1

Rating Agency MeetingsMarch 2012

2

Topics For Today

• Merger overview and update

• Regulatory update

• Business update

• Financial forecast

3

Company Attendees

• Jim Judge, SVP & Chief Financial Officer, NSTAR

• Jeff Kotkin, VP Investor Relations, NU

• Phil Lembo, VP & Treasurer, NSTAR

• Mike Ausere, VP Finance, NU

• Mark Mueller, Manager Financial Planning, NSTAR

• Emilie O’Neil, Director Corporate Finance & Cash Management, NSTAR

4

Merger Update

5

A Compelling Combination – Creates Largest Utility Company in New England

Larger, more diverse and better positioned company

Strong Balance Sheet and cash flows with enhanced business and financial profile

Best practice service quality capabilities to the largest customer base in New England

Highly experienced and complementary leadership team with proven track record

No premium or new debt issued in transaction NSTAR Electric Service Area

NSTAR Gas Service AreaNortheast Utilities Electric Service AreaNortheast Utilities Gas Service Area

ME

NY

PA

VT

NH

NJ

MA

RI

Combined Service Territory

• 3 million electric customers

• 500,000 natural gas customers

• 4,500 miles electric transmission

• 72,000 miles electric distribution

• 6,300 miles gas distribution

6

Key Merger Terms

Timing / Approvals: Expected to close by mid-April, 2012

Headquarters: Dual – Hartford and Boston

Consideration: 100% stock / 0% incremental debt

Exchange Ratio: 1.312 shares of Northeast Utilities per NSTAR share

Pro Forma Ownership: 56% Northeast Utilities shareholders 44% NSTAR shareholders

Pro Forma Dividend: At close, dividend increase for Northeast Utilities shareholders

Dividend parity for NSTAR shareholders

Governance: Chuck Shivery to be non-executive Chairman Tom May to be President and CEO 14 Board members

7 nominated by Northeast Utilities including Chuck Shivery 7 nominated by NSTAR including Tom May

7

Building A Larger, More Diverse and Better Positioned Regulated Utility Business

CT25%

FERC32%

NH12%

MA31%

Rate Base By State / Federal

Electric Generation

6%

Electric Distribution

52%

Gas Distribution

10%

Electric Transmission

32%

Rate Base By Business

Combined 2011 Rate Base: $12.4 billion

8

Management Organization Structure

Tom MayPresident &

Chief Executive Officer

Greg ButlerGeneral Counsel

David McHaleChief

Administrative Officer

Lee OlivierChief Operating

Officer

Christine Carmody

Human Resources

Jim JudgeChief Financial

Officer

Joe NolanCorporate Relations

9

Creates A Company That…

• Will focus on providing outstanding customer service

• Has diversified customer, economic and regulatory risks

• Invests in core regulated utility rate base; primarily transmission

• Is committed to strong credit quality, increasing cash flows and adequate liquidity

• Values a rigorous cost discipline and conservative financial approach

• Builds constructive regulatory relations

• Creates long-term value

10

Status of Merger Approvals

Securities and Exchange Commission

Shareholders

Department of Justice

Federal Communications Commission

Federal Energy Regulatory Commission

Maine DPUC

Nuclear Regulatory Commission

Connecticut PURA (expected April 2)

Massachusetts DPU (expected April 4)

Approvals Received

Applications Pending

New Hampshire PUCDetermined Not To Have Jurisdiction

11

Massachusetts Settlement Agreements – Key Provisions

• Settlement Agreement – MA Attorney General and DOER (Feb. 15, 2012)• One-time $21M rate credit (NSTAR Elec. $15M, Gas $3M, WMECo $3M)• Distribution rate freeze until 2016 – does not apply to transmission rates,

exogenous items or rate reconciling mechanisms (pension adjustment mechanism, bad debts, decoupling (WMECo), energy efficiency, etc)

