Q3 2021 Eversource Energy Earnings Call
Will be Joe Nolan, our president and Chief Executive Officer, and fill Limbaugh, our executive Vice President and CFO also joining us today are John Moreira, our treasurer, and senior VP for finding us and regulatory and J Booth RVP and controller now I will turn to slide three and turn over the call to Joe.
Thank you, Jeff we hope that all on the phone are safe and well and we look forward to seeing many of you in person next week at the conference.
We will cover a few topics. This morning, and then turn it over the call to fill to discuss our third quarter financial results in a regulatory activity first I want to discuss last week's northeaster, which impacted approximately 525000 customers across our service territory.
Our eastern Massachusetts customers sustained the greatest damage with more than 450000 customers impacted that's over 35% of ever sources customers in eastern Massachusetts.
This storm was far less damaging in Connecticut, Western, Massachusetts, and New Hampshire, So as we wrapped up the risks restoration in those areas, we were able to quickly redeploy resources to south Eastern Massachusetts, Cape Cod in Martha's Vineyard.
Areas that took the brunt of the storm.
Our internal resources were supplemented by hundreds of crews from outside the region and we were able to essentially complete the work over this past weekend.
This experience underscores the benefits of a large T&D organization, one where resources can be shifted based on the greatest need.
Last year. It was Connecticut last week. It was Massachusetts next time it might be in New Hampshire, we have 9300 dedicated employees all focused on providing the best possible experience for our customers.
Weapons, we learned last year in Connecticut, particularly regarding communication with municipalities have been vigorously applied this year.
Our customers and community leaders have certainly noticed or enhancements and we have received many positive comments on a storm response.
Customers I, noting that not all the best alignment in New England worked for the New England Patriots.
When stomps if threatened us.
And recall that we have had glancing blows from three tropical storms. This summer and last week's events that I described at the beginning of my comments I have been at the center of the action from before the storm hits until the last of our customers has power restored.
I believe that's critical for us to be Outfront visible transparent and collaborative during these major events.
Something that has been difficult to do as we all worked in a remote pandemic restricted environment for the last 18 months.
Next I want to discuss our Connecticut right settlement.
To start I want to thank the parties from deep that Connecticut Attorney General's office.
The office of consumer Council, and the state's industrial consumers fulfilling being willing to sit down and work out a settlement that will yield meaningful in immediate bill credits to customers and strengthen the Connecticut focus and control it Connecticut light and power.
And news reports Governor, Vermont Attorney General William Tong and state leaders were quoted as saying that the settlement provides customers with some well deserved relief in the short term greater local control and oversight and then improved customer's experience we agree I also.
So wanna, Thank PURA for approving the settlement agreement last Wednesday fill will discuss.
Settlements specifics in a moment.
But we are very grateful to PURA for the opportunity to move forward on a positive note.
Settling critical regulatory and legal disputes was a necessity to reset our relationship with key Connecticut stakeholders. We all want the state to move ahead on addressing critical energy and climate issues and the outstanding disputes had the potential to delay some of this important work.
Since becoming C E O. This past spring my top priority has been to strengthen our relationship in Connecticut.
I've met regularly with key state policymakers as well as business leaders in customers underscoring our commitment to the state with the largest number of ever source employees live and work. This will continue to be a strong focus for me going forward.
Ever sources fully committed to providing each and every one of our 4.3 million electric natural gas and water customers across the winland with exceptional service.
With Connecticut temporary rig talk it now behind US we can move onto other important topics, where progress has been hindered by the drain in time and resources devoted to storm <unk> in the interim rate reduction.
Supporting the build out of electric vehicle infrastructure and sending the construction of customer one energy storage installing am I that is the clean energy future and we will work together with our customers and policymakers to get there.
Changing topics I'm gonna come to cover some very positive developments in recent months concerning our offshore wind partnership with Austin.
You can see the status of our current projects on slide three.
Each has advanced since I lost earnings call.
To start a smaller projects South Park has received its final environmental impact statement and we expect a record of decision to be posted later this month.
