RATING AGENCY MEETINGSAPRIL 7, 2009

2

Today’s Agenda

> 2008 review

> ERM initiatives

> Transmission segment

> Distribution and generation segment

> Financing requirements

> Financial forecast

3

Key Achievements in 2008

> Solid execution of strategic initiatives

> Earnings ahead of forecast, excluding Con Ed litigation settlement

> Southwest Connecticut projects all completed and reflected in rates

› Middletown-Norwalk finished one year early and $100 million below budget

> Several positive FERC decisions on transmission rates

> New legislation could provide additional regulated investment

opportunities

> Strong operational performance

> Solid execution of financing plan

4

Most Key 2009 Financings Already Complete

> NU common equity issuance closed 3/20/09› Upsized to nearly 19 million shares

› Net proceeds exceed $370 million

› Four times oversubscribed

> CL&P $250 million bond issue closed 2/13/09› 7.7 times oversubscribed

› Coupon of 5.5%, 15 basis points below May 2008 issuance

› Ten-year maturity

> CL&P $62 million PCRB remarketing closed 4/2/09› 2.5 times oversubscribed

› Coupon of 5.25%

› One-year mandatory put

5

$11.7

$82.5

$146.2

$246.5

$6.1

$290.6

$13.1

($11.6)

$138.3$150.8

($40)

$0

$40

$80

$120

$160

$200

$240

$280

$320

2007

2008

2008 Results

Distribution and Generation

Transmission Parent/Other Competitive Total

*Excludes $29.8 million after-tax charge from March 2008 litigation settlement

3.1%

67.6%

*17.9%

*

In M

illio

ns

6

Competitive Business Performance Strong During Unwinding

> $13.1 million of net income in 2008

› Net income up 12% from 2007

› Forecast had been breakeven

› Strong management of wholesale contracts

› $1.1 million of net after-tax mark-to-market gains

> 2009 earnings projected to be $8.2 million

> 2009-2013 cash flow neutral overall

› Wholesale contracts roll off in 2012, 2013

› Boulos projected to be profitable, free cash flow positive

7

2008 Results vs. April 2008 Forecast

$millionsNU

ConsolidatedCL&P PSNH WMECO Yankee Gas

Forecast Actual Forecast Actual Forecast Actual Forecast Actual Forecast Actual

Earnings for common

$279 $291 $178 $186 $61 $58 $23 $18 $32 $27

Ending common equity

$3,080 $3,020 $2,089 $2,128 $624 $634 $277 $238 $345 $327

Ending total debt $4,674 $4,720 $2,511 $2,561 $734 $732 $315 $310 $373 $417

Interest ex. RRBs $226 $219 $114 $117 $35 $34 $14 $15 $22 $22

FFO before working capital changes and after RRB amortization

$558 $563 $356 $348 $112 $109 $43 $41 $65 $80

* Excludes $29.8 million after-tax charge to settle litigation** Excludes $56 million of WMECO long-term debt offset by spent nuclear fuel trust assets***Excludes $288 million of equity associated with acquisition premium

** **

*

**

***

**

***

8

NU is Targeting a Conservative 50% Dividend Payout Ratio

$1.18

$0.91 $0.91

$3.05

$1.59 $1.67$1.80

$0.95

($1.93)

$0.825$0.775$0.725$0.675$0.625$0.575$0.525

($2.00)

($1.50)

($1.00)

($0.50)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

Earnings/Share Annual Dividends/Share

2002 2003 2005 20072004 2006

EPS

2008 2009 Est.

*

*Low end of projected earnings range

9

Enterprise Risk Management Status Update

> Enterprise Risk Management is in its fourth year of implementation as a corporate oversight function.

