EXHIBIT 99.
SLIDE #1
NU OVERVIEW
MICHAEL G. MORRIS
CHAIRMAN, PRESIDENT,
CHIEF EXECUTIVE OFFICER
SLIDE #2
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 company's SEC reports.
SLIDE #3
FIVE KEY MESSAGES FOR TODAY
NU will focus on energy in the Northeastern U.S.
NU plans to grow both regulated and unregulated
businesses
NU plans to grow its dividend as earnings grow
NU will spend shareholder dollars prudently and will
continually test new investments against share repurchases
NU has more financial flexibility than it has had in
decades
SLIDE # 4
WHAT'S TO COME
PICTURES
John Forsgren - Finance
Cheryl Grise' - Utility Group
Bill Schivley - Select Energy
SLIDE #5
WHAT'S TO COME
PICTURES
Bruce Kenyon - Generation
Dave Boguslawski - Transmission
SLIDE #6
NU'S GOAL IS TO BE ONE OF THE LEADING ENERGY DELIVERERS AND
MARKETERS IN THE NORTHEAST UNITED STATES
Map of Northeastern United States showing the states
with regulated NU distribution companies, Connecticut,
Massachusetts and New Hampshire.
SLIDE #7
NU IS EYEING MAJOR NEW INVESTMENT OPPORTUNITIES IN ITS
TARGET MARKET
More than $600 million in Southwestern CT electric
transmission
Up to half of invested capital would be equity
More than $200 million in CT natural gas
distribution
Financed through debt, retained earnings
Looking hard at acquiring generation in Northeast power
pools
Reviewing additional energy services businesses to fill in
key needs
SLIDE #8
MEASURES OF FINANCIAL SUCCESS
Graph showing projected earnings from operations for 2001
and 2002. For 2001, projected earnings per share range is
between $1.35 and $1.50 and for 2002 projected earnings per
share range is between $1.40 and $1.65.
SLIDE #9
MEASURES OF FINANCIAL SUCCESS
Graph showing returns on equity at major business
segment. For Regulated Businesses the projected range of
returns is between 10 and 13%. For unregulated businesses
the targeted minimum return on equity is 15%.
SLIDE #10
MEASURES OF FINANCIAL SUCCESS
3. Dividend Growth
Annual Growth Target: 10%
Payout Target: 50% of regulated earnings
SLIDE #11
GOVERNMENT/REGULATORY UPDATE:
THE STATES
Strong relationships with regulators and executive and
legislative branches
2002 Elections
Connecticut
Electric choice available for 21 months, but few have
switched
Below market standard offer contract stifling
competition,
hurting Select Energy
New Hampshire
Choice available, but markets will develop slowly
Massachusetts
Developing a robust market
SLIDE #12
GOVERNMENT/REGULATORY UPDATE:
WASHINGTON
Congress
FERC
ISOs and RTOs
Transmission
NRC
SLIDE #13
MERGERS AND ACQUISITIONS
Deals to date
Hydro plants
Yankee Energy
Denron and E.S. Boulos
Niagara Mohawk Energy Marketing
Future focus
Generation outside New England
Strategic partnerships
Status of ConEd litigation
SLIDE #14
WHERE ARE THE OPPORTUNITIES AND RISKS
OPPORTUNITIES RISKS
Interest rates remain low
Strong O&M control Electric transmission
continues projects scaled back
Regulated businesses Unfavorable Yankee
exceed allowed returns Energy rate decision
Economic growth exceeds Accretive unregulated
modest targets investments are not found
Unregulated business
investments achieve superior
returns
SLIDE #15
WHAT YOU WILL HEAR FROM THE NU TEAM
NU has the financial flexibility and strength to grow all
lines of business
NU's regulated businesses are strong and have very
attractive investment
opportunities
NU's unregulated businesses continue their rapid expansion
Strong nuclear plant sales are providing capital to fuel
NU's growth
NU has an aggressive electric transmission expansion plan
SLIDE #16
JOHN H. FORSGREN
VICE CHAIRMAN, EXECUTIVE
VICE PRESIDENT AND CFO
SLIDE #17
PERFORMANCE OF MAJOR BUSINESSES THROUGH JUNE 30, 2001
Chart showing performance of major businesses through June
30, 2001. Net income, excluding extraordinary items for the
12 months ending June 30, 2001 for CL&P were $131 million,
for PSNH/NAEC were $104 million, for WMECO were $24 million,
for Yankee Energy were $9 million and for unregulated
businesses was $13 million.
SLIDE #18
SECURITIZATION AND MILLSTONE SALES ALLOWED A FINANCIAL
MAKEOVER OF NU THIS SPRING
Chart showing that $3.3 billion was made up of (i) $1.2
billion from the Millstone sale, (ii) $1.4 billion for CT
Securitization, $155 million form the WMECO Securitization
and $525 million form the NH Securitization.
