Uil Co. Ltd. · KRX:049520
Uil — 46th Annual EEI Financial Conference 2011
45 slides from Uil's conference presentation, Nov 4, 2011
Slide 1: 46th Annual EEI Financial Conference
Exhibit Exhibit99.1 99.1 46th Annual EEI Financial Conference November 2011
Slide 2: Safe Harbor Provision
Safe Harbor Provision Certain statements contained herein, regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These include statements regarding management’s intentions, plans, beliefs, expectations or
Slide 3: Contents
Contents q Overview ú Corporate Structure ú Investment Highlights ú YTD 3Q ’11 Financial Results ú Debt Maturities & Credit Ratings ú ’11 Earnings Guidance ú UIL Integration q UIL Forecasts ú Capital Expenditure ú Average Rate Base q Business Operations & Services ú Gas distribution ú Electric trans
Slide 4: UIL - Corporate Structure
UIL - Corporate Structure Southern Connecticut Gas Connecticut Natural Gas (SCG) (CNG) Service territory: 512 sq › Service territory: 716 sq miles from Westport, CT miles - Greater Hartford - to Old Saybrook, CT New Britain & Greenwich › ~178,000 customers › ~160,000 customers › 290 employees › 319
Slide 5: Investment Highlights
Investment Highlights q Electric distribution & transmission and gas distribution utilities - complementary earnings patterns q Growth opportunities q Disciplined capital investment program q Commitment to investment grade credit profile q Consistent history of dividend payments (5.1% yield as of 11
Slide 6: YTD '11 vs. YTD '10 Financial Results by Business
YTD ’11 vs. YTD ‘10 Financial Results by Business Net Income ($M) q $34M or 76% increase in net income compared to YTD 3Q ’10 ú Gas distribution net income of $29.7M YTD ’11, no comparable income in ‘10 ú Both GenConn peaking generation plants are now operating in the ISO-NE markets and YTD contribu
Slide 7: Debt Maturities & Credit Ratings
Debt Maturities & Credit Ratings Near-Term Debt Maturities Credit Ratings ($M) Issuer Issuer S&P Moody’s UIL BBB Baa3 Holdings (Stable) (Stable) $5 United BBB Baa2 Illuminating (Stable) (Stable) BBB Baa2 ** SCG (Stable) (Stable) BBB Baa1 CNG (Stable) (Stable) BBB Baa2 Berkshire (Stable) (Stable) UI
Slide 8: Increased '11 Earnings Expectations as of 11/4/11
Increased ‘11 Earnings Expectations as of 11/4/11 Current Assumptions ú Electric distribution, CTA & other and Gas distribution ranges were narrowed reflecting year-to-date performance ú GenConn expected to earn $0.12-$0.14 per share ú UIL Corporate was reduced to reflect tax savings resulting from
Slide 9: UIL Integration
UIL Integration q Integration progressing on schedule q Successfully completed a major SAP system cutover from Iberdrola USA (IUSA) at the beginning of August q Substantially exited Transition Services Agreement as of the end of September ‘11 $M Expected On-going Savings of $11.6M 9 2011 Fall EEI
Slide 10: UIL Forecasts
UIL Forecasts OIL UIL HOLDINGS CORPORATION
Slide 11: UIL 2012-2021 Capital Expenditure Forecast
UIL 2012-2021 Capital Expenditure Forecast q Previous 2011 capex forecast, $383M* Presentation format for 10-yr CapEx has q Identified projects with clear need changed (and will be the format going forward). Includes future 10 years (2012- q Full 10-yr forecast for Gas distribution capex 2021). Prev
Slide 12: 2012-2016 Average Rate Base Forecast
2012-2016 Average Rate Base Forecast Rate Base $M (Excluding GenConn Equity Investments): CAGR 7.3% $2,731 $2,535 $2,388 $2,235 Gas distribution $2,062 38% 1% 4.1% 40% 2% 40% 41% 43% Electric transmission 22% 24% 22% 22% 9.2% 22% Electric distribution 38% 38% 33% 36% 38% 11.6% Electric distribution
Slide 13: Gas distribution
Gas distribution OIL UIL HOLDINGS CORPORATION
Slide 14: Potential for Heating in CT
Gas Distribution Potential for Heating in CT American Community Survey’s selected housing characteristics estimates show a large percentage of households in Connecticut do not use natural gas for heating Litchfield Hartford (17) Tolland (2) Windham (0) Connecticut (0) 5% 2% 1% 5% 4% 4% 4% 2% 1% 8% 1
