Exhibit 99
SLIDE 1
Deutsche Bank Conference
New York
June 15, 2005
Northeast
Utilities System
SLIDE 2
Safe Harbor Provisions
This presentation contains statements concerning NU’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 Securities Litigation Reform Act
of 1995. In some cases, a listener 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, regulations or regulatory policy; expiration or initiation of
significant energy supply contracts; changes in levels of capital expenditures; development in
legal or public policy doctrines; technological developments; volatility in electric and natural
gas commodity markets; effectiveness of our risk management policies and procedures;
changes in accounting standards and financial reporting regulations; fluctuations in the value
of electricity positions; obtaining new contracts and anticipated volumes and margins; terrorist
attacks on domestic energy facilities; and other presently unknown or unforeseen factors.
Other risk factors are detailed from time to time in our reports to the SEC. 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
NU Overview
·
Restructuring competitive businesses
·
Growing regulated capital investment
SLIDE 4
2005 Competitive Business Organization
Organizational chart
NU | ||
Holyoke Water Power* | Regulated Utilities | |
NU Enterprises | ||
- Select Energy* - Retail* - Wholesale** | ||
- Northeast | ||
- Northeast | ||
- Select | ||
- Contracting** - E.S. Boulos** - Woods Electric** |
*
Competitive businesses
being retained
MERCHANT ENERGY
** Competitive businesses
being exited
ENERGY SERVICES
SLIDE 5
Pie chart illustrating
Competitive Business Perspective
as of 12/31/04
Competitive Business Revenues
(Shown in billions of $)
Wholesale | Services | Generation | Retail | |
Revenues | $1.5 | $0.3 | $0.2 | $0.9 |
Total - $2.9 billion
SLIDE 6
Components of First Quarter Competitive Results
|
| NUEI Services & Parent |
Day-to-day operations | $11.7 | ($3.2) |
Retail supply M-T-M | $59.9 | - |
Shorter-term contract M-T-M | $16.5 | - |
Services impairments | - | ($25.3) |
Natural gas hedges | ($25.7) | - |
Other wholesale marketing | ($37.1) | - |
Long-dated contract M-T-M | ($164.2) | - |
Total Net Income | ($138.9) | ($28.5) |
SLIDE 7
Status of Exit of Wholesale Marketing and Services Businesses
·
Wholesale business
•
High level of interest based on indicative proposals
•
Short list of bidders developed
•
Expect final bids in July
•
Expect to close the transaction(s) in fourth quarter
·
Services businesses (Woods Network, SECI – NH, E.S. Boulos, SESI, SECI – CT, Woods Electric)
•
Marketing effort on 4 of 6 businesses has commenced
•
Varying degrees of interest expressed in each of the businesses
•
Expect to close on one or more transactions in 2005
SLIDE 8
NU’s Regulated Business Investment Thesis
·
Investment in distribution and regulated generation infrastructure continues to improve system performance.
·
Electric transmission upgrades critical to Northeast.
•
Increases system reliability, especially in Southwest CT
•
Reduces congestion costs to customers in New England, primarily in CT
•
Supported by federal and state regulators
SLIDE 9
Regulated Distribution Projects
Multi- Year Projects | Ongoing Annual Investment | |||
(Illustration) | CL&P distribution | $225 million/yr. | ||
Yankee Gas LNG | ||||
$108 million | PSNH distribution & generation | $80 million/yr. | ||
(Illustration) | Yankee distribution | $40 million/yr. | ||
PSNH Northern Wood | ||||
$75 million | WMECO distribution | $30 million/yr. | ||
Total: | $375 million/yr. |
SLIDE 10
(Bar chart illustrating)
Distribution and Generation Rate Base
Capital investment in needed projects will result in a growing distribution and generation rate base over the next five years
(Shown in millions of $)
2004 | 2005 Projected | 2006 Projected | 2007 Projected | 2008 Projected | 2009 Projected | |
CL&P | 1197.5 | 1375.3 | 1539.8 | 1704.2 | 1851 | 1972.1 |
PSNH | 713.2 | 750.5 | 824.5 | 885.1 | 933 | 976.7 |
WMECO | 213.8 | 233.5 | 264.1 | 285.7 | 305.3 | 324.6 |
Yankee | 426.9 | 434.7 | 453.2 | 573.8 | 585.6 | 593.8 |
SLIDE 11
The Nation’s Transmission System is in Need of Significant Additions and Upgrades
FERC’s Electric Transmission Constraint Study identified congestion points that need immediate relief. | ||
· A 2001 Edison Electric Institute (EEI) study identified $56B in transmission infrastructure investment needs. · The Federal Energy Regulatory Commission (FERC) has identified $12B that is needed simply to relieve immediate congestion points. · The August 14, 2003 blackout report addresses the need for significant new transmission investments. | (U.S. map illustrating) Transmission Constraints in the Contiguous U.S. Northeast · Northeast of Boston* · East NY* · SW CT Interface* · Southeast PA · West VA/PIM Interface · Southeast West VA *Red Circled Area – Includes NU Service Territory Midwest · Southwest MI · Central IA · East KS/MO Interface · Central MO
· Pacific DC Intertie · CA/OR Interface · WY/ID Interface · Central CA · Northeast AZ · Southern CA |
SLIDE 12
In New England, the Regional Transmission Expansion Plan (RTEP)
Identifies Nearly $2.4 Billion in Projects
NU’s part of that transmission expansion program is over $1.4 billion.
