Eversource Energy (D/B/A) · NYSE:ES
Eversource Energy (D/B/A) — Eversource Energy — Non-Deal Roadshow (January 2015)
24 slides from Eversource Energy (D/B/A)'s roadshow presentation, Jan 28, 2015
Slide 1: New York Meetings
NEW YORK MEETINGS January 28, 2015
Slide 2: Safe Harbor
Safe Harbor This presentation includes statements concerning NU’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are “forward-looking statements” wi
Slide 3: A Rare Investment Opportunity
A Rare Investment Opportunity • Projected long-term EPS growth of 6%-8% • Unique electric and gas transmission growth platform Transmission • Unique opportunity to reduce O&M by 3% - 4% annually • Unique robust gas expansion plans • 2014 EPS range of $2.60 to $2.70 consistent with growth rate • Proj
Slide 4: Strong Record of Total Shareholder Return
Strong Record of Total Shareholder Return 30.5% 28.3% 16.8% 11.8% 12.1% 12.3% 2009 2010 2011 2012 2013 2014 4
Slide 5: Dividend Growth In-Line with Earnings Growth
Dividend Growth In-Line with Earnings Growth $1.57 $1.47 6% - 8% Annualized Dividend $1.372 $1.10 6.8% $1.025 7.1% 24.7%* 7.3% 7.9% 2010 2011 2012 2013 2014 * Reflects impact of the merger 5
Slide 6: Q3 and YTD 2014 Results
Q3 and YTD 2014 Results YTD EPS YTD EPS Q3 EPS 2014 Q3 EPS 2013 2014 2013 Electric Distribution $0.48 $0.50 $1.10 $1.10 Electric Transmission $0.28 $0.18 $0.65 $0.68 Natural Gas Distribution ($0.03) ($0.03) $0.14 $0.11 Parent & Other $0.02 $0.04 $0.04 $0.07 Total Excluding Integration $0.75 $0.69 $1
Slide 7: Preliminary Key 2015 Earnings Growth Drivers vs. 2014
Preliminary Key 2015 Earnings Growth Drivers vs. 2014 CL&P rate case outcome and return on $300 MM storm balance Transmission rate base growth 3 – 4% reduction in non-fuel O&M 2+%/year increase in firm natural gas customers $0.10 Q2 2014 FERC ROE Charge Higher depreciation Higher property taxes Lowe
Slide 8: Rate Base By Business
NU Consolidated ROE Will Grow as Transmission Portion of NU Rate Base Expands Rate Base By Business $18.5 billion* 3% 11% $13.6 billion 6% 10% 46% * Rate base figures exclude Access Northeast 51% $3 billion increase in Transmission Rate Base over 5 years 40% 33% Combined 2013 Year-End Projected Comb
Slide 9: Status of Major Transmission Projects
Status of Major Transmission Projects Expected Total Remaining Project Scope Investment by Work Ahead Amount 12/31/14 ~$1.28 billion Complete IRP in 2015 NEEWS/GHCC investment in CT, ~$925 million ~$355 million Complete GHCC in 2018 Western MA ~$145 million, ~$1.43 billion Complete siting in 2016 NP
Slide 10: Progress on Major CT Reliability Projects
Progress on Major CT Reliability Projects Interstate Reliability Project • Joint project with National Grid • Siting approval in place • Construction began in March 2014 • 62% complete as of September 30, 2014 • Projected completion: End of 2015 • Total projected NU investment: $218 million Greater
Slide 11: NPT - Overview
NPT - Overview • 1,200 MW of clean energy • $1.432 billion HVDC line, terminal and AC facilities • Participant-funded with opportunity for regional funding • Uses HVDC technology at +/- 300-kV with AC/DC converters in Quebec and NH • AC radial 345-kV line to connect to the New England bulk power gri
Slide 12: Northern Pass Timeline
Northern Pass Timeline Early 2015 Early 2015 Mid-2015 Mid-2016 Second Half- Dept. of Energy Northern Pass NH SEC Accepts Permits 2018 Issues Draft Files Application Application Received Environmental with New Within 60 days --- In-Service Date Impact Hampshire Site of Filing -- Statement Evaluation
Slide 13: New England Has Experienced a Significant Increase in Natural Gas Generation
