NSTAR (NYSE: NST) and Northeast Utilities (NYSE: NU) have reached
separate, comprehensive merger-related agreements with both the
Massachusetts Department of Energy Resources (DOER) and the
Massachusetts Attorney General (AG) that will guarantee substantial
customer and environmental benefits, while allowing the utilities′
merger to proceed. The settlement agreements both call for a one-time
$21 million rate credit to be directed to customers of NSTAR Electric,
NSTAR Gas and Western Massachusetts Electric Company (WMECo). Base
distribution rates for the utilities would then be frozen until 2016. In
addition, under the agreement with the DOER, the utilities pledge
further environmental commitments to solar, wind, hydro, energy
efficiency and electric vehicle development, including a memorandum of
understanding to purchase clean power from Cape Wind, the nation′s first
off-shore, large-scale wind farm.
'Today′s announcement is the result of a year-long effort by the state
agencies and the companies to reach agreements that appropriately
balance all of the interests affected by the merger,? said Tom May,
NSTAR Chairman, President and CEO. 'Benefits for Massachusetts customers
are both immediate, in the form of a rate credit plus a four-year
distribution rate freeze, and longer-term, with NSTAR′s purchase of
clean power from Cape Wind, which together with our existing wind
contracts will help meet the state′s clean energy targets. We recognize
that the climate change goals set forth by Governor Patrick′s Green
Communities Act will require aggressive action and we think the best way
to meet those requirements is through a diversified portfolio of
renewable resources.'
'The merger will benefit all of our customers by creating a stronger
company that stays headquartered in New England and is expected to
provide higher service levels and lower costs over the long term,' noted
Charles W. Shivery, NU Chairman, President and CEO. 'This merger
continues to be the right decision for customers, employees and
shareholders now and into the future.'
Highlights of both the AG and DOER agreements include the following:
- The proposed merger between NSTAR and NU would be approved by
the MDPU.
Merger will create a stronger, more efficient company that will
provide a number of benefits for customers that would not
otherwise be possible.
Merger would create a Fortune 300 company headquartered in New
England, with close ties to local communities.
All existing labor agreements will be honored, no broad-based
employee layoffs.
- Massachusetts customers will benefit from an immediate $21
million rate credit and a base distribution rate freeze beginning when
the merger closes and lasting until 2016.
Customers of NSTAR Electric, NSTAR Gas and WMECo will receive an
immediate, one-time rate credit.
NSTAR Electric, NSTAR Gas and WMECo agree that they will freeze
base distribution rates at current levels until 2016, thus
guaranteeing that customers will see no base distribution rate
increase during the term of the agreements.
In addition, the settlement agreement between the DOER and the utilities
includes the following environmental provisions:
- Massachusetts' climate goals will be substantially advanced.
- Wind: NSTAR will enter into a 15-year
contract to buy 129 megawatts of offshore wind power from Cape
Wind. This contract will complement NSTAR′s existing contracts for
109 megawatts of onshore wind and will help Massachusetts meet its
clean energy goals.
- Solar: NSTAR will issue an RFP to
enter into long-term contracts for 10 megawatts of solar power.
- Energy Efficiency: NSTAR and WMECo
will commit to reducing electric use 2.5% annually beginning in
2013 through the remaining term of the agreement by increasing
energy efficiency measures.
- Electric Vehicles: NSTAR will put in
place an electric vehicle pilot program in Massachusetts, building
on work already done by Northeast Utilities. The pilot will be
designed to help NSTAR understand the infrastructure requirements
needed for a substantial increase in the use of carbon-free
electric vehicles.
The agreements must be approved by the MDPU. The parties have requested
an approval date of April 4, 2012.
About Northeast Utilities
NU, headquartered in Hartford, operates New England′s largest utility
system with annual revenues of approximately $5.4 billion and assets of
$14.2 billion. NU and its companies in Connecticut, Massachusetts and
New Hampshire serve more than 2.1 million electric and natural gas
customers in nearly 500 cities and towns. For more information, go to
About NSTAR
NSTAR is the largest Massachusetts-based, investor-owned electric and
gas utility. The company transmits and delivers electricity and natural
gas to 1.4 million customers in Eastern and Central Massachusetts,
including more than one million electric customers in 81 communities and
300,000 gas customers in 51 communities. For more information, visit
Information Concerning Forward-Looking Statements
In addition to historical information, this communication may contain
a number of 'forward-looking statements? as defined in the Private
Securities Litigation Reform Act of 1995.Words such as
anticipate, expect, project, intend, plan, believe, and words and terms
of similar substance used in connection with any discussion of future
plans, actions, or events identify forward-looking statements.Forward-looking
statements relating to the proposed merger include, but are not limited
to: statements about the benefits of the proposed merger involving NSTAR
and Northeast Utilities, including future financial and operating
results; NSTAR′s and Northeast Utilities′ plans, objectives,
expectations and intentions; the expected timing of completion of the
transaction; and other statements relating to the merger that are not
historical facts.Forward-looking statements involve estimates,
expectations and projections and, as a result, are subject to risks and
uncertainties.There can be no assurance that actual results will
not materially differ from expectations.Important factors could
cause actual results to differ materially from those indicated by such
forward-looking statements.With respect to the proposed merger,
these factors include, but are not limited to: the risk that NSTAR or
Northeast Utilities may be unable to obtain governmental and regulatory
approvals required for the merger, or required governmental and
regulatory approvals may delay the merger or result in the imposition of
conditions that could reduce the anticipated benefits from the merger or
cause the parties to abandon the merger; the risk that a condition to
closing of the merger may not be satisfied; the length of time necessary
to consummate the proposed merger; the risk that the businesses will not
be integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction making
it more difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on merger-related issues;
the effect of future regulatory or legislative actions on the companies;
and the risk that the credit ratings of the combined company or its
subsidiaries may be different from what the companies expect. These
risks, as well as other risks associated with the merger, are more fully
discussed in the joint proxy statement/prospectus that is included in
the Registration Statement on Form S-4 (Registration No. 333-170754)
that was filed by Northeast Utilities with the SEC in connection with
the merger.Additional risks and uncertainties are identified and
discussed in NSTAR′s and Northeast Utilities′ reports filed with the SEC
and available at the SEC′s website at the date of this document.Neither NSTAR nor Northeast Utilities
undertakes any obligation to update its forward-looking statements to
reflect events or circumstances after the date of this document.
Additional Information and Where To Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval.In connection with the proposed merger between
Northeast Utilities and NSTAR, Northeast Utilities filed with the SEC a
Registration Statement on Form S-4 (Registration No. 333-170754)that
includes a joint proxy statement of Northeast Utilities and NSTAR that
also constitutes a prospectus of Northeast Utilities.Northeast
Utilities and NSTAR mailed the definitive joint proxy
statement/prospectus to their respective shareholders, on or about
January 5, 2011. Northeast Utilities and NSTAR urge investors and
shareholders to read the joint proxy statement/prospectus regarding the
proposed merger, as well as other documents filed with the SEC, because
they contain important information.You may obtain copies of all
documents filed with the SEC regarding this proposed transaction, free
of charge, at the SEC′s website ( Utilities′ website ( under the tab 'Investors? and then under the heading 'Financial/SEC
Reports.?You may also obtain these documents, free of charge,
from NSTAR′s website ( under the tab 'Investor Relations.?
