Northeast Utilities(NU) is the largest utility in New England, operating in Connecticut, Western Massachusetts, and New Hampshire. The company's regulated businesses distribute electricity and natural gas, while its competitive business generates power for sale to other distributors. As of June 2008. NU served over 2,000,000 electric and natural gas cutomers.]Northeast Utilities(NU) is the largest utility in New England, operating in Connecticut, Western Massachusetts, and New Hampshire. The company operates electric utility services, natural gas services, and also some competitive electric generation services. As of June 2008. NU served over 2,000,000 electric and natural gas cutomers.
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Since NU operates in regulated industries, the company faces little competition, but is instead susceptible to the prevailing regulatory winds. Utilities regulators set rates for utilities by setting an allowed rate of return on a set of the company's assets, called the "rate base". Between 2006 and 2008, the regulatory agencies in the states where NU operates were favorable towards the company, consistently increasing permitted rates of return - in 2007, for example, Connecticut’s regulatory body, the Connecticut Department of Public Utility Control, increased NU’s rate of return from 5.9% to 10.1%, an increase of over 70%. The favorable regulatory environment has helped temper problems caused by rising prices for energy commodities like coal, which powers a significant amount of NU's electric generation facilities and is one of the company's primary operating costs. Nearly 90% of NU’s revenues are from electric services, and variations in the use of electricity are largely dictated by temperature and weather patterns that drive the use of home air conditioning.