Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 208

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 208
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 continually assess whether the regulatory assets and liabilities continue to meet the criteria for probable future recovery or refund.  This assessment includes consideration of recent orders issued by regulatory commissions, the passage of new legislation, historical regulatory treatment for similar costs in each of our jurisdictions, discussions with legal counsel, the status of any appeals of regulatory decisions, and changes in applicable regulatory and political environments.  We believe that we will continue to be able to defer and recover prudently incurred costs, including additional storm costs, based on the legal and regulatory framework.

We use judgment when recording regulatory assets and liabilities; however, regulatory commissions can reach different conclusions about the recovery of costs, and those conclusions could have a material impact on our financial statements.  The ultimate outcome of regulatory rate proceedings could have a significant effect on our ability to recover costs or earn an adequate return.  Established rates are also often subject to subsequent prudency reviews by state regulators, whereby various portions of rates could be adjusted, subject to refund or disallowed.  

Storm restoration and pre-staging costs are subject to prudency reviews from our regulators.  We have $2.10 billion of deferred storm costs that either have yet to be filed with the applicable regulatory commission, are pending regulatory approval, or are subject to prudency review as of December 31, 2024.  Tropical Storm Isaias in August 2020 resulted in deferred storm restoration costs of approximately $232 million at CL&P as of December 31, 2024.  While it is possible that some amount of the Tropical Storm Isaias costs may be disallowed by PURA, any such amount cannot be estimated at this time. We believe that our storm restoration costs were prudently incurred, meet the criteria for cost recovery and are probable of recovery.

We believe it is probable that each of our regulated companies will recover its respective investments in long-lived assets and the regulatory assets that have been recorded.  If we determine that we can no longer apply the accounting guidance applicable to rate-regulated enterprises, or that we cannot conclude it is probable that costs will be recovered from customers in future rates, the applicable costs would be charged to net income in the period in which the determination is made.

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Pension, SERP and PBOP:  We sponsor Pension, SERP and PBOP Plans to provide retirement benefits to our employees.  Plan assets and the benefit obligation are presented on a net basis and we recognize the overfunded or underfunded status of the