Transmission Business Review Wall Street Access/Berenson & Co. JANUARY 11, 2007

1. Transmission Business Review Wall Street Access/Berenson & Co. JANUARY 11, 2007 Lee Olivier – President NU Transmission Group Energy / Growth / Leadership

2. Safe Harbor Provisions This presentation contains statements concerning NU’s expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, a listener can identify these forward-looking statements by words such as “estimate”, “expect”, “anticipate”, “intend”, “plan”, “believe”, “forecast”, “should”, “could”, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, actions by state and federal regulatory bodies; competition and industry restructuring; changes in economic conditions; changes in weather patterns; changes in laws, regulations or regulatory policy; expiration or initiation of significant energy supply contracts; changes in levels of capital expenditures; developments in legal or public policy doctrines; technological developments; volatility in electric and natural gas commodity markets; effectiveness of our risk management policies and procedures; changes in accounting standards and financial reporting regulations; fluctuations in the value of electricity positions; the methods, timing and results of the disposition of competitive businesses; actions of rating agencies; terrorist attacks on domestic energy facilities; and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in our reports to the Securities and Exchange Commission. We undertake no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made.

3. Agenda for Today • National Transmission Issues and Trends • New England Overview • NU Transmission Update

4. About Northeast Utilities Transmission… • Comparative Ranking of NU (miles) • Largest in New England • 4th largest in 11 northeast states • Nearly 2.4 million retail customers • About 280 miles of new transmission planned

5. 2005 Rate Base Composition 2005 Rate Base: $3.3 billion 2011E Rate Base Composition 2011E Rate Base: $7.9 billion Transmission Will Grow to Become a Bigger Portion of NU’s Rate Base Transmission to comprise much larger share of total rate base

6. The August 2003 Blackout … … Led Congress to Pass the Energy Policy Act of 2005 Illustrative only

7. Implementation of Mandatory Reliability Standards Creates Potential Challenges and Opportunities Challenges: • Must demonstrate compliance with standards through the ERO and Regional Entities or face civil penalties • Higher costs associated with compliance • Reputational and financial risk should there be poor performance Opportunities: • Small transmission operators, or those with limited management talent or constrained capital may wish to exit this business, thereby leading to some industry consolidation • Regulatory changes may create opportunities for top-performing utilities – those with the financial and organizational resources to mitigate risks • Additional capital investment in areas with identified reliability needs may be required

8. What Will it Take to Build New Transmission? • Who will make the investments needed? • Merchant transmission – disappointing track record to date due to high risk of cost recovery • Transcos – good business model, however comprising only 3% of all transmission • Investor-owned utilities – represent the lion’s share of the assets Annual Transmission Investments (2005$) $ Billions (inflation adjusted) Source: 1976-2005 EEI Statistical Yearbook/2005 Data 2006-2009 EEI Electric Transmission & Capital Budget and Forecast Survey

9. Our View on the Necessary Enablers for New Transmission • Regulatory certainty around the following: • Clear, enforceable national and regional reliability standards • An independent regional planning process that integrates and prioritizes needs • Timely, efficient siting process with federal back stop siting as appropriate • Well defined cost allocation rules • Level and timing of financial incentives

10. 1% Central Maine Power 4% Bangor Hydro 7% NGRID 8% NStar 59% NU 9% UI 12% Vermont New England is Seeing Significant Investment in Transmission • Complete transmission projects ($3.4 billion in reliability projects) • Other RSP initiatives: • Need for new generation resources by 2009 • Encourage more demand response and energy efficiency • Enhance fuel diversity • Improve reliability of natural gas resources • Develop new gas supplies • Improve monitoring and control of the grid • Improve coordination with neighboring systems • Comply with ERO and regional reliability standards ISO-New England 2006 Regional System Plan – Highlights Source: ISO-New England 2006 Regional System Plan

11. Percentage of Peak Load that Could Be Served by Transmission Imports 100% 80% 60% 40% 20% 0% VT RI MA ME CT NH Status of Connecticut Transmission Infrastructure Power Moves into Connecticut and SWCT from MA and RI • Within Connecticut transmission constraints exist that limit the flow of power from external sources • Significant transmission enhancements are under construction in SW Connecticut to meet that area’s needs • Future projects are in the planning phase to address power flows into Connecticut Connecticut Southwest Connecticut Norwalk-Stamford 345-kV Lines Boundaries of Major Constraints 345-kV Lines under construction With import capability of only 2,500 MW, CT is the least interconnected state in New England.

