Rating Agency MeetingsNew YorkMarch 19, 2007
Energy / Growth / Leadership
2
Agenda For Today
2006 implementation of strategic plan
2006 financial performance
Transmission business
Distribution and PSNH generation business
Rate cases
Financial forecast
3
2006 Strategic Plan Implementation
4
We Have Transformed Ourselves Into A Focused Regulated Utility
Northeast UtilitiesNortheast Utilities
Electric Transmission
Electric Transmission
ElectricDistribution
ElectricDistribution
CompetitiveCompetitive
RegulatedGeneration
RegulatedGenerationGas
Distribution
GasDistribution
RegulatedRegulated
WholesaleWholesale
RetailRetail
ServicesServices
GenerationGeneration
Year End 2005 Today
Northeast UtilitiesNortheast Utilities
CL&P
WMECO
PSNH
Yankee Gas
D
D
D
T
T
T
G
5
Chairman, President & CEO
Charles W. Shivery
Senior Vice President and CFO
David R. McHaleExec. Vice President
Cheryl W. Grise’
Exec. Vice President, Operations - NULeon J. Olivier
Senior Vice President & General CounselGregory B. Butler
Vice President – Human Resources
Jean M. LaVecchia
Competitive BusinessesWilliam J. Quinlan
President & Chief Operating Officer - CL&P/Yankee GasRaymond P. Necci
President & ChiefOperating Officer -
PSNHGary A. Long
President & Chief Operating Officer -
WMECORodney O. Powell
Vice President,Utility Group Services
Michael F. Ahern
Vice President,Customer ServicesPaul E. Ramsey
Vice President,Transmission Projects
James A. Muntz
Vice President,Transmission
Strategy & OperationsDavid H. Boguslawski
New Organizational Structure
6
2006 Highlights: Competitive Businesses Divestiture
2006 Accomplishments Remaining Activities
Generation
Sold all generation on 11/1/06 for $1.34 billion
$320 million of 8.81% debt assumed by new owners
None
Retail Sold to Hess on 6/1/06 Net payments to Hess of about $40
million - $25 million in 2006
Remaining payment of $15 million to Hess due by the end of 2007
WholesaleServed approximately half of 15 million mwh of remaining obligations
About half of remaining 7.5 million mwh will be served in 2007
Remaining obligations roll off through 2013
Services
Sold or winding down all businesses except E. S. Boulos
About $85 million of debt refinanced by new owners
Operate E. S. Boulos until sale (about $40 million of annual revenues, modestly profitable)
Complete 8 remaining construction projects not assumed by new owners by mid-year 2007
Telecom Sold remaining shares in Globix None
7
Remaining Commitments In The Wholesale Businesses
PJM Wholesale: 5 sales contracts, 4 of which expire in May 2007
NYMPA Wholesale: 1 sales contract which expires in 2013 Early years hedged
Wholesale contracts marked at 12/31/06 at negative $126.5 million
New England: In-the-money generation entitlement contract expires 12/31/12 Estimated positive value at 12/31/06 of about $100 million
Negative impact on cash flow expected to be $40 million in 2007 and $27 million in 2008, down from $100 million in 2006
8
Strategic Plan – Regulated Businesses
2006 Goal 2006 Results
Complete Bethel-Norwalk Done
Complete Northern Wood Done
Begin remaining SW CT projects Done
File/settle PSNH, WMECO, Yankee Gas cases Done
Develop CL&P rate case strategy In process
Complete FERC ROE case Done
Merge CL&P, Yankee Gas management Done
Better align organization to support 100% In process regulated companies
9
Enterprise Risk Management – Status Update
Board of Trustees
Chief ExecutiveOfficer
Chief FinancialOfficer
DirectorCorporate
ERM
Risk & CapitalCommittee
Utility Group Risk Controller
Corporate Shared ServicesRisk Controller
TransmissionRisk Controller
Senior RiskAnalyst
Executive VicePresident
Operations
Chair
ERM Organization Structure
• Enterprise Risk Management is in its second 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 and operational risks
• Fully functioning Risk and Capital Committee which integrates risk with capital expenditure decisions
• Responsible for establishment and oversight of ERM policies and procedures
