AGA Conference

Bonita Springs, Florida

May 3, 2004

2

Safe Harbor Provisions

This presentation contains statements that may be considered forward looking statements, such as management’s expectations of future earnings, cash position, sources of funds, coverage ratios, market conditions, customer growth, regulatory action, and the anticipated completion of various projects. These statements speak of the Company’s plans, goals, beliefs, or expectations, refer to estimates or use similar terms. Actual results could differ materially. All forward looking statements included in this presentation are based upon information presently available, and the Company assumes no obligation to update any forward looking statements.

3

Agenda

Improved first quarter financial performance

Strong financial footing

Growing regulated businesses

More profitable competitive businesses

4

What is Northeast Utilities Today? (2003 Revenues)

Regulated Companies Unregulated Companies

An electricity delivery company…

The Connecticut Light and Power Company ($2.7 billion)

Western Massachusetts Electric Company ($390 million)

A natural gas delivery company…

Yankee Gas Services Company ($360 million)

An hybrid electric company…

Public Service Company of New Hampshire ($890 million)

A competitive energy marketer…

Select Energy, Inc. ($2.33 billion)

A competitive electricity producer…

Northeast Generation Company ($140 million)

A supplier of energy services…

Northeast Generation Services ($100 million)

Select Energy Services ($150 million)

5

2004 Off To A Good Start

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

1Q03 1Q04 2003Reported

2003ExcludingSignificant

Items

2004ProjectedEarnings

$0.47 $0.53$0.91

$1.24$1.20

$1.40

$/S

har

e o

f E

arn

ing

s

6

First Quarter Improvement Driven By Competitive Business Results

$25.3$26.2

$10.8$11.8

$15.8

$11.9

$6.1

$3.5$4.9

$19.1

$0.4

-$0.2

($5.00)

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

2003 2004

CL&P PSNH YankeeGas

WMECO MerchantEnergy

Services

Ear

nin

gs

in M

illi

on

s

7

NU Consolidated $2,333 45.8% $116 2.3% $2,642 51.9% $1,683 Baa1/BBB

CL&P $718 39.3% $116 6.4% $991 54.3% $1,091 A2/A-

PSNH $386 46.6% $0 0% $442 53.4% $462 A3/BBB+

WMECO $160 45.7% $0 0% $190 54.3% $130 A3/BBB+

Yankee Gas $231* 50.4% $0 0% $227 49.6% $0 Baa1/BBB+

NGC $441 53.1% $0 0% $389 46.9% $0 Baa2/BB+

BBB/BBB-

Target Leverage

Strong Current Capitalization Ratios Provide Solid Foundation for Growth

55.0%

Common Preferred Debt RRBs Sr. Ratings

*Excludes equity associated with goodwill.

3/31/04(In Millions)

(Excludes RRBs)

8

RegulatoryOverrecoveries

Sources and Uses of Cash in 2003

$274 $183

$204$127$252

$211

$94$51 $79

$550

Net Income

Issuance of Debt, Net ofRetirements

AmortizationNet of RRBs

Depreciation

Dividends

Deferred, Accrued

Taxes

Primary Sources Primary Uses

InvestmentsIn Plant

SMDEscrow

PSNH IPP Buyout, CVEC Purchase

(in millions)

9

Dividend Has Continued to Grow, But Remains Modest

$1.76

$1.38

$0.25

$0.00$0.10

$0.40 $0.45 $0.525 $0.575

$0.00

$0.50

$1.00

$1.50

$2.00

1995 1996 1997 1998 1999 2000 2001 2002 2003

Dividends/Share

10

Overall Strategy - How the Puzzle Fits Together

Regulated Businesses

Expand retail, wholesale preservice in Northeast markets

Continue to win significant standard offer, and default service bids

Achieve targeted returns on investments by maintaining gross margins

Manage risk effectively

Build services businesses

Competitive Businesses

Build needed transmission facilities to remedy critical SW Connecticut supply situation

