Eversource Energy (D/B/A) · NYSE:ES
Eversource Energy (D/B/A) — Eversource Energy — ESG Presentation (May 2015)
37 slides from Eversource Energy (D/B/A)'s sustainability presentation, May 31, 2015
Slide 1: Eversource: A Sustainable Investment
Sustainability Northeast Utilities Board ofASTrustees EVERSOURCE A SUSTAINABLE INVESTMENT
Slide 2: Safe Harbor
Analyst Sustainability InvestorCall Call Safe Harbor This presentation includes statements concerning Eversource’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. The
Slide 3: Eversource Commitment
Analyst Sustainability InvestorCall Call Eversource Commitment Our Business Eversource has a long-standing commitment to the highest standards of integrity, accountability and independence. Our corporate governance, comprehensive risk management strategy and solid financial oversight result in a str
Slide 4: A Rare Investment Opportunity
Analyst Sustainability InvestorCall Call 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 • 2015 EPS range of $2.75 to
Slide 5: Strong Record of Total Shareholder Return
Analyst Sustainability InvestorCall Call Strong Record of Total Shareholder Return 2009 2010 2011 2012 2013 2014 4
Slide 6: Dividend Growth In-Line with Earnings Growth
Analyst Sustainability InvestorCall Call Dividend Growth In-Line with Earnings Growth Annualized Dividend $1.67 $1.57 $1.47 $1.372 6% - 8% $1.10 $1.025 6.8% 7.1% 24.7%* 7.3% 7.9% 2010 2011 2012 2013 2014 2015 * Reflects impact of the merger 5
Slide 7: Why Eversource?
Analyst Sustainability InvestorCall Call Why Eversource? Energy Efficiency: Eversource manages one of the nation’s most extensive and successful energy efficiency programs Renewable Energy: Eversource has signed contracts to purchase hundreds of megawatts of energy including wind, biomass and solar
Slide 8: Analyst Sustainability Call
Analyst Sustainability InvestorCall Call 7
Slide 9: New England is Doubling Down on Energy Efficiency
Analyst Sustainability InvestorCall Call New England is Doubling Down on Energy Efficiency 19 25 9 17 Most Improved Ranks 21-30 Ranks 1-10 Ranks 31-40 Ranks 11-20 Ranks 41-51 Source: ACEEE 2014 Scorecard 8
Slide 10: Energy Efficiency Spending vs. Total Revenues Rising
Analyst Sustainability InvestorCall Call Energy Efficiency Spending vs. Total Revenues Rising In Millions 6.1% 5.5% 5.0% 2012 2013 2014 Energy Efficiency Expenditures Total Revenues 9
Slide 11: Interests of Customers and Investors Aligned on Energy Efficiency
Analyst Sustainability InvestorCall Call Interests of Eversource Customers and Investors are Aligned on Energy Efficiency Profit Opportunity Performance Incentives $20 - $25M Annually Fully Funded Distribution Revenue Protected System Benefit Charge Forward Capacity Decoupling Market Lost base reven
Slide 12: Energy Efficiency Spending
Analyst Sustainability InvestorCall Call Energy Efficiency Spending • New construction and major renovations • Commercial and industrial retrofit programs • Home energy services − HVAC − Insulation & duct sealing − LED lighting & specialty bulbs • Residential behavioral programs • Lighting & applian
Slide 13: Impact: Economic and Environmental Sustainability
Analyst Sustainability InvestorCall Call Impact: Economic and Environmental Sustainability Successful implementation of our energy efficiency model over the three-year period 2011-2013 resulted in savings equivalent to what a 320 MW base load power plant would have had to generate and what 2 GW of s
Slide 14: Analyst Sustainability Call
Analyst Sustainability InvestorCall Call 13
Slide 15: New England States Have Aggressive Renewable and GHG Targets
Analyst Sustainability InvestorCall Call New England States Have Aggressive Renewable and GHG Targets Regional Greenhouse Gas Emission Targets MMTCO2e Renewable Portfolio Standards in Place 2014 2020 2025 CT 18% 27% 27% MA 17.8% 26% 32.3% NH 9.7% 20.3% 24.8% (Percentage of electricity that must come
Slide 16: Eversource Supporting Renewable Generation Deployment
Analyst Sustainability InvestorCall Call Eversource Supporting Renewable Generation Deployment Wind Executed hundreds of megawatts of long-term contracts Solar Owner and operator of 8 MW of solar facilities at WMECO Biomass Operator of 50 MW of biomass unit in Portsmouth, NH (Converted from coal in
Slide 17: Northern Pass Transmission Project
Analyst Sustainability InvestorCall Call Northern Pass Transmission – Single Most Significant Project in Region to Lower Emissions, Reduce Customer Bills • 1,200 MW of clean energy • $1.4 billion HVDC line, terminal and AC facilities • Participant-funded with opportunity for regional funding • Uses
Slide 18: Electric Transmission Infrastructure Development
Analyst Sustainability InvestorCall Call Electric Transmission Infrastructure Development 17
Slide 19: Transmission Invested $5.6 Billion From 2001-2014
Analyst Sustainability InvestorCall Call Transmission Invested $5.6 Billion From 2001-2014 $1,000 $900 $800 $700 $600 $ in Millions $500 $400 $300 $200 $100 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 18
Slide 20: Transmission Earnings Grew Dramatically Over Past Decade
Analyst Sustainability InvestorCall Call Transmission Earnings Grew Dramatically Over Past Decade Transmission expected to account for about 50% of consolidated earnings growth through 2017 $295.4 2004 – 2013 CAGR = 29.4% 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013* 2014* *Includes NSTAR Elec
