Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 317

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 317
---
 Revolution Wind.2023 Impairments:  Equity method investments are assessed for impairment when conditions exist as of the balance sheet date that indicate that the fair value of the investment may be less than book value.  Eversource continually monitors and evaluates its equity method investments to determine if there are indicators of an other-than-temporary impairment.  If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment.  Impairment evaluations are based on best information available at the impairment assessment date.  Subsequent declines or recoveries after the reporting date are not considered in the impairment recognized.  Investments that are other-than-temporarily impaired and written down to their estimated fair value cannot subsequently be written back up for increases in estimated fair value.  Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist at the equity method investment level, selecting discount rates used to determine fair values, and developing an estimate of discounted future cash flows expected from investment operations or the sale of the investment.  During 2023, in connection with the process to divest its offshore wind business, Eversource identified indicators for impairment in both the second and fourth quarters of 2023.  In each impairment assessment, Eversource evaluated its investments and determined that the carrying value of the equity method offshore wind investments exceeded the fair value of the investments and that the decline in fair value was other-than-temporary.  The completion of the strategic review in the second quarter of 2023 resulted in Eversource recording a pre-tax other-than-temporary impairment charge of $401 million ($331 million after-tax) to reflect the investment at estimated fair value based on the expected sales price at that time. This established a new cost basis in the investments.  Negative developments in the fourth quarter of 2023, including a lower expected sales price, additional projected construction cost increases, and the October 2023 OREC pricing denial for Sunrise Wind, resulted in Eversource conducting an impairment evaluation and recognizing an additional pre-tax other-than-temporary impairment charge of $1.77 billion ($1.62 billion after-tax) and establishing a new cost basis in the investments as of December 31, 2023.  The Eversource statement of income for the year ended 2023 reflects a total pre-tax other-than-temporary impairment charge of $2.17 b