> Corporate level Enterprise Risk Management Group works directly with the businesses and corporate functions

> Accountability for risk remains with the businesses

> Regular reports to the Board of Trustees on strategic financial, and operational risks

> Fully functioning Risk and Capital Committee which integrates risk with capital expenditure decisions

› Responsible for establishment and oversight of risk management and capital approval policies and procedures

› Executive management membership

> ERM principles integrated into strategic planning and budgeting processes with strategic and operating plans “risk rated”

Board of Trustees

Chief ExecutiveOfficer

Chief FinancialOfficer

DirectorCorporate

ERM

Risk & CapitalCommittee

Distribution/Generation

Risk Controller

Corporate Shared ServicesRisk Controller

TransmissionRisk Controller

Executive VicePresident

Operations

Chair

RiskAnalyst

Select EnergyRisk Controller

10

Strategic Risk Momentum Themes

Theme Business Unit Impacted Risks to

Deteriorating Economy Utility Operations > NU reputation (Risk S1)> Distribution revenues (Risk S2)> Distribution cost recovery (Risk S4)> Distribution rate of return (Risk S5)

High Energy Prices/Economy Utility Operations > NU reputation (Risk S1)> Distribution revenues (Risk S2)

Policy Changes Transmission

Utility Operations

> Value of transmission build-out (Risk S3)> Distribution cost recovery (Risk S9)> Operation of PSNH generation (Risk S13)> Exclusive transmission franchise (Risk S14)

Rate Cases Utility Operations > Distribution cost recovery (Risk S4)> Distribution rate of return (Risk S5)

Operations Utility Operations > NU reputation (Risk S6)> NU earnings (Risk S10)> New regulatory requirements (Risk S11)> Implementation of new technologies (Risk S15)

Capital Deployment Transmission > Timing of transmission projects (Risks S7, S12)> New strategic initiatives (Risk S8)

Each Strategic Risk can be mapped to a key business theme. The economy has also emerged as an additional theme driving risk and mitigation strategies.

11

Q1 2009 Strategic Risk Momentum[Extract from the April 2009 NU Board of Trustees Finance Committee Meeting Materials]

Risk Mitigation Implementation Status Risk Momentum

1S High energy prices lead to a public perception that increased utility investments are not producing tangible customer benefits

The issues and concerns driven by the turmoil in the economy have mitigated the focus on high energy prices. However the cost of utilities as one part of the financial struggle raises a cost/benefit challenge for utility companies as they expend capital or make rate adjustment filings that may result in higher customer bills. Momentum on this risk has improved from last quarter as the impact of high energy prices on the economy has been overshadowed by the bigger economic story. Plus, with the Obama administration focus on alternative fuel sources, the coverage has focused on these solutions, the need for an improved/expanded transmission infrastructure to support solutions and the long- and short-term stimulus impact of this energy policy. The integrated communications strategy focused on strengthening the reputation of NU and its operating units is underway with increased visibility on regional energy issues and developing solutions.

2S Increases in the price of energy and increased focus on conservation and/or self generation results in continued sales erosion

The abatement in energy prices that persists through 2009, along with the completion of standard service contracts for CL&P and WMECO for most of the year, have mitigated the risk of price increases on sales. This trend is expected to continue over the near term as the procurement of additional standard service contracts continues during this period of lower fuel costs. However, sales erosion remains a risk with the sharp economic recession expected to impact customer usage (and uncollectibles) and CL&P and PSNH rate cases. Various mitigations strategies, including advertising and media strategies, C&LM, procurement processes, and uncollectibles management are aimed at alleviating this risk.

3S Changes in regulatory and/or legislative policy (including changing leaders/members) limit NU's ability to influence local/regional energy policy and structure (e.g., 2010 expiration of the regional Transmission Owners Agreement, regional transmission cost allocation).

Governmental Affairs - Legislation recently introduced in the US Senate provides for an Interconnection-wide transmission planning process and cost allocation. This could diminish New England’s voice in its own transmission planning needs as well as reducing the voice of NU. It could result in cost shifts between the Midwest and New England.

Transmission - Changes at the federal level (including legislation and agency practices) are promoting renewable generation and the transmission to deliver it. This may lead to federal transmission planning, siting and cost allocation. Ownership rights for interregional lines has not yet been established.

Narrow lined arrow is an update from prior quarter view

Neutral

Unfavorable

Unfavorable

12

Q1 2009 Strategic Risk Momentum

Narrow lined arrows an update from prior quarter view

Risk Mitigation Implementation Status Risk Momentum

4S The aging infrastructure of NU’s distribution system requires additional capital investment and O&M expense thereby requiring additional rate relief

Programs are underway at all three electric distribution companies to mitigate the aging infrastructure risk, including the NU Maintenance Standardization Initiative and the Distribution Capital Investment cross-functional team. WMECO is constructing a 2010 rate case that will address funding for aging assets.