• Recovery of lost base revenues (NSTAR Electric)• Hurricane Irene & October Nor’easter Storm costs recoverable in rates

• NSTAR Electric – $38M recovered over 5 years commencing 1/1/14 with Prime Rate carrying charge

• WMECo – recovery as approved by the DPU in its last rate order

• Safety & Reliability program spending and recovery of $15M/yr (NSTAR Electric)• Amortization of merger-related costs (for rate-making) over 10 years

• Settlement Agreement – MA Department of Energy Resources (DOER)• 15-year contract for energy related to 129MW (27.5%) of Cape Wind (NSTAR)

• Costs fully recoverable in rates with 4% remuneration

• Issue RFP for 10-year “Mass. Qualified” solar contracts for up to 10MW (NSTAR)

• DPU Decision on April 4th

12

Connecticut Settlement Agreement – Key Provisions

• Settlement Agreement – CT Attorney General and Office of Consumer Counsel (March 13, 2012)

• One-time $25M rate credit for CL&P customers• Distribution rate freeze until December 1, 2014 – does not apply to rate

reconciling mechanisms, transmission rates, exogenous items or trackers currently in place

• Hurricane Irene & October Nor’easter Storm costs recoverable in rates• Recovery limited to $40M less than total storm costs ($263.3M)

• 6 year recovery period commencing 12/1/14

• System Resiliency Program – Multi-year plan for $300M of spending• $100M of spending and $25M of revenue recovered in rates during 2013-2014

• $15M set aside to advance state energy goals (e.g. energy efficiency, electric vehicles, microgrids and renewable projects)

• PURA Decision on April 2nd – Draft decision on March 26, 2012

13

Significant Portion of Rates Unaffected by Distribution Rate Freeze

• Transmission Rate

• Energy Supply Charge

• Tracker Charges

• Rate Decoupling Mechanism

• Pension Adjustment Mechanism

• Energy Efficiency Factor

• Lost Base Revenues

• Transition Charge

• Bad Debt Recovery Factor

Base25%

Energy52%

Transmission9%

Trackers14%

Base34%

Energy51%

Trackers6%

Transmission9%

NSTAR Electric

CL&P

14

Transmission Projects Update

15

Southwest Connecticut Reliability: Projects Complete

Connecticut Borders (MA, RI):NEEWS Projects Under Way

Excellent Transmission Opportunities into Largest New England Load Centers

Hydro-Québec-HVDC Line

Southeastern Massachusetts (MA):•Cape Cod Canal Line (Siting Approval in April)•Mid Cape Line (under consideration)

Load Center Populations (1)

Greater Boston: 4,600,000Hartford: 1,200,000Fairfield County: 900,000

___________________________1. Source: IHS Global Insight Winter 2009 – 2010, US Markets: State Economies, U.S. Census Bureau 2009 estimates.

Northeastern Massachusetts (MA):•Greater Boston Solution (under consideration)

16

NEEWS Projects – Status Update

Interstate Reliability Project

• Joint project with National Grid (NU in CT; NGrid in MA & RI)

• ISO-NE confirmed need: August 2010

• Siting application filed in CT in December 2011

• Siting decisions: Connecticut decision in early 2013; others by end of 2013

• Commence construction: late 2013/early 2014

• Projected in-service: late 2015

• Total projected NU cost: $218 million

Central Connecticut Reliability Project

• ISO NE expected to issue preliminary need results and transmission solutions in 2013

• Projected in-service: 2017

• Total projected NU cost: $301 million

SPRINGFIELD

HARTFORD

345-kV SubstationGeneration Station345-kV ROW

115-kV ROW

Central ConnecticutReliability Project

InterstateReliability Project

Greater SpringfieldReliability Project

Greater Springfield Reliability Project

• Substation construction commenced in MA in December 2010; in CT in summer 2011

• Projected in-service: late 2013

• Total projected NU cost: $718 million

• Project more than 55% complete as of 2/24/12

Under Construction

In Siting/Assessment

In Planning Phase

17

Cape Cod Canal Transmission Line

New 345kV Transmission Line

Existing Transmission Line

• New 345kV, 18 mile overhead transmission line

• NE-ISO approved the line for reliability

• January 2012 Energy Facilities Siting Board (EFSB) & the Cape Cod Commission approved the line, (EFSB) order expected in April

