All participants will be in a listen-only mode throughout the question-and-answer of the conference. [Operator Instructions]. The conference is being recoded. If you have any objections you may disconnect at this time. For today's call is Mr. Jeffrey R. Kotkin, Vice President of Investor Relations. Mr. Kotkin, you may begin.

Thank you. Good afternoon and thank you for joining us. I am Jeff Kotkin, NU's Vice President for Investor Relations. Speaking today will be Chuck Shivery, NU's Chairman, President and Chief Executive Officer; David McHale, NU's Senior Vice President and Chief Financial Officer and Lee Olivier, NU's Executive Vice President, will oversee our regulatory businesses. Also in the room today are Jim Muntz, Senior Vice President and Head of our Transmission business and Shirley Payne, our Vice President and Controller. Before we begin, I would like to remind you that some of the statements made during this conference call may be forward-looking as defined within the meaning of the Safe Harbor commission of the U.S Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties which may the cause the actual results to differ materially from forecasts and projections. Some of these factors are set forth in the press release issued yesterday evening announcing our earnings for the fourth quarter of 2007. Additional information about the various factors that may cause actual results to differ can be found in our Quarterly Report on Form 10-Q for the third quarter 2007 and also in our Annual Report on Form 10-K for the year ended December 31st, 2006. Now I'll turn over the call to Chuck.

Thank you Jeffrey. Thank all of you for joining us this afternoon. 2007 was a very strong year for us, as well as the first full year when we were operating under our fully ventilated business model. That's more than a transition year of '06. 2007 was indicative for what this company can accomplish. From an operational perspective, we continue to make significant progress on a number of initiatives. Our Southwest Connecticut transmission projects continue to move forward with about 70% of the aggregate work for these projects, compared to 30% at the end of 2006. We continued to move forward with the next generation of major transmission projects, also we expect to be completing between 2011 and 2013. Our New Hampshire generation including our new renewable energy in New England [ph] operating very well and providing measurable costs and environmental benefits to New Hampshire. On the distribution side, we settled distribution rate cases at Public Service of New Hampshire and Yankee Gas and experienced significant financial improvement of those subsidiaries. Earlier this year, we concluded the CL&P rate case. While we appreciate that the Connecticut Commission was faced with a difficult decision in light of increasing cost pressures on our customers, we're disappointed with the disallowance of several legitimate operating costs and with the 9.4% return on equity. In 2007, we were able to effectively deploy capital on all parts of our business, and have seen an improvement in distribution reliability as a result of those efforts. And from a financial standpoint, we also made considerable progress. By earning $1.59 per share, we exceeded the high end of our initial earnings range of a $1.30 to a $1.55 per share. And we are near to top of our revised range of a $1.45 to $1.60 per share. Given our…

Thank you Chuck. Well I'm going to start by excellent success assessment of 2007. From an operational and capital investment standpoint, 2007 was a very successful year. Our transmission distribution reliability was generally above our targets creating benefits for our customers. We invested a record $1.28 billion in our infrastructure, $762 million of which went into our transmission system. The Yankee Gas' LNG facility entered service on schedule in the 2007 and on its $108 million budget and was still in time to provide benefits for our customers in the form of lower commodity and pipeline costs this winter. On January 3rd the company saw a demand for natural gas reach over $332 million Btus. This represents the highest record send out day ever for Yankee Gas. With peak prices out $22 per million Btus which is more than double the cost of inventory in our LNG tank. Public service New Hampshire's Northern Wood 50 megawatt renewable energy plant reported a 77% capacity factor in the first year of operation, burning 481,000 tons of wood chips in one of the cleanest burning biomass plants in the country. Dispatching at a negative price when you consider the renewable energy and tax production credits. Our primarily coal-fired based load generation recorded an aggregate capacity factor of about 85% and has held PSNH keep its average rates well below those of other new utilities. As we look forward, we see more opportunities to increase our regulated generation earnings with projects that also will have significant customer benefits. We continue to work with the Washington Group on design and permitting applications for a wet scrubber for our two coal-fired units on our Merrimack generation facility in New Hampshire. We expect to provide you with more specifics about our proposal later this year, including an…