5S Unfavorable rate case decisions result in an inability of distribution companies to achieve fair and reasonable rates of return and potentially limit the ability to raise new capital.

The continued weak economic environment will increase the risk of unfavorable rate case outcomes as regulators attempt to mitigate rising consumer costs. As a result of the continued deterioration of the economy and recent unfavorable rate case decisions of UI, CL&P has delayed its rate filing originally scheduled for 2009. PSNH is considering plans to file a rate case in 2009 and WMECO in 2010. Overall, economic conditions will affect the political environment for increases. Companies continue to manage O&M and capital spend.

6S Implementation failures in NU’s operational processes (i.e., metering, billing).

Significant Customer Experience initiatives to address meter-to-cash processes have moved the overall momentum to slightly favorable, although metering and billing issues remain. There has been an increased focus at the electric distribution companies on operational processes. A Metering Improvement Program is underway and all operating companies have been converted to C2. Service Leadership Training is underway and will continue in 2009, and recommendations from the Chip Bell study are being implemented. Process improvements continue to be implemented.

7S Delays in large scale transmission projects due to design, siting/NIMBY, permitting, procurement, environmental or ISO-NE concerns result in revised scope and/or increased costs.

Focus to advance the NEEWS projects through the siting and permitting process continues but is challenged:

Delays in siting filings are likely for Interstate (IRP) and Central Connecticut (CCRP) portions of NEEWS due to increased CT Energy Advisory Board (CEAB) involvement;

Greater Springfield (GSRP) portion of NEEWS project filed in both MA and CT but delays are possible due to ISO’s continued interest in Southern Route, CEAB Request For Proposal, recent issuance of Phase II study, multi-state nature of proceedings and the numerous state and local issues in MA that are complex and novel to NU.

Continue collaboration with key stakeholders to demonstrate the need for and value of transmission projects.

Slightly Favorable

Slightly Unfavorable

Slightly Favorable

Slightly Unfavorable

13

Q1 2009 Strategic Risk Momentum

Narrow lined arrows an update from prior quarter view

Risk Mitigation Implementation Status Risk Momentum

8S NU proposed transmission solution to address RGGI and RPS initiatives with Canadian and Northern New England resources not successful.

Continue to work with Canadian Transmission Company and New England stakeholders to advance our suite of northern solutions projects. Filed with FERC in December requesting approval of HVDC project structure.

9S Changes in regulatory and/or legislative policy jeopardize NU’s distribution companies’ abilities to secure adequate and timely recovery of prudently incurred costs.

The overall economic conditions will put additional pressure on the federal, state and local governments to find solutions to keep rates from rising. Operating companies may find it more difficult to secure adequate and timely recovery of prudently incurred costs. The operating companies continue to build and maintain contacts with key legislative, regulatory and governmental leaders to educate them on the importance of financially healthy distribution companies in maintaining and strengthening electric reliability and the importance to the economic health of the states.

10S Increased emphasis on environmental remediation at Holyoke Water Power Company without current rate recovery mechanism results in higher costs.

Pursuing technical, political and legal strategies for addressing Massachusetts Department of Environmental Protection’s conditional approval. Weekly meetings held to track site progress and determine future courses of action. Periodic meetings held with HG&E to share information. Work began in October on additional delineation studies in the Connecticut River. Preliminary ecological risk studies and environmental forensics are ongoing on the tar/sediment.

11S Major equipment failures and/or extended system outages are used by public advocates to invoke regulatory proceedings/ corrective actions.

Storms continue to be a problem, which is impacting some distribution companies’ SAIDI ratings. December ice storm caused unprecedented damage and electrical outages in NH and MA. Regulatory reviews of our responses to the storm are ongoing, but feedback has been positive. Other regulatory and maintenance commitments are on schedule.

Slightly Unfavorable

Slightly Favorable

Neutral

Favorable

14

Q1 2009 Strategic Risk Momentum

Narrow lined arrows an update from prior quarter view

Risk Mitigation Implementation Status Risk Momentum

12S Generation solutions (2009-2013) delay or displace the need for a major transmission capital project, such as part of NEEWS.