>PAGE>
SLIDE #19
PROCEEDS WERE USED FOR MULTIPLE PURPOSES
Chart showing the use of proceeds of $3.3 billion: $1.3
billion to retire debt and preferred securities, $1.1
billion for buydowns/buyouts of IPP contracts, $300 million
for taxes on Millstone sale and $500+ million for return of
equity to Parent.
SLIDE #20
FINANCIAL MAKEOVER STRENGTHENED NU'S BALANCE SHEET
Pie chart showing ratio of common equity, preferred
securities, and debt and capital lease obligations to NU's
total capitalization as of 12/31/99 and 6/30/01. As of
12/31/99, 7%, or $404 million, was preferred securities;
36%, or $2.1 billion, was common equity; and 57%, or 3.3
billion, was debt and capital lease obligations. As of June
30, 2001, 2%, or $116 million, was preferred securities;
46%, or $2.1 billion was common equity and 52%, or $2.4
billion, was debt and capital lease obligations.
SLIDE #21
WITH STRONGER BALANCE SHEET, NU HAS $1.7 BILLION
OF REFINANCINGS UNDER REVIEW
Northeast Generation Company
Issue $440 million of 4 year and 25 year amortizing
notes to refinance bank debt
PSNH
Refinance $287.5 million of 7.65% and 7.5% tax-exempt bonds
NU
Refinance $263 million of floating rate Yankee
acquisition notes with a fixed rate maturity
NU System
Renew $700 million of existing bank lines with a new
facility that includes PSNH and Yankee
SLIDE #22
NU NOW HAS A HIGH LEVEL OF FINANCIAL FLEXIBILITY
Nothing drawn on $700 million of bank lines
Nearly $100 million of cash now invested in money markets as
of October 1
All preferred stock is perpetual
No significant debt maturities at regulated subsidiaries
until 2021
Additional liquidity will be created by refinancing
Northeast Generation Company debt this year and selling Seabrook in 2002
SLIDE #23
CREDIT RATINGS HAVE STRENGTHENED AND MAY BECOME STRONGER
S&P MOODY'S FITCH
NU Senior Notes BBB* Baa3* BBB-**
CL&P Bonds BBB+* Baa1* BBB+**
PSNH Bonds BBB+* Baa3* BBB-*
WMECO Senior Notes BBB* Baa2* BBB+**
NGC Bonds BBB-** Baa2** BBB-**
*Positive Review or Outlook
**Stable Outlook
SLIDE #24
HOW HAS NU USED ITS CASH TO DATE?
Buy back shares
10.1 million shares in April when forward repurchase
was closed
217,000 shares repurchased in June under old
authorization
1.3 shares repurchased since August under new 15 million
share authorization
Lend $15 million to NEON Communications
Convertible 18 percent notes
Add key niches to unregulated business portfolio
Niagara Mohawk Energy Marketing
SLIDE #25
NU WILL APPLY CURRENT CASH AND FUTURE EARNINGS TO REBUILD
ITS ASSET BASE.
Table showing the following:
Year Net Plant
1999 $3.95 billion
2000 $3.55 billion
6/30/01 $3.67 billion
2002 (est.) $4.55 billion
2003 (est.) $5.02 billion
2004 (est.) $5.62 billion
2005 (est.) $6.16 billion
2006 (est.) $6.47 billion
SLIDE #26
NU NEEDS BETTER UNREGULATED PERFORMANCE TO HELP OFFSET LOWER
PENSION CREDITS
Chart showing Annual Pension Credit on Income Statement
Year Dollars
1997 $13 million
1998 $44 million
1999 $53 million
2000 $89 million
2001 (est.) $100 million
2002 (est.) $71 million
SLIDE #27
UNREGULATED ENERGY BUSINESSES HAVE SEEN GREATEST REVENUE
GROWTH
Chart showing the following:
Year Revenues
1998 $37 million
1999 $649 million
2000 $1,900 million
2001 (est.) $2,800 million
2002 (est.) $3,500 million
SLIDE #28
BUT PROFITABILITY HAS LAGGED
Chart showing the following:
Year Net Income
1999 ($37 million)
2000 $14 million
2001 (6 months
through 6/30/01) $9 million
SLIDE #29
SEVERAL INITIATIVES UNDERWAY TO ENHANCE
UNREGULATED BUSINESS PROFITABILITY
Enhance energy trading operations
Acquire generation outside New England as prices recede
Refinance Northeast Generation Company debt
Sell Holyoke Water Power hydroelectric facilities and
distribution business
Acquire niche services businesses
Achieve better results on Select - CL&P contract
SLIDE #30
NU ALSO LOOKING AT NEON FOR GROWTH
Map showing Northeastern United States and Neon
Communications logo and locations where it provides
gateway services, dark fiber services, transport
services and LAMBDA Services.
