FERC ROE complaint and refund exposure
Transmission-owning utilities in ISO-NE have faced complaints over allowed returns, and adverse orders can require retroactive refunds.
- Scope
- Refund obligations and lower future allowed returns
- Materiality
- high
Nstar Electric Co
NSTAR Electric Co. is a regulated electric utility serving customers in Massachusetts as part of the Eversource Energy group. Its business centers on the delivery of electricity through transmission and distribution networks, with revenues driven by regulated service to residential, commercial, and industrial users.
| % | |
|---|---|
| Electric distribution service | 70% Delivery of electricity to end users over local distribution networks. |
| Electric transmission service | 20% High-voltage transmission of power through regulated network assets. |
| Customer and utility services | 10% Metering, billing, service connections, and outage response support. |
The company serves a broad base of regulated electric customers in Massachusetts, including households, businesses, and...
- Residential customersprimary
Households in the service territory that buy electric delivery and related utility services for everyday power needs.
- Commercial customersprimary
Retail, office, and service businesses that need reliable electricity and predictable utility service.
- Industrial customerssecondary
Larger power users that purchase regulated electric delivery and depend on service reliability.
- Regulated energy counterpartiessecondary
Energy marketers, utilities, and suppliers involved in long-term or high-volume supply contracts and collateralized transactions.
NSTAR Electric Co. operates in the United States, with its core service territory in Massachusetts...
- •United States is the operating country and regulatory base
- •Massachusetts is the core electric service territory
- •Exposure is concentrated in the ISO-NE regional power market
- •Local regulation shapes allowed returns and service obligations
- •Weather and storm activity can affect outage and restoration work
The company’s strategic focus is to operate a reliable regulated electric network and recover costs through approved...
01
Reliability and grid operationsshort-term
Utility performance depends on dependable service and rapid restoration in a regulated monopoly model.
02
Regulatory recovery of costs and returnsmedium-term
Allowed rates and ROE determine the economics of the regulated utility model.
03
Risk management for energy and credit exposuresshort-term
Contracting with suppliers and market participants creates counterparty and settlement risk even in a regulated business.
The main risks come from regulation, including allowed-return disputes and the possibility that regulators or courts...
Regulatory rate-setting risk
Revenue and profitability depend on state and federal approval of rates and recovery mechanisms.
- Scope
- Allowed ROE, rate base recovery, and timing of cost recovery
- Materiality
- high
Operational outage and weather risk
Electric utilities must maintain and restore service across a physical network exposed to storms and equipment failures.
- Scope
- Restoration costs, service interruptions, and reliability penalties
- Materiality
- medium
Counterparty credit risk
Energy contracts and margin accounts expose the company to non-performance by suppliers and market participants.
- Scope
- Letters of credit, cash collateral, and settlement balances
- Materiality
- medium
Regulatory accounting
Regulatory assets and liabilities
Contingent liabilities for FERC ROE refunds
Earnings, cash flows, and liabilities
Energy contract collateral and margin accounts
Cash, receivables, and payables
Debt and interest expense presentation
Interest expense and debt footnotes
: 16.6.2026