Results of second Forward Capacity Market auction, State Regulatory Cost Review Process and/or CT Energy Advisory Board’s Integrated Resources Plan and Request for Proposals processes could generate non-transmission alternatives to the Interstate and Central Connecticut portions of NEEWS. Enhanced planning efforts to document need and contingencies and to economically evaluate all options for Connecticut ratepayers underway. Enhanced communications campaign efforts continue.

13S Federal, regional and/or state policies create carbon constraints which are detrimental to the operation of PSNH generation.

To date, PSNH has been successful in affecting RGGI legislation in New Hampshire in a way that will reduce implementation risk, but remaining stages of the legislative process may undo advances made thus far. PSNH participated in the first RGGI allowance auction in September. The new Federal administration will give momentum to additional carbon legislation.

14S Changes in regulatory and/or legislative policy jeopardize NU’s exclusive transmission franchise rights, remove barriers allowing for competition for transmission investment or create new approval processes for transmission investment.

Governmental Affairs – It is unclear whether or not federal proposals for interconnection wide transmission planning and FERC jurisdiction over transmission siting will jeopardize NU’s transmission rights. Continue to brief key congressional members and key legislative and executive leaders on the importance of investments in the transmission infrastructure in Connecticut, Massachusetts and New Hampshire.Transmission – Ownership rights for reliability based transmission projects remain favorable. Ownership rights for emerging interregional transmission projects driven by federal priorities for increased use of renewable generation are not fully developed or clarified.

15S Failure to fully understand and build on the value of the customer interface results in challenges to NU’s ability to implement new strategies/technologies.

A number of new customer-based initiatives are underway including the development of a new Service Vision, along with company-wide standards and norms, development of strategy/implementation plans for all new technologies incorporating customer experience issues, and proactive communications programs targeted at customers.

Slightly Unfavorable

Neutral

Slightly Unfavorable

Neutral

15

Transmission Segment

16

Strong Execution, Efficient Operations and Effective Capital Deployment: Cornerstones of Our Transmission Strategy

> We continue to focus on strong execution of operations and projects, as we have shown with our southwest Connecticut transmission build-out

> Our capital investment plan continues to address needed infrastructure upgrades while creating value for customers and shareholders

> Our transmission segment of the business continues to be a major driver of capital outlays and earnings

> We have maintained excellent safety and environmental records

> We have had very successful NERC audits for compliance with reliability standards and cyber-security

17

A Deliberate, Strategic Approach to Contracting

> Limited internal resources are used for construction

> NU maintains field oversight with Project Managers, Construction Representatives, Switching & Tagging personnel and Inspectors

> Outside experts hired for construction management of specialty areas (underground, undersea cables, gas insulated substations)

> Larger construction projects:

› Use integrated contracts such as Engineer-Procure-Construct (EPC) or fixed price, turn-key purchase and install contracts

› Competitively bid the work

> Risk management – a formal, rigorous process to identify and manage risks is built into the decision-making and project oversight processes

18

Future Resources Aligned with Strategic Business Plans

> Construction Expertise – we use experienced, project management firms with a proven track record

› Burns & McDonnell, Bond Brothers, Power Engineers

> Labor – We have partnered with the largest U.S. transmission constructor

› Initial contract signed with Quanta in 2007 for $750 million in transmission construction services

› Provided for 70% of labor through 2013› Expanded in 2009 to $950 million through 2015› Already awarded $50 million

> Material – established worldwide network to procure key components› Cable suppliers – Silec, Prysmian, VISCAS, Nexans› Transformers – Areva› Breakers – Siemens› GIS – Mitsubishi› Poles – Thomas & Betts

19

Bethel/Norwalk 345/115-kV Underground& Overhead

21 miles

Completed October 2006

Middletown/Norwalk 345/115-kV Underground & Overhead

Glenbrook Cables 115-kV underground

9 miles

Completed November 2008

Long Island Replacement Cable138-kV marine

11 miles

Joint project with LIPA

Completed September 2008

69 miles

Joint project with United Illuminating

Completed December 2008

50% of CT Load

2008: Major SW Connecticut Projects Complete

SW CT Projects completed at a cost of $1.6 billion, nearly

$80 million under budget

SW CT Projects completed at a cost of $1.6 billion, nearly

$80 million under budget

20

2008: Several Favorable FERC Transmission Rulings

> March: Rehearing decision on New England transmission returns raised base ROE for regional projects by 20 basis points to 11.64%