• Executive management membership
• ERM principles integrated into strategic planning and budgeting processes with strategic and operating plans “risk rated”
10
2006 Results
11
$122.3
$41.1
$197.5
$59.8
$2.0 -$398.2
-$18.7
$211.3
($400.0)
($350.0)
($300.0)
($250.0)
($200.0)
($150.0)
($100.0)
($50.0)
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
2005
2006
2006 Earnings
Distribution and Regulated Generation
Transmission Parent/Other
$115.8
$81.7*
*$74 million from PLR and $7.7 million from competitive generation sale
In M
illio
ns
Competitive
12
$60.0
$33.9
$17.3
$147.6
$27.0
$11.0 $11.9$11.1
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
$200.0
2005
2006
Distribution/Regulated Generation Results
CL&P PSNH WMECO
$65.9
*$74 million from PLR and $7.7 million from competitive generation sale
In M
illio
ns
Yankee Gas
$81.7*
13
Cash Sources And Uses In 2006
$1,341$250
$407
Sale of Competitive Businesses (inc. NGC debt)
Debt Issuance
Cash From Operations
$61.0
$872.0
$220.0
$436.0
$320.0 $113.0
Cap Ex
Common Dividends
NGC Debt Reduction
Increase In Cash & Equivalents
RRB Retirements & Escrow
Debt Retirement
Major Sources Major Uses(in millions)
14
Improved Balance Sheet
$3,440
$116
$2,032
Total Debt (excluding RRBs) Preferred Stock Common Equity
$2,965
$116
$2,798
Total Debt Preferred Stock Common Equity
9/30/05 12/31/06
(in millions)
36.4%61.5%
2.1%
47.6% 50.4%
2.0%
15
Liquidity Today (In Millions)
Cash Internal BorrowingsBorrowings On
$1 Billion of
External Facilities
NU $443 0
CL&P ($243) $20 in LOCs
PSNH ($26) $20 in LOCs
WMECO ($65) 0
Yankee Gas ($50) 0
NUEI/Select Energy ($26) $7in LOCs
Other, Net $79
Surplus cash invested externally
$112 $47 in LOCs
16
Share Price Up 43% In 2006 Enhances Access To Capital
$16.0$17.0$18.0$19.0$20.0$21.0$22.0$23.0$24.0$25.0$26.0$27.0$28.0$29.0$30.0$31.0
11/1 12/27 2/22 4/18 6/12 8/4 9/28 11/21 1/19 3/15
November 2005 – March 15, 2007
Share Price Chart
$425 million equity issuance
17
Transmission Business
18
Transmission: A Very Successful 2006
Earnings up 45% Bethel-Norwalk completed ahead of schedule, below budget Other SW Connecticut projects commenced Several other projects completed successfully (Killingly
substation 10% below budget) Favorable FERC decisions on generic transmission incentives,
New England ROE Strong initial results from NERC readiness audit Initial planning under way on New England East West Solution
(NEEWS)
19
Growing Transmission Business
(in $ millions) 2004 2005 2006
Revenues $140.7 $167.5 $216.0
D&A (21.6) (24.0) (29.8)
Other operating (70.6) (80.7) (93.6)
Operating income 48.5 62.8 92.6
Interest, net (12.0) (14.4) (22.0)
Income tax expense (8.9) (12.5) (16.4)
Other income, net 1.9 6.6 6.8
Preferred dividends (1.3) (1.4) (1.2)
Net income 28.2 41.1 59.8
20
The Next Five Years: Transmission Capital Expenditures
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Other
NEEWS
Major CT
Historic Forecast$
Mill
ions
Up To $2.5 Billion
• The New England East-West Solution (NEEWS) family of projects is growing in scope and definition.
• Over the next three years, a high level of capital spending is associated with projects that have already received siting approval.
$1,062 Million $1.1 Billion of major
CT projects in 2007-2011 forecast period; $1.65 billion
in total
NEEWS family of projects estimated
at $710 million during the 2007-
2011 forecast period
21
Projected Transmission Year End Rate Base
$840
$2,117 $2,218$2,461
$140
$175
$276
$282$335
$325
$75
$80
$132
$173$208
$239
$1,512$1,173
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2006 2007 2008 2009 2010 2011
CL&P PSNH WMECO
Transmission Rate Base2006-2011
CAGR of 23%
$ M
illio
ns
*Reflects FERC approved 50% CWIP for southwest CT projects
* **
22
Four Major SW Connecticut Projects – A $1.65 Billion Investment
SWCT improvements have been a top priority in each of ISO-NE’s last four regional transmission expansion plans. Our four major
projects there total about $1.65 billion in investment.
