Rating Agency Meetings 4-20-10

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					    Rating Agency Meetings
    APRIL 20, 2010



1
    Today’s Agenda


    •   2009 review

    •   ERM initiatives

    •   Transmission segment

    •   Distribution and generation segment

    •   Financing requirements

    •   Financial forecast




2
    Key Achievements Over the Past Year


    •   Solid execution of strategic initiatives
    •   Earnings, cash flow well ahead of forecast
    •   Key rate case filings made
    •   Strong operational performance
    •   Strong interest in recent financings




3
    Near Term Financing Complete


    •   PSNH $150 million bond issue closed on 12/14/09
         •   3 times oversubscribed
         •   Coupon of 4.5%
         •   Ten-year maturity
    •   WMECO $95 million senior unsecured issue closed on 3/8/10
         •   2 times oversubscribed
         •   Coupon of 5.1%
         •   Ten-year maturity
    •   CL&P $62 million PCRB remarketing closed 4/1/10
         •   6 times oversubscribed
         •   Coupon of 1.4%
         •   One-year mandatory put
    •   Yankee Gas $50 million first mortgage bond is expected to close on or about 4/22/10
         •   2.7 times oversubscribed
         •   Coupon of 4.87%
         •   Ten-year maturity
    •   Syndication of new $900 million of bank revolvers to commence shortly


4
    Balance Sheet Strengthened Considerably
    in 2009
                 12/31/08           (In millions)                   12/31/09

                  $116                                                   $116

                   1.4%                                                  1.4%




         38.2%                        $4,776                                            $4,660
                            60.4%                             42.8%             55.8%


$3,020

                                                    $3,578



             Total: $7,912                                        Total: $8,354
                      Total debt     Common equity           Preferred


5
    2009 Results



                                      $375                                                                                                  13.6%
                                                                                                                                              $330.0
                                      $325
                                                                                                                                    $290.6*
    Earnings For Common In Millions




                                      $275


                                      $225
                                                   5.6%                18.8%

                                      $175             $159.2              $164.3                                                                      2008
                                              $150.8
                                                                  $138.3                                                                               2009
                                      $125


                                       $75


                                       $25                                                                    $13.1    $15.8
                                                                                        ($11.6)* ($9.3)

                                      ($25)
                                               Distribution and    Transmission           Parent/Other         Competitive              Total
                                                  Generation
                                                           *Excludes $29.8 million after-tax charge from March 2008 litigation settlement


6
        Competitive Business Performance Strong
        During Unwinding



    •    $15.8 million of net income in 2009
          •   Net income up 20.6% from 2008

          •   Forecast had been $8.2 million

          •   Strong management of wholesale contracts

          •   $3.8 million of net after-tax mark-to-market gains

    •    2010 earnings projected to be $7.1 million, cash flow projected to be
         $7.7 million

    •    2011-2014 cash flow negative
          •   Wholesale contracts roll off in 2012, 2013




7
       2009 Results vs. April 2009 Forecast


          $millions       NU Consolidated                      CL&P                      PSNH                WMECO              Yankee Gas


                          Forecast      Actual         Forecast       Actual     Forecast       Actual   Forecast     Actual   Forecast   Actual




    Earnings for common    $305         $330            $191          $211         $68           $66       $24         $26       $29       $21



    Ending common
                           $3,534      $3,578          $2,373         $2,373      $788          $727      $243        $247      $336 **   $331**
    equity



    Ending total debt      $5,008 *    $4,602 *        $2,589         $2,582      $861          $863      $382 *      $384 *    $455      $362




    Interest ex. RRBs      $248         $237            $140          $137         $40           $33       $15         $15       $23       $22



    FFO before working
    capital changes and
                           $752         $853            $430          $519        $137          $157       $45         $69       $63       $71
    after RRB
    amortization


                           * Excludes $57 million of WMECO long-term debt offset by spent nuclear fuel trust assets
                           ** Excludes $288 million of equity associated with acquisition premium
                                Better than forecast              Weaker than forecast

8
    NU Continues to Target a Conservative
    50% Dividend Payout Ratio


        $3.00                                                                                                               60.0%
                                                                                                            $2.73
                                                          52.3%
                               49.4%        49.7%                       49.5%      50.0%      $2.55
                  48.7%                                                                            49.0%
        $2.50                                                                                                       48.5%   50.0%
                                                                                 $2.35
                                                                    $2.22

                                                       $1.97
        $2.00                             $1.91                                                                             40.0%

                             $1.67
                $1.59

        $1.50                                                                                                               30.0%
                                                                                                                $1.325
                                                                                                   $1.250
                                                                                       .1
                                                                                     $1 75
                                                                            .1
                                                                          $1 0
                                                            $1.03
                                              $0.95
        $1.00                                                                                                               20.0%
                                 $0.825
                    $0.775




        $0.50                                                                                                               10.0%



        $0.00                                                                                                               0.0%
                  2007         2008         2009         2010           2011      2012          2013          2014
                                                                         Est.      Est.          Est.          Est.