Slide 21: Investment in Transmission: Big Payoff for Customers
Analyst Sustainability InvestorCall Call Eversource’s Investment in Transmission: Big Payoff for Customers Actual New England Congestion Costs Reported in the ISO-NE Markets Report • Dramatically reduced need $600 to operate older, higher $554 Bethel – Norwalk Boston 345-kV emitting coal and oil pow
Slide 22: Transmission Investment to Continue Growing
Analyst Sustainability InvestorCall Call Transmission Investment to Continue Growing Actual Forecast $701M $3.9 Billion $1,200 $1,000 Transmission Growth Enables: Plant retirements without disruption $800 Grid reliability and efficiency Connections to clean energy sources In Millions $600 $400 $200
Slide 23: Natural Gas Development Initiatives
Analyst Sustainability InvestorCall Call Natural Gas Development Initiatives 22
Slide 24: Natural Gas Initiatives Will Reduce Dependence on Imported Oil
Analyst Sustainability InvestorCall Call Eversource’s Natural Gas Initiatives Will Reduce New England’s Dependence on Imported, Higher Emission Oil • Natural gas emits about 27% less carbon than #2 oil when used for space heating • Programs in place to help customers pay for furnaces up to 97% effic
Slide 25: Natural Gas LDCs: Significant Expansion Ahead
Analyst Sustainability InvestorCall Call Eversource Natural Gas LDCs: Significant Expansion Ahead CT Residential Market Penetration by Heating Source Shale gas lowering natural gas prices 60% US Average = 7% 50% in Northeast 40% 32% Oil heat much more expensive, yet remains dominant fuel source 20%
Slide 26: Customer Growth Has Picked Up for Natural Gas Business
Analyst Sustainability InvestorCall Call Customer Growth Has Picked Up for Eversource’s Natural Gas Business Eversource Natural Gas Business – NSTAR Gas and Yankee Gas 2007-2014 Annual Customer Additions (Conversions and new construction) Economic Natural gas prices downturn decreasing 25
Slide 27: Conversions Expected to Accelerate Under MA, CT Mandates
Analyst Sustainability InvestorCall Call Conversions Expected to Accelerate Under MA, CT Legislative Mandates Potential conversion targets by year 18,000 Expansion Plan Timeframe 2015-2023 16,000 14,000 12,000 10,000 NSTAR Gas 8,000 6,000 Yankee Gas 4,000 2,000 0 2015 2016 2017 2018 2019 2020 2021 2
Slide 28: Natural Gas Segment Earnings Could Double From 2013-2023
Analyst Sustainability InvestorCall Call Natural Gas Segment Earnings Could Double From 2013-2023 Natural Gas Segment Earnings (ex Access Northeast) Up 100% Up 50% $72.3 M Growth driven by: $60.9 M • Increased conversions • New construction • Additional investments 2013A 2014A 2018E 27
Slide 29: Additional Initiatives
Analyst Sustainability InvestorCall Call Additional Initiatives 28
Slide 30: Access Northeast is a Tailored Solution for Region's Energy Needs
Analyst Sustainability InvestorCall Call Access Northeast is a Tailored Solution for the Region’s Electric Energy Needs • 40% Eversource, 40% Spectra, 20% National Grid • Estimated cost: $3 billion • Direct connection with Northeast generators • Takes advantage of existing infrastructure • Built to
Slide 31: Term Sheet to Divest New Hampshire Generation
Analyst Sustainability InvestorCall Call Term Sheet to Divest New Hampshire Generation Signed March 11 Nearly 1,200 MW of coal, oil, hydro, biomass Parties include Eversource, NHPUC staff, two state senators, Governor’s Energy Office, Consumer Advocate Conditions precedent to settlement include exec
Slide 32: Reduced Carbon Footprint by Cutting Total Emissions by 41 Percent
Analyst Sustainability InvestorCall Call Since 2009, Eversource Has Reduced its Carbon Footprint by Cutting its Total Emissions by 41 Percent GHG emissions excluding generation (metric tonnes CO2e): 41% Decline 31
Slide 33: Supporting Electric & Natural Gas Vehicles
Analyst Sustainability InvestorCall Call Supporting Electric & Natural Gas Vehicles • Installed 11 electric vehicle charging stations • 3,400 plug-in vehicles operating in our service area • Our "Plug My Ride" website resource provides customers with information about electric vehicles and charging
Slide 34: Deploying a Modern Grid: Resilient, Smart, Integrated
Analyst Sustainability InvestorCall Call Eversource is deploying a modern grid that will be more resilient, smart and integrated Resilient Smart Integrated Asset hardening to protect Self-healing, line and Two-way power flows against weather-related substation automation Distributed energy events, p
Slide 35: Corporate Governance
Analyst Sustainability InvestorCall Call Corporate Governance 34
Slide 36: Board Structure
Analyst Sustainability InvestorCall Call Board Structure • Board of Trustees: Ensures continuing compliance and attention to good governance practices as part of their oversight of management and in protecting shareholder’s long term interests • Corporate Governance Committee: Oversees governance gu
Slide 37: Compensation Governance
Analyst Sustainability InvestorCall Call Compensation Governance • Executive and Trustee share ownership (6x CEO) and holding guidelines emphasize Company share ownership • 50% of Trustee Board retainer paid in ES shares • Trustee stock compensation is 100% deferred and not distributed until retirem