50% of CT Load
Bethel-Norwalk 345 kV Underground& Overhead$350 Million
21 miles 345kV (56% underground)
10 miles 115kV (100% underground)
Completed October 2006 at a cost of $340 million Middletown-Norwalk 345 kV
Underground & Overhead$1,047 Million (NU Share)Glenbrook Cables
115 kV underground$183 Million
9 miles 115kV underground
Projected in-service date: 2008
Under contract – construction under way, 20% complete
Long Island Cable138 kV cross sound$72 Million (NU share)
11 miles 138kV submarine cable
Joint project with LIPA
Projected in-service date: 2008
Under contract – cable being manufactured
69 miles 345kV (35% underground)
57 miles 115kV (1% underground)
Joint project with United Illuminating
Projected in-service date: 2009
Construction under way, 16% complete
COMPLETE
COMPLETE
23
LUDLOW MILBURY
CARD
NORTHBLOOMFIELD
Rhode Island
Connecticut
Springfield
Interstate
FROSTBRIDGE
AGAWAM WEST FARNUM
KENT COUNTY
LAKE ROAD
We Have Selected The Preferred Routes For NEEWS
The four components, identified to date, are:
A Rhode Island Reliability Component
A CT East-West Reliability Component
A Springfield Reliability Component
An Interstate Reliability Component
Total Planning Grade Estimate (NU share):
$1.1 - $1.4 Billion
Total Planning Grade Estimate (NU share):
$1.1 - $1.4 Billion
Post-NEEWS Import Capability into CT is expected to grow to
3600 MW
Post-NEEWS Import Capability into CT is expected to grow to
3600 MW
24
Rate Case Status: Transmission
NU’s FERC-approved transmission tariffs fully track all transmission costs
We have forward-looking rates, adjusted every six months, with an annual true-up provision to ensure timely recovery of transmission investment
FERC decision on New England transmission ROE issued on October 31, 2006
Base ROE set at 10.2% for the period 2/1/2005 through 10/31/2006 and 10.9% beyond that
Incentive adders include: 50 basis points for joining an RTO 100 basis points for new transmission identified by ISO-NE within its regional
system planning process November 30th request for rehearing by New England transmission
owners – apparent 30 basis point error in base ROE Other parties seeking to reduce incentive ROEs
25
Transmission - Retail
CL&P
Legislatively mandated tracker reset semi-annually
WMECO
Regulatory tracker reset annually
PSNH
Regulatory tracker included in rate case settlement Effective 7/1/06
Impact on rates beginning 7/1/07
Will reset annually beginning 1/1/08
26
Distribution and Generation
27
Projected Distribution, Regulated Generation Capital Expenditures
$210$270 $261 $266 $270 $279
$110
$123 $134 $111 $128$148
$30
$34 $33$31
$31$31
$90
$62 $42$41
$41$41
$0
$100
$200
$300
$400
$500
$600
2006 2007 2008 2009 2010 2011
CL&P PSNH WMECO Yankee Gas
$ M
illio
ns
28
Projected Distribution And Regulated Generation Year End Rate Base
$1,765 $1,964 $2,084 $2,221 $2,358 $2,464
$868$969
$1,085$1,151
$1,220$1,289
$340$367
$388$406
$422$436
$493
$646$655
$656$668
$678
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2006 2007 2008 2009 2010 2011
CL&P PSNH WMECO Yankee Gas
Projected Distribution & Generation Rate Base
CAGR of 7%
$ M
illio
ns
29
Current Major Distribution/Regulated Generation Projects Mostly Complete
Yankee Gas’s 1.2 Bcf liquid natural gas production facility in Waterbury, CT
$108 million cost About 90 percent complete Scheduled to be in service for 2007-
2008 heating season Will enhance reliability, help insulate
customers from price volatility
Conversion of PSNH’s 50 MW Schiller unit in Portsmouth, NH from coal to wood
$74 million cost Commenced operation in December Enhances fuel diversity, reduces sulfur,
NOx, mercury emissions
30
CL&P Retail Rate Case To Be Filed This Summer
Expect to under-earn ROE significantly in 2007 due to lack of sales growth, higher costs, modest rate increase
Growing capital needs in distribution business to maintain reliability
Regulators generally support reliability initiatives
