EVERSOURCE ENERGYES
EVERSOURCE ENERGY Leases Disclosure
LEASES
Eversource, including CL&P, NSTAR Electric and PSNH, has entered into lease agreements as a lessee for the use of land, office space, service centers, vehicles, information technology, and equipment. These lease agreements are classified as either finance or operating leases and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.
Eversource determines whether or not a contract contains a lease based on whether or not it provides Eversource with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. Eversource has elected the practical expedient to not separate non-lease components from lease components and instead to account for both as a single lease component, with the exception of the information technology asset class where the lease and non-lease components are separated.
The provisions of Eversource, CL&P, NSTAR Electric and PSNH lease agreements contain renewal options. The renewal options range from one year to twenty years. The renewal period is included in the measurement of the lease liability if it is reasonably certain that Eversource will exercise these renewal options.
For leases entered into or modified after the January 1, 2019 implementation date of the leases standard under Topic 842, the discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on each company's collateralized incremental interest rate to borrow over a comparable term for an individual lease because the rate implicit in the lease is not determinable.
CL&P and PSNH entered into certain contracts for the purchase of energy that qualify as leases. These contracts do not have minimum lease payments and therefore are not recognized as a lease liability on the balance sheet and are not reflected in the future minimum lease payments table below. Expense related to these contracts is included as variable lease cost in the table below. The expense and long-term obligation for these contracts are also included in Note 13B, "Commitments and Contingencies - Long-Term Contractual Arrangements," to the financial statements. In 2024, these contracts at PSNH were terminated.
The components of lease cost, prior to amounts capitalized, are as follows:
| Eversource | For the Years Ended December 31, | ||||||||||||||||
| (Millions of Dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Finance Lease Cost: | |||||||||||||||||
| Amortization of Right-of-use-Assets | $ | 9.5 | $ | 6.4 | $ | 4.8 | |||||||||||
| Interest on Lease Liabilities | 2.9 | 2.7 | 2.0 | ||||||||||||||
| Total Finance Lease Cost | 12.4 | 9.1 | 6.8 | ||||||||||||||
| Operating Lease Cost | 13.0 | 15.2 | 11.4 | ||||||||||||||
| Variable Lease Cost | 18.6 | 18.3 | 69.2 | ||||||||||||||
| Total Lease Cost | $ | 44.0 | $ | 42.6 | 87.4 | ||||||||||||
| For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | CL&P | NSTAR Electric | PSNH | CL&P | NSTAR Electric | PSNH | CL&P | NSTAR Electric | PSNH | ||||||||||||||||||||||||||||||||||||||||||||
| Finance Lease Cost: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of Right-of-use-Assets | $ | 2.0 | $ | 0.2 | $ | 0.1 | $ | 1.7 | $ | 0.2 | $ | — | $ | — | $ | 0.2 | $ | — | |||||||||||||||||||||||||||||||||||
| Interest on Lease Liabilities | 0.9 | 0.6 | — | 0.8 | 0.6 | — | — | 0.6 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total Finance Lease Cost | 2.9 | 0.8 | 0.1 | 2.5 | 0.8 | — | — | 0.8 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Operating Lease Cost | 2.8 | 5.1 | 1.9 | 2.6 | 5.3 | 1.8 | 0.7 | 3.0 | 0.4 | ||||||||||||||||||||||||||||||||||||||||||||
| Variable Lease Cost | 18.6 | — | — | 18.9 | — | (0.6) | 21.9 | — | 47.3 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Lease Cost | $ | 24.3 | $ | 5.9 | $ | 2.0 | $ | 24.0 | $ | 6.1 | $ | 1.2 | $ | 22.6 | $ | 3.8 | $ | 47.7 | |||||||||||||||||||||||||||||||||||
Operating lease cost, net of the capitalized portion, is included in Operations and Maintenance (or Purchased Power, Purchased Natural Gas and Transmission expense for transmission leases) on the statements of income. Amortization of finance lease assets is included in Depreciation on the statements of income. Interest expense on finance leases is included in Interest Expense on the statements of income.