                              EPS                 Dividends per share                    Payout ratios

9
     Enterprise Risk Management Status Update

                                                         Board of
                                                         Trustees


                                                      Chief Executive
                                                          Officer


                                  Risk &      Chair         Chief            Executive Vice                Risk
                                  Capital                 Financial            President                Assessment
                                Committee                  Officer            Operations                  Teams

                                                          Director
                                                         Corporate                                         Corporate ERM Group
                                                           ERM




                                                  Select Energy        Distribution/     Transmission     Corporate
                                     Risk             Risk              Generation           Risk       Shared Services
                                    Analyst         Controller        Risk Controller      Controller   Risk Controller




        ERM is in its fifth year of implementation at NU
        ERM works directly with the businesses and corporate shared services functions
        Internal Risk Assessment Teams are used to identify, discuss and assess risks; Accountability for risk mitigation remains
         with the businesses and corporate shared services functions
        Regular reports are made to the Board of Trustees on strategic, financial, and operational risks
        ERM facilitates a fully functioning Risk and Capital Committee which integrates risk with capital expenditure decisions
        ERM principles integrated into strategic planning and budgeting processes with strategic and operating plans “risk rated”


10
        NU’s Risk and Capital Committee (RaCC)

                            The RaCC is NU’s Risk Committee, where key financial, operational, strategic and business risks are
     What is the RaCC?       reviewed and discussed.
                            The RaCC is also NU’s Capital Committee, where capital projects are reviewed and approved per
                             specific guidelines and with a risk perspective. Only the RaCC can authorize spending on certain
                             capital projects or programs in excess of $10 million

                            Responsible for oversight of Enterprise Risk Management and the implementation of the NU Risk
     What are the RaCC’s
                             Management Policy and Capital Approval Policies and Procedures
         Roles and
      Responsibilities?     Meets monthly or as needed
                            Reviews all capital projects and programs to recommend for CEO approval. Projects and programs
                             exceeding $50 million are also sent to the NU Board for their review
                            Reviews all risk assessments in accordance with the NU Risk Management Policy

                            Members                                                Advisory Team
 Members and Advisors
                             Executive VP and CFO (Committee Chair)                  Director - ERM
                             Executive VP and COO                                    VP and Treasurer
                             Senior VP and General Counsel                           VP – Accounting and Controller
                             Senior VP, Enterprise Planning & Development            VP – Rates and Regulatory
                             VP Human Resources                                      VP Finance
                             VP Shared Services                                      Director Internal Audit and Security
                             Chairman, President and CEO (non-voting)                Secretary, Chief Compliance Officer and
                             Assistant Secretary (non-voting)                        Deputy General Counsel
                                                                                     Assistant General Counsel
                            RaCC Charter
                                                                                     Executive Director Business Financial Services
     Guiding Documents      NU Risk Management Policy
                                                                                     ERM Business Unit Risk Controllers
                            Capital Approval Policies and Procedures



11
     Key Themes for March 2010
     Update of Strategic Risks
 •   Rates & Regulatory: Principal focus is on rate case outcomes for CL&P and PSNH; settlement options are being
     discussed and rate case planning for WMECO and Yankee Gas is underway. Cost-cutting efforts and ongoing
     education, discussions and other communications with key stakeholders are additional mitigations.
 •   Policy Changes: Companies continue to monitor potential national energy policy, including carbon legislation and an
     interconnection-wide transmission planning process and cost allocation. PSNH continues its RGGI program.
 •   Capital Deployment: Work to advance NEEWS continues, with positive approval from the Massachusetts
     Environmental Policy Act office stating that the proposed route for Greater Springfield (GSRP) portion of NEEWS is
     preferred, thus opening the door to siting and other required federal and state environmental permitting agency
     actions on applications. Advancement of the HQ HVDC project is ongoing, with negotiations on key documents
     underway and NU working closely with the NH legislature and its Transmission Committee.
 •   Operations: Risk of underinvestment in infrastructure remains a concern. 2009 scheduled maintenance was
     completed. While resolution efforts continue, uncollectibles remain high. Meetings with MA DEP are occurring to
     evaluate next steps with HWP remediation site.
 •   Financial: Bank liquidity and short-term debt costs are high relative to pre-recession levels, but have been
     improving. The IRS issued final guidance providing flexibility to switch approaches for calculating the present value of
     pension benefit obligation. Based on the results of the asset/liability study a new asset allocation policy was
     recommended to the Pension Committee with the goal of reducing the Plan’s exposure to equity market volatility and
     implementation began in Q4 2009.
 •   Customer Experience: Customer Experience has launched a receivables collection process improvement initiative
     and has implemented various plans to address call volume and longer hold times. The creation of the Customer
     Retention Index provides insight to the customer impact of our business processes.
 •   Business Continuity: Lessons learned from the pandemic outbreak in spring 2009 were used to improve plans and
     to make decisions regarding stockpiles of supplies, etc. New - Business Continuity Plans were enacted during a
     recent event regarding unidentified material in package delivered to Berlin offices.

12
     Key Themes for March 2010
     Update of Strategic Risks
 •    Information Technology: The IT Security Program continues to improve policies, processes and technology that
      address the evolving threats to NU’s enterprise. Employees’ personal devices pose some additional security risks.
      In addition, maintaining costs is challenging in an environment with continued need for outside services.
      Purchasing worked in collaboration with IT to develop a vendor web security questionnaire to ensure that the
      vendor that is hosting or managing company data meets the system security requirements. Purchasing also
      worked with Legal and IT Security to ensure compliance with new CT and MA laws regarding employee and
      customer personal information.
 •    Purchasing: To mitigate the impact of large project cancellations/delays, Purchasing continues to support the
      procurement of NEEWs materials and has begun bidding and awarding construction contracts. Major materials
      and equipment associated with NEEWs were awarded as blanket orders. New contracts achieved price
      reductions for certain assets and were awarded to multiple suppliers, mitigating the risk of insufficient supply to
      manufacturer default. Contractor of choice contracts (COC) were rebid in Q4 2009 and awarded in Q1 and Q2
      2010. New rules, policies and work procedure were introduced and accepted by our COC contractors.
 •    Human Resources: Specific training programs to improve trust, strategic thinking, develop leadership
      expectations, and improve customer service leadership and communication have been implemented. HR will
      continue to work with Purchasing and investigate stop loss coverage in the event that a future pandemic could
      present significant financial impact due to high numbers of medical claims. Action has been taken to draft, revise
      or write policies to protect confidential information, including personal information.
 •    Accounting: IFRS training was conducted and a plan for IFRS Implementation is being developed. As part of
      the implementation of the CPM tool, a change management plan is being followed to address the changes in
      business processes due to this new technology and provide detailed training and timely communications. No
      significant SOX deficiencies or weaknesses in internal controls were identified in 2009.
 •    Legal: Momentums on several risks move to slightly favorable based on reviews and revisions to policies and
      procedures, enhanced controls and additional training. PCB disposal risk underwent root cause analysis and
      resulted in increased focus on leaking equipment. Cyber risk insurance has been purchased.
13
     Transmission Segment