Thank you, Lee. As Chuck noted in 2007, we earned $246.5 million or $1.59 per share. Those results were above our initial guidance on a $1.30 or $1.55 per share, and just above or about at the very top of our revised range of $1.45 to $1.60 per share we announced last November at the EEI financial conference. Comparing these results for 2006 excluding non-recurring items, net income for our regulated businesses including a new tariff and other affiliates increased from a $178.2 million or $1.15 per share in 2006 to $234.8 million or $1.51 per share in 2007 representing an EPS increase of nearly 32%. In terms of business performance, every segment was within or above our initial guidance. Our Distribution and Generation segment earned a $146.2 million or $0.94 per share above our initial guidance of $0.80 to $0.90 per share and near the top end of our revised guidance from $0.85 to $0.90 per share. Those results were due to a combination of improved sales, well managed costs rate release and frankly some good fortune in having a relatively benign year for severe weather. Our parent segment earned 6.1 million or $0.4 per share near the upper end of our initial range of $0.00 to $0.05 a share. There we benefited from the interest we earned on the cash we received from our competitive generation sale in 2007. At the competitive businesses, we earned $11.7 million or $0.08 per share. We had initially projected breakeven results for the competitor businesses and later earnings were $0.05 per share. The improved results were due to sound management of our existing wholesale positions in closing out some contract in our former services business at favorable terms. In transmission, earnings were up $22.7 million or 38% over those of 2006. We…

And I'll turn back the call to Christine, just to remind you of how to enter questions. Question And Answer

Thank you sir. At this time, we would like to begin the question and session of the conference. [Operator Instructions]

Thank you. Our first question today is from Anthony Crowdell from Jefferies. Anthony? Anthony Crowdell - Jefferies & Co.: Hi, Jeff. Two questions, I guess the first question is, maybe a year ago, a little over a year ago, we were looking at I guess volumes declining in your service territory and you guys attributed to conservation because of the high commodity costs. It doesn't seem to be the case anymore. I wonder, if you had any comment on that. And the second question is, initially I guess we were expecting to see a pickup in the construction numbers for the NEEWS project and I think that the prepared remarks that it got pushed back and I wonder if you have any color on that?

Anthony, this is David. Let me just take the first piece of that question and at least kind of factually what we know in 2007 is on the surface, CL&P sales actually did increase 1.7%, some of that was weather driven, about 0.4 was the actual weather normalized growth. The equivalent numbers for New Hampshire, they actually had about 0.6% growth weather normalized. Western Mass is actually off fractionally by about 0.4%. So we are actually seeing at least in Connecticut and New Hampshire some modest sales growth, although not inconsistent with our expectations. I think in the range of 0 to about 0.5% is certainly less than historic trend. Certainly, but my sense is that customers are still responding to higher prices there and we still may not know directionally where these growth rates are going to settle. I would give you some comfort that for the CL&P, sales forecast that was in the rate case, that was based on about 0.3% growth and that's the type of number that embedded in our numbers going forward.

Anthony, this is Lee Olivier. One of the things I want to say is ISO New England and we continue to reiterate the fact that the overall NEEWS project including the 115 KV cables will be needed as we go forward, needed to solve reliability issues and needed to help in terms of marketing equities, in terms of vocational marginal pricing power between Connecticut and the region and also to get renewable power down. And as I said, we have completed the technical assessment of the 155 KV portion that we got favorable vote out of the reliability committee of ISO and I think to key thing here is quite frankly, the Greater Springfield portion of this project of the 345 KV overhead, the 115 KV underground and overhead, are probably the most complex projects we've had ever built and ISO's has to deal even more complex than the Southwest Connecticut projects. One of the things that ISO needs to do is to make sure that these projects meet all the existing and new reliable requirements set forth by the North American Reliability Corporation. And they need to understand that the operational aspects of the Greater Springfield projects the 115KV projects and how they handle relate with the other projects that we were building. They are looking at the Greater Springfield family of projects, and the 115 KV cables to make sure that they have their liability, operation flexibility and we optimize the cost for those projects. We've submitted the design that is clearly technically acceptable. They are looking at that design to make sure or to see if there is any other way that can be implemented in a way that meets that criteria and we can optimize the cost of the 115 KV underground cables. The overall project is we originally had projected it as you know, essentially kind of $1.4 billion between the underground cables and 345 KVs that those overall numbers end up we have not escalated the 345 KV part of the project to the most recent cost estimates in terms of labor and or construction materials and we just thought rather than continue to send out different cost estimates, we would wait to see what the ISO's analysis would say in terms of any design changes on the 115KV and then reforecast the cost of all these projects at one time, we estimate that ISO probably have their analysis done by the June timeframe, at which time we will reforecast all of the projects. I do believe that in their entirety that the overall project price will increase from the $1.4 billion. Anthony Crowdell - Jefferies & Co.: Okay.

