Eversource 1999 Annual Report Download - page 19

Retail growth has been affected by several market factors. In 1999, there was record-breaking
demand for electricity and significant increases in electricity generation costs due to rising oil prices.
As a result, wholesale electric power costs in New England were above the retail rates available
through local distribution companies (LDC) for standard offer and default service. In most cases,
LDC standard offer rates were set by regulators prior to the rise in generation costs. These below-
market rates, which customers receive automatically from their LDC in deregulated markets, have
become the option of choice for many consumers, slowing the development of competitive retail markets.
Select Energy has dramatically increased its natural gas presence in the competitive energy
market by acquiring the 651 New England retail customer contracts and 8.4 billion cubic feet of
associated natural gas supplies of Aurora Natural Gas LLC of Dallas. Direct sales force activity
also contributed to this significant growth, as Select Energy was chosen by the Massachusetts
Health and Educational Facilities Authority to supply natural gas to over 300 member locations.
Central to Select Energy’s growth are its technology investments in customer billing, load
analysis systems and electronic data interfaces to exchange information with local distribution
companies. Select Energy has developed a secure Internet site that allows aggregators to track
their members’ energy use and billing data. Customers also now have online access to the Select
Energy Depot’s energy-related products and services at www.selectenergy.com.
MAJOR CONTRACTS SPUR GROWTH
In 1999 our energy engineering and design firm, HEC Inc., posted the highest sales and profit
results in its history. The U.S. Departments of Energy and Defense selected HEC as an “Energy
Saving Performance Contractor,” authorizing the company to upgrade major federal facilities
across the U.S. and overseas. HEC has orders from Fort Huachuca in Arizona, Portsmouth Naval
Shipyard in Maine, and Tobyhanna Army Depot in Pennsylvania.
Continuing its strategic expansion toward greater vertical integration, HEC
formed Select Energy Contracting, Inc. and acquired northern New England’s
largest mechanical contractor, Denron Plumbing and HVAC, Inc.
BROADBAND – COMMUNICATIONS AT THE SPEED OF LIGHT
Through our Mode 1 Communications subsidiary, NU leverages its
assets to capitalize on the explosive growth in demand for high-speed,
high-capacity digital telecommunication. Mode 1 has two principal
investments: a 26 percent share in NorthEast Optic Network, Inc.
(NEON) and a 28 mile fiber ring in downtown Hartford, Connecticut.
In 1999, Mode 1 constructed a $3.3 million fiber optic network in the
city called HELPNET,connecting 41 public schools and libraries. NEON
provides very high-speed backbone telecommunication services for well-
known national and regional retail telecommunication companies.
The growth in demand for high-speed communication services has
propelled an impressive increase in the value of Mode 1’s investment in NEON. In
1999, NEON share prices rose from a low of $9.12 in January to $62.56 at year’s end.
In November 1999, the NEON system was positioned to expand within New York
City and extend on to Philadelphia and Washington, D. C. through asset and share exchanges
with subsidiaries of Consolidated Edison, Inc. and PECO Energy. Once completed, the extended
network will substantially enhance the traffic on the NEON network and the attractiveness
of the system to established retail telecommunication service providers.
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Shaw’s Supermarkets has over 170
locations throughout New England,
and chose Select Energy to supply
electricity for most of its stores, dis-
tribution centers and offices located
in Massachusetts and Rhode Island
(only stores in municipal electric
territories are excluded). Shaw’s keeps
a close eye on energy management,
because it keeps costs down for
them and for their customers.
Kathy Loftus, Shaw’s energy and
regulatory affairs manager, discusses
lighting and refrigeration technology
with Select Energy account executive
Richard Chagnon as part of an ongoing
commitment to implementing creative
energy management solutions.
Along the Northeast corridor, from
Portland, Maine, to Washington, D.C.,
NorthEast Optic Network, Inc. (NEON)
is extending its high-speed, broad-
band fiber optic network to meet
the escalating demand for digital
telecommunication.
Washington D.C.
Portland