Working on strategies to blunt impact of rate case
31
CL&P Has Significant Cost Components Which Are Tracked And Reconciled
For Timely Recovery
Power supplies bid on a staggered schedule
GSC set to reflect costs
Congestion costs passed through FMCC
Transmission projects helping to contain them
Transmission charge reset semi-annually
Legislative mandate
Majority of stranded costs recovered, except for RRBs which mature in 2010, decommissioning of Yankee nuclear units, and Independent Power Producer contracts
32
Recovery Of Generation And Reliability Costs In 2007 By Rate Component
Cost CL&P PSNH WMECO
Energy GSC ES DS
Capacity GSC ES DS
Congestion & losses BFMCC ES DS
Other Charges (a):
Black Start NBFMCC TCAM TT
VAR support - energy NBFMCC ES TT
VAR support - capital NBFMCC TCAM TT
Load Response NBFMCC ES TT
SCR NBFMCC TCAM TT
RMR NBFMCC TCAM TT
SW CT Energy Res. NBFMCC N/A N/A
ISO S-1 (S&D) NBFMCC TCAM TT
ISO S-2 (E) NBFMCC ES TC
ISO S-3 (R) N/A ES N/A
EIA NBFMCC N/A N/A
D&D Amortization NBFMCC N/A N/A
Misc. NEPOOL expense NBFMCC ES TTNotes:(a) Definitions of “other charges” are provided in the glossary on pages 48 - 51
BFMCC – Bypassable Federally Mandated Congestion ChargeDS – Default Service Recovery MechanismES – Energy Service ChargeGSC – Generation Service ChargeNBFMCC – Nonbypassable Federally Mandated Congestion ChargeTC – Transition ChargeTT – Transmission TrackerTCAM – Transmission Cost Adjustment Mechanism
33
CL&P Costs Being Recovered In A Timely Manner
Estimated Average Rate /kwh 1/1/07
Frequency of Rate Change
Costs Being Recovered
Cost Basis
Distribution 2.786 Rate proceeding Core distribution costs Projected
Transmission 0.717 January & JulyRetail transmission costs
Actual & projected
CTA 1.042 January Stranded costs Actual & projected
C&LM 0.222 LegislationConservation and load management
N/A
SBC - January Public policy costs Actual & projected
Renewable 0.074 LegislationFunding of state renewables program
N/A
FMCC - Delivery 0.871 January & JulyFERC costs associated with standard market design
Actual & projected
Subtotal – Delivery 5.712
GSC 11.276 January & July Supplier energy costs Actual & projected
FMCC - Generation 0.800 January & July Supplier energy costs Actual & projected
Subtotal - Energy 12.076
Total 17.788
¢
Notes:C&LM – Conservation and Loan ManagementCTA – Competitive Transition AssessmentFMCC – Federally Mandated Congestion ChargeGSC – Generation Services ChargeSBC – System Benefits Charge
34
Peak Load Growing Much Faster Than Overall Consumption
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1990
199119
92199
3199
4199
5199
6199
7199
819
99200
0200
1200
2200
3200
4200
5200
620
07200
820
09201
0201
1
Residential Use Per Customer Summer Peak
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
Residential Use Per Customer Summer Peak
CL&P Residential Use Per Customer and Summer Peak
Weather Normalized
PSNH Residential Use Per Customer and Summer Peak
Weather Normalized
Residential customer growth remains steady, at roughly the rate of housing growth
Residential use per customer has flattened in response to price induced conservation
Growth in peak demand outpaces growth in use per customers, as comfort during extreme weather appears to outweigh cost
Load factors continue to fall as peak loads riseLoad factors continue to fall as peak loads rise
35
2.51 2.99
0.380.61
9.138.59
1.300.300.30
3.37
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Stranded Cost Recovery Charge
System Benefits Charge
Consumption Tax
Energy
Transmission
Distribution
PSNH Bills Much Lower Despite July T&D Rate Increase
January 2006 Total 15.75 cents/kwh
July 2007 Total 13.85 cents/kwh
0.06 0.06
36
PSNH Distribution Rate Case Settlement
Joint settlement with NHPUC staff, Consumer Advocate filed 2/26/07
Proposed effective date of 7/1/07 Key elements
9.67% ROE, 7.55% overall cost of capital Transmission tracker to be reset annually $37.7 million estimated annualized increase ($26.45 million for