Slide 15: Gas Distribution Heating Conversions
Gas Distribution Heating Conversions q Interest in conversions increasing as heating season begins ú Direct mail marketing deployed in October to increase customers’ awareness of conversion benefits ú Financing options are being expanded to assist customers with up-front conversion costs ú Natural g
Slide 16: Example of Neighborhood Expansion
Gas Distribution Example of Neighborhood Expansion q New main is required to serve the new construction q New main will pass 79 homes that are mostly heated with oil q 18 homes already signed up for conversion q Opportunity - 61 homes that will be on the new main 16 2011 Fall EEI
Slide 17: Gas Distribution CapEx Forecast
Gas Distribution CapEx Forecast Gas Distribution CapEx Forecast $M q Previous 2011 capex forecast, $61M q Revised UIL Gas distribution forecast ú Previous 5-yr forecast was provided by IUSA q Forecast addresses replacement of cast iron & bare steel ú Base spend of approx. $26M annually ú Accelerated
Slide 18: Examples of Projects
Gas Distribution Examples of Projects Replacement Services & Mains ú Replacement of cast iron & bare steel ú Enhances system performance ú Program: on-going ~ $381M (2012-2021) 18 2011 Fall EEI
Slide 19: Electric transmission
Electric transmission OIL UIL HOLDINGS CORPORATION
Slide 20: Transmission CapEx Forecast
Electric Transmission CapEx Forecast Transmission CapEx Forecast $M q Previous 2011 capex forecast, $69M q CapEx is well-diversified in scale and category ú Not highly dependent on a few major projects or load growth ú See next slide for examples q Only includes high probability projects … ú Althoug
Slide 21: Examples of Projects
Electric Transmission Examples of Projects Grand Avenue 115 kV Switching Shelton 115/ 13.8 kV Substation Station Rebuild ú Addresses short circuit capability issues and ú Meets Greater Shelton area load growth aged/obsolete infrastructure ú In Planning ú Under ú Planned in- construction service 2014
Slide 22: Growth Outside Service Territory
Electric Transmission Growth Outside Service Territory Region-wide RPS Satisfaction New England East-West Solution (NEEWS) ú 2020 gap is significant ú Unlikely to be satisfied by current queue ú Significant UI Participation in CL&P Project: transmission ú UI’s portion of investment: greater of $60M*
Slide 23: Developments
Electric Transmission Developments FERC Order 1000 Challenge to Regional Base ROE q Issued by FERC on July 21, 2011. Includes provisions related to: q “206” Complaint filed by multiple ú Incorporating public policy into transmission state governmental parties on planning September 30, 2011 ú Transmi
Slide 24: Electric distribution
Electric distribution OIL UIL HOLDINGS CORPORATION
Slide 25: Electric Distribution CapEx Forecast
Electric Distribution CapEx Forecast Electric Distribution CapEx Forecast $M q Previous 2011 capex forecast, $172M q CapEx is well-diversified in scale and category ú Forecast is not highly dependent on a few major projects or load growth 25 2011 Fall EEI
Slide 26: Examples of Projects
Electric Distribution Examples of Projects Central Facility - UI Office & Splice Chamber Remediation Operations Building ú Consolidate all UI “Work Centers” onto a ú Rebuild deteriorated underground splicing single site referred to as the Central Facility chambers ú In progress ú Under construction
Slide 27: Recent Storm Update
Electric Distribution Recent Storm Update Tropical Storm Irene Tropical Storm Irene Impact across UI service territory q 59% of electrical circuits experienced outages q More than 10,000 locations worked on by crews q Nearly 50% of UI’s customers were without power at the peak ú 99.8% restored withi
Slide 28: Generation
Generation OIL UIL HOLDINGS CORPORATION
Slide 29: GenConn Energy - Peaking Generation
