Uil Co. Ltd. · KRX:049520
Uil — Wall Street Access and Berenson & Co. Northeast Conference 2008
31 slides from Uil's conference presentation, Feb 28, 2008
Slide 1: UIL Holdings Corporation: Transforming Investment into Future Value
EXHIBIT 99.1 UIL Holdings Corporation Transforming Investment into Future Value Wall Street Access and Berenson & Co. Northeast Conference Boston, February 28, 2008 Richard J. Nicholas Executive Vice President and Chief Financial Officer
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: Discussion Topics
Discussion Topics 2007 Accomplishments, Earnings & Financial Highlights 2008 Earnings Guidance and Initiatives 10-year Capital Expenditure Plan Generation Opportunities Why Invest in UIL?
Slide 4: Why UIL?
Why UIL? Competitively positioned for continued success Solid enterprise foundation Seasoned management team with industry expertise Attractive investment opportunities in both distribution and transmission businesses Future investment opportunities in generation Focused on regulated utility Pure-pl
Slide 5: 2007 Accomplishments
2007 Accomplishments Announced 10-year (2007-2016), $1.75 B capital expenditure program $887 M in Distribution, $866 M in Transmission To support robust infrastructure and customer needs Continued progress on the Middletown to Norwalk (M/N) 345 kV transmission project More than 70% complete In servi
Slide 6: 2007 Fourth Quarter and Annual Earnings
2007 Fourth Quarter and Annual Earnings
Slide 7: 2007 Financial Highlights
2007 Financial Highlights M/N incentive rate filing decision issued and effective in May, granting 100% CWIP in rate base and 50 bps incentive adder to ROE on advanced technology portion of the project (approx. 50%) Financing plan approved by DPUC in June. Successfully priced $175M of Senior Notes i
Slide 8: 2008 Earnings Guidance & Beyond
2008 Earnings Guidance & Beyond as of February 21, 2008 CAGR based on actual 2007 results and earnings projection for 2008. Assumes UI earns its distribution allowed return on equity in 2010. Does not include potential generation opportunities. ** Assumes UI earns a distribution return on equity of
Slide 9: 2008 Guidance Drivers
2008 Guidance Drivers Assumes the distribution division will earn a return on equity 8% to 8.5% in 2008, compared to its allowed return on equity of 9.75% Assumes the transmission division will earn its allowed return Based on current composition of the transmission rate base and projected spending
Slide 10: 2008 Initiatives
2008 Initiatives Execute on 10-year capital expenditure plan Bid to build new peaking generation in the state of CT jointly with NRG Energy, Inc. Work with key stakeholders on the joint energy assessment and resource plan Prepare for next distribution regulatory filing kWh sales Uncollectibles Earn
Slide 11: Capital Expenditure Detail
Capital Expenditure Detail * Support system and other infrastructure
Slide 12: Changes to CapEx Forecast
Changes to CapEx Forecast Transmission CapEx driven by; Timing M/N – slight shift of dollars from 2007 to 2008 Various other projects – shift into the future Increase in Scope M/N – additional construction costs Various other projects – increases in expected costs Distribution CapEx driven by; Timin
Slide 13: Transmission Need
Transmission Need $ 716 MILLION IN PROJECTS (2008-2016) Aging Infrastructure Substation rebuilds Line/cable upgrades Component replacement Capacity Six new substations Standards Compliance Thermal/ Voltage/ Fault duty Bulk Power System Protection Middletown/Norwalk 345 kV Gas Insulated Substation 5.
