700
Retirements of Rate Reduction Bonds		(36,635)		(34,515)
Capital Contributions from NU Parent		123,551		68,946
Other Financing Activities		(176)		(301)
Net Cash Flows Provided by Financing Activities		48,702		16,197
Net (Decrease)/Increase in Cash		(1,331)		980
Cash - Beginning of Period		1,974		195
Cash - End of Period	$	643	$	1,175

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

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WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY


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

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

ASSETS

Current Assets:
Cash	$	1	$	1
Receivables, Net		39,077		38,415
Accounts Receivable from Affiliated Companies		312		191
Unbilled Revenues		12,969		16,090
Materials and Supplies		9,192		8,314
Marketable Securities		38,424		28,261
Prepayments and Other Current Assets		4,034		5,966
Total Current Assets		104,009		97,238

Property, Plant and Equipment, Net		779,749		705,760

Deferred Debits and Other Assets:
Regulatory Assets		228,094		240,804
Marketable Securities		18,584		28,500
Other Long-Term Assets		38,224		29,498
Total Deferred Debits and Other Assets		284,902		298,802



Total Assets	$	1,168,660	$	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)

		September 30,		December 31,
(Thousands of Dollars)		2010		2009

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Affiliated Companies	$	10,200	$	136,100
Accounts Payable		40,027		36,680
Accounts Payable to Affiliated Companies		4,011		7,924
Other Current Liabilities		12,108		14,147
Total Current Liabilities		66,346		194,851

Rate Reduction Bonds		47,178		58,735

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		218,250		211,391
Regulatory Liabilities		21,887		21,683
Other Long-Term Liabilities		58,207		62,858
Total Deferred Credits and Other Liabilities		298,344		295,932

Capitalization:
Long-Term Debt		400,249		305,475

Common Stockholder's Equity:
Common Stock		10,866		10,866
Capital Surplus, Paid In		248,105		145,400
Retained Earnings		97,632		90,549
Accumulated Other Comprehensive Loss		(60)		(8)
Common Stockholder's Equity		356,543		246,807
Total Capitalization		756,792		552,282



Total Liabilities and Capitalization	$	1,168,660	$	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 September 30,				Nine Months Ended September 30,
(Thousands of Dollars)	2010		2009		2010		2009

Operating Revenues	$	103,719	$	96,622	$	296,400	$	309,823

Operating Expenses:
Fuel, Purchased and Net Interchange Power		39,922		42,403		120,274		151,936
Other Operating Expenses		27,314		19,022		73,607		64,503
Maintenance		4,915		5,196		14,825		13,437
Depreciation		5,838		5,609		17,658		16,758
Amortization of Regulatory Assets/(Liabilities), Net		2,735		(430)		445		(3,769)
Amortization of Rate Reduction Bonds		3,812		3,569		11,534		10,809
Taxes Other Than Income Taxes		4,319		4,104		12,483		10,518
Total Operating Expenses		88,855		79,473		250,826		264,192
Operating Income		14,864		17,149		45,574		45,631

Interest Expense:
Interest on Long-Term Debt		4,691		3,534		13,298		10,531
Interest on Rate Reduction Bonds		811		1,057		2,623		3,337
Other Interest		93		238		275		632
Interest Expense		5,595		4,829		16,196		14,500
Other Income, Net		747		160		1,512		1,095
Income Before Income Tax Expense		10,016		12,480		30,890		32,226
Income Tax Expense		2,679		3,971		12,645		11,764
Net Income	$	7,337	$	8,509	$	18,245	$	20,462

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)

		Nine Months Ended September 30,
(Thousands of Dollars)		2010		2009

Operating Activities:
Net Income	$	18,245	$	20,462
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		5,602		5,858
Depreciation		17,658		16,758
Deferred Income Taxes		4,712		17,227
Pension and PBOP Expense, Net of PBOP Contributions		(524)		(6,840)
Regulatory (Underrecoveries)/Overrecoveries, Net		(8,696)		3,083
Amortization of Regulatory Assets/(Liabilities), Net		445		(3,769)
Amortization of Rate Reduction Bonds		11,534		10,809
Other		(4,437)		(3,580)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		(2,896)		4,633
Materials and Supplies		(878)		124
Taxes Receivable/Accrued		1,203		5,616
Other Current Assets		728		1,016
Accounts Payable		(9,900)		(27,176)
Other Current Liabilities		(2,109)		(5,720)
Net Cash Flows Provided by Operating Activities		30,687		38,501