14
     Transmission Segment Continues Its Strong
     Performance


     • 2009 financial performance ahead of projections
     • Continued strong operations and regulatory audits
     • Initial NEEWS approvals received in March 2010
     • FERC issued declaratory order in May 2009 supportive of HQ
       project structure; reaffirmed order in December 2009
     • Capital program reduced due to reductions in PSNH spending
     • Regional initiative developing to unlock renewable potential of
       Northern New England




15
 Increased Transmission Investment Has Diversified and
 Significantly Increased Regulated Earnings

                        2005                                               2009

                                          25.2%
                                                                                           50.8%
                                $41.1

                                                                  $159.2          $164.3
                 $122.3
     74.8%

                                                       49.2%




               Net Income: $163.4                                 Net Income: $323.5
               Regulated EPS: $1.24                               Regulated EPS: $1.87

                                        Regulated Net Income
                                                  (In millions)
             Distribution/Generation
             Transmission
16
                Five-Year Transmission Capital Expenditures


                                                Program Reduced By More Than $500 Million

                                      2009 Forecast                                                                    2010 Forecast
                                       $3.4 Billion                                                                     $2.9 Billion
              $1,200                                                                                $1,200

              $1,000                                                                                $1,000




                                                                                      In Millions
               $800
In Millions




                                                                                                     $800

               $600                                                                                  $600

               $400                                                                                  $400

               $200                                                                                  $200

                 $0                                                                                    $0
                         2009        2010      2011       2012     2013                                      2010      2011        2012   2013    2014
                       Base Reliability     NEEWS     HQ HVDC    Major Southwest CT                             Base Reliability      NEEWS      HQ HVDC




17
     Components of Other Projects


                      CL&P                                           WMECO                                                                    PSNH

     Stamford Area Reliability               $100.0    Berkshire Area Solution                        $170.0      Manchester Area Solution                        $52.3
     Manchester - East Hartford Line          $53.4    115 KV Relay Replacements                       $14.4      Scobie - Tewksbury Line                         $52.0
     Southwest CT Upgrades                    $30.0    115 KV Reliability Project                       $4.0      Nashua Area Solution                            $51.1
     115 KV Relay Replacements                $28.3    CCVT Replacements                                $3.2      Deerfield 2nd Auto Transformer                  $42.8
     South Meadow BPS                         $13.1    13 Additional Reliability Projects              $11.6      Maine Power Reliablity                          $30.8
     CCVT Replacements                        $11.3                                                               Deerfield - Webster - Coolidge                  $30.0
     Spare Bethel -Norwalk Shunt Reactor       $9.8                                                               Northern Loop                                   $23.0
     Transmission Operations Center            $7.7                                                               Thornton Ferry Substation                       $27.7
     Vehicle Purchases                         $7.4                                                               OPGW Communications Project                     $16.0
     New Sherwood Substation                   $7.2                                                               New Pease Substation                             $6.0
     48 Additional Reliability Projects       $50.7                                                               29 Additional Reliability Projects              $43.1
                                             $318.9                                                   $203.2                                                    $374.8
      Projects not yet in Regional System Plan (RSP)            Total 2010-2014
                                                                  $897 Million                              Other Transmission Capital Projects in RSP,
                                                                                                             Not in RSP or Not Required to be in RSP
                                                                                                    $350

     Breakdown of Other Projects:                                                                   $300
                                                                                                                                                298
                                                                                                                                       259
     • 45% ($401M) - in RSP                                                                         $250
                                                                                      In Millions
                                                                                                           211
                                                                                                    $200
     • 24% ($216M) - not required to be in RSP                                                      $150
                                                                                                                       150                              156

     • 31% ($280M) - not yet in RSP                                                                 $100

                                                                                                    $50                                                             34
     Note: Upon commencement of the ISO-NE approval                                                  $0
                                                                                                           2009         2010           2011     2012    2013       2014
     process, the HVDC project will be included in the RSP                                                 Not Required to be in RSP           In RSP      Not Yet in RSP
18
                   Capital Projects Reflected in Projected
                   2010-2014 Transmission Year-End Rate Base

                                                                                                                     Transmission
                    $6,000                                                                                             Rate Base
                                                                                                                    CAGR of 12.6%
                    $5,500
                    $5,000                                                                                 $4,729
                    $4,500                                                                                  $675
                                                                                              $4,035
                    $4,000
     In Millions




                                                                              $3,499
                    $3,500                                                                     $959         $919
                                                             $2,986            $731
                    $3,000                    $2,697
                               $2,597                                                          $533         $580
                                                               $459
                    $2,500      $183           $267                            $463
                                $315           $348            $405
                    $2,000
                    $1,500
                                                                                              $2,542       $2,555
                               $2,099                                         $2,304
                    $1,000                    $2,082          $2,123
                     $500
                       $0
                             2009 Actual      2010            2011             2012           2013         2014