distribution; $11.24 million for transmission) in addition to $24.5 million increase effective 7/1/06
Incremental increase includes: $8.76 million, 12-month increase to recoup revenues not collected
between 7/1/06 and 6/30/07 $9.2 million related to storm costs to be recovered over three years
Generation ROE of 9.62% unaffected
37
Additional Factors Lowering PSNH Costs
Project 2006 Payments 2006 MWH Purchases Cents/kwh Expiration
Bethlehem $21.1 million 123,499 $0.1709 12/18/06
Bridgewater $32.4 million 130,794 $0.2479 8/05/07
Hemphill $12.8 million 96,656 $0.1322 10/26/06
Tamworth $23.2 million 169,781 $0.1367 3/31/08
$89.5 million 520,730 $0.1719
@ $80/mwh replacement energy cost, annual energy cost savings when all rate orders end will be about $46 million = rate cut of 0.56 cents/kwh
RRBs: PSNH RRB-2 matures 2/1/08, annual savings - $10 million
IPP Contracts Expiring:
38
PSNH Costs Being Recovered In A Timely Manner
Estimated Average Rate /kwh 7/1/07
Frequency of Rate Change
Costs Being Recovered
Cost Basis
Distribution 2.990 Rate proceeding Core distribution costs Known & measurable
Transmission 0.610 January Retail transmission costs
Actual & projected
SCRC 1.300 January Stranded costs Actual & projected
SBC 0.300 LegislativeC&LM programs and energy assistance costs
N/A
Consumption Tax 0.060 LegislativePass through to New Hampshire
N/A
Subtotal – Delivery 5.260
Energy Service 8.590 January & JulyPSNH generation and purchased power costs
Actual & projected
Total 13.850
¢
Notes:C&LM – Conservation and Loan ManagementSCRC – Stranded Cost Recovery ChargeSBC – System Benefits Charge
39
Yankee Gas Rate Case Highlights
Net increase of $37 million (8.4%) Base rate increase of $68 million Lower pipeline, commodity charges due to LNG facility of $26.5 million Savings from expected property tax abatement of $4 million
Expected effective date of July 1, 2007 Most recent increase January 1, 2005
$68 million base rate increase driven by: Improved returns ($17.5 million)* Higher rate base ($14 million)* Amortization of deferred hardship and environmental remediation costs ($11
million) Higher O&M ($11 million, including $3 million for LNG facility electricity)* Higher depreciation over July 1, 2005 – June 30, 2006 test year ($9 million)* Higher property and other taxed ($6 million)*
*Partially related to LNG facility – Overall total related to LNG facility about $20 million
40
Current Yankee Gas Rate Case Schedule
December 29
2006 2007
March 6
March 13
April 19
May 15
May 28
June 27
July 1
Evidentiary hearings
start
Briefs due
Consumer Counsel
testimony due
Final decision
Increase expected to be effective
Rate case filed
Draft decision
Statutory deadline for
decision
41
Yankee Gas Rate Base and Cap Ex
$543 $555 $559 $573 $586$497
$92$95$97$100$103
$0
$100
$200
$300
$400
$500
$600
$700
2006 2007 2008 2009 2010 2011
Other LNG
$42.1 $41.2 $41.2 $41.3$49.5$41.0
$48.9
$13.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
2006 2007 2008 2009 2010 2011
Other LNG
$ M
illio
ns
$ M
illio
ns
Projected Distribution Capital ExpendituresProjected Year-End Rate Base
42
WMECO Rate Settlement
Approved by DTE
Rates effective January 1, 2007
$1 million distribution increase, plus pension, other trackers, higher energy costs resulted in 17.8% increase
$3 million distribution increase to be effective January 1, 2008
Expect distribution ROE to remain in 9-10% range through 2008
Next rate case to be filed around 7/1/08
43
WMECO Costs Being Recovered In A Timely Manner
Estimated Average Rate /kwh 1/1/07
Frequency of Rate Change
Costs Being Recovered
Cost Basis
Distribution 2.756 Rate proceeding Core distribution costs Known & Measurable
RAAC 0.147 JanuaryDiscounts for low income customers
Actual
PPAM 0.261 JanuaryPension and PBOP costs
Actual & projected
Default Service True-Up 0.172 JanuaryAnnual true-up of Default Service
