-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NZg+RaAPPV4R6eJXvKAbCGUnOhsvT9vuNkX8TEM8MgJkOXHNXpn/0P8EQ5hrt8vJ ZqcCi338i/Y6UvWD3bJSeA== 0000072741-04-000153.txt : 20041025 0000072741-04-000153.hdr.sgml : 20041025 20041025151350 ACCESSION NUMBER: 0000072741-04-000153 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041025 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041025 DATE AS OF CHANGE: 20041025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT LIGHT & POWER CO CENTRAL INDEX KEY: 0000023426 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 060303850 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-00404 FILM NUMBER: 041093892 BUSINESS ADDRESS: STREET 1: SELDEN STREET CITY: BERLIN STATE: CT ZIP: 06037-1616 BUSINESS PHONE: 8606655000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05324 FILM NUMBER: 041093889 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDEN ST CITY: BERLIN STATE: CT ZIP: 06037-1616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN MASSACHUSETTS ELECTRIC CO CENTRAL INDEX KEY: 0000106170 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041961130 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-07624 FILM NUMBER: 041093890 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01089 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDEN ST CITY: BERLIN STATE: CT ZIP: 06037-1616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE CO OF NEW HAMPSHIRE CENTRAL INDEX KEY: 0000315256 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 020181050 STATE OF INCORPORATION: NH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06392 FILM NUMBER: 041093891 BUSINESS ADDRESS: STREET 1: 780 N. COMMERCIAL STREET CITY: MANCHESTER STATE: NH ZIP: 03105-0330 BUSINESS PHONE: 6036694000 MAIL ADDRESS: STREET 1: 780 N. COMMERCIAL STREET CITY: MANCHESTER STATE: NH ZIP: 03105-0330 8-K 1 nueei8k102504.txt NU, CL&P, PSNH & WMECO 8-K 102504 EEI SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 25, 2004 ------------------- NORTHEAST UTILITIES Commission File Number 1-5324 State of Incorporation - MASSACHUSETTS IRS. No. 04-2147929 THE CONNECTICUT LIGHT AND POWER COMPANY Commission File Number 1-11419 State of Incorporation - CONNECTICUT IRS No. 06-0303850 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE Commission File Number 1-6392 State of Incorporation - NEW HAMPSHIRE IRS No. 02-0181050 WESTERN MASSACHUSETTS ELECTRIC COMPANY Commission File Number 0-7624 State of Incorporation - MASSACHUSETTS IRS No. 04-1961130 MASSACHUSETTS 1-5324 04-2147929 -------------- --------- --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) or Identification No.) ONE FEDERAL STREET, BUILDING 111-4, SPRINGFIELD MASSACHUSETTS 01105 ----------------------------------------------------------------------- (Address of principal executive office (Zip Code) (Northeast Utilities)) (413) 785-5871 (Registrant's telephone number (Northeast Utilities), including area code) Not Applicable -------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d- 2(b) under the Exchange Act (17 CFR 240.14d- 2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) Section 7 - Regulation FD Item 7.01 Regulation FD Disclosure On October 25, 2004, NU made a slideshow presentation at the EEI Finance Conference in San Diego, California. The slides are attached hereto as Exhibit 99, incorporated in this Item 9 by reference thereto, and are furnished pursuant to Regulation FD. The information contained in this report on Form 8-K, including Exhibit 99, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Northeast Utilities, The Connecticut Light and Power Company, Public Service Company of New Hampshire or Western Massachusetts Electric Company under the Securities Act of 1933, as amended, unless specified otherwise. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit Description Exhibit 99 Slide Presentation before the EEI Finance Conference. [SIGNATURE PAGE TO FOLLOW] SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. NORTHEAST UTILITIES PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE WESTERN MASSACHUSETTS ELECTRIC COMPANY (Registrants) By: /s/ Gregory B. Butler Name: Gregory B. Butler Title: Senior Vice President, Secretary and General Counsel THE CONNECTICUT LIGHT AND POWER COMPANY (Registrant) By: /s/ Gregory B. Butler Name: Gregory B. Butler Title: Senior Vice President, Secretary and General Counsel of Northeast Utilities Service Company, as Agent for THE CONNECTICUT LIGHT AND POWER COMPANY Date: October 25, 2004 EX-99 2 nu8kexh99eeislides102504.txt EXHIBIT 99 - EEI SLIDES 102504 Exhibit 99 SLIDE 1 NU LOGO Northeast Utilities System EEI Finance Conference San Diego, California October 25, 2004 Safe Harbor Provisions This presentation includes statements concerning the Company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward looking statements" within the meaning of the Private Litigation Reform Act of 1995. In some cases the reader can identify these forward looking statements by words such as "estimate", "expect", "anticipate", "intend", "plan", "believe" "forecast", "should", "could", and similar expressions. Forward looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward looking statements. Factors that may cause actual results to differ materially from those included in the forward looking statements include, but are not limited to, actions by state and federal regulatory bodies, competition and industry restructuring, changes in economic conditions, changes in weather patterns, changes in laws, expiration or initiation of significant energy supply contracts, regulations or regulatory policy, levels of capital expenditures, developments in legal or public policy doctrines, technological developments, volatility in electric and natural gas commodity markets, and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in our reports to the Securities and Exchange Commission. We undertake no obligation to update the information contained in any forward looking statements to reflect developments or circumstances occurring after the statement is made. SLIDE 3 Topics for Today 2004 - - Financial results - - Earnings guidance - - Enterprise plan 2005 - - Earnings guidance - - Earnings drivers - - Financing plans Competitive business Regulated business Transmission business SLIDE 4 2004 Earnings Range Narrowed NU's current 2004 earnings estimate is within the original forecast earnings range of $1.20 - $1.40 per share. Bar graph chart comparing earnings per share, 2003 & 2004 earnings per share 3Q03 Reported $0.31 3Q04 Reported $0.30 YTD 3Q03 Reported $0.99 YTD 3Q04 Reported $1.01 2003 Reported $0.91 2003 Excluding Significant Items $1.24 2004 Projected Earnings Range $1.25 - $1.35 SLIDE 5 Year to Date Earnings (to 9/30/04) NU's 2004 earnings have been driven by improvements at CL&P and Merchant Energy Bar graph chart comparing 2003 to 2004 year to date earnings (Shown as Earnings in Millions) 2003 2004 CL&P $59.0 $65.1 PSNH $34.5 $36.0 WMECO $13.9 $ 8.7 Yankee Gas $ 3.4 $ 8.5 Merchant Energy $22.3 $27.0 Services $ 1.7 $-1.3 SLIDE 6 Key Accomplishments in 2004 NU has had significant accomplishments from all businesses this year. - - Multiple regulatory uncertainties resolved - - Profitability of merchant business extended - - Overall earnings on track - - Strong financial position maintained - - NU's strategy is validated SLIDE 7 NU Has Much Greater Certainty Today Multiple regulatory proceedings have been concluded over the past twelve months. Distribution/ Regulated Generation Transmission Competitive CL&P 4-year rate case Done FERC rate LMD PSNH rate case Done case Done dispute Yankee rate case Settlement Appeal of between Pending Bethel- Select- Approval Norwalk Done CL&P Settled PSNH Northern Agreement to Wood Project Approved replace 1385 Yankee LNG project Approved line to Long Island In place SLIDE 8 Northeast Utilities Enterprise Plan NU's enterprise planning began with a review of our current organization. REGULATED COMPETITIVE CL&P Wholesale Supply Distribution - Transmission Pumped - Hydro - Coal - Wholesale Storage PSNH Retail Supply