Investing Activities:
Investments in Property and Plant		(77,710)		(63,726)
Proceeds from Sales of Marketable Securities		94,575		99,898
Purchases of Marketable Securities		(94,896)		(100,413)
Other Investing Activities		(754)		581
Net Cash Flows Used in Investing Activities		(78,785)		(63,660)

Financing Activities:
Cash Dividends on Common Stock		(11,162)		(14,652)
Increase in Short-Term Debt		-		45,227
Issuance of Long-Term Debt		95,000		-
(Decrease)/Increase in NU Money Pool Borrowings		(125,900)		4,600
Retirements of Rate Reduction Bonds		(11,557)		(10,833)
Capital Contributions from NU Parent		102,600		864
Other Financing Activities		(883)		(46)
Net Cash Flows Provided by Financing Activities		48,098		25,160
Net Increase in Cash		-		1
Cash - Beginning of Period		1		-
Cash - End of Period	$	1	$	1

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

Proposed Merger with NSTAR

On October 18, 2010, NU and NSTAR announced that each company's Board of Trustees unanimously approved a Definitive Merger Agreement (the "agreement") to create a combined company that will be called Northeast Utilities. The transaction will be a merger of equals in a tax-free share for share transfer. The combined company will provide electric and natural gas energy delivery service to approximately 3.5 million electric and natural gas customers through six regulated electric and natural gas utilities in Connecticut, Massachusetts and New Hampshire.

Under the terms of the agreement, NSTAR shareholders would receive 1.312 NU common shares for each common share of NSTAR that they own (the "exchange ratio"). The exchange ratio is structured to result in a no premium merger based on the average closing share price of each company's common shares for the 20 trading days preceding the announcement. Following completion of the merger, the market capitalization of the combined company would be comprised of approximately 56 percent of NU shareholders and approximately 44 percent of former NSTAR shareholders. It is anticipated that NU would issue approximately 137 million shares to the NSTAR shareholders as a result of the merger. Following the closing of the merger, NU's first dividend per common share declared after the closing would be increased to a rate that is equivalent to NSTAR's last dividend per common share paid prior to the closing divided by the exchange ratio.

Completion of the merger is subject to various conditions, including, among others, approval by holders of two-thirds of the outstanding common shares of both companies, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the effectiveness of the registration statement for the NU common shares to be issued to NSTAR shareholders in the merger, and receipt of all required regulatory approvals. The companies anticipate that the regulatory approvals can be obtained in nine to twelve months. The companies intend to seek shareholder approval of the merger in early 2011 and expect that the merger will close in the third quarter of 2011.

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, the first and second quarter 2010 combined Quarterly Reports 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 September 30, 2010 and December 31, 2009, the results of operations for the three and nine months ended September 30, 2010 and 2009, and cash flows for the nine months ended September 30, 2010 and 2009. The results of operations for the three months ended September 30, 2010 and 2009, and the results of operations and cash flows for the nine months ended September 30, 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 outside of the consolidated group consist of 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 in a power plant, NU evaluates the activities of that particular 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 September 30, 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 September 30, 2010, NU was not identified as the primary beneficiary of, and therefore does not consolidate, any power plant VIEs. The Company does not have any variable interests in a VIE that are 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 and the statements of cash flows for all companies presented. 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 13, "Subsequent Events," for further information.

Fair Value Measurements

NU, including CL&P, PSNH, and WMECO, applies fair value measurement guidance to all 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 10, "Marketable Securities," to the unaudited condensed consolidated financial statements. There were no changes to the valuation methodologies for derivative instruments or marketable securities as of September 30, 2010 and December 31, 2009.

