Eversource 2004 Annual Report Download - page 6

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In New Hampshire, PSNH’s Northern Wood Power Project has begun the $75 million conversion of a
Portsmouth coal-fired generating unit to burn wood chips. The plant brings significant environmental
benefits and a $20 million boost to the state’s wood industry and economy. As Bill Dunlap, chairman
of the Society for the Protection of New Hampshire Forests, noted at the groundbreaking for this project,
“One of our missions is to preserve a sustainable forestry industry. The Northern Wood Power Project
is right in line with that mission and good for the environment. It’s a home run.”
On the gas side of our business, Yankee Gas broke ground early in 2005 to construct a $108 million
liquefied natural gas (LNG) storage facility in Waterbury, Connecticut. The LNG project has been a
model of collaboration and partnerships, bringing together government, business, regulators and the
Waterbury community. The new facility is expected to deliver both supply and price benefits to our
customers and is the largest construction project in Yankee’s history.
Our investment in the region carries us well beyond poles, wires and pipes. Northeast Utilities
companies are basic building blocks of the economic climate, quality of life and overall well-being of
the cities, towns and customers we serve. For us, doing well in business also means doing good, by
enriching our communities and making life better for those who count on us.
Supporting the United Way campaign is just one of the ways our employees make a positive difference.
In 2004, including matching corporate contributions and NU Foundation donations, the NU team
pledged more than $1.7 million to United Way and Combined Health Appeal charities to help people
across New England.
In 2004, the NU Foundation awarded a substantial grant to extend our environmental stewardship.
Our $500,000 grant to The Nature Conservancy initiates a large-scale, multi-state commitment to
improve the long-term viability of the Connecticut River, from the Canadian border to Long Island
Sound. The Connecticut River program will enhance conservation of New England’s most important
waterway.
Changing course with our competitive businesses
Poor performance in major areas of our competitive business in 2004 necessitated a change in
course. The wholesalegroup lost $17 million last year, compared with a loss of $3.7 million in 2003.
Despitethe hardwork and dedication of employees in this business, NUEI’s wholesale marketing
business is not expected to attain adequate profit margins given the wholesale merchant energy
environment. As a result, wewill exit the wholesale marketing business.
Our competitive energy services businesses lost $2.3 million in 2004. We have concluded that these
businesses are not central to NU’s long-term strategy and do not meet the company’s expectations
of profitability. We are exploring ways to divest of them in a way that maximizes shareholder value.
Despite these areas of disappointment, there were some bright spots at NUEI, with two segments of
our competitive businesses performing well.
Select Energy’s retail energy businessearned $4.9 million in 2004. We enjoy a very strong retail energy
marketing franchise in the Northeast and mid-Atlantic states, and we expect to build on that market
presence. Consequently, we will retain and grow this business. Select Energy’s retail group currently
serves some 30,000 commercial and industrial customer locations in the New England, New York and
PJM power pools.
Likewise, our competitive generating assets continue to perform well, and we will retain them. The
1,443 megawatts are primarily pumped storage, hydroelectric and coal-fired units, all of which are
competitive in today’s environment. They have solid operating histories, and we expect their value
could increase significantly in the coming years. In addition, we will retain our Northeast Generation
Services subsidiary to operate our generating plants.
$0.10 $0.40 $0.45 $0.53 $0.58 $0.63
99 00 01 02 03 04
DIVIDENDS PER SHARE
(DOLLARS)
EARNINGS PER
COMMON SHARE
(DOLLARS)
$0.26 $(0.20) $1.79 $1.18 $0.91 $0.91
99 00 01 02 03 04