Tuesday July 25, 2006 n John Ferrantino is director of Customer Solutions for CL&P and Yankee Gas. NU Stock Update At Close: 21.72, up 0.02 Volume: 1,525,600 shares Summary: NU shares closed up slightly Monday on heavy volume of more than 1.5 million shares. Broader markets were strong, up 1.5 to 2 percent. Current NU share price and graphs. Contact Us: Send a comment on today's issue. Is there a topic you want to hear more about? Other Closing Prices: Dow Industrials: 11,051.05, up 182.67 NASDAQ: 2,061.84, up 41.45 S&P 500: 1,260.91, up 20.62 Dow Utilities: 432.05, up 4.03 Electricity: $74.17 MWH, no change Natural Gas: $6.60 MMBtu, up 0.46 Quick Links: n Yankee Gas and CL&P's '@Work' n PSNH's 'The Current' n Transmission Times n Milestones (June/July 2006) n NU Employee Assistance Program n NU restructuring news archive Highlights · Osprey cam operational at PSNH's Ayers Island plant · Morning fire at PSNH's Schiller Station · More retirement choice workshops being held · Reaction varies on decision to sell NU plants · Con Edison struggles to restore power in Queens Around the Company Morning fire at PSNH’s Schiller Station A fire at PSNH’s Schiller Station Tuesday morning resulted in injuries to three firefighters. A Portsmouth Fire Department official told reporters that one firefighter suffered second-degree burns and two suffered first degree burns upon initially responding to a fire in the baghouse of the PSNH Northern Wood Power Project. No injuries to PSNH personnel were reported. PSNH staff notified the fire department at about 8:30 a.m. after noticing smoke in the area of the baghouse, which collects and removes particulates from the combustion process. Operational tests on the project’s new wood-fired boiler have been under way for the past several weeks and it has been offline since Saturday. The exact cause and nature of the fire is unknown at this time. PSNH will assess any damage and determine the cause once the fire department clears the area. · Media coverage: Fosters Daily Democrat, http://www.fosters.com/apps/pbcs.dll/article?AID=/20060725/NEWS06/107250218, Associated Press, Portsmouth Herald, http://hosted.ap.org/dynamic/stories/N/NH_POWER_PLANT_FIRE_NHOL-?SITE=NHPOR&SECTION=STATE&TEMPLATE=DEFAULT&CTIME=2006-07-25-11-06-44, WMUR-TV, Ch. 9, http://www.wmur.com/news/9570667/detail.html, 7/25 Osprey.cam views birds at PSNH's Ayers Island facility NU customers can watch live, streaming video of an active osprey nest at PSNH’s Ayers Island hydroelectric generation facility in New Hampton, N.H. on the Merrimack River. Two fledgling ospreys were hatched in the nest in early June. The birds have nested at Ayers Island since the spring of 2004. Working in partnership with the Audubon Society of New Hampshire, PSNH installed the OspreyCam at the Ayers Island nest this year to help educate people about these magnificent birds of prey, and to share an incredible bird-watching experience with viewers throughout New Hampshire and around the world. In 2000, Project Osprey was launched by the New Hampshire Fish & Game Department with PSNH and the Audubon Society of New Hampshire joining to work toward a full recovery of osprey and promote greater overall public awareness of the importance of healthy ecosystems to support wildlife populations. · View the osprey live at http://www.psnh.com/osprey/default.asp. · For more PSNH news, click on this link for the most recent edition of The Current. Retirement Choice workshops on Wednesday Workshops where NU's Retirement Choice program will be explained will be held tomorrow in the following locations. Eligible employees are urged to attend. Employees can register for a convenient seminar on-line at http://www.nuemployees.com or by calling 1-888-712-2310. PSNH employees should call 1-603-778-4414. Employees have until August 7 at 7 p.m. to make their plan choice. · Berlin cafeteria: Wednesday, July 26, noon to 1 p.m. · WMECO, East Springfield: Wednesday, July 26, 5-6 p.m. · PSNH, Rochester AWC: Wednesday, July 26, 4:30-5:30 p.m. For a schedule of other retirement choice workshops, please click on the following link. Registration is open for UVL Journal Entry System training Registration is under way for the New UVL Journal Entry System training. Classes will be held in the Berlin auditorium and PSNH Energy Park. Training is mandatory for all Preparers and Approvers. Click on this link for dates and times of training sessions in Berlin and Energy Park in Manchester. To register, please e-mail what session you will be attending to Kevin Leonard at leonakr@nu.com, Barbara Chamberlain at chambbl@nu.com or Mary McVay at mcvaymm@nu.com. CL&P sponsors Corporate Classic 5K in Hartford CL&P is a sponsor of the 16th annual Special Olympics Corporate Classic 5K (3.1 miles) road race at Bushnell Park in Hartford to benefit Special Olympics Connecticut. The race will be held on Thursday, Aug. 10, at 6:20 p.m. A health expo, children’s activities and live music will be part of the event. · Join the NU team on race day in Hartford: CL&P has 15 free registrations available. If you would like to participate, contact team captain Craig Holmes at holmecw@nu.com by July 31. All NU employees are welcome to participate. Recreation Committee events Discounted single-day and season passes for Six Flags New England in Agawam, Mass., are now available. Season tickets are $64.99 (save $5) and single-day passes are $30 (save $19.99). Tickets can be purchased in person (check