NSTAR Electric and Gas, a
) business wing, is all set to build a 345,000 volt, 26 mile power
transmission line spanning from Carver to West Barnstable and
ending at Cape Cod in Southeastern Massachusetts.
Essential features of the project include the construction and
installation of transmission towers as well as 18 miles of
high-voltage electric lines, along with setting the existing lines
on their structures. The project is scheduled to complete by the
summer of 2013. With the completion of this entire project, the
customers will have increased availability of power and a
redundancy option if any unexpected issue arises related to
The $106 million program is projected to boost reliability of
the power grids and ensure smooth utility services to hundreds of
residences across the southeastern Massachusetts area. In addition,
a back-up electric supply project is expected to provide
pro-environment benefits thereby diminishing the state's dependence
on fossil powered plants.
Additional advantage includes improvement in the economic
welfare as the program will lead to job creation. We also expect an
expansion in the customer base and a concomitant rise in the
top-line near term.
We note that the merger between NSTAR and Northeast Utilities
was completed in the first half of 2012, creating one of the
nation's largest utilities. The present infrastructure initiative
on part of NSTAR will generate substantial revenue upside for the
company in the near term. However, unexpected outages and failure
of the company's cost-control initiatives keep us wary.
The Zacks Consensus Estimates for the third quarter and full
year 2012 are currently pegged at 66 cents per share and $2.28 per
share, respectively. The company's closest peer is Indiana-based
). NiSource is also in the process of upgrading its Columbia gas
lines infrastructure to improve its service efficiency and
Northeast Utilities currently has a short-term Zacks #3 Rank
Hold rating. Based in Hartford, Connecticut, Northeast Utilities is
a public utility holding company which provides energy delivery
services to residential, commercial and industrial customers in
Connecticut, New Hampshire, as well as Massachusetts. The company
engages in the purchase, delivery, and sale of electricity.
NISOURCE INC (NI): Free Stock Analysis Report
NORTHEAST UTIL (NU): Free Stock Analysis Report
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