                                   CL&P *              PSNH               WMECO *                HQ HVDC **
                                  * Reflects FERC approval of 100% CWIP for NEEWS projects
                                 **NU share of this project is depicted as traditional rate base without
                                   CWIP during construction
19
Transmission as a Key Strategic Enabler to
Solving New England’s Energy Challenges


                                                  Renewable Collector
                                                        Lines
                                          ´
                                  Hydro-Quebec-
                                      HVDC




         Renewables & Clean Energy
     4   (ME/NH/VT):
         Projects in Development/
         High Wind potential areas

                             ´
         HVDC Line between Quebec and
     3   New Hampshire

         Connecticut Borders (MA, RI):
     2   NEEWS Projects Under Way
         Southwest Connecticut
     1   Reliability:
         Projects Complete

20
     NEEWS Advances Into the Siting Phase

 GSRP Status
 • ISO confirmed need date in
   October 2009
 • CT approved project in March
   2010                               Greater Springfield      SPRINGFIELD
                                      Reliability Project
 • MA hearings complete and
   briefs filed, decision and order
   expected in late summer 2010                                            Interstate
                                                                       Reliability Project
 • Construction start in late 2010
                                                  HARTFORD
 • In-service 2013
                                        Central Connecticut
                                         Reliability Project

                                                                                    345-kV Substation
 IRP and CCRP Status                                                                Generation Station
                                                                                    345-kV ROW
 • Updated needs assessment                                                         115-kV ROW

   expected by 3Q 2010



21
     NEEWS Projects - $1.49 Billion
     Capital Investment (2009-2014)

               NEEWS Projects Milestones
                                                                  Greater                                Central
                                                                 Springfield       Interstate*         Connecticut*

                FERC approval of financial incentives          November 2008    November 2008         November 2008

                File Municipal Consultation Filing (MCF)                                                Late 2010

                Hold open houses                                                                        Early 2011

                                                                                                     6-12 mo. Behind
                File siting application                                            Late 2010
                                                                                                        Interstate
                                                                                Late 2011/ Early     6-12 mo. Behind
                Complete Evidentiary hearings                                         2012              Interstate

                                                               CT –                                  6-12 mo. Behind
                Receive Decision and Order                                         Mid 2012             Interstate
                                                               MA – Q3 2010
                                                                                                     6-12 mo. Behind
                Begin Construction                               Late 2010          2012**
                                                                                                        Interstate
                                                                                                     6-12 mo. Behind
                Expected In-Service                                 2013             2014
                                                                                                        Interstate
                Estimated cost ($Millions)
                                                                    $714             $250                  $315
                Does not include $211M in ancillary projects

        * Depends upon the timing of a favorable outcome to ISO’s reassessment of need and need dates , which is expected in
          the 3rd quarter of 2010.
       **Depends upon timing of favorable outcome of siting in three states (CT, MA and RI)



22
                                      ´
     New HVDC Line To Connect Hydro-Quebec
     Generation To New England Market


                                       • Joint venture between NU (75%) and
                                         NSTAR (25%)
                                       • 1,200 MW transfer capability
                                       • Northern terminus at Des Cantons
      Des Cantons
                                         (Québec), southern terminus in central or
                                         southern New Hampshire
                                            • Québec terminal will convert the
                                              power from AC to DC (rectifier)
                                            • US terminal will convert the power
                                              from DC to AC (inverter)
                                       • Capital cost estimate for US segment:
                                         $900 million ($675 million for NU share)
                                       • Work proceeding on Transmission Service
                                         Agreement and Purchased Power
                                         Agreement
                      HVDC Line

                      HVDC Converter
                      Station




23
Understanding Terms Related to
the HVDC Project
•    Joint Development Agreement (JDA)
      •   Defines the terms on which we will jointly manage the development of the HVDC line with HQ-TransEnergie
            •   Design, engineering, siting, permitting, obtaining or preparing written cost estimates
      •   Creates a project board with general oversight responsibility for the project
      •   Describes the roles and responsibilities of the project board and each company’s project managers
      •   Defines project communication protocols
      •   Will be in place through siting approval (a separate joint construction agreement will likely be needed)
      •   Commercial agreement not subject to regulatory review
•    Transmission Service Agreement (TSA)
      •   Sets forth the terms and conditions under which HQ will acquire and pay for the transmission use rights over the New Hampshire
          segment of the HVDC line
      •   Describes what transmission rights HQ gets (firm rights to flow power, interruption or curtailment details)
      •   Defines process for HQ to offer the transmission rights to others at times when they might not be using the line
      •   Defines payment terms for the line
      •   Defines the components of the cost for the line (revenue requirements: depreciation, ROE, debt service, O&M, property taxes)
      •   Describes needed arrangements with ISO-NE such as scheduling flows over the line, etc.
      •   Subject to FERC review and approval
•    Power Purchase Agreement (PPA)
      •   Defines the product HQ will sell
      •   Defines the pricing structure for the energy
      •   Defines the pricing structure for capacity
      •   Defines pricing for externalities
      •   Sets forth payment terms
      •   Negotiations under way with expected completion in spring 2010, with state regulatory filings sequenced to coincide with ISO-NE,
          technical and state specific timetables
24
     Regulated Distribution & Generation


25
     Distribution and Generation Segment
     Opportunities and Challenges

     • Net income rose at electric distribution companies, but returns
       still disappointing
     • All companies have strong pass-through mechanisms, but
       electric distribution operations require rate relief to improve
       returns
     • Good success managing controllable O&M, but pension and
       uncollectible expenses have weighed down returns
     • Sales growth outlook strong for Yankee Gas, weak for electric
       companies
     • Generation business model meeting public policy mandates and
       producing reasonable returns




