NU LOGO NORTHEAST P. O. Box 270
UTILITIES SYSTEM Hartford, CT 06141-0270
107 Selden Street
Berlin, CT 06037
(860)-665-5000
www.nu.com
Exhibit 99
News Release
Contacts: Mary Jo Keating (media) Jeffrey R. Kotkin (investors)
Office: (860) 665-5181 (860) 665-5154
NU ANNOUNCES RESULTS OF COMPETITIVE BUSINESS REVIEW
BERLIN, Connecticut, March 9, 2005-Northeast Utilities (NU-NYSE)
announced that today it completed its previously announced comprehensive
review of its competitive energy businesses and that it has decided that
NU Enterprises, Inc. (NUEI), the holding company for NU's competitive
energy investments, will exit the wholesale marketing business.
NU also concluded that NUEI's competitive energy services businesses
are not central to NU's long-term strategy and do not meet the company's
expectations of profitability. As a result, the company will explore
ways to divest those businesses in a manner that maximizes their value.
Those businesses include electrical, mechanical, telecommunications,
commercial plumbing and performance contracting companies. NU will
retain its competitive generation and retail energy
marketing businesses because it believes that the assets and
retail business are competitively positioned to create significant
opportunities for those businesses over the next several years.
Charles W. Shivery, NU chairman, president and chief executive
officer, said NU has concluded that the wholesale merchant energy
sector in the power pools between Maine and Maryland is becoming
increasingly competitive and that NUEI's wholesale marketing business
will be unable to attain the profit margins necessary to generate
acceptable returns and cash flows. As a result, NUEI will explore a
number of alternatives for exiting the wholesale marketing business,
including selling the wholesale marketing franchise, selling existing
contracts, restructuring longer term contracts, and allowing shorter
term contracts to expire without being renewed. In the interim, NUEI
will only bid on new full requirements wholesale contracts to improve
the value of its book of business by reducing existing electric
positions.
Shivery said that Select Energy, Inc., NUEI's marketing subsidiary,
has built a very strong retail energy marketing franchise in the
Northeast and Middle Atlantic states and that the company expects to
build on that market presence. Additionally, the number of commercial
and industrial customers buying their electricity and
natural gas from competitive suppliers is continuing to rise. Select
Energy's retail marketing revenues in 2004 were approximately $850
million on sales of approximately 10 million megawatt-hours of
electricity and 40 billion cubic feet of natural gas. Select Energy's
retail marketing business serves approximately 30,000 commercial and
industrial locations in the New England, New York and PJM power pools.
Select's retail marketing business projects revenues to grow to
approximately $1 billion in 2005 because of a continued expansion of
the retail market and its high customer retention rate of approximately
85 percent.
NU will retain its 1,443 megawatts of competitive generating
assets because it expects that their value could increase significantly
in the coming years. The competitive generating assets, which include
pumped storage, hydroelectric, and coal-fired units, are contained
within its Northeast Generation Company (NGC) and Holyoke Water Power
Company (HWP) subsidiaries. NUEI also will retain its Northeast
Generation Services Company subsidiary, which operates the NGC and
HWP plants.
NUEI accounted for approximately $2.1 billion of NU's revenue
in 2004, excluding sales to affiliated regulated companies. The
wholesale marketing business accounted for approximately $1 billion
of that revenue and NUEI's energy services accounted for approximately
$275 million. The energy services businesses include E. S. Boulos
Company and Woods Electrical Company, both electrical contractors;
Woods Network Services, Inc., a telecommunications contracting firm;
Select Energy Contracting, Inc., an electrical, mechanical, and plumbing
contractor; and Select Energy Services, Inc., a performance contracting
subsidiary that specializes in upgrading the energy efficiency of large
governmental and institutional facilities.
NU expects to record a charge in the first quarter of 2005
associated with the wholesale marketing and energy services businesses.
The level of that charge will depend on a number of factors, including
how the disposition of those businesses is accomplished. NU continues
to work with the firm of Lazard Freres & Co., LLC, on that process.
Because of the variety of methods the company could use to
implement its decisions concerning the wholesale marketing and energy
services businesses, NU will not provide a 2005 earnings range for
its competitive energy businesses.
The company expects that implementation of its decisions will have
an impact on employment levels in those businesses, but the actual
impact is not known at this time because the disposition process has
just begun. Shivery said it is the company's goal to minimize layoffs
by using, to the extent possible, open positions within the NU system
or by a possible sale of both the wholesale franchise and the energy
services businesses in which the buyers may offer positions to
existing employees.
NU continues to estimate earnings of between $1.22 per share and
$1.30 per share at its regulated businesses and parent company and other
expenses of between $0.08 per share and $0.13 per share. NU's regulated
businesses represent more than 82 percent of NU's total assets and the
company expects to invest heavily in those businesses over the next
five years.
"The focus of Northeast Utilities' investments for the next several
years will continue to be on improving the electricity and natural gas
delivery systems of our franchised service territories in Connecticut,
New Hampshire and Massachusetts," Shivery said. "These systems will
require several billion dollars of investment over the next five
years to maintain and improve an infrastructure that is central to the
economic vitality and quality of life in New England. We have the
financial strength to make those investments on behalf of our customers
and investors and we intend to complete them with the support of our
regulators."
NU operates New England's largest energy delivery system, serving
approximately 2 million customers in Connecticut, New Hampshire and
Massachusetts.
This news release includes 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 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, regulations or regulatory policy,
expiration or initiation of significant energy supply contracts,
changes in levels of capital expenditures, developments 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, changes in the ability to sell
electricity positions and close out natural gas positions at
anticipated margins, obtaining new contracts at 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 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.
Note: NU will webcast an investor conference call on Thursday,
March 10, 2005, at 11 a.m. Eastern Standard Time. The call can be
accessed through NU's website at www.nu.com.
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