• Cost estimated at $110M-$120M

• Construction 2012-2013

• In-service early 2013

• FERC ROE of 11.64%

Cape Cod Canal

18

Northern Pass Transmission Project Will Provide Significant Environmental and Economic Benefits to the Region

• To be owned by Northern Pass Transmission LLC

• 1,200 MW carbon free power, Northern terminus of DC line at Des Cantons (Québec), southern terminus in Franklin (New Hampshire)

• 345kV AC leg from Franklin to Deerfield, NH

• “Participant funded” TSA approved by FERC

• Permitting process continues with U.S. DOE, U.S. Forest Service

• Continued progress in securing alternate route in northern New Hampshire

–Community outreach ongoing

• Eminent domain legislation signed by NH Governor Lynch

• Capital cost estimate for US segment - $1.1B

• Completion projected for fourth quarter 2016

Des Cantons

HVDC Line

HVDC Converter Station

345-kV Line

Existing Deerfield Substation

Deerfield

Franklin

19

$128$174

$108

$255$68

$66$125

$142$237$193

$132

$111

$190$90

$162

$100

$0

$100

$200

$300

$400

$500

$600

$700

2011 Actual 2012E 2013E 2014E

NSTAR

WMECO

PSNH

CL&P

Transmission Capital Expenditures (Combined)In

Mill

ion

s

$595 $598

$465

$623

20

Review of FERC-Approved Transmission ROEs

10.00%

10.50%

11.00%

11.50%

12.00%

12.50%

13.00%

13.50%

Local NetworkService

RegionalNetwork Service

Base

Northern Pass 2005-2008RegionalProjects

NEEWS M-NUnderground

Local Network Service Tariff ROE

NE RTO Incentive adder of 50 basis points on PTF assets

ISO-NE Planned Regional PTF projects in-service before 1/1/09 (D.C. Circuit Court rejected appeal on 1/29/10)

Middletown-Norwalk advanced technical underground cable system - NU

125 basis point NEEWS incentive (request for reconsideration denied by FERC on 6/28/11) - NU

142 basis point Northern Pass incentive (request for reconsideration denied by FERC on 8/5/11)

11.14%

12.64%

12.89%13.10%

12.56%

11.64%

21

Distribution Businesses

22

Overall Positive JD Power Customer Satisfaction Results

2011 JD Power Electric Company Survey2011 JD Power Gas Company Survey

23

Regulatory Update - Connecticut

CL&P

• Two-year rate plan approved 6/29/11

• Initial $0.5MM rate decrease effective 7/20/11 and $6.7MM rate increase effective 7/1/12

• Modified ADIT ruling added approximately $700,000/year in revenues

• Added $54 million Waterbury-Wallingford line to rate base

• Approved increase to $40 million/year in pipe replacement expenditures

• 8.83% ROE and 52.2% equity in capital structure (earned 9.3% in 2011)

Yankee Gas

• Two-year CL&P rate plan approved 6/30/10

• $63.4 million rate increase and reduced depreciation effective 7/1/10

• $38.5 million increase effective 7/1/11

• Cash increase deferred until 1/1/11; recovery complete as of 6/30/12

• 9.4% authorized ROE (earned 9.4% in 2011)

• 49.2% equity in capital structure

24

Regulatory Update – New Hampshire

Distribution

• Fully tracking cost recovery with same capital structure as Distribution

• 9.81% authorized ROE

• Per legislation, all prudently incurred Clean Air Project (Scrubber) costs recoverable from customers

• Scrubber in-service 9/28/11, project expected to be fully complete in mid-2012, $35M below $457M budget