SLIDE #31
NU HAS REVIEWED AND REAFFIRMED SUPPORT
FOR NEON BUSINESS PLAN
Prices and demand are holding up in NEON niche
System would be difficult and costly to replicate
Need for additional capital
Removal of NEON investment from equity accounting
will help NU's EPS
SLIDE #32
THE REGULATED DELIVERY BUSINESS
CHERYL W. GRISE'
PRESIDENT
UTILITY GROUP
SLIDE #33
Four Businesses in Three States
Chart showing information about NU's four businesses in 3
states:
CL&P PSNH Yankee Gas WMECO
Customers 1,122,000 436,000 188,000 198,000
Residential 1,026,000 374,000 165,000 181,000
Commercial 92,000 59,000 17,000 16,000
Industrial 4,000 3,000 2,000 1,000
Firm Trans. -- -- 4,000 --
Revenues $2.85 B 1.26 B $406 M $514 M
Employees 2,100 1,240 430 410
Exempt 24% 31% 31% 26%
Non-exempt 16% 33% 24% 24%
Union 60% 35% 45% 50%
4,400 Sq. mi. 5,445 Sq. mi. 1,995 Sq. mi. 1,490 Sq. mi.
SLIDE #34
WHO WE ARE
The Utility Group is a newly formed organization of the
electric and gas utilities of NU
CHERYL GRISE'
President
Utility Group
LEE OLIVIER GARY LONG KERRY KUHLMAN DENNIS WELCH LISA THIBDAUE
President & COO President & COO President & COO Pres. & COO Vice Pres.
CL&P PSNH WMECO Yankee Gas Rates & Reg.
SLIDE #35
CL&P IS NU'S LARGEST REGULATED BUSINESS
AND IS AGAIN PROFITABLE
Chart showing Income for Common
1995 $184 million
1996 ($95 million)
1997 ($155 million)
1998 ($210 million)
1999 ($26 million)
2000 $140 million
2001 $131 million (12 mos. ended 6/30/01)
SLIDE #36
CL&P IS REBUILDING ITS RATE BASE THROUGH T&D INVESTMENTS
Chart showing Investment in Electric Plant
1997 $156 million
1998 $132 million
1999 $180 million
2000 $208 million
2001 (est.) $231 million
2002 (est.) $279 million
2003 (est.) $353 million
2004 (est.) $331 million
2005 (est.) $343 million
>PAGE>
SLIDE #37
INCREASING INVESTMENT HAS HELPED MAKE CL&P RELIABILITY BEST
EVER
Chart showing Annual Average Customer Outage Minutes,
Excluding Major Storms
(approximates)
1992 140 minutes
1993 130 minutes
1994 150 minutes
1995 145 minutes
1996 125 minutes
1997 120 minutes
1998 125 minutes
1999 110 minutes
2000 90 minutes
SLIDE #38
ELECTRIC RESTRUCTURING HAS GONE
SMOOTHLY FOR CL&P CUSTOMERS
CL&P rates fell 5% on 1/1/00 when retail choice began
CL&P locked in four-year supply contracts in 1999 when
purchase power costs were low
Suppliers are Select Energy (50%), NRG (40%) and Duke(10%)
Supply costs fixed through 12/31/03
Generation charge overcollects supply costs and surplus used
to amortize stranded costs
Virtually no load has switched to competitive suppliers
Rate freeze ends 1/1/04 and default supply prices will go to
market
SLIDE #39
EXCELLENT PLANT SALES, SECURITIZATION ARE SHRINKING CL&P'S
STRANDED COSTS
Chart showing the following:
DPUC allowed Fossil Plants Hydro Plants CL&P net IPP, Other
Allowed level sell for sell for $400M stranded costs
6x book 7x book from Millstone Securitized
Nuclear $1.7B $1.4B $0.8B $0.4 B $0.4B
Non-Nuclear $1.9B $1.9B $1.9B $1.9B $0.5B
Total $3.6B $3.3B $2.7B $2.3B $0.9B
SLIDE #40
YANKEE ENERGY INTEGRATION HAS BEEN SMOOTH
Non-core businesses have been sold
Unregulated services business combined with Select
Gas delivery business undergoing rapid expansion
Back-office systems have been combined
Meriden, CT headquarters to be closed with staff moving 10
miles to NU's Berlin, CT campus
On track to achieve more than $60 million of synergies
through 2004
SLIDE #41
CURRENT YANKEE RATE CASE HAS SEVERAL KEY ISSUES
50-50 sharing of earnings above 12.78 ROE
Proposal would allow company to keep first 100 basis
points above 11.78 ROE
Rate support for aggressive capital program sought
$29 million increase sought for 2002 - 7.6%
Mechanism to allow increases in following years,
depending on level of investment
$190 million projected for expansion over next five
years, plus cost of LNG facility
SLIDE #42
YANKEE INVESTMENT WILL SIGNIFICANTLY ENLARGE ITS ASSET BASE
Chart showing Total Net Utility Plant and Annual Net
Investment in Plant
Total Net Utility Plant Annual Net
Investment in Plant
2000 $382 M $22 M
2001 (est.) $393 M $39 M
2002 (est.) $434 M $103 M
2003 (est.) $498 M $125 M
2004 (est.) $583 M $78 M
2005 (est.) $645 M $73 M
2006 (est.) $659 M $49 M
SLIDE #43
PSNH RESTRUCTURING DISPUTE IS OVER!!!