> July: 13.1% ROE approved for Middletown-Norwalk underground section – 46 basis point adder (reaffirmed in January 2009)

> November: 12.89% ROE, 100% CWIP approved for major NEEWS projects

21

Transmission 2009-2013: Capital Expenditure Program

$0

$200

$400

$600

$800

$1,000

$1,200

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Major Southwest CT NEEWS HVDC Line Other

Historic Forecast

In M

illio

ns

Up To $3.5 Billion $2.5 Million

NEEWS projects estimated at

$1.46 billion during the 2009-2013 forecast period

$1.5 billion of additional

forecasted projects

NEEWS projects

ramping up

US portion conceptually

estimated at $700 million with $525

million NU ownership share

HVDC Line from Canada

22

The NEEWS Projects are Advancing Into the Siting Phase

SPRINGFIELD

HARTFORD

345-kV SubstationGeneration Station345-kV ROW

115-kV ROW

Central ConnecticutReliability Project

InterstateReliability Project

Greater SpringfieldReliability Project

Major NEEWS Projects

Greater Springfield Reliability

(115-kV/345-kV)

Interstate Reliability (345-kV)

Central CT Reliability (345-kV)

Actual/Expected filing of state siting applications

October 2008

Late Q2/Early Q3

2009Early 2010

Estimated siting completed

2010 Late 2010 2011

Expected in-service Mid-2013Late 2012 /

20132013

Estimated cost (in millions)

$714 $250 $315

Favorable FERC treatment, with a 12.89% allowed ROE and 100% CWIP in rate base approved for major NEEWS projects

23

0

5000

10000

15000

20000

25000

30000

35000

40000

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

GW

h

RPS Requirements Existing Renewables

New England Regional Environmental Challenges

Renewable Portfolio Standards Needs Regional Greenhouse Gas Initiative CO2 Emissions

Compliance gap is 24 million MWh by 2025

Equivalent to 3,000 MW biomass (80%), 7,900 MW wind (30%), or 19,700 MW solar (12%)

Opportunities to develop large scale projects in ME (wind) and NH (wind, biomass), but not sufficient to meet requirements

Compliance gap is 21 million tons CO2 by 2025

Equivalent to 38 million MWh or 5,400 MW of emitting baseload generation

New England has 2,800 MW of coal

45

50

55

60

65

70

75

Mill

ions

of T

ons

NE RGGI CO2 Budget Projected NE CO2 Emissions

24

N

H

H

H

QuebecHydro Quebec plans to develop a portfolio of hydroelectric projects totaling 4,500 MW and integrate 4,000 MW of planned wind power by 2015.

Newfoundland & LabradorExploring development

of large Hydro facilities

New BrunswickExploring development

of 1 or 2 nuclear units

Eastern Canadian Development

H N WHydro Nuclear WindB Biomass General Movement Of Power

H

W

WW

B

WW

H

H

H

NU’s Proposed Canada Transmission Interconnection Project Will Bring Low-Carbon Resources to New England Load Centers

Signed MOU with NSTAR and Hydro Quebec to develop project on an exclusive basis

1,200 MW HVDC line between HQ’s hydroelectric system and New Hampshire

PPA to supply low-carbon energy to New England load

Joint filing with NSTAR for a Declaratory Order from FERC to approve concept of joint PPA / transmission arrangement

HVDC line would be participant funded

US portion of HVDC line would be owned by affiliates of NU and NSTAR

Anticipate filing PPA terms with State regulators in 2009

Intend to offer PPA broadly to New England load through an open process

NU share of project investment approximately $525 million

Construction targeted to begin in 2011

NU Partnership with NSTAR, Hydro-Quebec (“HQ”)

25

Logic Behind Our HVDC Project

> Bona fide supplier with committed low carbon supply› Project leverages new hydro facilities already under construction in Quebec› HQ system power with high reliability› Hydropower is dispatchable, unlike wind or solar which are intermittent resources› Winter peak/summer peak compatibility

Low CarbonGeneration

Transmission

> Developable path with existing right of way and few technical challenges› New Hampshire provides short path from resource to market› Transmission development with a separate corridor from the existing “Phase

2” HVDC tie line for reliability› Project will utilize proven overhead HVDC technology› Construction synergies with NH Coos County renewables