Actual
Subtotal – Distribution 3.336
Transmission 1.062 JanuaryRetail transmission costs
Actual & projected
Transition Charge 0.858 January Stranded costs Actual & projected
C&LM 0.250 LegislationConservation and load management programs
N/A
Renewable 0.050Legislation Funding of state
renewables programN/A
Subtotal – Delivery 5.556
Default Service 11.383 Varies (a)Supplier energy costs, DS adder, and uncollectibles
Projected
Total 16.939
¢
Notes:C&LM – Conservation and Loan ManagementPPAM – Pension/PBOP Adjustment MechanismRAAC – Residential Assistance Adjustment Clause(a) Rate changes every six months except for large commercial and industrial, which changes every three months
44
Financial Forecast
45
Changes In Forecast Assumptions From 2006
Sale of generation for projected $900 million
Issuance of additional equity in 2008 and 2010
FFO in 2006-2010 of $2.4 billion after $220 million of tax payments on generation sale
Net income of $1.22 billion from 2006-2010
Capex of $4.34 billion from 2006-2010
Sale of generation for actual $1.34 billion
No additional equity
FFO in 2007-2011 of $2.9 billion after $428 million of tax payments on generation sale
Net income of $1.65 billion from 2007-2011
Capex of $4.79 billion from 2007-2011
• Higher distribution at CL&P
• Higher distribution, generation at PSNH
• Higher transmission at WMECO
• Lower at Yankee
2006 2007
46
2010 Balance Sheet
$4,646
$116
$3,252
Total Debt Preferred Stock Common Equity
$5,083
$116
$3,540
Total Debt Preferred Stock Common Equity
2006 Forecast 2007 Forecast
58.0%40.6%
1.4%
58.2%40.5%
1.3%
47
NU’s Transformation Producing Solid Results, Prospects
Strategic plan elements announced one year ago are on or ahead of schedule
Financial flexibility is significantly improved Financial performance consistent with projections Transmission business is growing rapidly to meet customer
needs Distribution results expected to improve as reasonable rate case
outcomes are implemented Additional infrastructure needs being identified
48
Glossary
Black Start Charges billed by ISO and paid to generators to maintain the capability to restart without an outside supply of electricity.
D&D Decontamination and decommissioning expense paid to the federal government for the clean-up of nuclear fuel processing sites.
EIA Costs associated with the implementation of measures in support of Connecticut’s Energy Independence Act.
ISO S-1 ISO administrative and general expense relating to scheduling and dispatch charges.
49
Glossary
ISO S-2 ISO administrative and general expense relating to energy administration.
ISO S-3 ISO administrative and general expense relating to reliability administration.
Load Response Charges billed by ISO and paid to load response program participants for reducing their peak electricity demand.
Misc. NEPOOL Misc. NEPOOL expense includes other charges billed by the ISO such as Generation Information System costs, credit insurance charges, and allocations of participants late payments.
50
Glossary
RMR [Reliability Fixed charges per the cost of service Must Run] agreements approved by FERC for generating units in
constrained areas to ensure NEPOOL system reliability and stability, net of any revenues derived when the units are running.
SCR [Special Charges billed by ISO to pay generators thatConstrained run out of merit for transmission voltage Resource] reliability purposes.
SW CT Charges billed by ISO and paid to supply Energy resources and demand responses for improvingResources reliability in Southwest CT.
51
Glossary
VAR Support Charges billed by ISO and paid to generators for system voltage stability. Broken into two components as follows:
• CC [Capacity Cost]
Reimbursement of fixed capital cost incurred by a generator to provide VAR support.
• LOC [Lost Opportunity Cost]
Collects the generator’s lost opportunity in the energy market if directed by ISO to back down output to provide VAR support.