REGULATORY PROCEEDINGS	6 Months Ended
REGULATORY PROCEEDINGS	Jun. 30, 2011
REGULATORY PROCEEDINGS [Abstract]
REGULATORY PROCEEDINGS	(C) REGULATORY PROCEEDINGS Electric Distribution and Transmission Rates In rulings throughout 2009, PURA issued its final decision regarding UI’s application requesting an increase in distribution rates (the 2009 Decisions), the results of which provided for an allowed distribution return on equity of 8.75%, a decrease from the previously approved 9.75%, and a capital structure of 50% equity and 50% debt, compared to the previously approved 48% equity and 52% debt capital structure. The 2009 Decisions continued the prior earnings sharing mechanism structure, applying to the new 8.75% allowed return, whereby 50% of any earnings over the allowed twelve month level is returned to customers and 50% is retained by UI. Additionally, the 2009 Decisions provided for a two year pilot program for full decoupling of distribution revenues from sales. On April 1, 2010, UI filed its ratemaking proposal and underlying decoupling analysis for the 2009 rate year ended February 3, 2010. On September 1, 2010, PURA issued its final decision in this matter approving a decoupling charge totaling approximately $1.6 million to be recovered from ratepayers over a twelve month period commencing in October 2010. In addition to the decoupling charge, PURA also approved a pension and earnings sharing over-recovery credit totaling approximately $3.6 million to be refunded to ratepayers over the same twelve month period commencing in October 2010. PURA also approved the continuance of the decoupling pilot program beyond the 2010 rate year and until such time that a final decision is reached regarding whether to continue, modify or terminate the decoupling mechanism. UI filed its 2010 rater year decoupling results with PURA on April 4, 2011 and on August 1, 2011 PURA issued a draft decision approving a decoupling adjustment totaling approximately $1.3 million to be credited to ratepayers over a twelve month period and extending the decoupling pilot until UI's next general rate proceeding. A final decision is scheduled for August 31, 2011. In December 2010, UI received a letter ruling approving rates effective January 1, 2011 incorporating the above mentioned distribution rate changes along with previously approved changes to the Generation Services Charges (GSC), Non-Bypassable Federally Mandated Congestion Charges, transmission and systems benefits charges. Additionally, last resort service GSC rates have been approved for the period through September 30, 2011. On June 23, 2011, PURA approved revised retail transmission rates, effective July 1, 2011. Power Supply Arrangements UI has wholesale power supply agreements in place for the supply of all of its standard service customers for all of 2011, 80% for 2012 and 20% for 2013. Supplier of last resort service is procured on a quarterly basis. UI determined that its contracts for standard service and supplier of last resort service are derivatives under ASC 815 “Derivatives and Hedging” and also qualify for the “normal purchase, normal sale” exception under ASC 815. As such, UI regularly assesses the accounting treatment for its power supply contracts. These wholesale power supply agreements contain default provisions that include required performance assurance, including certain collateral obligations, that take effect if UI’s credit rating on senior debt falls below investment grade. In May 2011, Moody’s Investor Services released its updated credit opinion for UI and maintained its Baa2 rating with a stable outlook. In May 2011, Standard & Poor’s released its updated credit opinion for UI, maintaining its BBB rating with a stable outlook. If UI’s credit rating were to decline one rating and UI were to be placed on negative credit watch, monthly amounts due and payable to the power suppliers would be accelerated to semi-monthly payments. UI’s credit rating would have to decline two ratings to fall below investment grade at either rating service. If this were to occur, UI would have to deliver collateral security in an amount equal to the receivables due to the sellers for the thirty day period immediately preceding the default notice. If such a situation had been in effect as of June 30, 2011, UI would have had to post approximately $12.3 million in collateral. New England East-West Solution Pursuant to an agreement with CL&P (the Agreement), UI has the right to invest in, and own transmission assets associated with, the Connecticut portion of CL&P’s New England East West Solution (NEEWS) projects to improve regional energy reliability. NEEWS consists of four inter-related transmission projects being developed by subsidiaries of Northeast Utilities (NU), the parent company of CL&P, in collaboration with National Grid USA. Three of the projects have portions sited in Connecticut: (1) the Greater Springfield Reliability Project, (2) the Interstate Reliability Project and (3) the Central Connecticut Reliability Project. In May 2011, the FERC issued an order authorizing recovery of return on 100% of transmission construction work in progress costs for the NEEWS projects. As such, NU is in the process