Load

> Committed load to anchor project› NU and NSTAR collectively serve half of New England’s electricity load and

all major load centers and can effectively “anchor” the PPA

26

Distribution and Generation Segment

27

2008 Distribution and Generation Results

$22.6

$43.7

$61.4

$18.5

$27.1

$12.3

$41.4

$70.0

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2007

2008

CL&P PSNH WMECO Yankee Gas

19.9%

14.0%

5.3%

33.5%

In M

illio

ns

28

Distribution and Generation Regulatory Summary

Adjustment mechanisms

CompanyAllowed

ROE

Expected distribution rate

filingPurchased power / gas

Electric transmission

costs

Stranded/transition

costsPension tracker

9.40% Late-2009/2010

9.67% Mid-2009

9.81% No plans n/a n/a

8.00–12.00%

Mid-2010

10.10% No plans n/a n/a

Notes: WMECO allowed ROE based on a range of potential outcomesCL&P is also allowed full recovery of conservation and renewable costs

~66% of CL&P and WMECO distribution revenues, 50% of PSNH distribution revenues and 40% of Yankee Gas revenues are collected through charges not dependent on sales volume

PSNH Distribution

WMECO

Yankee Gas

Electric Gas

CL&P

PSNH Generation

29

297 278 295 295 307 316

9895

115 118 116 11638

3038 33 33 34

156

177117 94 50

44

66

89

9274

77

74

$593$624

$655

$714

$625

$551

$0

$100

$200

$300

$400

$500

$600

$700

$800

2008 2009E 2010E 2011E 2012E 2013E

CL&P–distribution PSNH–distributionWMECO–distribution PSNH–generationYankee gas

Projected Capital Expenditures and Rate Base

Projected capital expenditures by company

1,901 1,997 2,212 2,358 2,500 2,646 2,791

594 671765

856947

1,0341,087

362374

393413

425435

442

685732

781835

879923

307370

400411

424

861871

626

3,7904,097

4,5024,819

5,131

5,8556,114

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2007 2008 2009E 2010E 2011E 2012E 2013E

CL&P distribution PSNH distribution WMECO distribution

Yankee gas PSNH generation

CAGR of 8.3%

Projected rate base by company

($ millions)

($ millions)

30

-3.7%

-2.5%

-4.2%

2.1%

-2.8%

-1.6%

-3.5%

3.4%

0.5%

-1.8%

4.4%

-1.2%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2008 vs. 2007 actual 2008 vs. 2007 weather normalized 2009 projected vs. 2008 actual

Sales Data

CL&P PSNH WMECO Yankee Gas

31

0.60%

0.40%

1.75%

1.63%

0.76%

0.42%0.33%

1.44%

1.00%

0.54%

0.0%

0.5%

1.0%

1.5%

2.0%

CL&P PSNH WMECO Yankee Gas Composite

2008 2007

Write-Offs Rising, Reflect Each Service Territory’s Economic Conditions and Household Income