Bombs project website anticipate the decision on self box construction and operating permit or a cop in January of 2022, and we anticipate construction beginning early next year. We continue to expect commercial operation of the 12th Turbans hundred 30 megawatt project.
By the end of 2023.
In August we announced that key what will commence construction of the project substation this month in Texas.
Now we expect it to be installed in the summer of 2023.
Moving to the 704 megawatt Revolution wind project that will deliver clean power to Connecticut, and Rhode Island.
Bomb continues to anticipate a cop decision in July of 2023, which would support at 2025 in service date.
State, citing hearings have commenced.
Finally, our largest project Sunrise wind.
Which will supply 924 megawatts to New York, we are looking for federal agencies to complete their final reviews in late 2023.
Ah schedule that would support a late 2025 in service day last week, we announced that Sunrise will be the first offshore wind project in the United States that will utilize high voltage direct current technology.
H V D C office advantages over AC technology, when used over long distances and Sunrise will have in approximately 100 mile submarine transmission cable from offshore any energy production area to the grid connection and Brookhaven Long Island, New York.
We continued to project mid teens equity returns for these three projects.
The bike administration continues to show significant support for offshore wind and both words and actions targeting 30000 megawatts of offshore turbines by 2030.
We view our partnerships to ocean tracks off of Massachusetts, as the best offshore wind sites on the Atlantic Seaboard or leases are in close proximity to both the new England and New York markets. They enjoy strong offshore winds, particularly in the winter and they.
Modest ocean depths.
They can hold at least 4000 megawatts of offshore wind turbines far more than the approximately 760 megawatts. We currently have under contract.
We continue to exercise strong fiscal discipline and using the remaining offshore acreage that we have leased from the federal government. We did not be it into Massachusetts September RFP for up to 1600 megawatts of offshore wind.
<unk>, Massachusetts bidding rules.
Discourage imaginative bid packages Governor Baker, and some Massachusetts, policymakers and now recognizing that Massachusetts is not benefiting from the same level of economic development as states that place greater emphasis emphasis on infrastructure and supply chain development.
As such the Governor recently filed legislation that would eliminate the state's current price cap.
In Rhode Island, we are constructing a service vessel and the state in Connecticut, We are partnering with the state on more than $200 million upgrade of the new London state peer to peer will become the premiere sight than the entire northeast for staging offshore wind development.
Unsure construction is underway, which you can see from either I 95 are Amtrak's nearby Boston to New York line and.
In New York I joined members of the Governor vocals Administration last month, and then announcing the largest single offshore wind supply chain contract Award in New York to support the Sunrise project.
The local company rigs distiller will construct advanced foundation components at the port on the Hudson near Albany.
Is just the latest commitment we have made to New York, which also includes basing an offshore wind maintenance hub in port Jefferson, We have an excellent relationship with New York policymakers and that is where most of our currently contracted offshore wind capacity is headed we look forward to bidding.
Into future Rfps, where are strong mix of sites skillsets disciplined bidding strategies and all states vast offshore wind experience will make us a formidable contender in any competition that takes a broad work at the benefits of offshore wind now I will turn the call over to fill.
[noise].
Thank you Joe This morning, I'll cover a few topics or third quarter results.
Details about the Connecticut settlement, an update on a grid modernization electric vehicle initiatives.
And to look at natural gas.
Outlook for the coming winter.
I'll start with our results for the quarter slide for our GAAP earnings were 82 cents per share for the quarter, including the 19th century associated with the Connecticut electric rate settlement and one cent charge relating to our integration of Eversource gas of Massachusetts.
Overall, we experienced improved operating results at the electric transmission and distribution segments and lower results at the natural gas and water segments as well as the parents and other.
Our electric transmission business earned 40 per share in the third quarter of 2021 compared with earnings of 36 cents in the third quarter of last year, reflecting a higher level of necessary investment in our transmission facilities.
Our electric distribution business, excluding charges related to the Connecticut race settlement earned 62 cents per share in the third quarter of 2021.
Compared with earnings of 60 cents in the third quarter of 2020.
Hired a distribution revenues were partially offset by higher O&M dip.
Depreciation interest and property taxes.