Thank you, Anthony. Our next question is from Jonathan Arnold from Merrill Lynch. Jonathan?

Good afternoon everyone.

Good afternoon.

Just a quick question on your comments around the expectation of earning an 8.5% ROE CL&P in the first full year and obviously I think this rate deal is effectively a 2 year deal because you have an increase in the second year. But, yes, should we be thinking of as we look out into the second year that you will have an opportunity to work on costs and potentially push that return up or is it more likely to be trending down? And as a follow-up, at what time would you anticipate that you either it would or could be filing a new case in Connecticut?

Well, I will tell you an easy answer to is that we will not be filing a new case in Connecticut this year, certainly and Jonathan, you should expect as always that we continue to work on the cost structure not only the cost structure of our companies but, additional opportunities for these companies as well. And I think the types of costs that we were not covered to some degree can be mitigated and those are type of things that we are looking at pretty seriously, but there are other types of costs we might describe in this maybe I think there is philosophical differences with the commission about who paid for costs simply cannot be mitigated to any large degree. And you know the things like, as a classic example might be with the commission did not cover all the companies' director and officer insurance. We are not going to put a cut premium and policies, I mean we will continue to look at that, study that and look at overall limits and the like and be as diligent as we can negotiating terms particularly when we have opportunities to renew our premiums. But some of those products are going to remain in the structure, but certainly through the course of this year, we will take an opportunity to make sure that we are doing what we can to balance, providing the service to our customers and kind of maximizing our returns and we are hopeful that we can improve return year-over-year. But I'd say, at some point later in 2009, it is possible that we would file for new rates in 2010. But it's premature to say that now Jonathan, but it certainly won't be in the very near term.

Thank you very much.

Thank you, Jonathan. Our next call is from Micheal Lapides from Goldman Sachs. Michael?

Hey guys, congratulations on a good quarter and a good year. Question, can you give a real high level, I just want to make sure I got this down in my notes correctly. I'm trying to think about the roster of projects that you are looking at, but that's not in your official CapEx guidance. I mean the CL&P peakers obviously, the transmission up into Canada, which maybe a few years off, but kind of got in the back of the envelope. What else in my reading off that or kind of major items, $100 million plus items?

Okay. Michael, this is David. Let me kind of rattle through them because I probably went through them fairly quickly. And if you recall from our prior disclosures, typically at EEI we had a fixed slide up on the billboard that say, here is what's in our forecast, here's what's not in our forecast and those our initiatives that we continue to focus on and I think we can continue to advance, but not necessarily with 100% probability, some of the list goes to and you mentioned a couple of them. Certainly, on the Connecticut peaking generation, we talk about the fact that we will file a proposal for 260 plus megawatts, we haven't put a number on what that would cost. You will see that shortly, but that's one is going to go live very soon. Lee touched on where we are with NEEWS and we will update that later in the year and you can assign a probability or size to that that's one too, that's sort of right out in front of us. Other things that we talked about, which you include not only near term AMI but really wide scale AMI deployment through all of our states, and there you can put a probability on it. Connecticut of course, is the most aggressive now as we work through with the pilot. But I think it would be for some years before we get to the point where we are going to be swapping out 1 million meters. Nevertheless, it holds the potential to be an investment for this corporation. We touched on the future opportunities that's for New Hampshire transmission to reach into our renewable corridors and maybe even for PSNH to build renewables such as wood, biomass and the like. Both transmission and then additional PSNH generation which are bigger ticket items are not in our forecast as well. I think you will see us increasingly pursue inability to participate in the renewable market in generation in Connecticut and Massachusetts, too early to really develop numbers around that. But that's something that I think is possibility for us. I think also to the extent that regulators and policy makers are focusing on DSM and conservation, increasing business opportunities there too I think that is already a core competency of ours, if not necessarily a business line, but there that maybe opportunities for us there and you mentioned the longer term Canadian solution. I think when you stack that up and put some numbers on it, it's a very big number, all with varying degrees of probability, but that probably the less that we would keep you focused on.