Distribution - Generation - Transmission Retail WMECO NGS/SESI Distribution - Transmission Services Yankee Gas Distribution SLIDE 9 Regulated Strategic Plan NU's regulated growth story addresses the needs of customers and provides benefits to shareholders. New England customers require: NU Shareholders can benefit from: - - Expanded transmission system - Increased investment opportunities - - Upgraded distribution facilities - Above average earnings growth - - Increased local natural gas storage - Above average dividend growth - - Reduced power plant emissions - Strong credit profile SLIDE 10 Regulated Projects NU's five-year regulated capital investment program includes approximately $1.2 billion of major needed energy infrastructure projects. Photo of transmission line Photo of SW CT Transmission Photo of Yankee Gas LNG facility $1 billion PSNH Northern Wood Yankee Gas LNG facility $100 million PSNH Northern Wood $75 million SLIDE 11 Regulated Projects NU's five-year regulated capital investment program includes more than $400 million per year of ongoing projects. CL&P distribution..........$225 million/yr. PSNH distribution & generation............... $80 million/yr. Transmission................$60 million/yr .. Yankee distribution....... $40 million/yr. WMECO distribution........ .$30 million/yr. Total: $435 million/yr. SLIDE 12 Competitive Strategic Plan NU's competitive businesses provide balance. - - Source of cash to fund regulated growth - - Additional opportunities as wholesale and retail markets evolve - - No need for significant new capital - - Strong risk management skills stabilizing financial performance SLIDE 13 NU's Investment Thesis - - Unique opportunity to invest in needed energy delivery infrastructure - - Balance sheet capable of sustaining major investments - - Opportunity to create above industry average earnings growth - - Ability to continue above industry average dividend growth, assuming we succeed in executing our plan - - Competitive businesses that are expected to produce increasing earnings and free cash SLIDE 14 Financial Review and Outlook SLIDE 15 Projected 2004 Results NU's projected 2004 results reflect solid earnings from all businesses Key Drivers ----------- Regulated Distribution & Generation $0.91 - $0.95 - Sales Growth - CL&P Rate Increase Transmission $0.22 - $0.24 - Increased Investment Competitive $0.23 - $0.25 - Profitable CL&P Contract - Retail Earnings Parent & Other ($0.11) - ($0.09) Total Northeast Utilities $1.25 - $1.35 SLIDE 16 Earnings Growth NU's strategy continues to drive earnings growth. Bar chart showing earnings/share excluding significant items and dividends/share for the years from 2000 - 2003 (actual) and projected for 2004 & 2005 Earnings/share Dividends/Share 2000 $1.45 $0.40 2001 $1.37 $0.45 2002 $1.08 $0.53 2003 $1.24 $0.58 2004 (projected) $1.25 - $1.35 $0.63 2005 (projected) $1.35 - $1.45 SLIDE 17 Significant Earnings Impacts There are several developments that have had significant impact on 2004 earnings. - - CL&P - Transmission and distribution rate increases - - Yankee Gas - 2003 unbilled revenue adjustment - - WMECO - Higher pension, depreciation and interest costs - - Merchant Energy - Growing, profitable, geographically diverse book of business - - Services - Reduced government work, second quarter write-off SLIDE 18 Projected 2005 Results Chart showing NU's projected 2005 results reflect increases over 2004 in all businesses Key Drivers Regulated Distribution & Generation $0.96 - $1.00 - Sales Growth - Increased Investment - Rate Increases Transmission $0.26 - $0.30 - Increased Investment Competitive $0.26 - $0.30 - Improved sales Parent & Other ($0.15) - ($0.13) Total Northeast Utilities $1.35 - $1.45 SLIDE 19 Capital Investments Will Exceed Depreciation NU's capital investment will be growing much faster than depreciation over the next five years, allowing rate base to increase significantly. Bar chart comparing capital expenditures and depreciation in millions of dollars for the period from 2003 - 2009, with 