26
                                   2009 Distribution and Generation Results



                                   $100

                                    $90
                                             5.7%
                                    $80
                                                    $74.0
                                          $70.0
 Earnings For Common In Millions




                                    $70

                                    $60
                                                               14.7%

                                    $50                                $47.5                                      2008
                                                            $41.4                                     22.5%       2009
                                    $40

                                                                                  35.8%           $27.1
                                    $30
                                                                                                          $21.0
                                    $20                                                   $16.7
                                                                               $12.3
                                    $10

                                     $0
                                             CL&P               PSNH               WMECO           Yankee Gas




27
     Sales Data and Projections


                                                                                                 6.9%
     7.0%

     6.0%
                                                                                                         5.0%
     5.0%

     4.0%

     3.0%

     2.0%
                                                                                    0.9%
     1.0%                                                                                                        0.3%
     0.0%

     -1.0%
                                                        -1.1%
     -2.0%                    -1.6%             -1.4%
                      -2.1%             -2.2%
     -3.0%

     -4.0%                                                                  -3.4%
             -3.8%
     -5.0%                                                          -4.8%
     -6.0%
                     CL&P                       PSNH                        WMECO                       Yankee Gas

             2009 vs. 2008 actual     2009 vs. 2008 weather normalized       2010 projected vs. 2009 weather-normalized




28
Write-Offs Rising, Reflect Each Service Territory’s
Economic Conditions and Household Income



                                     3.0%                                                                 2.84%
     Write-offs as a % of Revenues




                                     2.5%



                                     2.0%                                             1.82%
                                                                              1.75%
                                                                                                1.63%

                                     1.5%
                                                                                                                          1.27%
                                                    1.09%
                                     1.0%                           0.93%
                                                                                                                  0.76%
                                            0.60%
                                     0.5%                   0.40%



                                     0.0%
                                               CL&P            PSNH                WMECO             Yankee Gas     Composite



                                                                            2008              2009




29
              Electric Distribution and Generation Capital
              Expenditures – By Company

                               2010-2014 Projected Distribution & Generation Capital Spending
                                                         $2.8 Billion


               $700                  $665
                                      $20        $616
               $600    $565                       $14        $557
                                     $187                     $7         $526        $518
                                                 $121
               $500                                          $79         $58          $29
                      $145
                                                                                      $38
In millions




                                                  $36         $38        $38
                                      $34                                                       WMECO - Solar ($41m total)
               $400    $38                       $113                                $133       PSNH - Generation ($474m total)
                                     $113                    $118        $125
                       $99                                                                      WMECO - Distribution ($184m total)
               $300
                                                                                                PSNH - Distribution ($602m total)
                                                                                                CL&P - Distribution ($1,581m total)
               $200
                                     $311        $332        $315        $305        $318
                      $283
               $100

                 $0
                      2009           2010        2011        2012        2013        2014
                      Actual


   30
      Projected 2010 – 2014 Distribution and
      Generation Year-End Rate Base

              $7,000                                                                         Projected
                                                                                           Distribution &
                                                                                  $6,503    Generation
                                                                       $6,224
                                                          $5,947                  $863       Rate Base
              $6,000                                                                       CAGR of 8.1%
                                                                         $883
                                                 $5,166    $874
                                                                                  $954
              $5,000                 $4,791       $444                   $912
                          $4,401      $446                 $873
                                                  $829                            $484
                          $407                                           $474
              $4,000                  $745                 $460
In Millions




                          $691                    $441                            $1,179
                                      $421                              $1,100
                          $411                            $1,035
              $3,000                              $933
                                      $845
                          $772
              $2,000
                                                                        $2,854    $3,022
                                                 $2,520   $2,705
                         $2,119      $2,334
              $1,000

                 $0
                       2009 Actual   2010         2011     2012         2013      2014
                          CL&P Distribution                   PSNH Distribution
                          WMECO Distribution                  Yankee Gas
                          PSNH and WMECO Generation
31
     2010 Rate Cases

                                            PSNH                               CL&P                      WMECO


     Filing:                Application filed 6/30/09             Application filed 1/08/10    Estimated 7/1/10


                            •   Rate lag                          • Sales declines             • Decoupling
                            •   Ice storm cost recovery           • Uncollectible expense      • First full rate case in
                            •   Low earned ROE                                                   nearly 20 years
                                                                  • Headroom from RRB final
     Key Topics:            •   Little sales growth                 amortization in December   • Sales declines
                            •   Rate base adds                      2010
                                                                                               • Rate base adds
                                                                  • Decoupling
                                                                  • Pension tracker

     Anticipated
                                            7/1/10                               7/1/10                    1/1/11
     Completion Date:

                            4/23/10: Target for possible filing   5/21/10: Draft decision
     Key Interim Dates                                                                                      N/A
                                     of settlement                6/7/10: Final decision

                            7.2%
                            Distribution and Generation
     2009 Regulatory ROEs                                                        7.3%                       8.4%
                            3.6%
                            Distribution only



32
     PSNH, CL&P Rate Case Status



     PSNH Rate Case Status               CL&P Rate Case Status

     • $50.9 million permanent          • $133 million effective 7/1/10
       retroactive to 8/1/09 ($25.6
                                        • $44 million effective 7/1/11
       million actually took effect
       8/1/09)                          • 2010 revenues deferred and
                                          recovered from 1/1/11 to
     • $16.8 million effective 7/1/10
                                          6/30/12
     • Settlement discussions well
                                        • Full amortization of RRBs
       advanced
                                          ($234 million) and lower
                                          purchased power costs should
                                          result in significant rate
                                          decrease on 1/1/11
                                        • Final decision due June 7




33
     Current CL&P Rates Trending Down

     2003-2009 Average Total Bill For All Customers Receiving Generation Supply From CL&P

