Fair value of guarantees

  
D.    Guarantees and IndemnificationsIn the normal course of business, Eversource parent provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric and PSNH, in the form of guarantees. Management does not anticipate a material impact to net income or cash flows as a result of these various guarantees and indemnifications.    
Guarantees issued on behalf of unconsolidated entities, including equity method offshore wind investments, for which Eversource parent is the guarantor, are recorded at fair value as a liability on the balance sheet at the inception of the guarantee. Eversource regularly reviews performance risk under these guarantee arrangements, and in the event it becomes probable that Eversource parent will be required to perform under the guarantee, the amount of probable payment will be recorded. The fair value of guarantees issued on behalf of unconsolidated entities are recorded within Other Long-Term Liabilities on the balance sheet, and was $7.3 million as of December 31, 2021.  
The following table summarizes Eversource parent's exposure to guarantees and indemnifications of its subsidiaries and affiliates to external parties: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| As of December 31, 2021 |
| Company (Obligor) |  | Description |  | Maximum Exposure(in millions) |  | Expiration Dates |
| North East Offshore LLC |  | Construction-related purchase agreements with third-party contractors (1)  |  | $ | 1,080.6  |  |  |  (1)  |
| Sunrise Wind LLC |  | Construction-related purchase agreements with third-party contractors (2) |  | 382.3  |  |  | 2026 |
| Revolution Wind, LLC |  | Construction-related purchase agreements with third-party contractors (3) |  | 150.9  |  |  | 2027 |
| South Fork Wind, LLC |  | Construction-related purchase agreements with third-party contractors (4) |  | 125.2  |  |  | 2023 - 2026 |
| Eversource Investment LLC |  | Funding and indemnification obligations of North East Offshore LLC (5) |  | —  |  |  |  (5)  |
| Sunrise Wind LLC |  | OREC capacity production (6) |  | 2.2  |  |  |  (6)  |
| Bay State Wind LLC |  | Real estate purchase |  | 2.5  |  |  | 2022 |
| South Fork Wind, LLC |  | Transmission interconnection |  | 1.2  |  |  | — |
| Various |  | Surety bonds (7) |  | 54.7  |  |  | 2022 - 2023 |
| Eversource Service |  | Lease payments for real estate |  | 0.8  |  |  | 2024 |

  
(1)    Eversource parent issued guarantees on behalf of its 50 percent-owned affiliate, North East Offshore LLC (NEO), under which Eversource parent agreed to guarantee 50 percent of NEO’s performance of obligations under certain purchase agreements with third-party contactors, in an aggregate amount not to exceed $1.3 billion with an expiration date in 2025. Eversource parent also issued a separate guarantee to Ørsted on behalf of NEO, under which Eversource parent agreed to guarantee 50 percent of NEO’s payment obligations under certain offshore wind project construction-related agreements with Ørsted in an aggregate amount not to exceed $62.5 million and expiring upon full performance of the guaranteed obligation. Any amounts paid under this guarantee to Ørsted will count toward, but not increase, the maximum amount of the Funding Guarantee described in Note 5, below. The guarantee expires upon the full performance of the guaranteed obligations.      
(2)     Eversource parent issued a guaranty on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guarantee Sunrise Wind LLC's performance of certain obligations, in an aggregate amount not to exceed $420.6 million, in connection with a construction-related purchase agreement. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) April 2026 and (ii) full performance of the guaranteed obligations.   
(3)    Eversource parent issued a guaranty on behalf of its 50 percent-owned affiliate, Revolution Wind, LLC, whereby Eversource parent will guarantee Revolution Wind, LLC's performance of certain obligations, in an aggregate amount not to exceed $158.9 million, in connection with a construction-related purchase agreement. Eversource parent’s obligations under the guarantee expire upon the earlier of (i) November 2027 and (ii) full performance of the guaranteed obligations.  
(4)    Eversource parent issued three guarantees on behalf of its 50 percent-owned affiliate, South Fork Wind, LLC, whereby Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations in connection with three construction-related purchase agreements. Under these guarantees, Eversource parent will guarantee South Fork Wind, LLC's performance of certain obligations, in a total aggregate amount not to exceed $137.2 million. Eversource parent’s obligations under these guarantees expire upon the earlier of (i) dates ranging from October 2023 and August 2026 and (ii) full performance of the guaranteed obligations.  
(5)    Eversource parent issued a guarantee (Funding Guarantee) on behalf of Eversource Investment LLC (EI), its wholly-owned subsidiary that holds a 50 percent ownership interest in NEO, under which Eversource parent agreed to guarantee certain funding obligations and certain indemnification payments of EI under the Amended and Restated Limited Liability Company Operating Agreement of NEO, in an amount not to exceed $910 million. The guaranteed obligations include payment of EI's funding obligations during the construction phase of NEO’s underlying offshore wind projects and indemnification obligations associated with third party credit support for its investment in NEO. Eversource parent’s obligations under the Funding Guarantee expire upon the full performance of the guaranteed obligations.  
(6)    Eversource parent issued a guarantee on behalf of its 50 percent-owned affiliate, Sunrise Wind LLC, whereby Eversource parent will guarantee Sunrise Wind LLC's performance of certain obligations, in an amount not to exceed $15.4 million, under the Offshore Wind Renewable Energy Certificate Purchase and Sale Agreement (the Agreement). The Agreement was executed on October 23, 2019, by and between the New York State Energy Research and Development Authority (NYSERDA) and Sunrise Wind LLC. The guarantee expires upon the full performance of the guaranteed obligations.    123