On October 1, 2000, 5% rate cut implemented
On April 25, 2001, $525 million securitization bonds sold
On May 1, 2001, additional 11% rate cut and retail choice
began
On May 22, 2001, restructuring law was modified
Sale of 1,200 MW of fossil/hydro generation delayed
until at least February 2004
Seabrook auction now under way; closing expected
in 2002 and NAEC is then dissolved
On June 18, 2001, U.S. Supreme Court refused to hear appeal
of NHPUC restructuring decision
SLIDE #44
PSNH's ABILITY TO RECOVER REMAINING STRANDED
COSTS IS ASSURED BY MULTIPLED FACTORS
PSNH units and Seabrook produce energy competitively
Seabrook proceeds will be used to amortize stranded costs
Energy prices for large commercial and industrial customers
move to market rates in less than two years
Remaining PSNH coal, hydro, oil, and gas units can more
than cover remaining residential and small commercial load
Low interest rates on securitization bonds (5.9% vs. 7.5%
budget) significantly reduce debt service costs
Most importantly, state statute allows full recovery of
purchased power deferrals beyond 2007, but we expect recovery to be
complete well beforehand
SLIDE #45
WMECO STORY HAS BEEN SIMPLIFIED
No bonds or preferred stock remain
No generation, except for small share of Vermont Yankee
being sold
Pass through of higher purchased power costs allowed
17% rate hike took effect 1/1/01
Standard Offer rate expected to drop to 4.8 cents/kwh on 1/1/02
Service reliability remains solid, but growth slow
All purchased power contracts renegotiated
Securitization paid the costs
Earnings have been strong - - 14.4% ROE for 12 months ended
6/30/01
Distribution rates stable since January 2000
SLIDE #46
CONNECTICUT INVESTMENTS WILL HELP GROW REGULATED EQUITY BASE
Chart showing Millions of Dollars of Common Equity (all
numbers approximate)
CL&P PSNH WMECO NAEC Yankee*
1998 $1 bil $700 mil $300 mil $300 mil ----
1999 $950 mil $800 mil $300 mil $300 mil ----
2000 $750 mil $500 mil $200 mil $150 mil $200 mil
6/30/01 $750 mil $300 mil $200 mil $100 mil $250 mil
2002 (est.) $600 mil $300 mil $200 mil -- $250 mil
2003 (est.) $600 mil $300 mil $200 mil -- $300 mil
2004 (est.) $700 mil $150 mil $200 mil -- $325 mil
2005 (est.) $800 mil $200 mil $200 mil -- $350 mil
2006 (est.) $800 mil $250 mil $200 mil -- $400 mil
SLIDE #47
BOTTOM LINE AT REGULATED BUSINESS
Regulatory, Legislative relationships best in decades
System performance is good
Intense focus on productivity and cost efficiency
Investment in new Connecticut gas and electric projects
mitigates sale of plants, amortization of regulatory assets
Earnings growth slower at PSNH and WMECO
Earnings growth faster at CL&P and Yankee as capital
projects proceed, assuming timely regulatory orders
Cash generation should remain strong as amortization
continues
SLIDE #48
THE UNREGULATED ENERGY BUSINESS
WILLIAM W. SCHIVLEY
PRESIDENT
SELECT ENERGY
SLIDE #49
ABOUT SELECT ENERGY
Recognized market leader in wholesale, trading, retail and
behind-the-meter energy business in Northeastern U.S.
Provide customer solutions through innovative products in
electric power, natural gas, energy management and related
energy services
Currently serving over 14,000 customer accounts
throughout the 12-state region from Maine to Virginia
Becoming the premier energy marketing/infrastructure company
in the Northeastern quadrant of the U.S.
Brand equity strong and growing across multiple
business audiences
SLIDE #50
SELECT ENERGY ORGANIZATION
Table showing the organization of Select Energy
Assets Trading Wholesale Retail Behind the
Meter Services
SELECT ENERGY
Holyoke Northeast Commodity Wholesale Retail Select Energy
Water Generation Trading Power Sales and Services
Power Company Group Marketing Marketing
Group Group
Mt. Tom Northfield Select Energy
Coal Unit Mountain Contracting
(147 MW) Pumped Storage
(1080 Mw)
Hydro Hydro Units Denron
Units* (209MW)
(43.6 MW) Yankee Energy
Services
* Expected to be in 2001
SLIDE #51
REVENUE GROWTH BRINGING IMPROVED OPERATING INCOME
Chart Showing Revenue and Operating Income
Revenue Operating Income
1998 $29 million ($20 million)
1999 $650 million ($50 million)
2000 $2,061 million $105 million
2001 $2,797 million $112 million
(est.)