Regulatory Accounting

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 a return, except for the majority of deferred benefit cost assets, regulatory assets offsetting derivative liabilities, securitized regulatory assets and income tax regulatory assets, all of which are not in rate base. 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 September 30, 2010		As of December 31, 2009
(Millions of Dollars)		NU		NU
Deferred Benefit Costs	$	1,078.1	$	1,132.1
Regulatory Assets Offsetting Derivative Liabilities		922.4		855.6
Securitized Assets		236.6		432.9
Income Taxes, Net		380.8		363.2
Unrecovered Contractual Obligations		133.4		149.5
Regulatory Tracker Deferrals		83.9		104.1
Storm Cost Deferral		62.3		60.0
Asset Retirement Obligations		45.2		42.9
Losses on Reacquired Debt		22.2		24.0
Deferred Environmental Remediation Costs		35.5		24.6
Other Regulatory Assets		84.6		56.0
Totals	$	3,085.0	$	3,244.9


	As of September 30, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Deferred Benefit Costs	$	477.3	$	142.6	$	98.9	$	502.4	$	154.2	$	104.9
Regulatory Assets Offsetting Derivative Liabilities		899.8		21.8		-		828.6		26.4		-
Securitized Assets		48.0		142.7		45.9		195.4		180.1		57.4
Income Taxes, Net		310.3		28.9		18.1		304.1		21.9		16.9
Unrecovered Contractual Obligations		105.6		-		27.8		118.0		-		31.5
Regulatory Tracker Deferrals		37.4		25.5		16.2		70.3		19.0		11.3
Storm Cost Deferral		4.7		42.3		15.3		-		50.8		9.2
Asset Retirement Obligations		25.5		14.4		3.0		23.8		14.0		2.8
Losses on Reacquired Debt		11.7		8.6		0.4		12.7		9.2		0.4
Deferred Environmental Remediation Costs		-		8.4		-		-		1.3		-
Other Regulatory Assets		45.2		19.8		2.5		13.5		17.2		6.4
Totals	$	1,965.5	$	455.0	$	228.1	$	2,068.8	$	494.1	$	240.8

Additionally, the Regulated companies had $45.3 million ($0.5 million for CL&P, $25 million for PSNH, and $11.9 million for WMECO) and $27.1 million ($9.9 million for CL&P and $9.1 million for WMECO) of regulatory costs as of September 30, 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. Management believes these costs are probable of recovery in future cost-of-service regulated rates.

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


	As of September 30, 2010		As of December 31, 2009
(Millions of Dollars)		NU		NU
Cost of Removal	$	197.6	$	209.2
Regulatory Liabilities Offsetting Derivative Assets		25.7		109.4
Regulatory Tracker Deferrals		99.2		62.5
AFUDC Transmission Incentive		58.3		51.1
Pension and PBOP Liabilities - Yankee Gas Acquisition		13.1		15.0
Other Regulatory Liabilities		40.6		38.5
Totals	$	434.5	$	485.7


	As of September 30, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Cost of Removal	$	78.7	$	58.3	$	11.6	$	82.2	$	60.5	$	16.6
Regulatory Liabilities Offsetting Derivative Assets		25.7		-		-		109.0		0.4		-
Regulatory Tracker Deferrals		88.1		7.4		3.7		56.0		4.4		2.1
AFUDC Transmission Incentive		54.7		-		3.6		50.4		-		0.7
WMECO Provision For Rate Refunds		-		-		2.0		-		-		2.0
Other Regulatory Liabilities		31.0		3.2		1.0		18.6		4.6		0.3
Totals	$	278.2	$	68.9	$	21.9	$	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 September 30, 2010 and December 31, 2009:


