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By Travis Miller | 11-06-2009 01:41 PM

How One Utility Outshines

NSTAR CFO Jim Judge on firm's dividend commitment, constructive regulatory relationships, and recent operating cost controls amid flat to lower sales.

Securities mentioned in this video
NST Nstar

Travis Miller: Hi. My name is Travis Miller. I'm an equity analyst at Morningstar. It's my pleasure to introduce Jim Judge, CFO from NSTAR. NSTAR is a Boston-based utility that we think is well positioned to benefit from changing demand and a very constructive regulatory structure that produces a solid dividend for investors. Jim, thanks for being with me.

Jim Judge: Thank you. Good morning, Travis.

Miller: Let's start of and talk about a trend that we've seen over the last couple of quarters in the utility space. Volumes are down. The economy is weak. Weather was unfavorable in most of the eastern half of the U.S. What's happening with volumes on your side?

Judge: Actually, to get a fuller perspective, I'd go back more than a few quarters. And if you look at the last two years nationally, electric sales are down between 7% to 8%. And we, up in the greater Boston area at NSTAR have fared much better than that.

Last year, our sales were actually flat while the industry was down 3% to 4%. And this year, our sales are down 3.7%, but a good portion of that has to do with the weather that we experienced. June and July were the mildest June and July in over 100 years. In fact, cooling degree days were off 40% from what we usually see in July, so the air conditioning load wasn't there.

So while there has been demand destruction, our region seems to have held up much better, and I think it's really a credit or a function of the stable customer base that we have in our territory.

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