Invest in distribution companies to replace aging infrastructure and to improve reliability

Maintain strong balance sheet

Timely recovery of purchased energy costs

Continue to implement best practices among four regulated operating companies to improve service, contain costs

11

A Closer Look At The Regulated Businesses

CL&PCustomers: 1,169K

Residential 1,058K

Commercial 105K

Industrial 6K

Revenues: $2.7B

Employees: 2,140

4,400 Square Miles

PSNHCustomers: 468K

Residential 399K

Commercial 66K

Industrial 3K

Revenues: $890M

Employees: 1,280

5,445 Square Miles

Yankee GasCustomers: 192K

Residential 168KCommercial 22KIndustrial 2K

Revenues:$360M

Employees: 4901,995 Square Miles

WMECOCustomers: 205K

Residential 185K

Commercial 19K

Industrial 1K

Revenues: $390M

Employees: 410

1,490 Square Miles

12

NU Forecasting Significant Regulated Capital Investment Program

$0

$200

$400

$600

$800

2002 2003 2004 2005 2006 2007 2008

Regulated Electric Regulated Natural Gas NGC Other

$ Millions - Excluding AFUDC

13

That Needed Investment Will Result in a Growing Distribution Rate Base

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2004 2005 2006 2007 2008

$ Millions

Dis

trib

utio

n R

ate

Bas

e(E

lect

ric a

nd G

as)

14

For CL&P, 2003 Was Marked By Important Legislation, Regulation

Public Act signed into law June 25, 2003 Transitional standard offer took effect January 1, 2004 Rate cap raised 11.1% for 2004 and beyond Procurement fee of 0.5/mill began January 1

Additional 0.25 mill incentive can be earned Could produce $12-$18 million/year of additional revenue

Flow through of all energy related and “federally mandated” costs

Rate decision effective January 1, 2004 Distribution rates set for four years Transmission rates increased $28 million Distribution ROE of 9.85% Endorsement of $900 million distribution capital program

15

Key Factors in CL&P’s First Quarter Results Expected to Continue

Positive Distribution rate increase Transmission rate increase Sales growth Procurement fee

Negative Lower pension income Higher depreciation

16

PSNH Update

December 2003: PSNH filed rate case requesting 2.6% ($21 million) increase

Hearings in early August Decision will be retroactive to February 2004

January 2004: PSNH closed on Connecticut Valley Electric Co. acquisition

$9 million for assets (11,000 customer accounts); $21 million to buy down power contract

February 2004:Energy supply rate rose to 5.36 cents/kwh from 4.6 – 4.67 cents

Based on estimated costs of owned generation and market purchases of power

PSNH’s NHPUC approved proposed $70 million conversion of Schiller unit to burn wood (waste)

Settlement on risk sharing mechanism now before regulators

17

Yankee Gas Update

Increasing pension costs hurting financial performance

New rate design produces more balanced quarterly earnings

Rate case to be filed this summer to be effect in 2005

New projects advance 9-mile extension of main in southeast Connecticut

approved by regulators and due for completion October 1

Compliance filing on LNG storage facility due with regulators in June

18

WMECO Update

Power supply costs continue to be fully tracking

Continued cost management needed to offset falling pension credit

More modest capital expenditure program

Transition period ends in March 2005

19

Generation Has Not Been Sited Where It’s Needed, Creating Bottlenecks

15000

20000

25000

30000

35000

1998

1999

2000

2001

2002

2003

2004

2005

2006

Generation

Load

5%

10% 10%

15%

21%

28%27% 25%26%

New England has added 9,000 MW of generation capacity since 1998.

Surplus Generation

Adequate Generation

Marginal Conditions

Deficient

But it has been added in the wrong locations!

Source: 2003 CELT Report

More transmission is needed to move power from capacity rich areas to those in need.