2003 showing actual and years 2004 - 2009 showing projected. In Millions of $ Capital expenditures Depreciation 2003 actual $ 550 $204 2004 projected $ 638 $239 2005 projected $ 753 $242 2006 projected $ 765 $261 2007 projected $ 667 $283 2008 projected $ 822 $302 2009 projected $ 729 $326 SLIDE 20 Distribution and Generation Rate Base Bar chart illustrating Capital investment in needed projects will result in a growing distribution and generation rate base over the next five years. (Shown in Millions of $) CL&P PSNH WMECO Yankee 2004 projected $1197.5 $713.2 $213.8 $426.9 2005 projected $1375.3 $750.5 $233.5 $434.7 2006 projected $1539.8 $824.5 $264.1 $453.2 2007 projected $1704.2 $885.1 $285.7 $573.8 2008 projected $1851 $933 $305.3 $585.6 2009 projected $1972.1 $976.7 $324.6 $593.8 SLIDE 21 Rate Increases Multiple rate increases are projected for our regulated companies over the next year. Amount Timeframe Status CL&P Distribution $25 million 1/1/05 Approved PSNH Delivery $3.5 million 10/1/04 Approved $10 million 6/1/05 Approved Yankee Gas Delivery $14 million 1/1/05 Settlement Pending Approval Transmission $18-$20 million 1/1/05 Formula Driven SLIDE 22 Transmission Rate Base Bar chart showing NU's capital investment will also result in a growing transmission rate base over the next five years. (Shown in Millions of $) CL&P PSNH WMECO 2004 projected $304.6 $124.2 $57.6 2005 projected $330.4 $101.5 $62.8 2006 projected $586.2 $132.2 $62.2 2007 projected $617 $180.2 $62.7 2008 projected $783.4 $188.1 $62 2009 projected $1440.8 $183.9 $61.4 SLIDE 23 Financing Outlook - - Starting from a position of strength with our balance sheet and credit ratings - - External financing is required annually as we continue our investment program - - Financial markets support our story SLIDE 24 Credit Ratings NU continues to maintain strong credit ratings on its debt. Moody's S&P Fitch NU Unsecured Baa1 (N) BBB (N) BBB (S) CL&P Secured A2 (N) A- (N) A- (S) PSNH Secured A3 (S) BBB+ (N) BBB+ (S) WMECO Unsecured A3 (S) BBB+ (N) BBB+ (S) NGC Secured (25 yr) Baa3 (S) BB+ (N) BBB- (S) SLIDE 25 Today's Balance Sheet NU's earnings growth is sustaining our strong balance sheet. (As of 9/30/04) Leverage Target 55% Total Debt Excludes RRBs Preferred Common NU Consol. 54.6% 2.2% 43.2% CL&P 54.9% 5.8% 39.3% PSNH 55.0% 0.0% 45.0% WMECO** 53.8% 0.0% 46.2% Yankee Gas* 53.7% 0.0% 46.3% NGC 45.4% 0.0% 54.6% *Excludes acquisition premium **Excludes $50 million issue to fund prior spent nuclear fuel trust SLIDE 26 Recent Debt Issues The regulated companies continue to attract capital at favorable rates Issue Spread to Company (millions) 2004 Rating Treasuries Yankee Gas $75 10-yr. FMBs January Not rated 75 bps PSNH $50 10-yr. FMBs July A3/BBB+ 79 bps CL&P $150 10-yr. FMBs September A2/A- 67 bps CL&P $130 30-yr. FMBs September A2/A- 85 bps WMECO $50 30-yr. Senior Unsecured September A3/BBB+ 104 bps SLIDE 27 Bar chart illustrating Debt Maturity and Sinking Fund Requirements NU system has modest cash requirements to meet debt maturities. Shown in $ Millions Shown in $ Millions 2004 36.6 2005 92.2 2006 28.6 2007 9.8 2008 161.4 2009 63.2 2010 15.2 2011 17.5 2012 311.9 2013 68.5 2014 290.2 2015 13.6 2016 30.8 2017 24.9 2018 36.5 2019 25.8 2020 26.1 2021 436.2 2022 72.5 2023 51.4 2024 174.1 2025 37.1 2026 40.2 2027 0 2028 369.3 SLIDE 28 Credit Lines Bar chart illustrating Favorable bank market will allow a cost effective expansion of credit lines in terms of both size and tenor. Shown in $ Millions 2003 364-Day 2004 5-Year 2004 3-Year Regulated Revolver $300 $400 Parent Revolver, LOCs $350 $500 CL&P Receivables $100 $100 SLIDE 29 Cash Requirements 2005-2009 NU projects it will meet a projected $4.4 billion of cash requirements during 2005 - 2009 through internally generated funds and new financings. Pie Chart illustrating Shown in Billions $ Net New Financing $1.8 Depreciation $1.4 Non-RRB Amortization $0.3 Earnings, Deferred Taxes & other $0.9 SLIDE 30 Competitive Businesses SLIDE 31 Competitive Businesses The competitive businesses' performance