Company: CNLHP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050033
Chunk: 193

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 193
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 included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

Commodity Price Risk Management:  Our regulated companies enter into energy contracts to serve our customers, and the economic impacts of those contracts are passed on to our customers.  Accordingly, the regulated companies have no exposure to loss of future earnings or fair values due to these market risk-sensitive instruments.  Eversource's Energy Supply Risk Committee, comprised of senior officers, reviews and approves all large-scale energy-related transactions entered into by its regulated companies.

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Other Risk Management Activities

Interest Rate Risk Management:  Interest rate risk is associated with changes in interest rates for our outstanding long-term debt.  Our interest rate risk is significantly reduced as typically all or most of our debt financings have fixed interest rates.  As of September 30, 2025, all of our long-term debt was at a fixed interest rate. 

Credit Risk Management:  Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties pursuant to the terms of our contractual obligations.  We serve a wide variety of customers and transact with suppliers that include IPPs, industrial companies, natural gas and electric utilities, oil and natural gas producers, financial institutions, and other energy marketers.  Margin accounts exist within this diverse group, and we realize interest receipts and payments related to balances outstanding in these margin accounts.  This wide customer and supplier mix generates a need for a variety of contractual structures, products and terms that, in turn, require us to manage the portfolio of market risk inherent in those transactions in a manner consistent with the parameters established by our risk management process.

Our regulated companies are subject to credit risk from certain long-term or high-volume supply contracts with energy marketing companies.  Our regulated companies manage the credit risk with these counterparties in accordance with established credit risk practices and monitor contracting risks, including credit risk.  As of September 30, 2025, our regulated companies held collateral (letters of credit or cash) of $14.0 million from counterparties related to our standard service contracts.  As of September 30, 2025, Eversource had $44.1 million of cash posted with ISO-NE related to energy transactions.

We have provided additional disclosures regarding interest rate risk management and credit risk management in Part