UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
YANKEE ENERGY SYSTEM, INC.
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(Name of Registrant as Specified In Its Charter)
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(2) Form, Schedule or Registration Statement No.:
Proxy Materials of YANKEE ENERGY SYSTEM, INC., all
filed on Form S-4 - Registration Statement Number: 333-85613
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(3) Filing Party:
NORTHEAST UTILITIES SERVICE COMPANY
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(4) Date Filed:
August 20, 1999
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Dear Shareholders:
As shareholders of this company, you have an important
decision to make about the future of our company. You are
being asked to vote on the proposed merger of Yankee Energy
System, Inc. (Yankee Energy), with Northeast Utilities (NU)
- - two prominent companies who split apart ten years ago but
are now hoping to come back together again. We recently
mailed you a proxy statement regarding the proposed merger.
I urge you to read the proxy statement carefully. The proxy
statement contains all the important information you need to
consider the merger.
Your Board of Directors believes that the merger is in
the best interests of Yankee Energy and its shareholders and
has unanimously recommended a vote FOR approval of the
merger.
I strongly believe this merger is good for Yankee
Energy shareholders, our employees, our customers and the
region's economy. The $45.00 per share of consideration NU
will pay you for each of your Yankee Energy shares
represents a 38% premium over the last trade prior to our
merger announcement on June 15, 1999 and is one of the
highest premiums paid in recent gas utility mergers. Your
vote to approve this merger is vitally important. Not
returning your proxy card, or abstaining has the effect of
voting against the merger.
I also believe that with the advent of competition in
the electric utility industry and NU's vision of becoming a
leading provider of energy products and services in the
Northeast, the combination of NU and Yankee will enable NU
to broaden its service offerings to existing customers and
provide a platform to expand throughout the Northeast. It
also will position Yankee Energy as the springboard for
growing the natural gas business as a subsidiary of NU. As
a result, we'll be better positioned to provide value to
you, our shareholders, and our customers and employees in
today's competitive energy environment.
There have been positive developments at NU in the past
several months that you should be aware of. First, on
September 14, 1999, NU's Board of Trustees voted to approve
the payment of the first common stock dividend since March
1997. The decision to begin paying dividends on common
stock is a sign of the improving financial profile of the NU
System. NU's philosophy was to set the dividend at a level
($0.10 a share per quarter) that NU believes is sustainable
and one that should give them room for growth over the
coming years.
Other positive events at NU include:
- - The successful auction of NU's Massachusetts and
Connecticut fossil and hydroelectric generating plants.
- - Approval from Connecticut state regulators to recover the
bulk of stranded costs.
- - All nuclear generating stations are on line and operating
well.
- - Agreement reached with the state of New Hampshire to
introduce competition to that state (includes a rate
reduction of about 18 percent from current levels), which if
put into effect next year after legislative and regulatory
approvals, would resolve pending litigation between NU and
the state of New Hampshire.
These developments have helped drive up NU's share price
by about 14 percent since January 1, 1999.
Your Board of Directors believes this merger will be good
for Connecticut's economy. Customers will ultimately
benefit by having greater customer choice. This merger will
offer one-stop shopping for energy needs - something our
customers are asking us for. Also, the merger affords the
opportunity to maintain competitive gas and electric rates
by taking advantage of synergies that the merger is expected
to create. In addition to the substantial financial
benefits a $45.00 per share price brings, this merger offers
shareholders the prospect of being part of a company that is
on the move.
I urge you to return your proxy card today with a vote
FOR approval of the Merger. If you have any questions about
the Merger or need any assistance in voting your shares,
please call Tom Dorsey, director of Investor Relations, at
(203) 639-4643. A special meeting of shareholders will be
held Tuesday, October 12, 1999 at 10 a.m. at the Ramada Inn,
Research Parkway in Meriden, Connecticut.
Sincerely,
/s/ Charles E. Gooley
____________________
Charles E. Gooley
President & CEO