• Temporary rates expected to take effect 4/1/12 reflecting about 2/3rds of total costs

• Full costs expected to be reflected in energy rates as of 1/1/13 following regulatory review in 2nd half 2012

• Helps PSNH serve the 64% of overall load that has not switched to competitive suppliers

• Sharply reduced cap-ex going forward

Generation

• Five year settlement effective 7/01/10 through 6/30/15

• $45.5 million increase on 7/1/10

• $2.3 million decrease on 7/1/11 due to expiration of recoupment period

• Projected increases of $6.5 million on 7/1/12 and $11.1 million on 7/1/13 for net plant additions

• 9.67% ROE on authorized equity ratio of 52.4% (combined D&G ROE of 9.7% in 2011)

25

2011 Tropical Storm Irene and October Nor’easter Impacts

• CL&P – Recovery stipulated in March 13, 2012 Settlement Agreement• Will limit recovery to $40M less than total storm costs (i.e. $223.3M)• Costs recoverable in rates over a six year period beginning in 12/1/2014

• NSTAR – Recovery stipulated in February 15, 2012 Settlement Agreement• Costs recoverable in rates over a five year period with a carrying charge (prime

rate) beginning in 2014

• WMECo – Recovery stipulated in February 15, 2012 Settlement Agreement• Costs recoverable in rates under storm recovery mechanism approved by DPU in

last rate case

• PSNH – Currently recovering $9.3 million/year through distribution rates. Expect to request recovery of deferred storm costs, below, in 2013

Company Deferred ($M)

CL&P $263.3

NSTAR $38.0

WMECO $26.7

PSNH $21.9

Total $349.9

26

72%

53%48% 47%

31%

0%

20%

40%

60%

80%

% o

f p

en

etr

ati

on

of

na

tura

l ga

s

Natural gas penetration vs. other states

CTNJ NY RI MA

Natural Gas: A Compelling Growth Opportunity

• Yankee Gas has experienced 33 percent increase in firm gas sales since 2006

• WWL project in CT:• Expands natural gas access, removes gas

constraints• Pursues further oil-to-gas conversions• Accelerates cast iron and bare steel pipe

replacement to $40 million/year

• Increasing penetration to 50 percent would yield long-term benefits

• Significant customer savings• Reduced emissions• Reduction in oil demand

• In 2010, Yankee Gas converted approximately 1,000 single-family homes and multi-unit apartments to natural gas.

• In 2011, that number doubled to 2,000

• In 2010, NSTAR Gas converted 867 single-family homes and multi-unit apartments to natural gas.

• In 2011, that number more than doubled to 2,020.

$0

$10

$20

$30

$40

$50

$60

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

CT Wholesale #2 Heating Oil

Henry Hub + Tport

CT Wholesale Propane

No

min

al $

/MM

Btu

Difference increases from $9 to $28 per

MMbtu

Price Differential Forecast $ per MMBTU

Price differentials, can lead to homeowner savings of $1,000 - $1,500 per year

27

Electric Distribution Companies – Return on Equity

2009 2010 2011 2009 2010 2011

2009 2010 2011 2009 2010 2011

NSTAR Electric

11.3% 11.6%10.8% Allowed

10.5%+/-2%

7.3%7.9%

9.4% Allowed9.4%

8.4%

4.6%

9.0%

Allowed9.6%

7.2%

10.2% 9.7% Allowed9.67% -9.81%

Connecticut Light & Power

WMECO PSNH

28

Gas Distribution Companies – Return on Equity

2009 2010 2011

2009 2010 2011

NSTAR Gas

7.12% 6.88% 6.47%

6.6%

8.6%9.3%

Allowed8.83%

Yankee Gas

Allowed13.0%

29

Financial Policies & Liquidity

30

Post Merger – Financial Policies

• Maintain long-term, adequate credit facilities with high quality banks

• Expect to have a new multi-year NU consolidated credit facility in place by mid-September