Supplemental balance sheet information related to leases is as follows:
| As of December 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Balance Sheet Classification | Eversource | CL&P | NSTAR Electric | PSNH | Eversource | CL&P | NSTAR Electric | PSNH | ||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Right-of-use-Assets, Net | $ | 47.4 | $ | 6.1 | $ | 27.2 | $ | 1.5 | $ | 56.1 | $ | 7.7 | $ | 29.4 | $ | 3.3 | |||||||||||||||||||||||||||||||||||||
| Operating Lease Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Portion | $ | 10.0 | $ | 2.3 | $ | 3.9 | $ | 1.5 | $ | 10.4 | $ | 2.2 | $ | 3.7 | $ | 1.7 | |||||||||||||||||||||||||||||||||||||
| Long-Term | 37.4 | 3.8 | 23.3 | — | 45.7 | 5.5 | 25.7 | 1.6 | |||||||||||||||||||||||||||||||||||||||||||||
| Total Operating Lease Liabilities | $ | 47.4 | $ | 6.1 | $ | 27.2 | $ | 1.5 | $ | 56.1 | $ | 7.7 | $ | 29.4 | $ | 3.3 | |||||||||||||||||||||||||||||||||||||
| Finance Leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Right-of-use-Assets, Net | $ | 76.6 | $ | 14.6 | $ | 2.6 | $ | 0.6 | $ | 61.9 | $ | 16.6 | $ | 2.8 | $ | — | |||||||||||||||||||||||||||||||||||||
| Finance Lease Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Portion | $ | 24.5 | $ | 1.6 | $ | — | $ | 0.1 | $ | 5.6 | $ | 1.5 | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||
| Long-Term | 57.2 | 14.0 | 4.9 | 0.4 | 62.1 | 15.6 | 4.9 | — | |||||||||||||||||||||||||||||||||||||||||||||
| Total Finance Lease Liabilities | $ | 81.7 | $ | 15.6 | $ | 4.9 | $ | 0.5 | $ | 67.7 | $ | 17.1 | $ | 4.9 | $ | — | |||||||||||||||||||||||||||||||||||||
The finance lease payments that NSTAR Electric will make over the next twelve months are entirely interest-related, due to escalating payments. As such, none of the finance lease payments over the next twelve months will reduce the finance lease liability.
As of December 31, 2024, the operating lease balances attributable to the Aquarion water distribution business were classified as Assets Held for Sale on the Eversource balance sheet. As of December 31, 2025, these assets were reclassified as Other Long-Term Assets on the Eversource balance sheet. For further information, see Note 24, “Assets Held for Sale.”
Other information related to leases is as follows:
| As of December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Eversource | CL&P | NSTAR Electric | PSNH | Eversource | CL&P | NSTAR Electric | PSNH | ||||||||||||||||||||||||||||||||||||||||
| Weighted-Average Remaining Lease Term (Years): | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases | 9 | 3 | 12 | 2 | 9 | 4 | 12 | 2 | |||||||||||||||||||||||||||||||||||||||
| Finance Leases | 9 | 7 | 16 | 4 | 12 | 8 | 17 | — | |||||||||||||||||||||||||||||||||||||||
| Weighted-Average Discount Rate (Percentage): | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases | 4.1 | % | 5.3 | % | 4.2 | % | 5.1 | % | 4.1 | % | 5.2 | % | 4.2 | % | 5.2 | % | |||||||||||||||||||||||||||||||
| Finance Leases | 3.5 | % | 5.3 | % | 2.9 | % | 4.6 | % | 3.3 | % | 5.3 | % | 2.9 | % | — | % | |||||||||||||||||||||||||||||||
| (Millions of Dollars) | Eversource | CL&P | NSTAR Electric | PSNH | |||||||||||||||||||
| For the Year Ended December 31, 2025 | |||||||||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | |||||||||||||||||||||||
| Operating Cash Flows from Operating Leases | $ | 12.8 | $ | 2.8 | $ | 5.0 | $ | 1.9 | |||||||||||||||