Storm related expenses remain a headwind for us costing that's a penny a share in the third quarter of 2021 compared to the same period in 2020.
And a total of five cents a share more in.
In 2021, and then last year on year to date basis.
Our natural gas distribution business lost six cents per share in the third quarter of 2021 compared with a loss of four.
And the third quarter of 2020 give.
Given the seasonal nature of customer usage natural gas utilities tend to record losses over the summer months.
A natural gas segment now.
Natural gas segment loss is now about 50% larger as a result of the acquisition of Columbia gas at Massachusetts assets back and last October and as you recall, we now refer to that franchises.
Eversource gas at Massachusetts, So Eversource gas, Massachusetts last about three per share in the quarter. It had no comparable amount in the third quarter of 2020.
I think it's important to point out here that.
Given this is the first full year for our Eversource gas of Massachusetts, or D. GMA franchise modelling. Its quarterly earnings contribution is very widely across street estimates at least the ones that I've seen.
Just as some investors underestimated the 14 cents per share positive contribution from Iijima in the first quarter.
I believe they may have been some underestimate of each GMA losses in the third quarter as I said email us three cents in the quarter.
And it was not part of the <unk> family in the third quarter of 2020.
I say going forward with a year's track record behind Us I am sure that the estimates will better reflect the earnings pattern, we have for that franchise going forward.
A water distribution business Aquarian are in five per share in the third quarter of 2021 compared with earnings of seven in the third quarter of 2020.
The lower results were due primarily to the absence of the Hingham, Massachusetts water system that we sold at the end of.
July of 2020.
17.5 million that we earned at our water segment in the third quarter of 2021 is more Ah more normalised level.
That segment.
Our parent another.
Earned one cent per share in the third quarter of 2021 compared with earnings of three.
In the third quarter of 2020.
Low earnings were primarily due to a higher effective tax rate are consolidated rate was 24.8% in the third quarter of 2021.
Compared with 23.7% in the third quarter of 2020.
Turning to slide five you can see that we have reiterated the $3.81 to $3 and 93 EPS guidance that we issued in February.
That range excludes the 25 per share per share of charges related to our Connecticut settlement.
And storm related Bill credits the re recognized in the first quarter of this year as well as the transition costs related to the integration of the former Columbia gas of mass.
Massachusetts assets into the Eversource system.
Also we project long term EPS growth in the upper half of the range of 5% to 7% through 2025 excluding.
Excluding the impact of the positive impact that we expect from our offshore wind projects.
That growth is largely driven by our $17 billion five year capital program and continued strong operational effectiveness throughout the business.
The reference our five year capital forecast is shown in the appendix and through September 30th R capital expenditures totaled $2.3 billion.
From the financial results I'll turn to our recently approved Connecticut settlement on slide number six.
Early to Joe provided you with an overview.
Additional details the settlement calls for $65 million in right credits to see LNP customers over the course of December of 2021 in January of 2022, and that's about in total $35 per customer over the two months for the for the typical <unk>.
Is essential customer.
It provides another $10 million a shareholder pay benefits to customers, who are most in need of help with their energy bills.
Further as part of the settlement, we will withdraw our superior court appeal of the 28.4 million dollar.
Total storm related credit the customers first saw their bills in September of 21. So these customers will continue they will continue to flow back to customers through August of next year.
As part of the settlement the 90 basis point indefinite reduction of C. Lnp's distributionnow or we will not be implemented. Additionally, the current 9% to 5% are we in capital structure will remain in effect.
This will avoid an appeal of the interim rate reduction and will withdraw the pending appeal the 90 basis point reduction.
B LNP cannot implement new base distribution rates before January 1st of 2024 prior.
Parties to the settlement agreed that this review satisfies the statutory requirement in Connecticut that all electric and natural gas distribution company rates be reviewed once every four years.
To determine whether they are just and reasonable so as a result of next statutory mandated review would be in late 2025.
Since the Lnp's last distribution rate case was effective in may of 18.
The actual company the company is actual <unk> of generally range between 8.6% and 9%.
With the latest reported quarter at 8.6%.