SLIDE #52
OUR 2001 BUSINESS AT-A-GLANCE
Projected annual revenues (year-end): $2.8 billion)
Pie Chart showing percentage of business
Wholesale Gas 8%
Retail Electric/Gas 9%
Behind the Meter 4%
CL&P Wholesale
Standard Offer 19%
Other Wholesale Electric 60%
SLIDE #53
ROBUST ENERGY MARKETPLACE =
LUCRATIVE GROWTH FOR SELECT ENERGY
Over 20% of U.S. population lives and works in our 12-state
region
$50+ billion energy commodity consumption
represents 17% of total U.S. energy consumption
[Map of northeastern states]
SLIDE #54
GROWTH INITIATIVES
Purchase of Niagara Mohawk Energy Marketing
Increases Select Energy annual revenues roughly 25%
Secures significant business in NY and beyond
(PJM, ECAR, Canada)
Accelerates foothold in lucrative NY market by 1-2 years
Adds important expertise, transmission access, asset management
capabilities and contractual assets
Additional expansion into neighboring power pools
Tolling and asset output arrangements
Asset acquisition
Expanded trading activity
SLIDE #55
WHOLESALE ELECTRIC & GAS
5,000 MW peak load - largest in New England
Supported by 1,500 MW of owned generation
Unique Northfield Mountain pumped storage facility
(1,080 MW)creates energy, optionality and all ancillaries
2001 volume sold: 43,000,000 MWH; 51 BCF physical natural
gas
$450 million in major wholesale contracts won in 2001:
National Grid, NStar, Central Maine Power; also
serving 60+ municipalities throughout the Northeast
CL&P standard offer contract hedged for final 2 years
Average annual growth rate: 15% to 25%
SLIDE #56
TRADING
Conduit of critical market information
Foundation of our Retail and Wholesale business
segments
Expanded management expertise to optimize market
opportunities;
strengthen existing skills
Products/commodities: electric, gas, oil, weather, options,
futures
Growth/expansion under way
- Electric in New England, NY, PJM, ECAR, SERC, Canada
- Natural gas: commodity, basis, liquids (butane, propane, etc.)
- Oil: West Texas Intermediate, West Texas Sour, Light
Louisiana Sweet, Brent, residual, heating oil and unleaded
gasoline
Risk management thru industry-standard policies/practices
Average annual growth rate: 15% to 25%
SLIDE #57
RETAIL ENERGY MARKETING
2001 volume sold to end-user customers (projected year-end):
1,800,000 MWH; 27 BCF natural gas
Retail gas sales increased more than thirteen-fold
from 1999 to 2001 (from $12 million to $160 million in revenue)
$95 million combined electricity and natural gas contract
with Mass. Health & Educational Facilities Authority (HEFA)
Energy purchasing in New England shifting from wholesale to
increased retail
Active in all Northeastern states that have retail choice
- Approx. 14,000 customer accounts (9,900 electric; 4,100 gas)
- Currently providing approx. 25% of gas customers w/electricity
Average annual growth rate: 30% to 60%
SLIDE #58
BEHIND-THE-METER SERVICES
HEC Inc. is now Select Energy Services, Inc.
2001 projections: revenues of $105 million; gross margins
of 15% to 25%; operating income of $5 million
Behind-the-meter arm differentiates us from competitors
Captures additional margin from the value chain;
enormous long-term growth potential as energy outsourcing
proliferates
Select Energy companies awarded 20-year energy outsourcing
contract for new Connecticut Juvenile Training School
Includes largest single-site fuel cell installation in
U.S. to date
Acquisitions of well-managed, profitable companies
Average annual growth rate: 15% to 40%
SLIDE #59
SELECT ENERGY NOW STARTING TO TURN REVENUE GROWTH INTO
PROFITABILITY
Chart showing Net Income
1998 ($13 million)
1999 ($35 million)
2000 14 million $0.10 EPS
2001 (est.) 20 million $0.15 EPS 15% to 25% Annual Growth
2002 (est.) 25%+ Annual Growth
SLIDE #60
LOOKING AHEAD: 2006 BUSINESS AT-A-GLANCE
Average annual growth rate 2001-2006: 15% to 25%
Pie chart showing
Wholesale Trading 47%
Wholesale Electricity and Gas 26%
Behind the Meter 3%
Retail Electricity and Gas 24%
SLIDE #61
ON TRACK FOR SUSTAINED, PROFITABLE GROWTH
Growth in revenues & gross margins of at least 15%
year-over-year in all business segments
#1 wholesale energy player in New England; New York and
PJM growth and expansion under way
Expanding trading operations