Reserve Margins

20

$14B Spent on Buying and Building Generation in 1997–2002; $500M Spent on Transmission

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1997-2002ConstructedGeneration

1997-2002PurchasedGeneration

(initial sale from utility)

1997-2002NU, Nat Grid. NStar

ConstructedTransmission

(in millions)

21

ISO-NE’s Regional Transmission Expansion Plan (RTEP 03) Calls For Over $1.2B in Investment* By NU

* For some projects, RTEP 03 cost estimates have been updated based on more current information. ** NU’s Share

ME

RICT

MA

VT

NH

New Hampshire• Deerfield STATCOM $33 M• 115kV Upgrades $37 M• Scobie – Tewksbury 345kV Line** $15 M• Fitzwilliam 345 / 115kV Transformer** $15 M • Bedford/Tioga 115/34.5kV Substation $13 M• Deerfield 345/115kV Transformer $6 M• Upgrades in White Mountains Area $6 M Total $125 M

Massachusetts• Springfield Area Cable Replacement $32 M

Connecticut• Bethel-Norwalk $200 M• Middletown-Norwalk ** $496 M• Glenbrook Cables $75 M • Card-Lake Rd-Sherman 345kV line** $94 M• Long Island Replacement Cable ** $45 M• Eastern CT $42 M• Glenbrook STATCOM $41 M• Haddam 345/115kV Transformer $26 M• Manchester-Barbour Hill $18 M Total $1,037 M

22

Transmission Business: Major Capital Projects

* CL&P’s 80% share

(Bethel

to Norwalk)

(Middletown

to Norwalk)

Siting Process Construction

20062005200420032001 2002 2007

$200 M

$496 M *

2008

Capital Program $26 M $55 M $99 M $270 M $240 M $200 M $200 M $200 M

Phase I

Phase II

7/03: Siting Council decision 12/03: Norwalk Substation expansion began 7/04: 115kV & 345kV underground construction begins 8/04: Gas-Insulated Substation starts 12/04: Overhead line orders under contract

5/03: Municipal consultation 10/03: Siting Council application filed 12/03 – 2/04: Public hearings process 3/04 –6/04: Adjudicative hearings 6/04: DEP filing (estimated) 12/04: Siting Council decision

23

NU Enterprises Had Strong First Quarter

First Quarter 2004 Full-Year Projection

Merchant Energy $19.1 $24 - $31

Services and Parent

($0.3) $4 - $7

Total $18.8 $28 - $38

(earnings in millions)

24

Contributing Factors To First Quarter Improvements

Seasonal pricing of wholesale contracts

Retail profitability

Expiration of old Select – CL&P contract

Strong generator operating performance

25

Region Company Service Start Date

TermTotal Load (MW)

AmountsWon

New England

MECO Default 11/1/03 3 mos. to 1 yr.

900 700 MW

NSTAR SO & DS 1/1/04 3 to 14 mos. 1,600 650 MW

UI TSO 1/1/04 1 to 3 yrs. 1,200 -

CL&P TSO 1/1/04 1 to 3 yrs. 5,000 1,875 MW

WMECO SO & DS 1/1/04 3 to 14 mos. 710 450 MW

NSTAR Ind. Default 4/1/04 3 mos. 300 Not announced

WMECO Ind. Default 4/1/04 3 mos. 50 -

MECO Default 5/1/04 3 mos. to 1 yr.

800 Not announced

NSTAR Default 7/01/04 3 mos. to 1 yr.

1,050 Not announced

PJM NJ IOUs BGS (fixed & hrly.)

6/1/04 1 to 3 yrs. 17,960 1,000 MW

MD IOUs CO 7/1/04 11 to 35 mos.

5,500 300 MW

Calendar of Bids in Wholesale Electric Market

26

Summary

2004 earnings projection consistent with street consensus NU forecast of $1.20 to $1.40 per share

Street range of $1.25 to $1.36 per share

Plans for transmission buildout progressing

Profitability of competitive businesses increasing

Financial and credit profile strong and remains a priority