There are some tracking mechanisms that will allow us to recover costs associated with certain new investments over the coming years.
Such as those to improve reliability or implement grid modernization initiatives, but we will not be able to obtain any additional revenues to offset higher wages employee benefits costs property taxes, and and other inflationary items.
We will continue to provide superior service to our nearly 1.3 million CMP customers will also be effectively managing our operations.
We will certainly be a challenge, but one I know that our entire LNP and every source team is up to meeting.
From the Connecticut settlement, I'll turn to our various grid mod.
Electric vehicle initiatives in Connecticut, and Massachusetts.
So first I'll turn to slide seven and cover the Connecticut programs.
On October the 15th CMP filed final electric vehicle program design documents for pure review and approval.
Including a proposed budget and program implementation plan for residential managed charging.
Pure will conduct a review process with a final decision targeted for December the eighth.
The program is planned to launch.
January 1st of 2022 and will support the state's target of having at least 125000 electric vehicles on the road by the end of 2025.
In terms of am I.
In Connecticut.
<unk> is preparing to file an updated proposal based on a straw proposal from pure to have all our customers on amway, but at the end of 2025.
The date.
We'll need to replace.
More than 800000 meters over the next.
To do that we will have to replace over 800000 meters over the next several years.
Altogether, moving see LNP fully to AMIA would involve a capital investment of nearly $500 million, we estimate and meters and communication related technologies.
In Massachusetts on slide eight.
As we mentioned on our July earnings call.
We have submitted nearly $200 million grid modernization plan to regulators for the 2022 through 2025 period the.
The vast majority of that investment would be capital.
We expect a ruling on the entire program by the second quarter of 2022.
Our Massachusetts AMIA program is now being evaluated by the Massachusetts Department of public utilities with a decision expected in.
2022.
It would involve about $575 million of capital investments.
Over Multiyears from 2022 through 2027, and like Connecticut would provide significant customer service reliability energy efficiency grid modernization and demand management improvements.
Also in Massachusetts, the <unk> is evaluating an extension of our electric vehicle program.
Extension would provide investments of nearly $200 million over the next four years with about $68 million being capital investments.
We currently expect that decision on this by mid 2022.
Turning to slide nine.
We've been receiving regular questions over the past couple of months about the impact of higher natural gas prices on this winter is electric and natural gas supplies and prices.
So first start with with supplies for.
What do we have to supplies.
Our three natural gas distribution companies are required to have access to enough natural gas to be able to serve our firm customers on the coldest day in the last 30 year period.
So we accomplish that through a combination of firm capacity contracts across multiple interstate pipeline systems.
And through storage, both inside and outside of our service territory.
Ah regulators in Connecticut, and Massachusetts have had the foresight to allow us to maintain significant in region LNG storage in Waterbury, Connecticut.
And hopkinton, and a cushion that Massachusetts as well as various facilities that we purchased as part of the Columbia guess of Massachusetts transaction.
Although these facilities provide us with.
Altogether these facilities to provide us with storage connected to our distribution system of nearly 6.5 billion cubic feet.
Ah regulators have also.
Permitted us to require additional firm delivery capacity.
It was added to the Algonquin system in recent years through the aim in Atlantic Bridge expansion projects.
We've also acquired additional firm capacity on the Tennessee in Portland pipelines, so from a reliability standpoint and supplies. We are we consider ourselves very well prepared.
The winter.
In terms of price.
A natural gas sources include a combination of store gas, where the price has been fixed and pipeline gas from Marcellus shale basin that is price based off of Nymex related in this indices.
Because our firm pipeline capacity, we are able to purchase at the Marcellus related price not at the New England City Gate price you can see on the slide that we have in our deck that there's significant difference in pricing between the two.
Nonetheless, even the Marcellus prices higher this year and as of now we expect the commodity portion of natural gas bills to be approximately 20% higher than last winter is extremely low levels.
Judith due to Covid prices were pretty low last year and well below levels we experienced.
A decade ago after Hurricane Katrina struck the Gulf of Mexico in Louisiana.
Overall include.