Aggressively targeting large-volume retail energy users
where default/standard offer rates are high
Energy project development/outsourcing to be "all-in-
one" provider
Development of all business segments/revenue sources as
competitive markets are slower to open than expected
Increased generation asset ownership to support expanding
book of business
SLIDE #62
THE GENERATION BUSINESS
BRUCE KENYON
PRESIDENT
GENERATION GROUP
SLIDE #63
PRESENTATION TOPICS
Recent strength of U.S. nuclear industry performance and
benefit to NU
Status of Seabrook sale
Seabrook operations
Vermont Yankee sale results
Fuel pin search at Millstone
Growth of Northeast Generation Services
SLIDE #64
SUBSTANTIAL PERFORMANCE IMPROVEMENTS ACHIEVED
DURING PAST DECADE BY 103 U.S. NUCLEAR PLANTS
Average nuclear production costs have decreased 53% (1.74
cents/KWh in 2000 vs. 3.68 cents/KWh in 1990)
Average capacity factor has improved by 40% (89.6% in 2000
vs. 64% in 1990)
Average duration of refueling outages has decreased by 62%
(40 days in 2000 vs. 105 days in 1990)
Nuclear generation increased by the equivalent of adding 23
new 1,000 MW plants, despite 7 plants permanently retired
(183 million MWh since 1990)
Unusual events reported to NRC dropped 88% (from 151 in 1990
to just 18 in 2000)
SLIDE #65
THE NUCLEAR INDUSTRY FUTURE LOOKS BRIGHTER THAN EVER
Power Uprates - NRC has approved increases for 2,000MW
NRC currently reviewing 17 requests
Most around 1.5%, some BWRs up to 20%
Industry plans to increase capacity by 1,600 MW over
next five years
License Renewal will enhance plant's economic value
NRC has renewed Calvert Cliffs 1&2, Oconee 1,2,3, and
ANO-1 licenses for 20 yrs.
Currently NRC reviewing applications covering 12
additional reactors
Most other reactors are expected to extend their
operating licenses
SLIDE #66
THE NUCLEAR INDUSTRY FUTURE LOOKS BRIGHTER THAN EVER (cont.)
Industry announced Vision 2020 - to add 50,000MWe of new
capacity by 2020
Construct advanced designs on existing sites
Order within 5 years
Environmental Preservation - of all energy sources, nuclear
has lowest impact
on the environment
Limited emissions
Clean water discharge
SLIDE #67
SALE PRICES OF NU's NUCLEAR INTERESTS HAVE
BENEFITED FROM INDUSTRY PERFORMANCE
Millstone was a record sale
Millstone 3 sold for $782/kw
NU received $532M from its 68% ownership of MP3
Millstone 2 sold for $507/kw
NU received $443M from its 100% ownership of MP2
Vermont Yankee sold for $284/kw, seven times original offer
NU received $29 million from its 16% share
NU's 40% share of Seabrook could be more than $300 million
based on Millstone 3 sale
SLIDE #68
NU GENERATING ASSETS
Operating # of Stations Megawatts
Nuclear 2 541
Pumped Storage 2 1,110
Fossil 4 1,137
Hydro 17 272
ICU 2 118
TOTAL 27 3,178
Sales Pending
Seabrook (40%) 465
Vermont Yankee (16%) 76
Holyoke Hydro (100%) 44
TOTAL 585
Net After Sales 2,593
Decommissioning Dry Cask Storage (est.completion dates)
Connecticut Yankee (49%) Fall 2003
Yankee Rowe (38.5%) Summer 2002
Maine Yankee (20%) Summer 2002
SLIDE #69
SEABROOK STATION
Picture
SLIDE #70
THE SALE OF SEABROOK SHOULD BE COMPLETED
BY END OF 4TH QUARTER 2002
NH Selected Auction Agent (JP Morgan) 10/01
Solicitation to Market 11/01
Due Diligence 1st Qtr 02
Bids Due/Select Winning Bidder 2nd Qtr 02
Closing End of 4th Qtr 02
<PAEGE>
SLIDE #71
SEABROOK CONTINUES TO BE A STRONG PERFORMER
Capacity Factor for Cycle 8 through Sept. 2001 - 92.8%
Capacity Factor since commercial operation - 80.5%
Next refueling outage scheduled for May 2002 - less than 30
days
203 days on-line through October 10, 2001
On track to earn ISO 14001 Certification by year-end
INPO Category 1
NRC performance indicators - all green
SLIDE #72
SEABROOK WILL CONTINUE TO AGGRESSIVELY MANAGE THE
PLANT TO EXCELLENCE THROUGH SALE COMPLETION
Equipment Reliability
Develop long term strategies
Intolerance to unanticipated equipment failures
Improved safe and reliable operation
Quality of Maintenance
Improve skills & effectiveness
Refocus and standardize planning process
Corrective Action
Reinforce clear expectations
Aggressive performance goals
SLIDE #73
VERMONT YANKEE SALE WAS SUCCESSFUL
Vermont Yankee purchased by New Orleans based Entergy Corp.