12. 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. COMPLETE 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 50% of CT Load Middletown-Norwalk 345 kV Underground & Overhead $1,047 Million (NU Share) Glenbrook Cables 115 kV underground $183 Million Long Island Cable 138 kV cross sound $72 Million (NU share) • 69 miles 345kV (35% underground) • 57 miles 115kV (1% underground) • Joint project with United Illuminating • Projected in-service date: 2009 • Construction under way, 15% complete • 9 miles 115kV underground • Projected in-service date: 2008 • Under contract – construction under way, 10% complete • 11 miles 138kV submarine cable • Joint project with LIPA • Projected in-service date: 2008 • Under contract – cable being manufactured

13. Southern New England Transmission Reinforcement Projects Are the Next Major Undertaking • The SNETR projects solve four area problems: • Interstate transfer capability • Connecticut East-West transfer capability • Springfield Reliability • New England East-West transfer capability 4 3 1 • 2006 Activities: • Complete planning studies • Analyze routing options • 2007 Activities: • Begin siting process in Connecticut and Massachusetts • ISO-NE technical approval 2 2005 2006 2007 2008 2009 2010 2011 2012 2013 Planning Siting Construction

14. We Have Selected the Southern New England Transmission Reinforcement Project Preferred Routes The four components, identified to date, are: A Springfield Reliability Component An Interstate Reliability Component A Rhode Island Reliability Component A CT East-West Reliability Component Total Planning Grade Estimate: $1.1 - $1.4 Billion Post-SNETR Import Capability is expected to grow to 3600MW

15. NU is a Major Part of New England’s Transmission Infrastructure Upgrade Legend White Mountain Upgrade Complete Under Construction ISO-NE Approved Future Regional System Plan Projects Timber Swamp Fitzwilliam Substation Scobie – Hudson Line Barbour Hill Substation Northeastern Connecticut Plumtree - Triangle Frost Bridge Corridor Middletown - Norwalk Norwalk Harbor Substation Controls Long Island Replacement Cable (LIRC) Madbury Capacitor Deerfield Autotransformer Gosling Road Substation Tioga Weare Substation Scobie Substation Berkshire Solution Woodland Capacitor Pleasant Capacitor Springfield Solution Windsor Substation Manchester-Hopewell Southern New England Transmission Reinforcement (SNETR) Southeast CT Solution Oxford Substation Bethel - Norwalk Haddam Autotransformer Shunock Substation Glenbrook Statcom Glenbrook Cables

16. 2006 NU Transmission Project Performance Summary – Excellence, Execution • Project construction milestones were on-time and spending was on-budget • Capital spending of approximately $470 million in 2006 • Plant-in-service totaling $390 million -- $10 million greater than budget • We have maintained excellent safety and environmental records • We have completed and energized the $340 million Bethel-Norwalk project as of October 12, $10 million under budget • We have completed and energized the new $29 million Killingly substation in northeast Connecticut, $3 million under budget • Completion of projects will result in significant cost savings for customers

17. The Next Five Years: Transmission Capital Expenditures Historic Forecast $1,062 Million Up To $2.4 Billion $1.1 Billion of major CT projects in 2007-2011 forecast period; $1.65 billion in total $ Millions SNETR family of projects estimated at $710 million during the 2007-2011 forecast period • The Southern New England Transmission Reinforcement 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.

18. Looking Beyond the Five-Year Horizon • The Southern New England Transmission Reinforcement family of projects will be our next major undertaking • ISO-NE’s Regional System Plan has identified longer-term projects within our franchise • ISO-NE is planning beyond the 30 GW grid to a 50 GW grid • Providing added transfer capacity between Maine and New Hampshire • Strengthening ties and transfer capability between southern New Hampshire and Massachusetts • FERC/NERC mandatory reliability standards may create new projects • Replacement of aging equipment will be increasingly important • ISO-NE is evaluating stronger interconnections with Canada

19. Imports of Renewable Power from Canada May Create the Potential for Additional Investment in Transmission ISO-NE Forecasts Show Surplus Generation in the Eastern Provinces of Canada and Insufficient Generation in New England, New York and Ontario SURPLUS Newfoundland & Labrador Existing DC interconnection with Hydro Quebec Québec +2,800 MW +10,984 MW Ontario -3,511 MW DEFICIENCY Maritimes New England +196 MW New York -2,070 MW Source: ISO-NE Regional System Plan (RSP) 2005 Forecast for 2014 -4,224 MW Connecticut -828 MW

20. New England Return On Equity • 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 • If successful with our FERC Rehearing Request: • Our going forward ROE on the large majority of NU’s transmission capital program will be at 12.7% • As new investment enters rate base our weighted ROE will rise – from approximately 12.1% blended in 2007 to about 12.45% by the end of the forecast period