                                                                                                                 18.689
                                                                       17.788                                              17.52
                                                                                                        17.055    1.956
                                                             16.054     2.209                                              1.971
         Cents/KWH as of January 1                                                                      1.831     1.293
                                                                        0.717
                                                             2.511                                      0.679              1.446
                                                                                                                  3.293
                                                             0.664      2.786
                                                  12.529                                                2.879
                                                                                                                           3.293
                                         10.783   2.174      2.754

         9.336                           1.702    0.468
                   CL&P 2003 Rate Case




                                                                                  CL&P 2007 Rate Case




                                                                                                                                    CL&P 2010 Rate Case
         1.549                           0.468
                                                  2.702
          0.35                           2.592
         2.484                                                          12.076                                    12.147
                                                                                                        11.666
                                                                                                                           10.813
                                                             10.125

                                                  7.185
                                         6.021
         4.946




         2003                            2004     2005       2006       2007                            2008      2009     2010                           2011

                                                    Supply    Distribution      Transmission                     Other
34
      Generation Strategy




     The Clean Air Project                          WMECO Solar Initiative
        Scrubber must be installed by 7/1/13          Installation of 6 MW solar projected by
        Will remove 90+% of sulfur, 80% of             2012
         mercury emissions                             First site (Pittsfield) announced in
        Estimated cost: $457 million                   February
              Nearly $147 million capitalized at      Estimated cost: $41 million
               12/31/09
        Broad stakeholder support                     Constructive regulatory model – fully
                                                        tracking, segmented rate base
        On or ahead of schedule: 48%
         complete as of 3/31/10                        Potential for up to 50 MW
        Resolved major uncertainties
35
               Yankee Gas Capital Expenditures

                               2010-2014 Projected Yankee Gas Capital Spending
                                                 $461 Million


               $120
                                          $112
               $110               $106
               $100
                                           $35                                         Yankee Gas Strategy
               $90                 $35
                                                   $77       $80       $82
               $80                                                               •   New shale-led supply paradigm
 In millions




               $70                         $18               $23       $22       •   Marcellus changes NE US gas
                       $60                         $22
               $60                 $17                                               markets
               $50     $17                                                       •   Natural gas pricing “divorce” from oil
                                                              $29          $30
               $40                         $35      $29
                                   $32                                           •   Lower carbon footprint
               $30     $26                                                       •   Low penetration rate in Yankee Gas
               $20                                                                   franchise
                                           $24      $26       $28          $30
               $10                 $22
                       $17                                                       •   Potential significant savings for CT
                $0                                                                   customers
                       2009       2010     2011    2012      2013      2014
                      Actual
                       Aging Infrastructure               Basic Business
                       Peak Load / New Business           WWL




36
     Five-Year Forecast


37
     Significant Changes in Modeling Assumptions
     From 2009


     •   Lower five-year capital investment forecast ($6.4 billion vs. $7.0 billion)
     •   NEEWS and HQ projects completed in 2014 vs. 2013
     •   Smaller annual dividend increases (7.5 cents/yr. vs. 10 cents/yr.)
     •   NU share of HQ line to cost $675 million (vs. $525 million); still
         reflected as PSNH project, though likely to be in separate subsidiary
     •   Less sales growth
     •   Lower level of pension funding ($591 million vs. $884 million)
     •   Less equity issuance ($290 million vs. $871 million)
     •   Less net long-term debt issuance ($2.07 billion vs. $2.5 billion)




38
     2009-2014: New Capital Expenditure Forecast

                     $2,000




                                                                                     $1,662
                                                                   $1,670
                     $1,800




                                                                                                                      $1,439
                                                                                              $1,440
                     $1,600




                                                                            $1,374




                                                                                                             $1,211
                     $1,400

                                                 $1,174




                                                                                                                                 $1,112
                                                          $1,096
                     $1,200
       In Millions




                                        $969
                                 $851




                     $1,000

                      $800

                      $600

                      $400

                      $200

                         $0
                                 2009             2010             2011              2012                    2013              2014

                        Distribution and Generation Capex (2009 Forecast)                              Distribution and Generation Capex (2010 Forecast*)
                        Transmission Capex (2009 Forecast)                                             Transmission Capex (2010 Forecast)

                      *Includes total capex at corporate service companies on behalf of operating companies of $134 million ($48 million in 2010,
                       $25 million in 2011, $22 million in 2012, $25 million in 2013, and $14 million in 2014).


                            Five-year 2010-2014 capital spending of approximately $6.4 billion,
                                   compared with last year’s 2009-2013 $7 billion plan;
39                                        2009-2013 period down by $0.6 billion.
     Cash Flow To Cover More of Cap Ex
     After 2009 Actual

                                              Actual/Projected Cash From Operations
                                                   (Excluding RRB Retirements)
                     $1,600
                                                                                 $1,373          $1,384
                     $1,400                                      $1,299

                     $1,200                                                                                     $1,067
                                                                                                          $1,043
                                                   $988
                     $1,000          $921                                                 $945
       In Millions




                              $771                                        $764
                      $800                  $684          $664

                      $600

                      $400

                      $200

                        $0
                              2009 Actual     2010          2011             2012           2013              2014

                              Funds from operations               Capital expenditures, ex. cost of removal




40
     Projected Consolidated Balance Sheet




                                 100.0%
                                 90.0%
        Year-End Balance Sheet




                                 80.0%    41.6%          39.1%          40.1%         39.0%     39.3%

                                 70.0%
                                 60.0%                    1.1%          1.0%          1.0%      0.9%
                                          1.3%
                                 50.0%
                                 40.0%
                                 30.0%    57.2%          59.7%          58.9%         60.0%     59.8%