of revising its NEEWS project cost estimates. Previously NU had projected the cost of the Connecticut portion of these projects would be approximately $779 million. UI will update its projected investment once the revised estimate is provided by NU. Under the terms of the Agreement, UI has the option to make quarterly deposits to CL&P in exchange for ownership of specific transmission assets as they are placed in service. UI has the right to invest up to the greater of $60 million or an amount equal to 8.4% of CL&P’s costs for the Connecticut portions of the NEEWS projects. Based upon the previously projected costs that NU has provided to UI, this amount would be approximately $65 million. As assets are placed in service, CL&P will transfer title to certain transmission assets to UI in proportion to its investments, but CL&P will continue to maintain these portions of the transmission system pursuant to an operating and maintenance agreement with UI. Also, under the terms of the Agreement, there are certain circumstances under which CL&P can terminate the Agreement, but such termination would not affect assets previously transferred to UI. Through June 30, 2011, UI has made deposits totaling $8.3 million in NEEWS and expects to make the remaining deposits over a period of three to five years, depending on the timing and amount of CL&P’s capital expenditures and the projects’ in service dates. Equity Investment in Peaking Generation UI is a 50-50 joint venturer with NRG in GCE Holding LLC, whose wholly owned subsidiary, GenConn, was chosen by PURA to build and operate two new peaking generation plants to help address Connecticut’s need for power generation during the heaviest load periods. The two new peaking generation projects are located at NRG’s existing Connecticut plant locations in Devon and Middletown and are both operating in the ISO-New England markets. PURA has approved 2011 revenue requirements for GenConn Devon of $36.8 million for the period of January 1, 2011 through December 31, 2011 and for GenConn Middletown of $22.6 million for the period of June 1, 2011 through December 31, 2011. UI’s income (loss) from its equity investment in GenConn was $4.7 million and ($0.9) million for the six month periods ended June 30, 2011 and 2010, respectively. For the three month periods ended June 30, 2011 and 2010, such income (loss) was $2.6 million and ($0.9) million, respectively. GenConn filed a rate case request with PURA on July 29, 2011, seeking approval of 2012 revenue requirements for the period commencing January 1, 2012 for both the GenConn Devon and GenConn Middletown facilities. A final decision on this request is expected by the end of 2011. Gas Distribution Rates SCG and CNG In 2008, PURA, as required by Connecticut statute, initiated an investigation after SCG reported earning more than one percentage point over its authorized return on equity (ROE) for the previous twelve month period in each of six consecutive months. In October 2008, PURA issued a decision ordering an interim rate decrease for SCG of approximately $15.1 million, or 3.4%, effective October 24, 2008, compared to the rates previously set in the SCG 2005 rate case, and ordered SCG to file a rate case. In January 2009, SCG filed an application for a rate increase of $50.1 million, or approximately 15.2%. PURA’s August 2009 decision in the SCG rate proceeding ordered a 3.2% rate decrease, or approximately $12.5 million, compared to the rates set in the 2005 rate case, and reduced SCG’s authorized ROE to 9.26%. SCG appealed the PURA order to the Connecticut superior court. Pursuant to Connecticut statute, SCG is entitled to collect through a surcharge the differential between the interim rate decrease and the rates finally set after full review. The 2009 PURA decision ordered rates that were higher on a dollar per one hundred cubic feet (Ccf) basis compared to the rates established in the interim rate decrease decision. The difference between these higher per unit rates provided for SCG to collect a surcharge from customers. The rates established in the 2009 decision, and certain other orders, have been stayed by stipulation pending the resolution of the appeal. The stipulation stayed SCG’s collection of the surcharge and provides for the continuation of the interim rate decrease amount pending resolution of the appeal. SCG has been accruing the revenues associated with the surcharge for purposes of calculating its earnings. SCG has not appealed the 2009 case’s elimination of SCG’s weather normalization provision; however, this provision has remained in effect pending resolution of the appeal. In April 2010, the Connecticut superior court ruled against SCG’s appeal. SCG appealed the superior court’s dismissal, and that appeal is now pending at the Connecticut supreme court. The stay remains in effect. In December 2010, PURA denied a petition from the Office of Consumer Counsel (the OCC), finding that SCG had not earned more than one percentage point over its authorized ROE for the previous twelve month period in each of six consecutive months, but opened a docket to determine whether SCG is charging rates that may be more than just, reasonable and adequate and