Exhibit 99.1
News Release
CONTACT: Jeffrey R. Kotkin
Office: (860) 665-5154
NU ANNOUNCES SETTLEMENT, SMALL REVISION TO 2003 RESULTS
BERLIN, Connecticut, March 3, 2004-Northeast Utilities
(NU-NYSE) today announced the filing of a definitive
settlement with the Federal Energy Regulatory Commission
(FERC) to resolve a year-long wholesale power contract
dispute.
The dispute involved the responsibility for additional
costs that were incurred over the last 10 months of 2003 as
a result of the implementation of Standard Market Design
(SMD) in New England on March 1, 2003. Incremental SMD
costs related to supplying customers of The Connecticut
Light and Power Company (CL&P), NU's largest operating
subsidiary, totaled approximately $186 million in 2003.
Under the settlement filed at FERC, Select Energy, Inc.,
NU's competitive energy marketing subsidiary, will absorb
approximately $57 million of these costs. CL&P's two other
2003 standard offer wholesale power suppliers and CL&P
customers will absorb the remaining balance of $129 million.
CL&P will absorb a separate $2 million of costs.
Other parties involved in the negotiated settlement
include the Connecticut Department of Public Utility Control
(DPUC), the Attorney General for the State of Connecticut,
the Connecticut Office of Consumer Counsel, NRG Power
Marketing Inc., and Duke Energy Trading and Marketing,
L.L.C. Additionally, FERC trial staff participated in the
negotiations and has indicated its support of the settlement
agreement.
CL&P has collected approximately $155 million from
customers since May 2003 to cover 2003 SMD-related costs,
but withheld payment from its standard offer service
suppliers. Should the settlement receive FERC approval,
which is expected in the first half of 2004, CL&P will pay
approximately $83 million to suppliers, including
approximately $40 million to Select Energy. The balance of
the $155 million will be returned to customers under a
methodology to be determined by the DPUC.
The settlement resulted in a slight revision to NU's
2003 results announced January 27, 2004. NU's revised 2003
earnings are $116.4 million, or $0.91 per share on a fully
diluted basis, compared with $152.1 million, or $1.18 per
share, in 2002. In the fourth quarter of 2003, NU lost $9.9
million, or $0.08 per share, compared with earnings of $56.0
million, or $0.44 per share, in the fourth quarter of 2002.
Due to the settlement, NU's year-end and fourth quarter
after-tax 2003 revised results are approximately $1.0
million, or $0.01 per share lower than the results reported
on January 27. The earlier announced results reflected NU's
best estimate at that time of the cost of settling the
wholesale power contract dispute. The terms of the final
settlement called for Select Energy to absorb $1.6 million
more than was reflected in the pre-tax reserve NU included
in the financial statements it published on January 27. On
an after-tax basis, the settlement cost Select Energy about
$36 million, or $0.28 per fully diluted NU share. Including
the effects of the settlement, NU's competitive businesses
lost $3.5 million in 2003, compared with losses of $53.2
million in 2002.
In 2003, excluding the effects of the settlement and a
$4.7 million after-tax accounting change, NU earned $158.0
million, or $1.24 per share fully diluted and the
competitive businesses earned $32.2 million. The figures
that excluded the effects of the settlement and accounting
change were unchanged from earnings announced on January 27.
The $1.24 per share figure was within the $1.10 to $1.30 per
share earnings range NU published in early 2003 and the
$1.20 to $1.30 per share earnings range NU discussed in
October 2003. Both of those ranges excluded costs related
to SMD implementation.
The settlement cost CL&P approximately $1 million on an
after-tax basis, or $0.01 per fully diluted NU share.
Including the effects of the settlement, CL&P earned $63.4
million in 2003 after payment of preferred dividends,
compared with $80.1 million in 2002.
NU operates New England's largest energy distribution
system, providing service to more than 1.8 million retail
electric customers in Connecticut, New Hampshire, and
Massachusetts and natural gas services to more than 192,000
customers in Connecticut.
This press release includes forward-looking statements
within the meaning of the Private Securities Litigation
Reform Act of 1995, 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 weather patterns, changes in laws, regulations or
regulatory policies, 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 NU's reports to the
Securities and Exchange Commission.
# # # #