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Northeast Utilities System. Regulated Business Review and Northern Wood Power Project Tour. Portsmouth, New Hampshire September 23, 2005. Safe Harbor Provisions.
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Regulated Business Review
Northern Wood Power Project Tour
Portsmouth, New Hampshire
September 23, 2005
This presentation contains 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 Securities Litigation Reform Act of 1995. In some cases, a listener 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; 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.
Massachusetts Delivery Businesses
President – Utility Group
In millions of dollars
Numbers of customers in thousands as of 6/30/05
*Excludes acquisition premium
The proposed transmission investments in CT will help contain generation, congestion, and RMR costs.
YTD sales through August (2005 vs. 2004)
Actual Electric Sales
Weather-Adjusted Electric Sales
Total Retail Electric
President and Chief Operating Officer
2000: Electric restructuring laws approved by the NH Legislature consistent with a 1999 state settlement agreement with PSNH
2002: Electric restructuring laws modified to restrict PSNH from divesting its generating units until at least 2004
2003: Electric restructuring laws modified again to restrict PSNH from divesting its generating units until at least April 30, 2006. PSNH to divest its generation only if it is in the economic interest of PSNH’s retail customers
The changes allowed PSNH to modify its generation facilities with cost recovery thus enabling the NWPP
September 2005 Total 13.855 cents/kwh
(% change 7/05 vs. 7/04)
Manufacturing Employment Growth
(% change 7/05 vs. 7/04)
Vice President - Operations
Meeting Customer Demand
$75 Million in Savings Annually
* Forecast estimate
Northern Wood Power Project
Fuel will be delivered by truck
Additional Revenue and Avoided Cost Associated with the Project
Sale of additional incremental generation: $2-3M/year
Reduced emissions cost: $3-5M/year
Sale of renewable energy credits: $8-12M/year
Production tax credit: $3M/year
Using wood for fuel has significant environmental benefits
Equity: $33.75M (45%)
Allowed return: 9.63%
Debt: $41.25M 55%
50/50 sharing of supplemental revenues
and rebates over or below settlement baseline*
* Includes revenue from the sale of Renewable Energy Certificates or Renewable Production Tax Credits
Investment in Transmission Infrastructure
President – Transmission Group
FERC’s Electric Transmission Constraint Study identified congestion points that need immediate relief.
Transmission Constraints in the Contiguous U.S.
Pacific DC Intertie
Northeast of Boston
SW CT Interface
West VA/PJM Interface
East KS/MO Interface
Southeast West VA
NU’s part of that transmission expansion program is over $1.4 billion.
Gosling Road Substation
Hudson – Scobie Line
Southern New England
Reliability Project (SNERP)
Barbour Hill Autotransformer
Bethel - Norwalk
Plumtree - Triangle
Middletown - Norwalk
Long Island Replacement Cable (LIRC)
Glenbrook CablesNU’s Transmission Asset Strategy Has Identified Both Current and Future Transmission Investments
SWCT improvements have been a top priority in each of
ISO-NE’s last four regional transmission expansion plans. Our four major projects there total over $1.3 billion in investment.
Bethel-Norwalk 345 kV Underground & Overhead
50% of CT Load
Middletown-Norwalk 345 kV
Underground & Overhead
$672-792 Million* (CL&P 80% Share)
115 kV Underground
Long Island Cable 138 kV cross sound
$72 Million (CL&P 50% Share)
*Costs are being reevaluated
NU’s Transmission growth has already begun.
* Spending levels depend on final level and timing of all projects.