Company: CNLHP
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001628280-25-037369
Chunk: 102

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 8
Chunk 102
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 progress, the construction of the offshore substation and turbine tower installations may lead to future cost overruns.  The Company has factored known cost overruns into the existing liability estimate.  Based on the status of construction and latest cost projections, management has determined that the information currently available does not necessitate a change to the Company’s existing liability estimate.  It is possible that as additional updated cost estimates become available and if those future cost overruns materialize, or other adverse changes in facts, regulations and circumstances occur, it could result in additional losses and increases to this liability, which could be material.  The Company believes it is reasonably possible that there could be an additional loss in excess of the liability recorded, but management cannot reasonably estimate a range of loss beyond the amount recorded at this time.  The Company will continue to monitor developments, evaluate potential exposures, and revise its estimates as additional information becomes available. Total net proceeds could also be adjusted for a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation of Revolution Wind.  

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E.    LeasesIn the first quarter of 2025, EGMA entered into a land and building finance lease that is expected to commence late 2025.  The lease contains a purchase option that the Company has determined is probable of being executed.  In accordance with ASC 842, Leases, the Company will recognize the right-of-use asset and corresponding lease liability, and will assess the purchase option as part of the lease fair value upon commencement.  As of June 30, 2025, the lease agreement totaled $18.7 million and the estimated purchase option was $19.0 million.

10.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each of the following financial instruments:Preferred Stock, Long-Term Debt and Rate Reduction Bonds:  The fair value of CL&P's and NSTAR Electric's preferred stock is based upon pricing models that incorporate interest rates and other market factors, valuations or trades of similar securities and cash flow projections.  The fair value of long-term debt and RRB debt securities is based upon pricing models that incorporate quoted market prices for those issues or similar issues adjusted for market conditions, credit ratings of the respective companies and treasury benchmark yields.  The fair values provided in the table below are classified as Level 2 within the fair