Writ

e-o

ffs

as

a %

of

Re

ven

ue

s

32

CL&P Update

> Rate case filing deferred until late 2009/early 2010

> Peaking generation proposal not selected by DPUC

> Internal task force in place to better target distribution capital

> Conversion of all utility accounts into new customer service system

completed in late 2008

> New procurement contracts likely to lower CL&P customer bills

> 3,000 customer Smart Grid pilot to commence June 1, 2009

33

CL&P Recovers Costs Mostly Through Tracking Mechanisms

11.114

1.293

0.75

1.206

3.293

Distribution

Other

Transition

Transmission

Energy Service

Total: 17.656 cents/kwh

All subjectto

trackersCen

ts/k

wh

12.85 12.56 12.44 12.24

3.61 4.16 4.36 4.60

1.26 1.57 2.09 2.710.59

-0.22 -0.17 -0.10

0.59 0.48 0.470.47

-5

0

5

10

15

20

25

2010 2011 2012 2013

Energy Service Distribution Transmission Transition (*) Other

(*) Rate Reduction Bonds are fully retired in 2010

Cen

ts p

er k

Wh

Projected Price of Electricity

18.90 18.55 19.20 19.91

Average rate as of 4/1/09

34

PSNH Regulatory and Legislative Update

> Temporary and permanent distribution rate cases to be filed this quarter

> Legislative focus this year on Merrimack Scrubber

› $250 million cap proposal rejected by House

> 2008 legislation provided new distribution and generation opportunities

> RGGI-related costs being passed through PSNH generation charge

> Initiative still under review to connect new renewable generation in

northern New Hampshire

35

PSNH Rates Competitive Within New England

0.935

0.980

0.3300.055

9.92

3.02

Distribution

Energy Service

Consumption tax

System benefits

Stranded costs

Transmission

Total: 15.24 cents/kwh*

Trackedcosts

Ce

nts

/kw

h

10.26 10.2711.30 11.67

3.87 4.04

4.244.43

1.03 1.15

1.351.57

0.89 0.88

0.87

0.24 0.24

0.370.240.240.06

0.06

0.06

0.06

0

2

4

6

8

10

12

14

16

18

20

2010 2011 2012 2013

Energy Service Distribution Transmission

Stranded Cost System Benefits Consumption Tax

Cen

ts p

er k

Wh

Projected Price of Electricity

16.27 18.0016.58 18.28

*Blended rate

36

New Hampshire Clean Air Project Construction Under Way

• Merrimack a key source of low-cost power for PSNH customers Two coal units supply about 40% of PSNH’s energy requirements PSNH energy costs will remain one of the lowest in the region

• Scrubber required by New Hampshire statute to reduce mercury emissions

• Revised estimate of $457 million

• All major contracts in place

• Estimated project completion: 2012

• Expected to reduce sulfur emissions by more than 90%

• Expected to reduce mercury emissions by 80%

• Investment to be recovered through PSNH generation rates per legislation

37

WMECO Implementing New Legislative Regulatory Initiatives

> Next distribution rate case planned for mid-2010 filing, early 2011

implementation

› Full decoupling

› First litigated case in about 20 years

> Application filed to build up to 15 MW of solar generation

> Application to implement “Smart Grid” pilot for 600 – 800 lower income

customers

> Greater Springfield Reliability Project now in siting

› Will significantly change composition of WMECO rate base by 2013

38

WMECO Costs Mostly Tracked

9.854

1.240

0.569

0.662

2.799

Distribution

Energy Service

Other

Transition

Transmission

Total: 15.125 cents/kwh

TrackedcostsC

ents

/kw

h

11.20 10.90 10.77 10.53

3.19 3.75 3.89 4.11

1.18 1.20 1.37 1.580.54 0.53 0.62 0.380.54 0.68 0.81 0.88

0

2

4

6

8

10

12

14

16

18

20

2010 2011 2012 2013

Energy Service Distribution Transmission Transition Other

16.65 17.4717.06 17.49

Cen

ts p

er k

Wh

Projected Price of Electricity

39

NEEWS Will Change WMECO Rate Base Composition Significantly

$393 $413 $425 $435 $442

$180$262

$517

$732$867

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2009 2010 2011 2012 2013

Distribution Transmission

$510

$1,023

$870

$665

$1,109

Ye

ar-

En

d R

ate

Ba

se$

Mill

ion

s

40

Yankee Gas: New Opportunities, Lower Prices Driving Improved Projections

> Sales increases continue to be driven by distributed generation, lower

natural gas prices

> Conversions from oil to natural gas up 500% in 2008

› Customer growth of 1% in 2008

› Interest in conversions continues to be strong

› More than 50,000 new potential customers are located along Yankee’s gas

mains

> No near-term rate relief required

> Proposed expansion of LNG facility to meet planning criteria would

enable new line from Waterbury to Meriden

41

Financings and Forecast

42

Available Cash/Credit As Of 4-3-09(in Millions)

Unused

Used

Unused

Used

Available Cash

$500 Million Parent Revolver

$400 Million Regulated Revolver

$163

$436

$260

$337

$140

43

$1,250

$900

$150

$50

$130

$170

2008 2009E

Cash capex Debt maturities Other

$420 $500

$1,110

$620

2008 2009EOutside financing net of changes in short-term debt, cash

Cash from operations after RRB retirements

Cash Requirements Projected To Be Much Lower In 2009

Uses Sources

$1,530

$1,120

$1,530

$1,120

($ millions) ($ millions)

