Connecticut Light & Power Co. (the) · OTC:CNLPL
Connecticut Light & Power Co. (the) — EEI Financial Conference 2005
25 slides from Connecticut Light & Power Co. (the)'s conference presentation, Nov 7, 2005
Slide 1: EEI Financial Conference
Exhibit 99.3 SLIDE 1 NU Logo Northeast Utilities System EEI Financial Conference Hollywood, Florida November 7, 2005 SLIDE 2 Safe Harbor Provisions This presentation contains statements concerning NU’s expectations, plans, objectives, future financial performance and other statements that are not hi
Slide 2: Today's Announcements; Third-Quarter Results
SLIDE 3 Today’s Announcements · Divest all competitive business and focus solely on regulated utilities · Update five-year regulated capital expenditure estimates · Issue third-quarter results and reaffirm 2005 guidance · Establish 2006 guidance · Report on divestiture of wholesale, energy services
Slide 3: Key Developments in 2005
SLIDE 5 Key Developments in 2005 · Transmission - Approvals of key southwest Connecticut projects - Bethel/Norwalk project ahead of schedule - Earnings growth continuing to track increased investment · Distribution - Major projects (LNG, Northern Wood) on schedule - Earnings on track - Full pass-thr
Slide 4: Corporate Strategy for 2006 and Beyond
SLIDE 6 Corporate Strategy for 2006 and Beyond - Divest all non-regulated businesses during 2006 - Simplify business model - Reduce business risk and improve financial flexibility - Enhance earnings visibility - Capitalize on increasing valuation of generation assets - Focus on regulated utility inf
Slide 5: Why Are We Moving in This Direction?
SLIDE 7 Why Are We Moving in This Direction? The Reason The Result New England’s energy Simplified business model infrastructure needs investment Lower risk profile and increased financial flexibility Greater transmission → investment provides attractive use of capital Increased earnings predictabil
Slide 6: We Will Transform Ourselves Into a 100% Regulated Utility
SLIDE 8 We Will Transform Ourselves Into a 100% Regulated Utility [Chart illustrating transformation of business into a regulated utility] Year End 2005 Northeast Utilities Regulated Competitive Electric Electric Retail Wholesale Distribution Transmission Gas Regulated Generation Services Distributi
Slide 7: Necessary Regulated Capital Investment Will Produce Substantial Rate Base Growth
SLIDE 9 Necessary Regulated Capital Investment Will Produce Substantial Rate Base Growth Bar Chart Illustrating Cash Capital Expenditures in Millions and comparing Regulated Capital Expenditures and Depreciation Regulated Rage Base CAGR of 14% Cash Captial Expenditures (shown in millions of $) Regul
Slide 8: Transmission Will Comprise a Much Larger Share of NU's Regulated Mix
SLIDE 11 Transmission Will Comprise a Much Larger Share of NU’s Regulated Mix Northeast Utilities System Electricity Transmission YTD Net Income: $31.6 million Rate Base: $650 million (Est. 12/31/05) ’06-’10 Capex: $2.3 billion Electricity Distribution and Generation YTD Net Income: $72.4 million Ra
Slide 9: 2005E Rate Base Composition; Projected Transmission Rate Base Growth
SLIDE 11 (Continued) 2005E Rate Base Composition 2005E Rate Base: $3.5 billion [Pie Chart illustrating percentages of $3.5 billion rate base] Transmission 19% Gas 12% Dist. & Reg. Generation 69% 2010E Rate Base Composition 2010E Rate Base: $6.5 billion Transmission 36% Gas 9% Dist. & Reg. Generation
Slide 10: Projected Distribution and Regulated Generation Rate Base
SLIDE 13 Projected Distribution and Regulated Generation Rate Base [Bar Chart illustrating Projected Distribution and Regulated Generation Rate Growth] Projected Distribution & Generation Rate Base CAGR of 8% Shown in millions of dollars CL&P PSNH WMECO Yankee Gas 2005 $1,460 $704 $250 $438 2006 $1,
Slide 11: We are Confident in Our Ability to Execute the Strategic Plan
SLIDE 15 We are Confident in Our Ability to Execute the Strategic Plan A review of our status over the past year shows significant forward progress Fall 2004 Fall 2005 Bethel-Norwalk project Final engineering and design; 60% expected this year ($350 million appeals just versus 45% targeted; full con
Slide 12: New England's Transmission Needs Provide a Significant Investment Opportunity
SLIDE 16 New England’s Transmission Needs Provide for a Significant Investment Opportunity - New England faces significant energy challenges, including the need for new transmission infrastructure - The current 345 kV backbone grid in New England is inadequate - Regional load pockets exist where une