only) from the security guards at the main lobby in Berlin and the NU East lobby. Tickets are also available from Linda Zavecz in Berlin at BMW2 or Steve Hussey in NU East at NUEG. Make check payable to the NUSCO Recreation Committee and write Six Flags in the memo line. Tickets are also available from WMECO's Kate Agin at aginkt@nu.com and Ken Garber at garbeks@nu.com in Springfield. Prices are the same but checks to Agin or Garber should be made payable to WMECO-Six Flags. · Click on this link for more information about Six Flags New England. http://www.sixflags.com/parks/newengland/index.asp In the News Reaction to agreement to sell NU plants varies The news of the agreement by NU and Energy Capital Partners to purchase 15 generation units that comprise NU’s competitive generation fleet in Connecticut and western Massachusetts for $1.34 billion produced a variety of stories in the local media with most stories taking a local angle of how the purchase will affect their local communities. Here is a sample of excerpts from the stories. · Holyoke [Mass.] Mayor Michael Sullivan hopes that ECP is committed to the continued operation of Mount Tom Station, which generates about $1.4 million a year in property taxes for the city. · An official from Norwich Public Utilities, which had hoped to purchase Northeast Generation Company’s three dams in eastern Connecticut, was disappointed that the municipal utility could not participate in the sale. · NU will use proceeds from the sale to invest in its regulated businesses, to reduce debt and to pay taxes. "Going forward, our focus centers on our regulated utility operations," said Chuck Shivery, NU’s chairman, president and CEO. The transaction is expected to close by the end of 2006. · The agreement affects 216 employees of Northeast Generation Services, including 126 in Massachusetts and 90 in Connecticut. "The expectation is they will all go with the buyer," NU spokeswoman Mary Jo Keating said. "The buyer is expected to substantially retain the employees because it needs them." · Connecticut Attorney General Richard Blumenthal was disappointed the state legislature did not create a Connecticut Electric Authority, a state-owned and state-run organization to generate electricity and provide it at cost to residents. He was disappointed than an opportunity to purchase these plants was lost. “This purchase perpetuates the status quo of a failed energy market where the highest electricity prices prevail, regardless of the cost of producing the power,” Blumenthal said. (Danbury News Times, http://www.newstimeslive.com/news/story.php?id=1006734, Springfield Republican, http://www.masslive.com/springfield/republican/index.ssf?/base/news-5/1153813327231860.xml&coll=1, New London Day, http://www.theday.com/re.aspx?re=d0a3aad0-66d4-4222-bd2c-18489ef0b4fc, New Haven Register, http://www.nhregister.com/site/news.cfm?newsid=16961745&BRD=1281&PAG=461&dept_id=7546&rfi=6, Associated Press, Boston Globe, http://www.boston.com/news/local/connecticut/articles/2006/07/24/nu_to_sell_conn_mass_units_for_13_billion/, Attorney General Richard Blumenthal statement, http://www.ct.gov/ag/cwp/view.asp?Q=317962&A=2426, 7/25) · Click on this link for links to additional news stories. ECP will have to abide by same environmental rules at NU did The sale of generation plants currently owned by Northeast Generation Company in western Connecticut along the Housatonic River shouldn’t affect residents that live along Candlewood Lake, Lake Zoar or Lake Lillinonah. "It should be a seamless transition for property owners on the lake," Northeast Utilities spokeswoman Mary Jo Keating said. "They are going to keep the workers in the plants, and they’re going to manage the lakes as they’ve been managed." Energy Capital Partners is buying 15 generation plants from NU for $1.34 billion. "Energy Capital Partners is going to have to meet the same environmental requirements that NU has to, so there shouldn't be any extended environmental effect," said Chris Zurcher, communications director for the Connecticut Fund for the Environment. (Danbury News Times, http://www.newstimeslive.com/news/story.php?id=1006716, 7/25) Buyer of NU plants has been open for a short time The firm buying 15 generation facilities from NU has been open since 2005 when founder Doug Kimmelman left investment firm Goldman Sachs after 22 years. Energy Capital Partners, with offices in San Diego and Short Hills, N.J., is focusing on investments in energy-related businesses including natural gas storage, pipelines and fuel-handling firms. "We are very enthusiastic about the competitive generation business owing to the outstanding track record and credentials of the employees as well as the exceptional quality of the asset fleet," Sarah Wright, a partner of ECP, said in a press statement. (Danbury News Times, http://www.newstimeslive.com/news/story.php?id=1006719, 7/25) Editorial: Newspaper hopes buyer understands importance of lakes In an editorial in today’s edition of the Danbury News Times, the newspaper ponders the significance of the agreement between NU and Energy Capital Partners, which agreed to purchase NU’s competitive generation assets including five hydroelectric plants along the Housatonic River. “ECP is welcomed as a new neighbor. It should know the Housatonic hydroelectric system has a storied history,” the newspaper writes. “The plants generate electricity (and revenue) for their owner. But the man-made lakes have created an