	As of September 30, 2010		As of December 31, 2009
(Millions of Dollars)	NU		NU
Distribution - Electric	$	6,100.1	$	5,893.9
Distribution - Natural Gas		1,098.4		1,071.1
Transmission		3,286.4		3,219.2
Generation		680.0		660.1
Electric and Natural Gas Utility		11,164.9		10,844.3
Other ⁽¹⁾		282.1		265.6
Total Property, Plant and Equipment, Gross		11,447.0		11,109.9
Less: Accumulated Depreciation
Electric and Natural Gas Utility		(2,844.5)		(2,721.3)
Other		(121.8)		(120.3)
Total Accumulated Depreciation		(2,966.3)		(2,841.6)
Property, Plant and Equipment, Net		8,480.7		8,268.3
Construction Work in Progress		837.3		571.7
Total Property, Plant and Equipment, Net	$	9,318.0	$	8,840.0

⁽¹⁾

These assets are primarily owned by RRR ($146.9 million and $143.8 million) and NUSCO ($122.3 million and $109 million) as of September 30, 2010 and December 31, 2009, respectively.


	As of September 30, 2010						As of December 31, 2009
(Millions of Dollars)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
Distribution	$	4,117.3	$	1,345.6	$	669.1	$	3,960.1	$	1,309.2	$	654.9
Transmission		2,605.2		459.7		221.5		2,573.2		450.2		195.7
Generation		-		680.0		-		-		660.1		-
Total Property, Plant and Equipment, Gross		6,722.5		2,485.3		890.6		6,533.3		2,419.5		850.6
Less: Accumulated Depreciation		(1,501.1)		(832.7)		(227.5)		(1,426.6)		(805.5)		(218.2)
Property, Plant and Equipment, Net		5,221.4		1,652.6		663.1		5,106.7		1,614.0		632.4
Construction Work in Progress		266.5		334.3		116.6		233.9		200.7		73.4
Total Property, Plant and Equipment, Net	$	5,487.9	$	1,986.9	$	779.7	$	5,340.6	$	1,814.7	$	705.8

Provision for Uncollectible Accounts

NU, including CL&P, PSNH and WMECO, maintains a provision for uncollectible accounts to record 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, based upon 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 the accounts are terminated and these balances are deemed to be uncollectible.

The provision for uncollectible accounts as of September 30, 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 September 30, 2010		As of December 31, 2009
NU	$	55.2	$	55.3
CL&P		27.7		26.1
PSNH		6.5		5.1
WMECO		7.7		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				For the Nine Months Ended
	September 30, 2010		September 30, 2009		September 30, 2010		September 30, 2009
(Millions of Dollars, except percentages)	NU		NU		NU		NU
AFUDC:
Borrowed Funds	$	2.8	$	1.2	$	6.9	$	4.7
Equity Funds		4.6		2.8		11.6		6.2
Totals	$	7.4	$	4.0	$	18.5	$	10.9
Average AFUDC Rates		7.3%		6.4%		7.1%		6.2%


	For the Three Months Ended
	September 30, 2010						September 30, 2009
(Millions of Dollars, except percentages)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
AFUDC:
Borrowed Funds	$	0.7	$	1.8	$	0.1	$	0.4	$	0.8	$	-
Equity Funds		1.2		2.9		0.2		1.9		0.9		-
Totals	$	1.9	$	4.7	$	0.3	$	2.3	$	1.7	$	-
Average AFUDC Rates		8.1%		6.9%		8.3%		8.2%		6.1%		0.8%


	For the Nine Months Ended
	September 30, 2010						September 30, 2009
(Millions of Dollars, except percentages)	CL&P		PSNH		WMECO		CL&P		PSNH		WMECO
AFUDC:
Borrowed Funds	$	2.0	$	4.4	$	0.2	$	1.9	$	2.4	$	0.2
Equity Funds		3.7		7.1		0.4		3.5		2.5		-
Totals	$	5.7	$	11.5	$	0.6	$	5.4	$	4.9	$	0.2
Average AFUDC Rates		8.4%		6.7%		5.8%		6.8%		6.7%		2.0%

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		For the Nine Months Ended
	September 30, 2010	September 30, 2009	September 30, 2010	September 30, 2009
(Millions of Dollars)	NU	NU	NU	NU
Other