                                 20.0%
                                 10.0%
                                  0.0%
                                          2010           2011          2012           2013      2014

                                                  Total Debt     Preferred      Common Equity




41
     Projected Consolidated FFO to Total Debt


           20.0%


                      15.4%
           15.0%                                                         14.4%
                                                           13.7%
                                           12.7%                13.5%
                              12.0%11.8%           12.4%

                   9.8%
           10.0%



            5.0%



            0.0%
                    2010        2011           2012          2013       2014

                               2009 Forecast           2010 Forecast

                              Includes pension funding payment




42
     Projected Consolidated FFO to Total Debt



           20.0%


                       15.9%
                                                                           15.2%
                               13.9%        13.9%            14.6%14.5%
           15.0%
                   13.7%            13.8%        13.7%



           10.0%



            5.0%



            0.0%
                      2010       2011             2012          2013      2014

                                  2009 Forecast          2010 Forecast


                                Excludes pension funding payment

43
     Projected Consolidated FFO Interest Coverage



           5.0


                       3.9
           4.0

                                                                  3.2     3.3
                                   3.1           3.0
           3.0               2.9           2.8              2.9
                 2.7


           2.0


           1.0


           0.0
                  2010        2011             2012          2013       2014

                               2009 Forecast           2010 Forecast

                             Includes pension funding payment


44
     Projected Consolidated FFO Interest Coverage



           5.0

                       4.0
           4.0
                                   3.5                            3.4     3.4
                 3.4
                             3.2                 3.2
                                           3.0              3.0
           3.0


           2.0


           1.0


           0.0
                  2010        2011             2012          2013       2014

                               2009 Forecast           2010 Forecast

                              Excludes pension funding payment


45
     Appendix


46
 Strategic Risk Momentum Summary – March 2010
Rate case outcomes are critical, with CL&P and PSNH cases underway and WMECO planned for later in 2010. Cost management and
               resolution of uncollectibles balances remain a focus. Work to advance NEEWS projects continues.

                    Risk                                            Mitigation Implementation Status                                                Risk
                                                                                                                                                  Momentum
  1S Unfavorable regulatory decisions result      CL&P filed a multi-year distribution rate case in January 2010 that increases rates
     in unsupported programs, O&M, and            coincident with a decrease in the CTA, thus creating no net impact on customers’ total
     investment levels, which (1) affect the      bills.
     ability of our distribution companies to
                                                  PSNH was able to settle a temporary rate case, setting the stage for permanent rates to
     achieve fair and reasonable rates of
                                                  be retroactive to August 1, 2009. PSNH has filed a permanent case. Settlement with
     return; (2) impair safety, reliability and                                                                                                       Neutral
                                                  the NHPUC staff and OCA may be possible.
     customer experience; (3) expose the
     company to penalties and prudency            Operating companies also continue to communicate and educate stakeholders and
     reviews; and (4) limit the ability to        state regulators.
     raise new capital.



  2S Volatility in energy prices and a weak       Overall, economic conditions will affect the political environment for rate increases in
     economy draw greater attention to the        2010. NU’s mitigation focus has been on demand response programs to help
     cost of electricity.                         customers manage energy costs and the utilization of wholesale power sourcing to
                                                  manage supply price volatility. Power costs have decreased significantly and
                                                  continue to gradually decline.
                                                  NU has also rolled out an integrated communications strategy to strengthen company                 Slightly
                                                  reputations among key stakeholders, including regulators, politicians, and our                    Favorable
                                                  customers.

  3S Changes in regulatory and/or                 There are no pending changes in legislative policy that would impact the operating
     legislative policy and rate recovery         companies’ abilities to secure adequate and timely recovery of prudently incurred
     mechanisms jeopardize the NU                 costs, but the economy and previous CL&P customer service issues add risk to
     generation, distribution, and                recovery of prudently incurred costs.
     transmission businesses’ abilities to
     secure adequate and timely recovery          The operating companies continue to build and maintain contacts with key legislative,              Slightly
     of prudently incurred costs.                 regulatory and governmental leaders to educate them on the importance of financially
                                                  healthy distribution companies in maintaining and strengthening electric reliability and
                                                                                                                                                   Unfavorable
                                                  the importance to the economic strength of the states that they operate in.

 47                                                                                                                          Dashed arrow is March 2010 update
                                                                                                                             Solid arrow is December 2009 update
 Strategic Risk Momentum Summary – March 2010

                 Risk                                         Mitigation Implementation Status                                          Risk
                                                                                                                                      Momentum
 4S The aging infrastructure of NU’s       Programs are underway at all three electric distribution companies to mitigate the aging
    distribution system requires           infrastructure risk, including the NU Maintenance Standardization Initiative and the
    additional capital investment and      Distribution Capital Investment cross-functional team.
    O&M expense, thereby requiring
    additional rate relief.
                                                                                                                                       Slightly
                                                                                                                                      Favorable
 5S A weak economy and an increased        Uncollectibles remain a problem for the operating companies, and focus on resolution
    focus on conservation and/or self      continues. In January 2010, Customer Experience created the Receivables Recovery
    generation results in continued        initiative to address issues with the receivables process.
    sales erosion, increases in bad
                                           2010 rate case proposals consider decoupling of sales and revenue.
    debt, uncollectible, and operating
    expenses, and has negative cash        The operating companies continue to control spending as a mitigation.                        Slightly
    flow impacts.                                                                                                                     Unfavorable