Slide 14: Distribution Need
Distribution Need $938 MILLION IN PROJECTS (2008-2016) Aging Infrastructure Substations Network facilities Splicing chambers Poles/ cable/ transformers Capacity Six new substations Customer Connecting customer loads Support Systems IT Routine Other Infrastructure Facilities
Slide 15: Investments for the Customer Results in Returns to our Shareowners
Investments for the Customer Results in Returns to our Shareowners Average Rate Base Total $849 $1,023 $1,061 $1,087 $1,171 $1,232
Slide 16: Rate Base Evolution
Rate Base Evolution 2007 Total = $849 M 2012 Total = $1,232 M
Slide 17: Aging Infrastructure – Historic Investment
Aging Infrastructure – Historic Investment Arab Oil Embargo Seabrook Restructuring Replacement Cost Installed Cost Source: Installed Cost – FERC Form 1 Distribution Electric Plant Additions - Escalation-Handy Whitman Index for Electric Utilities
Slide 18: Financing Plan 2007-2009
Financing Plan 2007-2009 Consolidated cash on hand at UIL on 12/31/07, $13.2 million Primarily proceeds from non-utility divestitures Used to infuse equity into UI IRS refund of $20.4 million received January 2, 2008 Received $0.9 million in interest on the January 2008 refund DPUC approved a 3-year
Slide 19: A New Opportunity: The Hybrid Generation Model
A New Opportunity: The Hybrid Generation Model THE HYBRID GENERATION MODEL CAN PROVIDE THE “BEST OF BOTH WORLDS” 2007 legislation recognized the need for more peaking generation in Connecticut UI/NRG Partnership UI’s COS expertise and record of delivering customer benefits NRG’s expertise in develop
Slide 20: Regulatory Update
Regulatory Update Energy Assessment and Resource Plan - filed with the Connecticut Energy Advisory Board (CEAB) on January 2, 2008 Collaborative effort between UI, CL&P and The Brattle Group, and independent economic consulting group Recommendations Maximize the use of demand side management Explore
Slide 21: UIL is an Attractive Investment
UIL is an Attractive Investment As of February 22, 2008 * Assumes achieving a distribution return on equity of 8% to 8.5% and a transmission weighted average return on equity of 12.15% in 2008.
Slide 22: Why UIL?
Why UIL? Competitively positioned for continued success Solid enterprise foundation Seasoned management team with industry expertise Attractive investment opportunities in both distribution and transmission businesses Future investment opportunities in generation Focused on regulated utility Pure-pl
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix 24
Slide 25: The United Illuminating Company
The United Illuminating Company * 34 substations by 2016 ** Including CTA
Slide 26: 10-Year Transmission Planning
10-Year Transmission Planning PROJECTS IN THREE CATEGORIES Distribution Capacity Distribution capacity solutions exhausted Distribution load transfers Existing substation expansion Aging Infrastructure Majority of assets exceeding useful lives Substation rebuilds Line/Cable replacements Component re
Slide 27: Distribution Capacity: Impact of Load Growth
Distribution Capacity Impact of Load Growth 2012
Slide 28: Aging Infrastructure
Aging Infrastructure OVERVIEW OF AN AGING SYSTEM Majority of current assets installed in the 1960’s and 1970’s Common useful lives: 35 to 50+ years At end of life, risk of failure increases Reliability diminishes For Example: Substations 30 years and under 19% Over 30 years 81% SUBSTATIONS
Slide 29: Standards Compliance
Standards Compliance North American Electric Reliability Council/Northeast Power Coordinating Council/ISO-NE Reliability Standards: Thermal Standards intended to ensure that equipment and components remain within acceptable operating limits Voltage Standards intended to keep system voltage within ac
Slide 30: Middletown to Norwalk Transmission Project
Middletown to Norwalk Transmission Project EXPERIENCE & DEMONSTRATED CAPABILITIES Cap Ex: $265-$285 million In service in 2009 All underground One of, if not the largest 345-kV Gas Insulated Switchgear substation in North America Rate base growth: $270-$290 million FERC incentives approved pending r
Slide 31: UI Transmission Project Locations
UI Transmission Project Locations Sampling of Some of the Major Projects: Capacity: Trumbull, Shelton, Fairfield, Orange, Hamden, North Branford Substations Aging: Grand, Baird, Sackett Substation Rebuilds Standards Compliance: Naugatuck Valley, Pequonnock Fault Duty, Underground transmission Other:
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