on 8/15/01
Purchase price was $180 million for $284/kw
$145 million for plant and $35 million for fuel
Price was $150 million greater than the initial $23.5
million offer in late 1999 by AmerGen
JP Morgan retained as auction agent
Sale of Vermont Yankee and Seabrook will allow NU to exit
the nuclear operating business
SLIDE #74
MILLSTONE FUEL ROD ACCOUNTABILITY PROJECT
IS NEARLY COMPLETE
Two fuel pins disappeared from inventory after May 1979
Discovered missing in November 2000
Extensive search involving
- Records review
- Physical inspections
- Interviews
Report submitted to NRC on October 5, 2001
Investigation conclusions
- One of four locations: Millstone Spent Fuel Pool,
Hanford WA, Barnwell SC, or GE Vallecitos, CA
- Not a threat to public health and safety
SLIDE #75
NORTHEAST GENERATION SERVICES COMPANY
IS A GROWING ENTERPRISE
Formed in January, 1999
Offers design, build, manage, operate, maintain and support
services for electric generating facilities and medium and
large industrial customers
Strong foundation of services based upon decades of
management and operations experience with NU's fossil
and hydroelectric generating plants
Construction/build component added by acquiring
experienced companies with a proven track record of
success in a competitive environment
SLIDE #76
NGS LINES OF BUSINESS
Manage & Operate Services Industrial Services
Manage, Operate and maintain Mechanical and electrical
electric generating facilities maintenance
Combustion Turbine Electrical Test Services
maintenance Environmental Field Services
Energy Information Services Analytical laboratory
Consulting and Engineering E.S. Boulos
Services
Engineering and Design Electrical contracting
EPC contracting Electrical construction
Co-gen evaluations Power generation/substations
Environmental support Telecommunications
SLIDE #77
NGS FACILITIES PROVIDE READY ACCESS TO THE NORTHEAST MARKET
Map showing location of NGS Facilities
Boulos Home Office, Westbrook Maine
Boulos Satellite Office, Lewiston, Maine
NGS Mechanical, Londonderry, NH
Boulos Satellite Office. Andover, Mass.
Analytical Laboratory, West Springfield, Mass
NGS Home Office, Rocky Hill, CT
Eastern CT Hydro, Connecticut
Maintenance and Machine Shop, Madison, CT
South Meadow, Connecticut
Housatonic Hydro, Connecticut
Cobble Mountain, Massachusetts
Mt. Tom, Massachusetts
Northfield Mt. And Cabot Hydro, Massachusetts
Holyoke Hydro, Massachusetts
SLIDE #78
NGS MISSION: TO BE THE LEADING PROVIDER OF INTEGRATED
SERVICES TO THE POWER AND INDUSTRIAL MARKETS IN THE
NORTHEAST
Pie chart breaking down 201 revenues of $113.4 million
E.S. Boulos - Electrical Construction $52 million
Consulting and Engineering Services $14.1 million
Manage and Operate Services $29.6 million
Industrial Services $17.7 million
SLIDE #79
NGS IS GROWING AGGRESSIVELY
Acquired E.S. Boulos in 1/2001 - largest electrical
construction contractor in northern New England, adding
"build" capability to our integrated services strategy
Plan to acquire additional companies in 2001-2004 that offer
geographic and service related synergies
Managing four M&OS contracts covering 23 facilities, 1,700
MW, increasing to 4,200 MW by 2006
SLIDE #80
NGS IS GROWING AGGRESSIVELY
Increasing market presence - bid on more than $90 million of
work over 18 months with a 57% success rate (excludes
Boulos)
Current backlog of work under contract is $77 million vs.
$44 million in 12/2000; $100 million additional
opportunities
Increased portion of work from external, for profit,
customers to 64% vs. 24% for 2000
Established NGS Mechanical, Inc. to provide mechanical
services and construction
SLIDE #81
NGS CONTINUES TO EXCEED AGGRESSIVE REVENUE AND EARNINGS
GROWTH TARGETS
Chart showing Revenue and Net Income Targets being
exceeded
2001 Projected ROE of 35.4%
Revenue Net Income
1999 $5.3 million ($1.1 million)
2000 $44.3 million ($0.2 million)
2001 $113.4 million $3.5 million
2002 $123.9 million $5.8 million
2003 $155.8 million $7.9 million
2004 $177.6 million $10.4 million
2005 $213.6 million $13.9 million
2006 $225.5 million $16.4 million
SLIDE #82
CURRENT MAJOR OBJECTIVES
Manage Seabrook to excellence
Accomplish Seabrook auction
Continue to aggressively grow NGS
SLIDE #83
DAVID H. BOGUSLAWSKI
VICE PRESIDENT -
TRANSMISSION
SLIDE #84
KEY TOPICS
Industry changes bring transmission opportunities
New transmission organization within NU
Status of Regional Transmission Organizations (RTO's)
Major transmission initiatives
Southwest Connecticut
Connecticut to Long Island Merchant Cable
Profitability
SLIDE #85
INDUSTRY CHANGES BRING TRANSMISSION OPPORTUNITIES
FERC is pushing for larger regional transmission
organizations
Federal focus on improving the energy infrastructure
Transmission constraints could cost consumers $1.5B annually
in New England and New York
New England and New York will have significant price and
capability differences in coming years
NOW IS THE TIME TO MOVE FORWARD WITH TRANSMISSION
SLIDE #86
NU'S FUTURE TRANSMISSION BUSINESS UNIT
Table showing Northeast Utilities Structure
Northeast Utilities
Parent Company
Distribution Transco NUSCO Competitive Other
Companies Businesses Subsidiaries
Traditional Non-Traditional
Transmission Transmission
Connecticut DC Cable
Massachusetts Joint Venture #2
New Hampshire Joint Venture #3
Etc.