recovered significantly in 2003 and is on track for improvement in 2004 and 2005. Bar chart showing Seven Consecutive Quarters of Profits Shown in Million $ 2003 1st Qtr $ 5 2003 2nd Qtr $12 2003 3rd Qtr $ 7 2003* 4th Qtr $ 8 2004 1st Qtr $19 2004 2nd Qtr $ 3 2004 3rd Qtr $ 4 Net Income ($ Millions) 2003* 2004 2005 Actual Estimate Estimate Merchant $30 $29 -$31 $29 - $33 Services $2 $ 1 - $ 2 $ 4 - $ 6 Total $32 $30 - $33 $33 - $39 * Excludes $36 million SMD write-off SLIDE 32 Select Energy's Electric Portfolio NU focuses its wholesale and retail operations on the Northeast U.S. Pie charts illustrating Wholesale and Retail peak loads over three regions Wholesale Measured in MW New England 3,800 PJM 1,500 New York 400 2004 Total Peak Load = 5,700 MW Retail Measured in MW New England 700 PJM 500 New York 600 2004 Total Peak Load = 1,800 MW SLIDE 33 Competitive Wholesale Contracts Select Energy currently has the following contracts and opportunities for further success. Estimated Location Power Pool Peak Load Duration Major Secured Contracts WMECO New England 400 MW January - February '05 NSTAR New England 1,100 MW January - June '05 NGRID New England 250 MW May - October '05 NJ BGS PJM 300-1,400 MW January - May '07 Maryland PJM 50-300 MW January `05 - May '07 Upcoming Opportunities CL&P New England 3,900 MW January '05 for 1-2 years NSTAR New England 2,500 MW January '05 for 3-12 months Maine New England 800 MW March `05 - multi year NGRID New England 1,800 MW May `05 - April `06 PEPCO(DC) PJM 1,400 MW February `05 - May `08+ Maryland PJM 2,000 MW June `05 - multi year BGS PJM 5,000 MW June `05- May `08 SLIDE 34 Competitive Retail Markets Select Retail is a growing retail electric and gas supplier in the competitive commercial and industrial market in the Northeast Total Retail Electric Customer Accounts 18,580 Electric Peak Load 1,800 MW Gas Customer Accounts 9,700 Total Annual Gas Load 37.5 Bcf SLIDE 35 Regulated Businesses SLIDE 36 Regulated Businesses Success The regulated companies must manage the regulatory process and execute well operationally to be successful. - - Regulatory support for growing capital program - - Timely rate relief - - Strong reliability and customer service - - Improved cost management SLIDE 37 Distribution and Generation Capital Expenditures NU continues to invest more than $400 million annually in distribution and regulated generation. Bar chart comparing actual and forecasted distribution and generation capital expenditures (Shown in $ Millions) Actual Forecast 2001 $402 2002 $408 2003 $433 2004 $453 2005 $466 2006 $443 2007 $385 2008 $414 2009 $443 SLIDE 38 CL&P Rate Decision The CL&P rate decision as revised is fair for CL&P and customers. - - Distribution rate increases - $25.1 million in 2005 - $11.9 million in 2006 - $7.0 million in 2007 - - Procurement fee - 0.5 mills/Kwh through 2006 - 0.25 mills/Kwh potential adder through 2006 - - August reconsideration decision - $10 million benefit in third quarter 2004 - $4 million pre-tax annual benefit in 2005 - 2007 - - Transmission - $28.4 million annual increase in 2004 - New filings needed for additional increases - - ROE - 9.85% with 50-50 sharing above (excludes procurement fee) SLIDE 39 CL&P Bill Components Today The proposed transmission investments in CT will help contain generation, congestion, and RMR costs. Bar chart illustrating generation, congestion, and RMR costs. cents/Kwh Distribution 2.59 Transmission 0.47 Stranded Cost Charge (CTA) 0.94 Other 0.40 Congestion, RMR and Other 0.86 Generation 5.74 SLIDE 40 CL&P $900M Distribution Capital Program Distribution system investment will enhance customer reliability and increase earnings power. Pie Chart illustrating distribution system investment 2004 - 2007 ($ Millions) Maintenance Capital & Load Growth $402 Reliability Improvements $161 Replace Aging Plant $178 Technology, Streetlights, Other $159 - - Average age of our infrastructure is >35 years, which drives higher operation & maintenance expenses. - - More than 40% of the system is fully