EX-99 2 0002.txt EXHIBIT TO NU FORM 8-K (SLIDE PRESENTATION) SLIDE NO. 1 The Northeast's Energy Company Edison Electric Institute Financial Conference San Francisco, CA October 31, 2000 SLIDE NO. 2 Joan S. Freilich Executive Vice President & Chief Financial Officer Consolidated Edison, Inc. SLIDE NO. 3 This presentation contains forward-looking statements, which are statements of future expectations and not facts. Actual results or developments might differ materially from those included in the forward-looking statements because of factors such as competition and industry restructuring, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments, in legal or public policy doctrines, technological developments and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in the two companies' SEC reports. SLIDE NO. 4 Con Edison's track record of delivering on promises Earned 12%+ ROE in 13 of last 14 years Accretive acquisition of O&R Constructive rate agreements $1 billion share repurchase completed SLIDE NO. 5 Northeast Utilities completes three-year recovery Profitability restored Extremely strong Millstone performance over the past 15 months Restructuring successfully implemented in CT and MA Restructuring agreement approved by NH governor, legislature and regulators Yankee Gas merger successfully completed SLIDE NO. 6 (Map) Con Edison: The Northeast's Energy Company Total assets $ 26 billion Electric customers 5.0 million Gas customers 1.4 million Region: 19% of U.S. population 25% of electricity output SLIDE NO. 7 (Graph) Our "wires and pipes" businesses provide a strong foundation for future success Telecom & Technology Specialized Generation Products & Services Electric, Gas and Steam Distribution Customers/Assets SLIDE NO. 8 New York Global Agreement addresses major issues Extension of current agreement Continued recovery of energy costs and stranded costs Provides framework for solid earnings Approval of NU merger recommended SLIDE NO. 9 Provides extension of current agreement Agreement was to expire March 2002 Full rate case would have to be filed in 2001 Global agreement extends rate freeze 3 years - March 2005 Makes permanent the April 2001 rate reduction Shareholder protections continue (environmental, taxes, inflation, etc.) SLIDE NO. 10 Provides regulatory certainty Continued full recovery of all commodity costs Continued full recovery of all stranded costs $170 million rate reduction funded by Achieved productivity and sales growth Divestiture proceeds SLIDE NO. 11 Provides Framework for Solid earnings No sharing target for year ending March 2001 12.9% threshold for year ending March 2002 11.75% threshold for years ending March 2003, 2004 and 2005 Additional 25 basis points (12% total) Based on operating performance Merger savings and incentives/penalties excluded from sharing formula SLIDE NO. 12 Recommends approval of NU merger 50/50 sharing of net synergies Rate reduction of $18.5 million Present value of 10 year synergies Opportunity to continue sharing after 2005 No tracking of synergy savings SLIDE NO. 13 We are working hard to reduce market volatility Made recommendations to PSC/FERC Working through the ISO to point out deficiencies 50% hedged in summer, 75% in winter through NUG contracts and own generation Issued RFP for winter load SLIDE NO. 14 Merger approval process Approvals required from NY, NH and CT SEC and DOJ also required Connecticut DPUC votes 4-1 to approve merger with conditions on October 19, 2000 Request for Reconsideration filing within 15 days of final decision DPUC reply within 25 days from receipt of Request for Reconsideration SLIDE NO. 15 (Graph) Regulated Business 5% Annual Growth Target Maximize Value of Assets Economic Growth Efficiencies Superb Customer Service Critical Mass of Electric, Gas and Steam Customers SLIDE NO. 16 Our expertise assures that we will take full advantage of our growth potential Highest electric reliability performance Continuing high load growth Unparalleled knowledge of Northeast energy markets Unmatched expertise in underground cable build-out and operation High-tech, learning organization SLIDE NO. 17 Graph Gas distribution growth through conversions Home heating potential market % of market not served by natural gas Con Edison of New York 45% Yankee Gas 65% SLIDE NO. 18 We are continuing the focus that is the foundation of our success Increased efficiency and productivity Economies of scale - B2B Best practices Technology Reinforce infrastructure for new growth Long-term rate agreements Capture gains for shareholder SLIDE NO. 19 John H. Forsgren Executive Vice President & Chief Financial Officer Northeast Utilities System Acting Chairman and CEO NEON Communications, Inc. SLIDE NO. 20 We are exiting the nuclear business to reduce business risk Connecticut - Millstone 1, 2 & 3 Dominion to acquire units for $1.3 billion CL&P to receive $843 million; WMECO $196 million Closing expected April 2001 New Hampshire - Seabrook Auction to follow final approval of restructuring plan New York - Indian Point 2 Winner to be announced in the Fall Closing in mid 2001 SLIDE NO. 21 We are creating value for shareholders in regulated and unregulated markets We can achieve 5% growth in the regulated business We are exploring opportunities in various areas and looking to create alliances Generation will have a niche role in earnings growth Telecom has the potential to be an engine for growth SLIDE NO. 22 (Graph) Combined Con Edison/NU non-regulated activities provide a strong growth platform Con Edison Northeast Utilities Solutions Retail Marketing & Select Energy Services Energy Wholesale Marketing HEC Generation: NGC Development Development, Ownership, Services NGS Communications Telecommunications Mode 1/NEON SLIDE NO. 23 (Graph) We will leverage our knowledge of the energy market Specialized Generation Products & Services SLIDE NO. 24 (Map) Investments in strategic power generation facilities will enhance growth 1. Northfield Mtn. NEPOOL - 23,000 MW NYPOOL - 30,000 MW 2. CEEMI PJM - 52,000 MW 3. Mt. Tom 4. Holyoke Project 5. Housatonic Hydro 6. Eastern Hydro 7. Newington (under construction) 8. Lakewood Con Edison/NU combined capacity 2,500 MW Regional 1999 peak load 105,000 MW SLIDE NO. 25 (Graph) We will leverage our customer base and infrastructure skills through telecom investments and alliances Telecom & Technology SLIDE NO. 26 Our telecommunications business is rapidly emerging as a significant earnings growth driver Con Edison Communications Building out in NYC and Westchester NYC franchise received Expected to: Become profitable by year-end 2001 Generate $50 million in income by 2004 Strategic partnership with NEON Other alliances being evaluated SLIDE NO. 27 (Map) Market metrics Target market includes 12 states 30 million people 1 million businesses 19 million access lines Ownership NU owns 4.8 million shares, or 22% Con Edison acquired 10.75% stake 7.5 million shares publicly traded (NASDAQ: NOPT) SLIDE NO. 28 NEON's Business Plan: Focus on Wholesale Market 65,000 fiber miles, 1,100 route miles from New York to Maine Partnership at Con Edison Communications and Exelon would add 440 route miles, about 9,000 fiber miles Focus on large and medium-size cities in New England Install advanced optronic equipment Major customers include AT&T Local, MCI WorldCom, Sprint, RCN, CTC Communications, Network PLUS SLIDE NO. 29 We offer low-risk and dependable return potential Strong growth at Con Edison and NU Synergies and cost controls increase growth Plant sales and securitizations greatly reduce stranded cost exposure Leveraging core assets provides even greater earnings growth and returns to shareholders Demonstrated ability and commitment to achieve targets SLIDE NO. 30 Our commitment to the future Achieve accelerated growth in regulated businesses Capitalize on unregulated growth opportunities Leverage strong management team DELIVER VALUE TO SHAREHOLDERS