And what is the process that's going to play out in terms of the New Hampshire transmission and getting approval. Trying to think about just process and timeline and tracking of the New Hampshire transmission, kind of build out?

Michael, this is Lee Olivier. Right now, the New Hampshire Public Utility Commission has issued a report on the need for transmission and Chuck indicated some numbers in terms of 400 megawatts to 500 megawatts of additional transfer capacity at costs perhaps up to $100 million to $200 million of transmission investment. Right now, the decision is over in the legislature, they are looking at essentially a mechanism or methodology of who is going to pay for this. As you know, traditionally, when you interconnect generators to generators, pay for the interconnection and with all renewables anywhere in the country; if you use that approach, then the renewables never get billed. So, there needs to be a mechanism such that the renewable generators contribute to a tariff and support a transmission, and then the balance would have to be picked up by either the local network service or potentially even through part of the region. So, they are looking at the various adjusting statutes and they will have to make some kind of statutory change, we expect that to happen this year, we will be advocating for that in the legislature.

Got it, thank you guys. Much appreciate it on that.

Thanks Michael.

Sure.

Our next question is from Oliver King from Zimmer Lucas [ph]. Oliver?

Hi guys. I just wanted to clarify on your long-term growth rate, which you guys lowered. You guys had the 10% to 14% five year growth rate since the beginning of '07, when your '07 guidance was $1.42. Now that you have lowered it to 8% to 11%, but your '07 results were actually around $1.57, would it be fair to say that your 5 year earnings outlook has actually unchanged, despite lower growth rate or would you actually expect lower growth long-term growth rate going forward?

To pick up on your kind of mathematical construct there, I think at this point it is fair to say that our long-term growth prospects are driven by the amount of capital we put to work, the agree to which that capital gets into rate base and through which we can earn on it. I mean that's basic process and the amount of capital has not changed. Our growth process remains the same. I do suggest that longer term, we did a little refining of what we think of steady state ROE is for our CL&P electric jurisdiction and they have vowed that back a little bit, everything else remains in the 9 to 10, but fundamentally, the story is the same and you will see that when we will print the K that will have all of our CapEx and rate based information in front of you. So with the exception of a little bit of movement around CL&P ROE, this story remains the same, our earnings power is intact.

Okay, thank you.

Thank you, Oliver. Next question is from Ross Fowler from Lehman. Ross?

Good afternoon guys, how are you?

All right.

Good afternoon.

Just a couple of questions around the New Hampshire transmission. I know the study that they put out, said, we are kind of looking at a year-to-year and a half of study citing an ISO review and then three to five years post that to kind of get this done. So I was wondering, if that's kind of still in play and that put this into kind of a 2012 timeframe? And then kind of other question around the ISO New England presentation, is the 135 mile DCY from Quebec to New Hampshire and then there is also the 85 mile undersea line from New England to New Hampshire to Boston, you guys haven't really talked about that at all, just wonder if that still in play? And then what the timing of that stuff is and if it could be kind of out of balance to look at the undersea line in Connecticut and kind of the Middleton and Norwalk line to get a scope of cost per mile or what that might look like?