whether its rates need to be decreased on an interim basis. In 2008, PURA, as required by Connecticut statute, initiated an investigation after CNG reported earning more than one percentage point over its authorized ROE for the previous twelve month period in each of six consecutive months. In August 2008, PURA issued a decision ordering an interim rate decrease for CNG of approximately $15.5 million, or 3.28%, effective August 6, 2008, compared to the rates previously set in the CNG 2006 rate case, and ordered CNG to file a rate case. In January 2009, CNG filed for a rate increase of $16.4 million or approximately 4.4%. PURA’s July 2009 decision in the CNG rate proceeding ordered a 4.2% rate decrease, or approximately $16.2 million, compared to the rates set in the 2006 rate case, and reduced CNG’s authorized ROE to 9.31%. CNG appealed PURA’s order to the Connecticut superior court. Pursuant to Connecticut statute, CNG is entitled to collect through a surcharge the differential between the interim rate decrease and the rates finally set after full review. The 2009 PURA decision ordered rates that were higher on a dollar per Ccf basis compared to the rates established in the interim rate decrease decision. The difference between these higher per unit rates provided for CNG to collect a surcharge from customers. The rates established in the 2009 decision, and certain other orders, have been stayed by stipulation pending the resolution of the appeal. The stipulation stayed CNG’s collection of the surcharge and provides for the continuation of the interim rate decrease amount pending resolution of the appeal. CNG has been accruing the revenues associated with the surcharge for purposes of calculating its earnings. In April 2010, the Connecticut superior court ruled against CNG’s appeal. CNG appealed from the superior court’s dismissal, and that appeal is now pending at the Connecticut supreme court. The stay remains in effect. On March 24, 2011, SCG, CNG and the OCC filed a motion with PURA to reopen the SCG and CNG rate cases for the purposes of reviewing and approving a settlement agreement. On April 13, 2011, PURA reopened the rate cases and on August 3, 2011 issued a final decision. PURA's final decision approves the settlement agreement, except for minor modifications, including removing the provision that would have combined SCG and CNG for ratemaking purposes without further PURA approval. The final decision resolves all pending issues related to the rate case appeals and terminates the SCG potential overearnings investigation. Among other things, it results in the removal for monitoring purposes of the ten basis point penalty originally imposed at both companies for billing issues which have since been remediated resulting in authorized ROEs of 9.41% and 9.36% for CNG and SCG respectively. Additionally, the companies will be allowed to recover carrying charges on the excess interim rate decrease over-credited to customers during the stay of the rate case decisions while on appeal. Recoverable carrying charges through June 30, 2011 total approximately $2 million and will be recorded in the third quarter of 2011. Berkshire Berkshire’s rates are established by the Massachusetts Department of Public Utilities (DPU). Berkshire is currently operating under a 10-year rate plan approved by the DPU and which expires on January 31, 2012, pursuant to which Berkshire’s rates can be adjusted annually. The ROE approved in Berkshire’s rate plan is 10.5%. Approval for the Issuance of Debt On July 5, 2011, PURA approved SCG’s application requesting approval of the issuance of up to $50 million of secured medium-term notes (MTNs) which will be priced at a fixed coupon rate not to exceed 7.0% and can have maturities ranging from one to forty years. The proceeds from the sales of the MTNs may be used by SCG for the following purposes: (1) to refinance $30 million principal amount of maturing existing debt; (2) to finance capital expenditures; (3) for working capital purposes; and (4) for general corporate purposes. SCG has initiated a process to issue $50 million of debt, according to the terms and conditions approved by PURA. SCG expects to complete the process in September 2011. Gas Supply Arrangements In November 2010, the Tennessee Gas Pipeline Company (Tennessee), a pipeline on which the Gas Companies hold firm transportation contracts, filed a FERC rate case proposing significant rate increases across their entire system which runs from south Texas through New England. In December 2010, the FERC issued an order setting the Tennessee rate proceeding for hearing and suspended the proposed rate increase until June 1, 2011. On that date the rates were placed into effect by Tennessee subject to refund to final rates determined through the federal regulatory process. These higher rates are nearly double the pre-existing rates for reserving pipeline capacity on Tennessee, but provide lower variable costs, resulting in a significant net cost increase. The Gas Companies will continue to oppose Tennessee’s proposal and actively participate in the Tennessee FERC proceedings in conjunction with other gas companies and interveners in the Northeastern United States.