 6S Substantial delays in, displacement    NU continues to actively demonstrate to key stakeholders the need for Transmission
    or cancellation of transmission        Projects through relationship building, technical analyses and education. Focus to
    projects result in revised scope and   advance the NEEWS projects through the siting and permitting process continues with a
    cost and lower capital spending.       positive approval from the Massachusetts Environmental Policy Act office, but overall
                                           remains challenged. Enhanced planning efforts to document need and contingencies and
                                           to economically evaluate all options for Connecticut ratepayers is underway. Enhanced        Slightly
                                           communications campaign efforts continue.                                                   Favorable
 7S Changes in regulatory and/or           Legislation in the US Senate provides for an Interconnection-wide transmission planning
    legislative policy (including          process and cost allocation. This could diminish New England’s voice in its own
    changing leaders/members) limit        transmission planning needs as well as reduce the voice of NU, and could result in cost
    NU's ability to influence local and    shifts between the Midwest and New England. NU remains active with local, state,
    regional energy policy.                regional and federal policymakers to educate them on our objectives.
                                                                                                                                       Slightly
                                                                                                                                      Unfavorable

48
     Strategic Risk Momentum Summary – March 2010

                 Risk                                           Mitigation Implementation Status                                        Risk Momentum
8S   NU proposed transmission solutions       NU continues to work with Hydro Quebec and New England stakeholders to advance
     to address RGGI and RPS                  our suite of northern solutions projects. FERC approval of HVDC project structure was
     initiatives with Canadian and            received in May 2009. NU is working to advance HVDC project with development of
     Northern New England (especially         various agreements. NU is also working closely with New Hampshire legislators and
     New Hampshire) resources are not         their Transmission Committee.
     successful.                                                                                                                          Favorable
9S Banks restrict access to short-term        The bank market continues to strengthen. Although the pricing of revolving credit
    liquidity, resulting in higher fees and   facilities has improved, the cost of these new facilities continues to be significantly
    interest rates, shorter terms for our     higher than that of our existing facilities. Facility tenors have lengthened to up to 3
    bank credit facilities, and more          years, over the 364 day facilities that had been the norm earlier in 2009. Discussions
    restrictive covenants, which              are ongoing with current revolver banks over potential timing and structure of new
    significantly changes the costs and       facilities in 2010.                                                                         Slightly
    way we finance our businesses.                                                                                                       Favorable
10S Major equipment failures or               Scheduled preventive maintenance was completed for all companies in full for 2009.
    unplanned system repairs result in        The operating companies did not have any significant SAIDI or SAIFI issues in 2009.
    more expensive and/or suboptimal
    system repairs, and are used by
    public advocates to invoke
    regulatory proceedings and
                                                                                                                                           Slightly
    corrective actions.                                                                                                                   Favorable
11S Historical environmental remediation      NU is pursuing technical, political and legal strategies for addressing Massachusetts
    sites result in significant financial     Department of Environmental Protection’s conditional approval of the Holyoke MGP
    exposure to shareholders due to the       remediation sites. A high level strategic meeting was held in January 2010 with MA
    lack of rate recovery.                    DEP and key NU Personnel discussing policy-related matters. Technical meetings with
                                              the MA DEP are planned for February/March 2010 to evaluate next actions at the site.
                                              Periodic meetings are also being held with HG&E to share information on the site. Field
                                              delineation activities associated with the site have been ongoing in the Connecticut         Neutral
                                              River since October 2008. Preliminary ecological risk studies and environmental
                                              forensics are ongoing on the tar/sediment.
12S Federal, regional and/or state            PSNH is continuing to implement a RGGI program by undertaking collaborative
    policies create carbon constraints or     outreach with business groups, environmental organizations, the Consumer Advocate
    other environmental regulations that      and PUC. PSNH is also evaluating various bills for potential impact to NU’s operations
    are detrimental to our operations.        including bills under the Clean Air Act, Clean Water Act and Federal Climate bills.
                                                                                                                                           Neutral
49
Beyond NEEWS, HQ Project, Significant Transmission
Investment Will Be Needed to Bring Renewables to Market

                      Current New England Renewable Portfolio Requirements

                 Vermont
                                                                                        Maine
     Goal: 20% by 2017
                                                                                     33% in 2010
     Minimum: 2005-2012. Load
     growth to be met with renewables                                                40% by 2017
     and capped at 10%.




                                                               New Hampshire
                                                                7.54% in 2010
                                                               23.8% by 2025

                                                                                Massachusetts
                                                              Class I                 Class II      APS
                                                        5% in 2010; 1% annual    3.6% kwH sales     1.5% in 2010
               Connecticut
                                                       increments thereafter     starting in 2009 & 5% by 2020
               14% in 2010                                                       3.5% kwH sales
                                                                                 from waste energy
               27% by 2020                                                       starting in 2009

                                            RI
                                        4.5% in 2010
50                                      16% by 2019
Developing a Regional Renewable Solution for
New England
          Concept
 • Renewable Access                                  New England Renewable Projections for 2020
   Transmission Line
 • 2,000 MW                                          Estimated Class I Renewable Resource Requirements
 • $1.5 billion to $2 billion                        for New England (GWh) by 2020 = 22,800 GWh
                                                      6,600 GWh = Existing Available Renewables
                                                      3,500 GWh = Currently Planned or Under Development
                                                     12,700 GWh = Unplanned Renewables/Balance Shortfall


                                                     Class I Technologies include:
                                                     > Biomass/Biofuels       > Fuel Cells (CT)
                                                     > Landfill Gas           > Small Hydro
                                                     > Solar PV               > On and Offshore Wind


                                                     Resources Required to Fill Shortfall in 2020
                                Electricity Demand
                                                     Wind (on-shore and off-shore)                ~ 3,300 MW
                                                     Other Class I Technologies                   ~   500 MW

                                   Wind Zone

                                   New Line

51

				
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