Ross, in terms of the kind of renewables in New Hampshire transmission, there is a strong momentum to try to expedite the construction of those projects and to get them build as soon as we can, but what we are hoping for quite frankly is legislation that would allow us to go forward and then put together a transmission designed and take it through the ISO process, in terms of getting approval, we own essentially right away 115 KV right away that runs up through northern Hampshire and then we own it right away that comes off of the north of the Berlin to Hampshire that actually, it's a 34.5 KV right away that goes into Quebec. Our position is as soon as soon we get legislation, we are prepared to expedite both the design and sighting and the build out of that projects. So, if you look up the 2012 timeframe, if we get immediate legislative approval sometime this year, we would hope to have it done on or before that time period because on using existing 115 KV lines is not a very sophisticated design, it would be relatively correct to design and build. So, on or before 2012 assuming we get legislative changes we need.

And Ross, with respect to your question about the Quebec line, you probably don't have a... having looked at the D.C. Dayton material, there were a number of folks that presented different opportunities in New England ranging from conceptual to specific projects. We thought it important to begin to inform this discussion and to make this discussion a little more real, to put forth a project that as you pointed out runs a DC line into Quebec to bring the considerable hydro resources from Quebec down and then has at least that as one adjunct to it and under sea line. You can appreciate there are a lot of moving parts to this, each of the states have their own views on this, the transcription owners have their own particular views on this, and you know, clearly ISO does. And so one of the things we are attempting to do and I said in my remarks that we will hope to have a more refined solution set in place that we could discuss in more detail by the second half of this year. One of the things that we are trying to do is meet with those interested parties, begin to have informed discussions around what each party is trying to accomplish and then see if we can reach a consensus that begins to bring real solutions to the region. I will say, and we have said this on a number of occasions, this is not just one solution, we are not going to just build... nobody is going to build just one line to charge everything. But looking at a portfolio approach that which may include accessing additional renewables in Maine or New Hampshire, we are accessing additional generation capabilities in a variety of the Eastern Canadian provinces. I think we can fashion something that we can reach a consensus opinion on. That process is as you appreciate got a lot of associated aspects to it and we'll continue to keep your apprised, but our hope is that we can put a more refined solution set in space to have people talk concretely about by the second half of this year.

Ross, Is there a question in regards to underwater cables that would be cost per mile per underwater DC cable?

Yes, I was just trying to get like a scope, I know that you guys have gone Norwalk to Northport and that's like a 11 miles for $72 million and then Middleton and Norwalk is 69 miles for about $1 billion. I know this difference is in geography and probably labor of Connecticut to New Hampshire. But, I was just trying to scope out what this might look like down the road based on a darker mile kind of cost picture?

If you are looking like underwater lines, I think underwater DC lines is an example, you are probably talking a good number is about $10 million a mile for a DC mine underwater and if you are looking overhead lines, depending on what the sighting criteria is in each state and Connecticut is probably the strictest and so has the highest pass. If you do overhead differences like overhead 345 KV lines there, they're up around $4 million a mile with EMF mitigation technology and so forth. So, it kind of depends on the technology on the state sighting criteria. Now, all of the numbers we have given with NEEWS as in... you given an example with the exception of the underground 115 KV cables, all of those 345 KV numbers have no undergrounding built into that. So, to the extent that either in Connecticut or Massachusetts that require undergrounding then whatever the mileage is you multiply times essentially about 4 in terms of that task.

Okay, that makes sense. Thank you very much.

Okay.

All right, thank you Ross. Our next question is from Maury May from Soliel [ph]. Maury?

Yes, good afternoon gentlemen.

Good afternoon.

I have a question again on the new growth rate, if I recall the old growth rate of 10% to 14% was backend loaded and that the growth in the early years of the 5 years was faster than the final couple of years, is that also true of the new 8% to 11% made?

Maury its David. I think it's true if you look at where we are going kind of '08 midpoint over 2007 actual effective gain of 12% or 13% growth. I think when you kind of look through 09, 2010 kind of model out with different shape and they probably flattens out a little bit and then at the very end the last tail here you got to note a little pop. So, its looking... it's a little chunkier year-by-year than say last time, last year it was. Good growth in 2007, big growth in 2008 and kind of a bit of U shaped or chewing off some of that front end, as we sort of succeeded out in 2007. Still got a kind of U shape but the last year too is a bigger increase. So, you got to sort of model out year by year.