• Continue to maintain short-term liquidity facilities at multiple entities• Establish a NU commercial paper program if cost effective

• Maintain strong credit metrics and conservative equity ratios at each Operating Company and at the consolidated level

• Capital programs at each entity will be financed primarily by the entities own cash flows and balance sheet

• Internal dividend policy will be conservative and consistent, while external payout will be moderate and grow in-line with earnings

31

Combined Liquidity of $1.9 Billion

Borrower Facility Size Maturity Comments

1. NU Parent $500M 9/24/2013

2. NU Operating Companies $400M 9/24/2013Sublimits: Connecticut Light & Power $300M Public Service Co. of New Hampshire $300M Western MA Electric Co. $200M Yankee Gas $200M

3. Connecticut Light & Power $300M 3/26/2017 New facility

4. NSTAR Parent $175M 12/31/2012 Extension in process

5. NSTAR Electric $450M 12/31/2012 Extension in process

6. NSTAR Gas $75M 6/8/2012 Extension in process

32

$89$129

$50

$94$64

$50

$88$80

$80$88

$65$88

$75

$75$75

$75

$252$209

$205$163

$159$152

$140$115

$88$65$65$65$64

$50$50

$30$30

$88

$65$65

$0 $100 $200 $300

CitigroupBank of America

Wells FargoUnion Bank

Bank of New York/MellonJP Morgan Chase

TD BankGoldman Sachs

Barclays Bank, PlcCredit Suisse

Morgan StanleyUBS Loan Finance

Key BankRBS Citizens Bank

Tokyo-Mitsubishi TrustState Street

US Bank

NSTAR

NU

CL&P

Well Established, Diverse Bank Group Support Revolving Credit Facilities

33

Expect to Continue Each Company’s Long History of Earnings Growth and Conservative Dividend Payouts

• Post-merger dividend increases expected to be in-line with earnings growth

• Target 50-55% equity levels at operating subs

• Maintain common equity ratios appropriate for strong rating level

$2.161

$0.95

$1.91

$1.025

$2.382

1 Excludes NU tax settlement, NU-NSTAR merger costs2 Excludes merger costs and CL&P storm fund reserve

$1.303

EPS 2011 total dividend per share

Per

Sha

re

NSTAR and NU Earnings and Common Dividends: 2009-2011

$2.37

$2.561

$1.50 $1.60$1.70

1 Excludes merger costs, MATEP sale and RCN tax adjustment2 Excludes merger costs

Per

Sha

re

$2.652

EPS Dividend per share

NSTAR NU

$1.10

34

Synergy Savings & Integration

35

Integration Planning – Well Planned, Controlled and Executed

• Formal integration planning kicked off in February 2011• Extensive involvement of NU and NSTAR officers, directors and

managers• 11 functional teams; over 175 subject matter experts involved

• Process coordinated and supported by experienced outside consultants

• Objectives and focus of integration planning on:• Preparing for merger close (planning and execution of Day One

requirements)• 129 Day One action items identified and completed pending merger close

• Developing deep understanding of both companies’ “as-is” operations and organization, and identifying significant integration opportunities

• Parallel process to develop high-level organization structure and select the next level of officers by early April

36

Projected Net Merger Savings $784 Million in First Ten Years

$9.0$21.8

$35.6$45.6 $49.6 $52.2 $54.8 $57.4 $60.0 $63.2

$14.7

$19.1

$23.6

$26.9$28.5 $29.6

$30.8 $32.0 $33.2$37.6

$9.0

$12.1

$15.1

$18.0$20.9

$23.7$26.5

$29.2$31.9

$36.5

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Labor Savings Corporate and Administrative Savings Purchasing Savings

In M

illio

ns

$32.8

$90.5

$74.3

$52.9

$105.6$99.0

$112.1

$125.1

$137.3

$118.6

Note: Savings reflected above exclude $164.3 million merger integration costs.