Generation GenConn Energy - Peaking Generation 50/50 Joint Venture between UI and NRG Project Highlights Locations Devon & Middletown Middletown Technology GE LM6000 Capacity 400 MW (188MW each at Devon and Middletown) Off Taker CL&P Devon q Regulated COS approach ú ROE, lifetime floor - 9.75% ú 50/
Slide 30: Regulated Renewables Development Opportunity
Generation Regulated Renewables Development Opportunity q CT Public Act 11-80 / Section 127 (effective July 1, 2011) authorizes UI to construct, own, operate and rate base Class I renewable generation up to 10MW ú Solar Photovoltaics ú Fuel Cells ú Wind Turbines q Expected investment up to $40-$50M
Slide 31: Smart Systems
Smart Systems OIL UIL HOLDINGS CORPORATION
Slide 32: UI's Mesh Network
Smart Systems UI’s Mesh Network q Over 337,000 meters - Modernization of UI’s Electric System ú 80,000 two-way w/remote disconnect capability ú Meters have q Mesh Network q Master Data is stored in Meter Data Management - interface with SAP q Outage Mgt System uses meter intelligence for restoration
Slide 33: Governmental and Regulatory Updates
Governmental and Regulatory Updates
Slide 34: Regulatory Update
Regulatory Update qAnnual revenue requirement filed with CT PURA on 7/29/11 (DN 11-07- 12) ú Requesting approximately $78M for the period commencing 1/1/12 - 12/31/12 ú Draft decision expected 12/7/11 ú Final decision expected 12/21/11 qFinal decision by CT PURA approving CNG & SCG settlement of rat
Slide 35: Regulatory Update - continued
Regulatory Update - continued q Electric Decoupling final decision (DN 08-07-04 RE03) ú Issued on 8/31/11 ú Approved decoupling credit of $1.4M for ’10 rate year ú Allows decoupling mechanism to continue until next general rate case proceeding q Utility Company Storm Response Docket (DN 11-09-09) ú
Slide 36: Governmental Update
Governmental Update q Implementation of Public Act 11-80 ú Department of Energy & Environmental Protection (DEEP) was created ú Former DPUC has become the Public Utilities Regulatory Authority (PURA) ▪ Change from 5 DPUC commissioners to three PURA directors § Kevin DelGobbo (former DPUC chair), Joh
Slide 37: Conclusion
Conclusion OIL UIL HOLDINGS CORPORATION
Slide 38: Investment Highlights
Investment Highlights q Electric distribution & transmission and gas distribution utilities - complementary earnings patterns q Growth opportunities q Disciplined capital investment program q Commitment to investment grade credit profile q Consistent history of dividend payments (5.1% yield as of 11
Slide 39: Q&A
Q&A OIL UIL HOLDINGS CORPORATION
Slide 40: Appendices
Appendices OIL UIL HOLDINGS CORPORATION
Slide 41: 3Q & YTD 2011 Financial Results - Details
3Q & YTD 2011 Financial Results - Details q Electric distribution, CTA, GenConn & Other ú 1% increase in net income YTD, 3Q was lower primarily due to mark to market & effective tax rate adjustments, offset by GenConn earnings ▪ The mark to market & effective tax rate adjustments reduced net income
Slide 42: Gas Distribution 2012-2016 Average Rate Base Forecast by Company
Gas Distribution 2012-2016 Average Rate Base Forecast by Company $M $1,036 $1,002 $913 $957 8% $882 8% 8% 8% 8% 41% 41% 42% 42% 42% 51% 50% 50% 51% 50% SCG CNG BGC Amounts may not add due to rounding 42 2011 Fall EEI
Slide 43: Previous 10-yr Capital Expenditure Forecast
Previous 10-yr Capital Expenditure Forecast $M *2010 Gas distribution CapEx reflects the full year amount; UIL ownership was for 6 weeks effective with the closing on the acquisition. ** Updated - February 23, 2011 *** Information as of November 2010, except for Gas distribution Amounts may not add
Slide 44: Previous 5-yr Rate Base Forecast
Previous 5-yr Rate Base Forecast 44 2011 Fall EEI
Slide 45: CT RPS
CT RPS Connecticut RPS Requirements (Percentage of Retail Load) Class 1 resources include energy derived from solar, wind, fuel cell, methane gas from landfills, ocean thermal, wave, tidal, run-of-river hydropower (<5MW, began operation after July 1, 2003), sustainable biomass (NOx emission <0.075 l
UIL Holdings — 46th Annual EEI Financial Conference 2011 on 6ix