Okay, my second question has to do with the parent re-financing that you planned for June 1st. If I recall, you are refinancing $150 million of 3.3% debt, and what do you plan to refinance, exactly that amount or a higher amount and if you have to do it today what would be the cost, to you all?

We are studying that now. And those are the right numbers $150 million 3.3%, roughly five years ago. So, we are studying exactly how much it will be that number plus or minus, don't expect to see a $500 million offering anytime soon. We did already not only for NU parent but we did for all of our... based for all our debt exposure, lock-in interest rates already, some fives and some tens through some forward ratings starting to ops as I mentioned. So at this point it depends on what's happening in the credits spread markets as we get into that timeframe. But clearly it's going to depend on where we are on the maturity spectrum and so did ten year deal and that ten year its trading at 380. You can guess when a new parent take over right now, it might be 225 given their rating. But I've already got the underlying interest rate for you lock-in. So its still developing I'd say 5 to 10 year maturity, I'd say generally is going to be that 150 and generally around 225 over the that year.

Okay. Alright thank you very much.

You are welcome.

Next question is from Paul Patterson from Glenrock. Paul?

Good afternoon guys, I just want to follow up on Jonathan Arnold's question on the ROE. We are looking at the ROE that you guys are projecting business versus what you allowed. You mentioned that there was certain class or clause that you guys simply disagree with the commission in terms of what applicable to CL&P is what it sound like to me. I guess I'm wondering here is an how much of the difference in the ROE, I mean it is possible to quantify is associated with items that they simply don't feel should be to be expensed by CL&P and in cost allocations what had you from the parent work, have you mentioned in your insurance versus just maybe expectation of sales growth or something that's different. Just elaborate a little bit more in terms of what's causing the differential in the earned ROE versus AL?

Sure. So there are probably two types of costs that I will characterized. The first cost is were we may have a different view of what our rate year expense will be. They think differently but fully recovered whatever they believe that rate is -- And the second bucket is maybe a sort of philosophically cost that they feel should be borne in part by our shareholders, as opposed to exclusively in a rate pair account. So, some of those costs for example might be some of our benefit programs such as 401(k) and they are quite expressed in their rate or is same as some of those costs should be borne by our shareholders. Also, things like for... incentive compensation for our executives, those costs should be borne by our shareholders. So, some of those type of costs probably, philosophically the commission may continually will that they are not recoverable. Even if you actually do bear that expense level. And see that's difference to say that the first bucket of costs that maybe things like storm expense or rent expense or expense to cover your vehicles and your fleet, in your auto insurance and the like, where you're just saying they might say your test here is not reflective of what your rate year expensive level might be. And they are just kind of a difference. If you do not think philosophically you shouldn't get them covered. But to your second point, when you look to those items where they may rule for some period of time that your shareholders should cover some of those costs P&L insurance, 401(k), executive incentives, there might be worth 30 or 40 basis point after that 9.4 we just can't get to.

Excellent. Okay, that's great. And then just a follow-up on Jonathan's question about the 2009. Was your answer and I'm sorry to be not clear on this but, I wasn't clear whether the answer was that, you weren't sure what the 2009 or whether it will be improved or not or whether... just what exactly was your expectations if you had one of those?

Okay, first off my stock answer is we are not giving 2009 guidance, I don't mean to flip about it

Sure.

That that's not our precise study period right now. We know we got about $20 million of revenues coming in to CL&P from the rate case and what we are doing now and will do over the course of this spring in particular as we kind of drive toward deeper in the year preparing '09 guidance is sort of think through what costs were recovered, back to that philosophical issue of who is going to recover these costs? What is their appropriate expense structure for this organization and what is the outcome, what is this regulatory ROE outcome? All that work sort of, is in motion, Paul.

Okay great. Thanks a lot guys.

Thank you, Paul. we don't have any more questions now so. I just want to thank you all for joining us. If you have any follow-up questions, please give us a call this afternoon or tomorrow and we will talk to you soon. Thank you very much.