We recognize that our success in meeting the needs of all stakeholders is predicated on our financial strength. The successful closing of the Northeast Utilities/NSTAR merger in 2012 and resulting multi-year merger settlement agreements with Connecticut and Massachusetts regulators provide a solid foundation for continued delivery of high quality service to our customers and value for our shareholders.
As a result of improved regulatory diversity, a stronger balance sheet and improved cash flows, our Standard & Poor’s credit rating was raised to A-. This rating is among the highest in the industry and gives us solid access to capital markets. Debt refinancing activity that benefited from the upgrade is expected to produce annualized interest cost savings of nearly $30 million – savings that benefit customers and shareholders.
Successful execution of our business plan will allow us to grow recurring earnings per share by 6 percent to 9 percent annually for several years off of the $2.28 per share we earned in 2012, excluding merger expenses. This earnings growth will come from our investment in New England’s energy infrastructure – an investment that is vital to maintaining reliability for customers in an efficient and effective manner. We have developed a five-year, $3.9 billion transmission capital plan beginning in 2013 to address regional reliability concerns for customers while growing our transmission business.
The natural gas segment of our business also offers significant growth potential. We are working closely with Connecticut state officials to develop a long-range plan for natural gas expansion, and we continue to work diligently to mirror those efforts in Massachusetts. Customer demand for low-price natural gas is driving heating conversions to record levels, and we expect conversions to continue to be strong in the years ahead.
We expect to be able to grow our common dividend, an important element of total shareholder return, in line with earnings growth. After two increases in 2012 that totaled nearly 25 percent, we raised our quarterly dividend by another 7.1 percent in the first quarter of 2013.
Our business plan has been well received by the financial community. In 2012, a year when utility stocks significantly lagged the broader market, we provided our shareholders with a total return of 12.1 percent, nearly six times that of the total return of 2.1 percent for the 51-company Edison Electric Institute (EEI) Index. Over the 15 years ended December 31, 2012, our total return was the best of any of the 51 utilities in the EEI Index.
We are confident about our future and remain equally as confident about our ability to continue to be a thriving New England-based business.