37

38

Key Takeaways

• Very enthusiastic and confident about the merger

• A truly compelling transaction combining two very strong companies with complementary skill sets

• Offers significant customer and environmental benefits

• Strong commitment to credit quality

• Strong overall financial condition combined with a low-risk, well diversified business profile

• Track record of top performance

39

Financial Forecast

40

41

Appendix

42

President & Chief Executive Officer

Tom May

Chief Administrative Officer

David McHale

General Counsel Greg Butler

Senior Vice PresidentHuman ResourcesChristine Carmody

Chief Financial Officer

Jim Judge

Chief Operating Officer

Lee Olivier

Senior Vice PresidentCorporate Relations

Joe Nolan

Regulatory Policy (FERC)

Internal Audit & Security

Deputy General Counsel

Secretary/Compliance

Compensation

Human Resources Consulting

Employee & Labor Relations

Benefits &Human Resources

Operations

Organization & Talent Development

Diversity, Inclusion & Ethics

Corporate Strategy& Environmental

Affairs

Supply Chain, Real Estate & Prop.

Management

Unregulated Businesses

Information Technology

Customer Care

Energy Supply

Integration Planning

Business Financial Services & Corporate Performance Mgmt

Financial Planning & Analysis

Treasurer

Investor Relations

Controller &Chief Accounting

Officer

Rates & RevenueRequirements

StateLegislative &

Regulatory Affairs

Ops & Transmission Communications &

Community Relations

Media Relations

Corporate Communications

OperationsServices

Transmission Business Unit

Connecticut Light & Power

GasBusiness Unit

NSTARElectric

WesternMassachusetts

Electric

Public Service ofNew Hampshire

Yankee Gas

NSTAR Gas

Federal Legislative Affairs

Deputy General Counsel

Post-Close Organizational Chart*

LegislativeAffairs

Regulatory Affairs

* Announced February 23, 2012

43

New Northeast Utilities

CL&P100%

PSNH100%

WMECO100%

Yankee Energy Systems

Holding Co. – 100%

NSTAR LLC100%

NU Enterprises Incorporated

100%

NU Services Company

100%

CL&P Funding 100% - Financing

Properties Inc100% - Real

Estate

Nutmeg Power Corp

100% - inactive

Electric Power Incorporated

100% - inactive

Connecticut Steam Company

100% - inactive

PSNH Funding 2100% - Inactive

PSNH Funding100% - Financing

WMECO Funding100% - Financing

Yankee Gas Services Co

100%

Yankee Energy Services Co

100% - Energy Related Services

Yankee Energy Financial Services

100%

Advanced Energy Systems

100%

NSTAR Electric100%

NSTAR Gas Co100%

Hopkington LNG100%

HEEC100%

CEC Funding100% - Financing

BEC Funding 2100% - Financing

NSTAR Communications

100%

NSTAR Gas and Electric100%

Northeast Generation Services Co

100%

Select Energy100%

E.S. Boulos CoTransmission Const – 100%

MGM Mechanical Services Co

100%

Acumentrics CorpFuel Cell Dev.

NUEI 7.4%

Mode 1 Communications100% - Inactive

Select Energy Contracting Co

100%

Rocky River RealtyReal Estate

100%

North Atlantic Energy Services100% - Inactive

North Atlantic Energy

100% - Inactive

HWP CompanyReal Estate

100%

Northeast Nuclear Energy Company100% - Inactive

NU Transmission Ventures – 100%

Northern Pass Transmission LLC

100%

Northern Realty100%

Merged Company Legal Structure

44

45

Transmission Year-End Rate Base Forecast

$2,100 $2,149 $2,091 $2,211

$866 $949 $1,079$1,135

$390$407

$524$654$467

$615$722

$747

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2011Actual

2012E 2013E 2014E

WMECO

PSNH

NSTAR

CL&P

In M

illio

ns

$4,120

$4,416$4,747

$3,823