SLIDE #87
NU's TRANSMISSION BUSINESS
Strategy:
Build a significant regional transmission company
by expanding existing cost-based assets and investing
in unique, market-based transmission projects.
Initiatives:
Implement a for-profit Regional Transmission Organization
(RTO)
Strengthen existing transmission in southwest Connecticut
Build a market-based, DC cable to Long Island by 2004
Form NU Transmission subsidiary
Achieve favorable market and regulatory rules
Improve system-wide asset condition
SLIDE #88
FIRST, LET'S LOOK AT PROPOSED RTOS
Map showing the continental United States, shaded to
show the locations of various RTOs.
Alliance RTO
ATC/MISO
California ISO
Crescent Moon RTO
Desert Star RTO
Entergy ITC/SPP
ERCOT ISO
GridFlorida Transco
Gridsouth Transco
Midwest ISO
New England RTO
New York RTO
Northern Maine ISA
PJM/PJM West
RTO West
Transconnect/RTO West
SoTrans Grid Company
SPP RTO
Translink/MISO
Non-participating IOUs
Non-participating Cooperatives
Non-participating Public Power
Non-utility/no electric service area
SLIDE #89
AND HOW FERC WANTS US TO BE
Map showing the continental United States, shaded to
show FERC proposal of RTOs
ERCOT RTO
Midwestern RTO
Northeastern RTO
Southeastern RTO
Western RTO
Non-participating IOUs
Non-participating cooperatives
Non-participating public power
Non-utility/no electric service area
SLIDE #90
NEW ENGLAND HAS PROPOSED A BINARY RTO
Chart showing the following:
RTO made up of ISO + ITC under FERC with a Stakeholder
Process in both the ISO and ITC
ISO ITC
Independent System Independent Transmission
Operator Company
Non-profit entity For profit entity
Similar to ISO-NE Formed by New England
Manages the power Transmission Owners
markets and grid Manages the
reliability Transmission system
SLIDE #91
NU PROPOSALS ADDRESS SIGNIFICANT
BOTTLENECKS IN SOUTHWEST CONNECTICUT
[Map]
Surplus Generation - BHE, SME, SEMA, RI
Adequate Generation - HQ, NB, ME, NH, VT, CMA/NEMA, WMA, NY, CT
Marginal Conditions - Bost.
Deficient - SWCT, NOR
SLIDE #92
PROJECT 1: AC CABLE REPLACEMENT
Replace the existing, 12 mile AC cable between Norwalk and
Long Island
In Service Date - May 2003
Cost -- $80M, shared 50/50 with Long Island Power Authority
(LIPA)
Cost Recovery - Include our share in New England's regional
rate which is paid by all New England load
Technology - AC system capable of transmitting 300 MW of
energy
SLIDE #93
PROJECTS 2: 345 kV UPGRADE IN CONNECTICUT
Expand the 345kV system into southwest Connecticut
Location -
Phase 1, Bethel to Norwalk (20 miles)
Phase 2, Norwalk to Devon to Middletown (65 miles)
In Service - Phase 1 early 2004; Phase 2 May 2006
Cost - Phase 1 $125M, Phase 2 $400M
Cost Recovery - Include our share in New England's regional
rate which is paid by all New England load
Technology - Overhead and buried AC system
SLIDE #94
PROJECT 3: CONNECTICUT - LONG ISLAND CABLE (CLIC)
Connect New England and Long Island with a new merchant
project
Location - Norwalk, CT to Oyster Bay, Long Island (30 miles)
In service - May 2004
Cost depends on Long Island connection point and the
capacity of the cable
Cost Recovery - Market-based rates, contracts via Open
Season
Technology - DC system capable of transmitting 330 - 660 MW
of energy
SLIDE #95
THESE PROJECTS WOULD TRIPLE NU'S TRANSMISSION INVESTMENT
WITHIN FIVE YEARS
Table showing Transmission Net Plant (numbers in
approximates)
Year Traditional 345 Upgrades Merchant Projects
2002 $350 million -------- $ ---
2003 $450 million $150 million $ ---
2004 $450 million $100 million $275 million
2005 $450 million $300 million $300 million
2006 $525 million $500 million $400 million
SLIDE #96
SUMMARY
Now is the time to move forward with transmission investment
NU has built a transmission plan and organization to achieve
value for customers and shareholders
Our for-profit RTO vision is being expanded beyond New
England
Our plan will triple NU's transmission investments in 5
years