environmental oasis that is not just another asset, not just another business.” (Danbury News Times, http://neighbors.newstimeslive.com/opinion/edit.php?id=1006809, 7/25) Around the Industry Public comments slow release of greenhouse gas rules A final model rule for the Regional Greenhouse Gas Initiative (RGGI) participant states has been delayed at least another month as the analysis continues on public comments. RGGI participants, Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont, are angling to put the rule in place by Jan. 1, 2009. Franz Litz, climate change policy coordinator at the New York Department of Environmental Conservation, said: "There are no hang-ups among the states, it's just that there are so many comments." AES has protested the auctioning allowances under RGGI and said that the region already has some of the highest wholesale and retail energy prices in the country. Northeast Utilities, in its comments, said the proposal does little to help the reliability of the power grid, hold down prices, or set up accurate modeling. In its comments, NU said, "Reliability of the electric system is crucial. Possible curtailment or early retirement of existing coal generation will limit the region's generating capacity ... [which] dramatically limits the region's fuel diversity" and thereby will hurt reliability and raise energy prices. (Greenwire [no free online version available], 7/24) Utilities consider burial of lines Utilities across the country are looking for options to make their distribution systems more reliable in the wake of outages due to last week’s heat wave and hurricane-force winds over the past year. Over 365,000 customers of Exelon subsidiary PECO lost power in Pennsylvania last week. Some are considering burying lines but the cost of underground lines can be $1 million per mile, or 10 times what it costs for overhead lines. And outages are harder to repair quickly. (Reuters, USA Today, http://www.usatoday.com/weather/storms/2006-07-21-power-outages_x.htm, 7/21) · Click on this link for EEI’s report on burying transmission and distribution lines. http://www.eei.org/industry_issues/energy_infrastructure/distribution/UndergroundReport.pdf Con Edison struggles to restore power in Queens Con Edison officials believe the massive outage in Queens was caused when about half of the feeder cables that supplied the western portion on the borough failed. At a command center near Union Square in Manhattan, top managers at the utility had to choose: keep the power running and take the risk of causing more damage to the system, or shut down the network serving western and northern Queens, guaranteeing a wide blackout but one that could likely be resolved quickly. The localized nature of the problem seemed to raise the distinct possibility that it was a simple equipment failure somewhere in the vast labyrinth of underground cables and transformers. The question now is can the grid handle the growing demand from consumers for power? (New York Times, http://www.nytimes.com/2006/07/25/nyregion/25astoria.html, New York Times [Bloomberg defends Con Ed], http://www.nytimes.com/2006/07/25/nyregion/25mayor.html, UPI, http://www.upi.com/Energy/view.php?StoryID=20060724-010917-4848r, New York Daily News, http://www.nydailynews.com/front/story/437859p-368918c.html, Newsday, http://www.newsday.com/news/local/newyork/am-pow0725,0,2409844.story?coll=ny-top-headlines, 7/25) Stage 2 emergency declared in California as demand soars The California ISO declared a Stage 2 emergency Monday afternoon as Gov. Arnold Schwarzenegger, R-Calif., and regulators called on state agencies and private businesses to reduce their usage to prevent blackouts. The Los Angeles Department of Water and Power and Southern California Edison acknowledged Monday that their systems, parts of which were built in the 1920s and 1930s, were not designed to handle anywhere near the power demand produced during the heat wave. DWP General Manager Ron Deaton said, "When these transformers were installed, you had neighborhoods that weren't air-conditioned, homes without two computers and five television sets." Southern Cal Edison has had to replace more than 715 transformers due to age and demand. One utility official said the heat wave is the worst since 1998 and demand is 40 percent higher than it was during the peak of the Enron crisis. (Los Angeles Times, http://www.latimes.com/news/printedition/front/la-me-powermain25jul25,1,7333512.story?coll=la-headlines-frontpage, New York Times, http://www.nytimes.com/2006/07/25/us/25power.html, California ISO release, http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060724005976&newsLang=en, Southern Cal Edison release, http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060724005981&newsLang=en, 7/24) Links to newspaper stories in NU Today: Some Web sites require registration to view their content. Registration is free for many Web sites. Most stories on the Wall Street Journalare not available unless you pay for an online subscription. NU Todaystrives to use links to free Web sites as much as possible. NU TODAY is produced by Corporate Communications, BMN1, Berlin. For more information on today's items, refer to the Employee Information Board or go to http://nunet.nu.com/. If you have news to report, please e-mail EMCOM, fax to 701-3614 (Berlin) or call 701-3072 (Berlin). The deadline for submissions is 10 a.m. each weekday. Copyright 2006, Northeast Utilities Service Company