2008 Annual Meeting of Shareholders

Recent Developments in New England’s Bedrock Energy Efficiency (EE)

Programs New England Electricity

Restructuring Roundtable

Penni McLean-ConnerVice President, Customer Care

June 18, 2010

The Energy Efficiency

Value Proposition

Areas of Focus

• Redesigning delivery models is key

• Ensuring EE financial levers are in place

• Reaching hard to reach customers

• Advancing complimentary policies

• Continuing NSTAR leadership in EE

The Energy Efficiency

Value Proposition

50 and more%

Our challenge is to drive deeper savings!

• CFL bulbs

• Air sealing & duct sealing

• Insulation

• Furnace/boiler & thermostat

• Appliances & AC

• Replacement windows

• Deep Energy Retrofit

• Onsite Renewables

5%

This home produces more electricity than it

uses.

The Energy Efficiency

Value Proposition

• Innovative technologies

• Fully integrated gas and electric programs

• Advanced delivery models

• Packaging of Measures

• Targeted marketing and data mining

• Comprehensive design solutions

• Combined heat and power offerings

Redesigning our EE Delivery Models is Key

Most importantly, we must create value propositions that are compelling to customers to invest in deeper energy savings.

The Energy Efficiency

Value Proposition

Ensuring EE financial levers are in place

• Funding source for EE efforts

– Systems Benefit Charge (SBC)

– Regional Greenhouse Gas Initiative (RGGI) funds

– Forward Capacity Market funds (FCM)

– Energy Efficiency Recovery Factor (EERF)

• Recovery for lost revenue/decoupling

• Performance incentives

MA has been a leader in creating a financial infrastructure that supports sustainable EE investment.

The Energy Efficiency

Value Proposition

Reaching Hard to Reach Customers

• Micro-businesses – Main Streets Program

• Property Management – Office of the Future

• Underserved rental markets – Community-based

outreach

Participation by Demand Range

0%

2%

4%

6%

8%

10%

12%

14%

16%

Non 0-2020-50

50-100100-200

200-250

kW Range

Per

cen

t P

arti

cip

atio

n

-

20,000

40,000

60,000

80,000

100,000

Nu

mb

er

of

Acc

ts

Part Rate

Num Accts

We must address gaps in participation

The Energy Efficiency

Value Proposition

Advancing complimentary policies

• National Energy policy

• Building labeling

• Property-Assessed Clean Energy (PACE) financing

NSTAR is an active participant several MA energy policy task forces and in providing letters of support for standards and grants.

The Energy Efficiency

Value Proposition

NSTAR continues to be a Leader in EE

Our fuel of choice in Massachusetts is energy efficiency.  That’s what we’re investing in tremendously as a utility and as a state.

-- Tom May on the Emily Rooney Show, February 4, 2010

NSTAR is investing in people, processes and technology

to meet rapid increase in programs.

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