(Pie chart illustrating)
RTEP05 Transmission Projects
NU | 57% |
NGrid | 18% |
NSTAR | 10% |
UI | 9% |
Bangor Hydro | 5% |
Energy East | 1% |
SLIDE 13
Regulated Transmission Projects
Multi- Year Projects | Ongoing Annual Investment | |||
(Illustration) | $40 million/yr. | |||
Bethel-Norwalk $300 - $350 million | ||||
NH Transmission | $20 million/yr. | |||
(Illustration) | MA Transmission | $ 2 million/yr. | ||
Middletown-Norwalk $670 - $794 million | ||||
(Illustration) | ||||
Glenbrook Cables $120 million | Total: | $62 million/yr. |
SLIDE 14
The Need: An Adequate Transmission System
Southwest CT improvements have been a top priority in each of ISO-NE’s last four regional
transmission expansion plans. Our four major projects there total over $1.3 billion in investment.
(Illustration showing map of Connecticut with locations of existing and proposed transmission lines)
(Map shows proposed lines in area of 50% of CT Load)
Middletown-Norwalk 345 kV
Underground & Overhead
$670-794 Million (NU 80% Share)
·
69 miles 345kV (35% underground)
·
57 miles 115kV (1% underground)
·
Projected in-service date: 2009
Long Island Cable
138 kV cross sound
$72 Million (NU 50% Share)
·
11 miles 138kV submarine cable
·
Joint project with LIPA
·
Projected in-service date: 2007
Glenbrook Cables
115 kV underground
$120 Million
·
9 miles 115kV underground
·
Projected in-service date: 2008
Bethel-Norwalk
345 kV Underground
& Overhead
$300-350 Million
·
21 miles 345kV (56% underground)
·
10 miles 115kV (100% underground)
·
Projected in-service date: Dec 2006
SLIDE 15
Transmission Rate Base
NU’s capital investment will also result in a growing transmission rate base over the next five years.
(Bar chart illustrating capital investment broken down by entity)
Shown in millions of $
2004 | 2005 Projected | 2006 Projected | 2007 Projected | 2008 Projected | 2009 Projected | |
CL&P | 304.6 | 330.4 | 586.2 | 617 | 783.4 | 1440.8 |
PSNH | 124.2 | 101.5 | 132.2 | 180.2 | 188.1 | 183.9 |
WMECO | 57.6 | 62.8 | 62.2 | 62.7 | 62 | 61.4 |
SLIDE 16
Transmission Investment has a Favorable
Regulatory and Financial Environment
·
NU’s transmission tariffs fully track all transmission costs. Forward looking rates and the annual true-up provision lowers the risks associated with recovery of transmission investment
·
ROEs granted by FERC are more robust than those being granted by retail commissions
·
NU has put in place risk management initiatives to manage transmission projects
SLIDE 17
Summary
·
Competitive businesses changes on schedule
·
Execution of the competitive business plan should result in a significant reduction in risk profile
·
Significant opportunities to deploy capital in both the distribution and transmission businesses
·
Current regulated projects are on schedule
·
NU will take steps to ensure continued financial strength