Liability Assumed Upon CMA Asset Acquisition

  
  
During the year ended December 31, 2020, Eversource recorded an other-than-temporary impairment of $2.8 million within Other Income, Net on the statement of income, related to a write-off of an investment within a renewable energy fund.  
7.     ASSET RETIREMENT OBLIGATIONS  
Eversource, including CL&P, NSTAR Electric and PSNH, recognizes a liability for the fair value of an ARO on the obligation date if the liability's fair value can be reasonably estimated, even if it is conditional on a future event.  Settlement dates and future costs are reasonably estimated when sufficient information becomes available.  Management has identified various categories of AROs, primarily CYAPC's and YAEC's obligation to dispose of spent nuclear fuel and high level waste, and also certain assets containing asbestos and hazardous contamination. Management has performed fair value calculations reflecting expected probabilities for settlement scenarios.  
The fair value of an ARO is recorded as a long-term liability with a corresponding amount included in Property, Plant and Equipment, Net on the balance sheets.  The ARO assets are depreciated, and the ARO liabilities are accreted over the estimated life of the obligation and the corresponding credits are recorded as accumulated depreciation and ARO liabilities, respectively.  As the electric and natural gas companies are rate-regulated on a cost-of-service basis, these companies apply regulatory accounting guidance and both the depreciation and accretion costs associated with these companies' AROs are recorded as increases to Regulatory Assets on the balance sheets.    
A reconciliation of the beginning and ending carrying amounts of ARO liabilities is as follows:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
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|   | As of December 31, |
|   | 2021 |  | 2020 |
| (Millions of Dollars) | Eversource |  | CL&P |  | NSTARElectric |  | PSNH |  | Eversource |  | CL&P |  | NSTARElectric |  | PSNH |
| Balance as of Beginning of Year | $ | 499.7  |  |  | $ | 33.4  |  |  | $ | 91.8  |  |  | $ | 4.4  |  |  | $ | 489.5  |  |  | $ | 32.0  |  |  | $ | 97.5  |  |  | $ | 4.2  |  |
| Liability Assumed Upon CMA Asset Acquisition | —  |  |  | —  |  |  | —  |  |  | —  |  |  | 20.1  |  |  | —  |  |  | —  |  |  | —  |  |
| Liabilities Incurred During the Year | —  |  |  | —  |  |  | —  |  |  | —  |  |  | 2.1  |  |  | —  |  |  | 2.1  |  |  | —  |  |
| Liabilities Settled During the Year | (23.9) |  |  | (0.6) |  |  | —  |  |  | —  |  |  | (21.8) |  |  | (0.7) |  |  | (1.0) |  |  | —  |  |
| Accretion | 29.4  |  |  | 2.2  |  |  | 4.0  |  |  | 0.3  |  |  | 28.9  |  |  | 2.1  |  |  | 4.3  |  |  | 0.2  |  |
| Revisions in Estimated Cash Flows | (5.1) |  |  | —  |  |  | 1.7  |  |  | —  |  |  | (19.1) |  |  | —  |  |  | (11.1) |  |  | —  |  |
| Balance as of End of Year | $ | 500.1  |  |  | $ | 35.0  |  |  | $ | 97.5  |  |  | $ | 4.7  |  |  | $ | 499.7  |  |  | $ | 33.4  |  |  | $ | 91.8  |  |  | $ | 4.4  |  |

  
Eversource's amounts include CYAPC and YAEC's AROs of $325.9 million and $330.3 million as of December 31, 2021 and 2020, respectively. The fair value of the ARO for CYAPC and YAEC includes uncertainties of the fuel off-load dates related to the DOE's timing of performance regarding its obligation to dispose of the spent nuclear fuel and high level waste and other assumptions, including discount rates.  The incremental asset recorded as an offset to the ARO liability was fully depreciated since the plants have no remaining useful life.  Any changes in the ARO liability are recorded with a corresponding offset to the related regulatory asset.  The assets held in the CYAPC and YAEC spent nuclear fuel trusts are restricted for settling the ARO and all other nuclear fuel storage obligations.  For further information on the assets held in the spent nuclear fuel trusts, see Note 5, "Marketable Securities," to the financial statements.  
8.     SHORT-TERM DEBT  
Short-Term Debt - Borrowing Limits:  The amount of short-term borrowings that may be incurred by CL&P and NSTAR Electric is subject to periodic approval by the FERC.  Because the NHPUC has jurisdiction over PSNH's short-term debt, PSNH is not currently required to obtain FERC approval for its short-term borrowings.  On December 3, 2021, the FERC granted authorization that allows CL&P to issue total short-term borrowings in an aggregate principal amount not to exceed $600 million outstanding at any one time, through December 31, 2023.  On December 3, 2021, the FERC granted authorization that allows NSTAR Electric to issue total short-term borrowings in an aggregate principal amount not to exceed $655 million outstanding at any one time, through December 31, 2023.  
PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional $60 million until further ordered by the NHPUC.  As of December 31, 2021, PSNH's short-term debt authorization under the 10 percent of net fixed plant test plus $60 million totaled $408 million.  
CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur, including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization.  As of December 31, 2021, CL&P had $963.6 million of unsecured debt capacity available under this authorization.  
Yankee Gas, NSTAR Gas and EGMA are not required to obtain approval from any state or federal authority to incur short-term debt.  
Short-Term Debt - Commercial Paper Programs and Credit Agreements: Eversource parent has a $2.00 billion commercial paper program allowing Eversource parent to issue commercial paper as a form of short-term debt. Eversource parent, CL&P, PSNH, NSTAR Gas, Yankee Gas, EGMA and Aquarion Water Company of Connecticut are parties to a five-year $2.00 billion revolving credit facility, which terminates on October 15, 2026. This revolving credit facility serves to backstop Eversource parent's $2.00 billion commercial paper program.  
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