depreciated. SLIDE 41 PSNH Distribution Rate Case The PSNH rate decision is fair for PSNH and customers. - - $3.5 million T&D rate increase October 1, 2004 - - $10 million T&D rate increase June 1, 2005 - - No specific ROE authorized on distribution rate base - - No expiration date for rate plan - - $60 million/yr. distribution capital program - - No transmission tracker - - Northern Wood Project can enter rate base without a new rate case SLIDE 42 PSNH Earnings Power PSNH's earnings power is based on its three business lines. Pie chart illustrating Projected 12/31/04 Rate Base Projected 12/31/04 Rate Base (Shown in $ million) Distribution (no authorized ROE) $520 Transmission (11% authorized ROE) $125 Generation (11% authorized ROE) $210 SLIDE 43 PSNH Northern Wood Project There are many benefits to customers, the state, the environment, and PSNH from the Northern Wood Project. - - Replaces 50MW coal burning unit with wood-burning fluidized bed boiler - - $75 million project - - $20 million/year benefit to the regional economy - - Projected to be neutral to PSNH rates due to annual sale of 350,000 renewable energy credits [Illustration of power plant] - - 75% less NOX; 98% less SOX - - About 90% less mercury; CO2 neutral - - Official groundbreaking was October 15, 2004 - - Expected completion by late 2006 SLIDE 44 Yankee Gas Rate Case The Yankee rate decision has far reaching impact on the business going forward. - - Proposed settlement reached with Consumer Counsel and DPUC Prosecutorial Division - $14 million or 4.1% increase - 9.9% allowed ROE with 50/50 sharing - Hearings on settlement set for October 28, 2004 - - New rates effective January 1, 2005 until mid-2007 - - Positions us for a significant earnings turnaround in 2005 SLIDE 45 Yankee Gas LNG Project The Yankee Gas LNG project in Waterbury, CT was approved by the DPUC on September 3, 2004. - - 1.2 Bcf LNG storage tank - - Vaporization capability of 60,000 mcf per day - - Liquefaction capability of 6,000 mcf per day - - Total costs estimated at $100 million [Picture of LNG - - Construction contract signed on October 15, 2004 facility] - - Incremental capacity to fill supply gap - - The facility is scheduled to be in service for the 2007/2008 winter heating season - - Helps insulate customers from price volatility SLIDE 46 WMECO WMECO needs to address lower earnings. - - Restructuring rate freeze in effect until March 2005 - - Lower capital needs than other subsidiaries - - Unable to offset lower pension income, higher O&M through growth - - Rate filing likely soon, unless rate relief negotiated - - Tracking mechanism adjusts annually to recover transmission costs SLIDE 47 Transmission Business SLIDE 48 Transmission Business Significant capital investments to solve bulk power delivery problems. - - $500 million of current rate base - - $1 billion - $1.5 billion of capital spending projected in 2005-2009 - - Siting for our large projects is progressing - - Our cost recovery mechanisms are largely defined SLIDE 49 Transmission Capital Expenditures* NU's Transmission growth has already begun. Bar chart illustrating actual and forecasted Transmission Capital Expenditures Actual Forecast (Shown in $ Millions) 2001 $20 2002 $55 2003 $99 2004 $175 2005 $245 2006 $285 2007 $250 2008 $375 2009 $255 * Spending levels depend on final level and timing of all projects. SLIDE 50 Ongoing Transmission Projects 2005-2009 NU's projects meet important customer needs in the region and in each of our states. Map of New England states including Connecticut, Rhode Island, Massachusetts, Maine, Vermont, New Hampshire and Vermont Text boxes pointing to specific states containing description of ongoing projects by state in Millions of $ New Hampshire ongoing projects.. $122M (arrow from text box pointing to NH) Massachusetts ongoing projects $15M (arrow from text box pointing to MA) Connecticut ongoing projects including Long Island Cable $220M (arrow from text box pointing to CT) SLIDE 51 Bethel-Norwalk Project Status Project helps meet growing needs of the