| Operating Cash Flows from Finance Leases | 2.8 | 0.9 | 0.7 | — | |||||||||||||||||||
| Financing Cash Flows from Finance Leases | 5.7 | 1.5 | — | 0.2 | |||||||||||||||||||
| Supplemental Non-Cash Information on Lease Liabilities: | |||||||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities | 1.4 | 0.8 | 0.1 | 0.1 | |||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities | 19.7 | — | — | 0.7 | |||||||||||||||||||
| (Millions of Dollars) | Eversource | CL&P | NSTAR Electric | PSNH | |||||||||||||||||||
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | |||||||||||||||||||||||
| Operating Cash Flows from Operating Leases | $ | 14.5 | $ | 2.5 | $ | 4.9 | $ | 1.8 | |||||||||||||||
| Operating Cash Flows from Finance Leases | 2.6 | 0.7 | 0.7 | — | |||||||||||||||||||
| Financing Cash Flows from Finance Leases | 5.2 | 1.2 | — | — | |||||||||||||||||||
| Supplemental Non-Cash Information on Lease Liabilities: | |||||||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities | 15.3 | 7.8 | 5.7 | 0.3 | |||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities | 0.3 | — | — | — | |||||||||||||||||||
| (Millions of Dollars) | Eversource | CL&P | NSTAR Electric | PSNH | |||||||||||||||||||
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | |||||||||||||||||||||||
| Operating Cash Flows from Operating Leases | $ | 10.5 | $ | 0.7 | $ | 2.5 | $ | 0.4 | |||||||||||||||
| Operating Cash Flows from Finance Leases | 2.0 | — | 0.6 | — | |||||||||||||||||||
| Financing Cash Flows from Finance Leases | 3.9 | — | — | — | |||||||||||||||||||
| Supplemental Non-Cash Information on Lease Liabilities: | |||||||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Operating Lease Liabilities | 12.8 | 0.6 | 7.0 | 5.0 | |||||||||||||||||||
| Right-of-use-Assets Obtained in Exchange for New Finance Lease Liabilities | 18.5 | 18.3 | — | — | |||||||||||||||||||
As of December 31, 2025, there are no lease agreements for Eversource, CL&P, NSTAR Electric or PSNH which have been executed but have yet to commence and have not been recorded as right-of-use assets.
Future minimum lease payments, excluding variable costs, under long-term leases, as of December 31, 2025 are as follows:
| Operating Leases | Finance Leases | |||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Eversource | CL&P | NSTAR Electric | PSNH | Eversource | CL&P | NSTAR Electric | PSNH | ||||||||||||||||||||||||||||||
| Year Ending December 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | $ | 11.5 | $ | 2.6 | $ | 5.0 | $ | 1.5 | $ | 27.9 | $ | 2.4 | $ | 0.7 | 0.2 | |||||||||||||||||||||||
| 2027 | 7.1 | 2.0 | 2.8 | 0.1 | 8.2 | 2.5 | 0.7 | 0.2 | ||||||||||||||||||||||||||||||
| 2028 | 6.8 | 1.9 | 2.8 | — | 7.5 | 2.6 | 0.7 | 0.2 | ||||||||||||||||||||||||||||||
| 2029 | 4.7 | 0.1 | 2.5 | — | 7.3 | 2.6 | 0.7 | — | ||||||||||||||||||||||||||||||
| 2030 | 4.3 | — | 2.5 | — | 7.3 | 2.6 | 0.7 | — | ||||||||||||||||||||||||||||||
| Thereafter | 22.0 | 0.1 | 19.6 | 0.1 | 43.1 | 6.2 | 9.6 | — | ||||||||||||||||||||||||||||||
| Future lease payments | 56.4 | 6.7 | 35.2 | 1.7 | 101.3 | 18.9 | 13.1 | 0.6 | ||||||||||||||||||||||||||||||
| Less amount representing interest | 9.0 | 0.6 | 8.0 | 0.2 | 19.6 | 3.3 | 8.2 | 0.1 | ||||||||||||||||||||||||||||||
| Present value of future minimum lease payments | $ | 47.4 | $ | 6.1 | $ | 27.2 | $ | 1.5 | $ | 81.7 | $ | 15.6 | $ | 4.9 | $ | 0.5 | ||||||||||||||||||||||
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.