New England Has Experienced a Significant Increase in Natural Gas Generation Annual Energy Output Generating Capability <1% 100% 6% 90% 22% Oil: 5273 MW 80% 70% 18% 46% Coal: 2300 MW 60% Nat Gas: 17,850 MW 50% 15% Nuclear: 4656 MW 40% 30% 30% 33% Hydro: 3335 MW 20% Renewable: 1079 MW 10% 7% 7% Sourc
Slide 14: Natural Gas Generation Unavailable During Winter Peak; Units Retiring
Yet 75 Percent of Region’s Natural Gas Generation Was Unavailable During Winter Peak Demand… …And Critical Oil, Coal, Nuclear Units Retiring Fuel Mix During Peak Demand on 1/7/14 2014 Retirements Salem Harbor (coal & oil) Mt. Tom (coal) VT Yankee (nuclear) ~ 1,400 MW 2017 Announced Retirements Brayt
Slide 15: $3 Billion Cost Increase in Last Winter
$3 Billion Cost Increase in Last Winter 15
Slide 16: Infrastructure Deficiency Driving Retail Rates Sharply Higher
Infrastructure Deficiency Driving Retail Rates Sharply Higher • Price increases despite abundant nearby natural gas and hydro • Pipeline constraints caused supply costs to increase by $3 billion during 2013-2014 winter • Liquidity reduced due to suppliers leaving New England market • Failed auctions
Slide 17: Additional Investment in Spectra Energy Pipelines Will Provide a Regional Solution
Additional Investment in Spectra Energy Pipelines Will Provide a Regional Solution 17
Slide 18: Regional Funding Approach
Regional Funding Approach We support a regional approach to expedite construction of gas infrastructure Generation Gas LDC Demand Demand Support NESCOE approach to Traditional “Open Season” securing new gas infrastructure process where gas LDCs subscribe to pipeline capacity EDCs subscribe to
Slide 19: NU Natural Gas LDCs: Significant Expansion Ahead
NU Natural Gas LDCs: Significant Expansion Ahead CT Residential Market Penetration by Shale gas lowering natural gas prices Heating Source 60% in Northeast 50% US Average = 7% 40% Oil heat much more expensive, yet 32% remains dominant fuel source 20% 15% Huge conversion potential 4% 0% Heating
Slide 20: Significant Massachusetts Gas Initiatives Taking Shape
Significant Massachusetts Gas Initiatives Taking Shape Project Status Cost Ratemaking Upgrade of 3 bcf Hopkinton methodology now Up to $200 MM LNG facility under DPU review $42 MM in 2015 Legislatively mandated 25- Joint plan with NSTAR $47 MM in 2016 year plan to replace NSTAR Gas and other Escalat
Slide 21: Potential for More Than 150,000 Additional New Heating Customers
Potential for More Than 150,000 Additional New Heating Customers Over the Next Ten Years Potential natural gas conversion targets by year 18,000 Expansion Plan Timeframe 2014-2023 16,000 14,000 12,000 10,000 NSTAR Gas 8,000 6,000 Yankee Gas 4,000 2,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 22: Long-Term Rate Stability
Long-Term Rate Stability Jurisdiction Company Commentary NSTAR Electric Base rates frozen through 12/31/15 with limitations on number of concurrent filings; NSTAR Gas filed Massachusetts NSTAR Gas 12/17/14 for $33.9 million in higher distribution rates WMECO effective 1/1/16 Final decision issued 12
Slide 23: CL&P Final Rate Decision Issued December
CL&P Final Rate Decision Issued December 17 $135 million distribution increase, including storm recovery, resiliency $221 million requested Effective December 1, 2014 9.17% ROE (15 bps storm performance penalty in Year One) Capital structure, traditional capital program, 2012 and 2013 stor
Slide 24: Other Regulatory Initiatives
Other Regulatory Initiatives FERC ROE Cases Generation Update Photo of scrubber • 10-16-14 order lowered base ROE to • Merrimack Scrubber Case (DE 11-250) 10.57% and capped total ROE at 11.74% • Completed September 2011 • Multiple requests for reconsideration • Favorable staff testimony pending • He