Slide 13: We Will Deploy Significant Capital Over the Next Five Years
SLIDE 18 We Will Deploy Significant Capital Over the Next Five Years [Bar chart showing capital spending historic and forecast for the period from 2006 – 2010] (Shown in Millions of $) Historic $508 Million Major CT Other Preliminary Total 2001 26 26 2002 16 39 55 2003 13 86 99 2004 65 106 171 2005
Slide 14: Changes in the Capital Program Driven by New Regional System Plan Projects
SLIDE 19 The Changes in the Capital Program from Last Year are Largely Driven by New Regional System Plan Projects Bar Chart illustrating costs for new regional system plan projects, comparing prior forecast (2005-2009) to current forecast (2006-2010) Shown in Millions of $ Cost Prior Forecast $1,41
Slide 15: NU Collects its Revenue Requirements Through Regional and Local Tariffs
SLIDE 21 NU Collects its Revenue Requirements Through a Combination of Regional and Local Tariffs 100% of Revenue Requirements Regulated At FERC NU Local Network Service Others CL&P WMECO PSNH 10% 59% 9% 22% New England Regional Network Service Others CL&P WMECO PSNH 70% 20% 3% 7% Recovery at the Re
Slide 16: Transmission Investment Provides for Strong Growth
SLIDE 22 Transmission Investment Provides for Strong Growth Based on current transmission investment schedule, NU’s transmission-related rate base is expected to grow at a 29% CAGR [Bar chart illustrating growth rate of transmission rate base growth] Shown in Millions of $ Capex Depreciation Rate Ba
Slide 17: Cash sources and uses
- Cash sources and uses
Slide 18: Year-To-Date Results
SLIDE 26 Year-To-Date Results Shown in Millions of $ ($ in millions) September 30, September Increase 2005 EPS 30, 2004 EPS (Decrease) Regulated, Parent Results CL&P $62.3 $0.48 $65.1 $0.51 ($2.8) PSNH 29.8 0.23 36.0 0.28 (6.2) WMECO 11.9 0.09 8.7 0.07 3.2 Yankee Gas 10.3 0.08 8.5 0.07 1.8 Total Uti
Slide 19: Third-Quarter Regulated Earnings
SLIDE 27 Third-Quarter Regulated Earnings [Bar Chart Showing Third-Quarter Regulated Earnings for 2004 & 2005] Distribution and PSNH Generation $26.8 million in 2004; $26.4 million in 2005 Shown in Millions of $ CL&P PSNH WMECO Yankee 2004 $14.6 $14.5 $1.3 ($3.6) 2005 $16.5 $10.4 $3.7 ($4.2) Transmi
Slide 20: Year-To-Date Regulated Earnings
SLIDE 28 Year-To-Date Regulated Earnings [Bar Chart Showing Year-To-Date Regulated Earnings for 2004 & 2005] Distribution and PSNH Generation Distribution $94.7 million in 2004; $82.7 million in 2005 Shown in Millions of $ CL&P PSNH WMECO Yankee 2004 $49.6 $30.1 $6.5 $8.5 2005 $39.8 $24.0 $8.6 $10.3
Slide 21: 2005 NUEI Results; 2005 and 2006 Earnings Guidance
SLIDE 29 2005 NUEI Results Shown in Millions of $ [Bar Chart Showing NUEI Results for 3Q05 and YTD 2005] Wholesale, Excl. Wholesale Contract Market Retail, Excl. Retail Transfer Market Changes Changes, Transfer Price Services, Restructuring Price Parent 3Q05 ($31.0) ($77.6) $1.1 ($19.6) ($2.5) YTD 2
Slide 22: Earnings Drivers at NUEI in 2005-2006 Until Divestiture is Complete
SLIDE 31 Earnings Drivers at NUEI in 2005-2006 Until Divestiture is Complete - Earnings on generation, retail, services until divested - Managing wholesale contracts not divested - Marking to market remaining wholesale, retail positions - Cash termination payments on wholesale contracts - Proceeds f
Slide 23: Earnings To Be Driven By Investment Growth
SLIDE 33 Earnings To Be Driven By Investment Growth Target Utility Capitalization Structure = 45% equity, 55% debt Estimated Transmission ROE = 11%-12% Estimated Cost of Capital Distribution ROE = 9 -10% Rate Base in Millions OF $ Regulated Rate Base 2004-2010 CAGR of 14% [Bar Chart illustrating Est
Slide 24: Items Affecting Q4 2005 and 2006 Cash Flows
SLIDE 34 Items Affecting Q4 2005 and 2006 Cash Flows Additional Sources: Uses: Internal: Sales Growth Higher transmission capex Higher transmission rates, including 50% Stable distribution capex CWIP in rates for SW CT projects Divestiture expenses Lower CL&P regulatory refunds Dividend payments CL&
Slide 25: Focus, Growth, Financial Success Factors
SLIDE 35 Focus - NU will transition toward a 100% regulated business -- Simplified business model - Reduced operating risk profile and improved financial flexibility - Enhanced earnings predictability Growth - Substantial regulated investment opportunities will drive superior regulated earnings grow
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