44

Significant Modeling Assumptions in Forecast

> Reflects upsized net equity issuance of $371 million in 2009, additional

$600 million in 2011, and $300 million in 2013

> Annual dividend increases of $0.10/share, down from $0.15 annual

increases in last year’s forecast

> Assumes $835 million of pension funding, no relief from Pension

Protection Act

> Assumes rate relief to achieve distribution ROEs of 9.25% beginning

7/1/10 for CL&P, 7/1/09 for PSNH, 1/1/11 for WMECO, Yankee Gas

> Transmission projects are constructed as planned and achieve blended

ROEs of approximately 12%

45

2008-2013: New Capital Expenditure Forecast

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Five-year 2009-2013 capital spending of $6.7 billion, compared with last year’s 2008-2012 $6.0 billion plan;

2008-2012 period up by $806 million

Five-year 2009-2013 capital spending of $6.7 billion, compared with last year’s 2008-2012 $6.0 billion plan;

2008-2012 period up by $806 million

Distribution Capex From 3/08 Forecast

Transmission Capex From 3/08 Forecast

Distribution Capex Actual or From 3/09 Forecast

Transmission Capex Actual or From 3/09 Forecast

2008 Actual* 2011 Est.* 2012 Est.*2009 Est.* 2010 Est.*$1

,247

$986

$1,3

10

$1,0

88

$1,3

71

2013 Est.*

$921

$1,2

10

$1,6

93

$1,6

85

$1,2

34

$1,2

99

* Includes capex of approximately $20 million per year for 3/08 forecast and $35 million per year for 3/09 forecast at corporate service companies on behalf of operating companies

46

Elements of 2009-2013 Capex Projections

> $430 million to complete Merrimack Clean Air Project

> $1.46 billion to complete NEEWS

> $525 million for transmission from Canada

> $130 million for Northern NH transmission loop

> $1.3 billion for additional transmission projects

> $2.3 billion for electric distribution

> $400 million for natural gas distribution

> New PSNH distributed generation

> New WMECO solar opportunities

> Additional renewable generation

> Additional transmission opportunities

> Underground portion of NEEWS (if required)

> Extensive Smart Grid infrastructure

What’s In What’s Not

47

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

NU Parent CL&P PSNH WMECO Yankee Gas

Minimal Maturities Through 2011

Excludes RRBs

Millions

48

Cash Flow To Cover More of Cap Ex After 2008 Actual

$1,299

$921

$1,210

$1,693 $1,685

$1,234

$933$844

$796

$549$501$484

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2008 2009 2010 2011 2012 2013

Cash flows from operations Capital expenditures, inc. cost of removal

Actual/Projected Cash From Operations(Excluding RRB Retirements)

In M

illio

ns

49

Defined Benefit Pension Funding Requirements are Biggest Change From Last Year’s Forecast

> Strong performance has offset need to fund pension plan since 1991

> ABO obligation was 123% funded as of 12/31/07, 76% funded as of

12/31/08

> Forecast projects $835 million of funding in 2010-2013

› Funding requirement significantly increases outside equity and debt

financings

› No relief from Pension Protection Act requirements in forecast

50

Projected Consolidated Balance Sheet

55.3% 56.8% 55.5% 57.5% 55.6%

43.3% 41.9% 43.4% 41.5% 43.4%

1.4% 1.3% 1.1% 1.0% 1.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

2009 2010 2011 2012 2013

Total Debt Preferred Common Equity

Ye

ar-

En

d B

ala

nce

S

he

et

51

Projected Consolidated FFO to Total Debt

15.2%

9.8%

12.7%13.7%

12.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2009 2010 2011 2012 2013

Includes pension funding payment

52

Projected Consolidated FFO to Total Debt

15.2%

13.7% 13.9%14.6%

13.9%

0.0%

5.0%

10.0%

15.0%

20.0%

2009 2010 2011 2012 2013

Excludes pension funding payment

53

Projected Consolidated FFO Interest Coverage

3.78

2.682.79 2.852.86

0.00

1.00

2.00

3.00

4.00

2009 2010 2011 2012 2013

Includes pension funding payment

54

Projected Consolidated FFO Interest Coverage

3.78

3.37

2.96 2.983.16

0.00

1.00

2.00

3.00

4.00

2009 2010 2011 2012 2013

Excludes pension funding payment