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INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 12 Months Ended
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Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATES Investments in entities that are not consolidated are included in long-term assets on the balance sheets and earnings impacts from these equity investments are included in Other Income, Net on the statements of income. Eversource's investments included the following:
|  |  | Investment Balance as of December 31,
(Millions of Dollars) | Ownership Interest |  | 2022 |  | 2021
Offshore Wind Business - North East Offshore | 50 | % |  | $ | 1,947.1 |  |  | $ | 1,213.6 |
Natural Gas Pipeline - Algonquin Gas Transmission, LLC | 15 | % |  | 118.8 |  |  | 121.9 |
Renewable Energy Investment Fund | 90 | % |  | 84.1 |  |  | 76.5 |
Other | various |  | 26.1 |  |  | 24.3 |
Total Investments in Unconsolidated Affiliates |  |  | $ | 2,176.1 |  |  | $ | 1,436.3 |
For the years ended December 31, 2022, 2021 and 2020, Eversource had equity in earnings of unconsolidated affiliates of $22.9 million, $14.2 million, and $14.2 million, respectively. Eversource received dividends from its equity method investees of $26.2 million, $21.6 million, and $21.8 million, respectively, for the years ended December 31, 2022, 2021 and 2020. Investments in affiliates where Eversource has the ability to exercise significant influence, but not control, over an investee are initially recognized as an equity method investment at cost. Any differences between the cost of an investment and the amount of underlying equity in net assets of an investee are considered basis differences, and are determined based upon the estimated fair values of the investee's identifiable assets and liabilities. The carrying amount of Eversource’s offshore wind investments exceeded its share of underlying equity in net assets by $343.1 million and $300.4 million, respectively, as of December 31, 2022 and 2021. As of December 31, 2022, these basis differences are primarily comprised of $168.9 million of equity method goodwill that is not being amortized, intangible assets for PPAs, and capitalized interest. Offshore Wind Business: Eversource's offshore wind business includes a 50 percent ownership interest in North East Offshore, which holds PPAs and contracts for the Revolution Wind, South Fork Wind and Sunrise Wind projects, as well as an undeveloped offshore lease area. The offshore wind investment includes capital expenditures for the three offshore wind projects, as well as capitalized costs related to future development, acquisition costs of offshore lease areas, and capitalized interest. Cash flows used in investing activities presented in Investments in Unconsolidated Affiliates on the statements of cash flows primarily relates to capital contributions in the offshore wind investment. On May 4, 2022, Eversource announced that it had initiated a strategic review of its offshore wind investment portfolio. As part of that review, Eversource is exploring strategic alternatives that could result in a potential sale of all, or part, of its 50 percent interest in its offshore wind partnership with Ørsted. In late July, Eversource started preliminary and targeted outreach to interested parties. Eversource continues to work with interested parties through this ongoing process and expects to complete this review in the second quarter of 2023. Eversource’s strategic review of its offshore wind investment does not impact the presentation of the December 31, 2022 financial statements. NSTAR Electric: As of December 31, 2022 and 2021, NSTAR Electric's investments included a 14.5 percent ownership interest in two companies that transmit hydro-electricity imported from the Hydro-Quebec system in Canada of $9.3 million and $9.0 million, respectively. Impairment of Equity Method Investments: Equity method investments are assessed for impairment when conditions exist that indicate that the fair value of the investment is less than book value. 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 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. No impairments occurred during the year 2022. Eversource continually monitors and evaluates its equity method investments to determine if there are indicators of an other-than-temporary impairment. Eversource believes that the fair market value of its offshore wind investment is greater than the carrying value based upon management’s expectation for future cash flows arising from the sale of all, or part, of its investment. There are uncertainties in a sale process, and there could be changes in market conditions that would impact Eversource’s ability to sell this investment or the value it would receive for these assets. In the event that the strategic review does not result in the sale of the offshore wind business or that a sale of the offshore wind business is significantly delayed or at lower than expected value from these changes in market conditions driven by unfavorable developments, such as scheduling or permitting delays, increases in cost estimates, changes to tax laws impacting the project’s ability to monetize tax attributes, higher interest rates, and increases in the discount rate, it could result in Eversource having to evaluate whether or not its investment is impaired. Any resulting impairment charge could have a material adverse effect on the financial position and results of operations. During the year ended December 31, 2020, Eversource recorded an other-than-temporary impairment of $2.8 million within Other Income, Net on the statement of income, related to a write-off of an investment within a renewable energy fund.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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