Norwalk-Stamford-Greenwich area. Timeline bar chard horizontal graph for period from 2001 - 2007 showing project status stages for project mid 2001 - late 2003 Siting late 2003 - 2004 Appeals & Permitting late 2004 - 2007 Construction - - July 2001 - Municipal Consultation begins - - October 2001 - Application is filed with the [Map of Siting Council Connecticut with - - July 2003 - Siting Council certifies project solid lines - - August 2004 - Court dismisses appeal indicating - - December 2004 - Siting Council approves existing remaining detailed plans transmission - - Estimated in-service date of 2006 and lines and dotted project cost of $300M - $350M* lines showing number of miles for proposed 345kV line (21 miles) and for 115kV line (10 miles)] * In-service date and project cost depends upon resolution of technical and siting issues. SLIDE 52 Middletown-Norwalk Project Status Project increases imports to Southwest Connecticut, unlocks generation, and addresses important reliability concerns. Timeline bar chard horizontal graph for period from 2003 - 2009 showing project status stages for project 2003 - Early 2005 Siting early 2005 - 2007 Appeals & Permitting early 2006 - 2009 Construction - - May 2003 - Municipal Consultation begins [Map of - - October 2003 - Application is filed with the Connecticut with Siting Council solid lines - - Dec. 2003 - February 2004 - Siting Council indicating holds 8 public meetings existing lines and dotted transmission - March 2004 - Siting Council begins adjudicated lines showing hearings number of - - April 2005 - Expected Siting Council certificate miles for Estimated in-service date of 2009 and proposed 345kV a project cost of $565M line (69 - miles) (NU's 80% share)* and for 115kV line (79 miles)] * In-service date and project cost depends upon resolution of technical and siting issues. SLIDE 53 Glenbrook Cables Project Status Project helps meet the growing needs of the Stamford-Greenwich area. Timeline bar chart horizontal graph for period from 2003 - 2009 showing project status stages for project 2005 - 2006 Siting 2006 - 2009 Construction - - March 2004 - Municipal consultation begins [Map of - - May 2004 - Application is filed with Connecticut with Siting Council solid lines - - November 2004 - Siting Council begins indicating existing adjudicated hearings transmission lines - - Forecast assumes an in-service date of 2008 and dotted lines and a project cost of $126M* showing number of miles for proposed 115kV line (9-miles) * In-service date and project cost depends upon resolution of technical and siting issues. SLIDE 54 NU's Transmission Tariff Most costs are billed to ISO-NE for regional recovery. Distribution of regional rates for new transmission investment is based upon usage levels: Pie chart showing percentage breakdown by state by usage levels Connecticut 27% Maine 8% Massachusetts 45% New Hampshire 9% Rhode Island 7% Vermont 4% SLIDE 55 NU's Transmission Tariff Those costs not billed to ISO-NE are recovered locally. - - Case filed in 2003; settled with CT, MA, NH regulators in mid-2004 and approved by FERC on September 15 - - Provides for forward-looking rate base and improved cash flow - New rates set every six months - Based on expected plant additions in coming year - Subject to true-up - Projects receive AFUDC during construction period - ROE now 11%; will be modified when FERC approves RTO SLIDE 56 New England RTO Status Filed for approval in 2003 Approved by FERC in 2004, subject to rehearing Most ROE issues outstanding - - New England TOs applied for 12.8% base ROE, plus incentives - - FERC approved 50 basis point adder for RTO formation on regional assets of transmission owners; local assets excluded - - FERC conditionally approved investment incentive of 100 basis points for new regional assets; local assets excluded (subject to rehearing and FERC final pricing policy) - - Hearings on base ROE to commence in early December 2004, with ROE set in April/May 2005. SLIDE 57 Questions and Answers -----END PRIVACY-ENHANCED MESSAGE-----