Including the distribution charge, we expect natural gas heating bills will be up about 15% on average that's about $30 a month.
To the average for a typical heating customer compared to last winter and that's an average across our three natural gas distribution companies, while a 15% increase is significant.
It is far less than the more than 30% increase that propane heating customers are facing and and really a 60% increase that's out there for home heating oil as the alternatives for customers.
Of course.
Primary determinant of the total bill is usage.
The autumn has been quite mild here in new England, thus far and natural gas usage has been has been particularly low.
Nonetheless.
Ah bitterly cold month of December January it could cause natural gas.
Cost to increase.
Recognizing the stress that this situation could place on customers.
We've been proactive we suggested to our regulators that we spread out the recovery of certain charges and a <unk>.
Distribution portion of our bill to moderate the potential bill impacts where possible.
We're also taking additional proactive steps and working closely with regulators. So the customers understand the current pricing environment and take actions to address it.
Intensifying our communications to be sure customers understand the bigger picture macro factors affecting natural gas bills, and we're urging customers to take advantage of our.
Nationally recognized energy efficiency programs and leverage payment options that we have available.
So on the on the electric side, it's a bit different.
Natural gas power plants around the margin in new England year round really except for the coldest days of the year.
So rising natural gas prices are significantly affecting power prices.
Between 60.
65% of our electric load.
Is bought by customers directly from third party suppliers.
For the 35% to 40% of our load that continues to buy through our franchises, Connecticut light and power and Star Electric and public service in New Hampshire.
This is mostly residential load and customers will see higher prices, but they are partially protected by the fact that we contract for power in multiple <unk>.
Launches throughout the year.
So lower cost trenches from our purchases earlier in 2022 will offset some of the higher priced tranches that we purchased more recently.
Due to wintertime natural gas constraints, new England, our customers normally see a penny and a half to two cents per kilowatt hour increase in their retail electric prices in January.
An increase that usually reverses.
As we move into the summer.
This January customers in Massachusetts, and Connecticut are likely to experience an additional 2% to three cent increase due to higher gas prices driving power production.
This would be an additional 20 $25 per month for a typical residential customer compared with last winter.
New Hampshire customers.
Rates remain in effect until February so there's really no impact at this stage for our new Hampshire customers.
While the vast majority of majority of our residential customers did not use electricity for space heating recognize that any increase in energy bills add stress to the household budget and we redoubled our efforts again to urge customers to take advantage of the more than $500 million that we have available on energy efficiency.
<unk> initiatives.
We provide customers throughout our states each year.
I should note that similar to natural gas prices wholesale electric prices were extremely low in 2020 in fact, they they were at a 10 year low. So the percentage increase is that we're reporting here comes off some very low base numbers from last year.
As a reminder, increases and Andrew a decreases in the energy component of our electric bills are pass throughs.
Dollar for dollar pass throughs.
We earn nothing on providing this procurement service for customers.
So thank you very much for joining us this morning, I'll turn the call back over to Jeff for Q&A.
Thank you fell and I'm going to return the call to Cheryl just to remind you how to answer your questions.
Thank you we will now begin the question and answer session. If you would like to ask a question. Please try star then the number one on your Touchtone phone. If you are using you seek song please pick up the handset first before pressing any numbers.
Once again to ask a question. Please try star then one on your Touchtone phone.
Thank you Cheryl our first question. This morning is from Jeremy Jeanette from J P. Morgan Good morning, Jeremy.
Good morning, Thanks for thanks for the update their covered a lot of ground.
Maybe just starting off with Connecticut, a little bit more here. Thanks for all the caller, but just wondering if you could provide a little bit more color and how you think about how you're planning to manage the rate freeze in Connecticut, and how we should be thinking about going forward and earn a row.
And when you think you might end up filing the next case there.
Oh, Jeremy Thank you for the question as I mentioned.
[noise], Connecticut light and power and Star Electric public service in New Hampshire, The Eversource family has a strong track record from for managing operations.
In an effective manner and will continue to do that.
Throughout all of our franchises.
Connecticut included so as I mentioned the last reported.
Quarterly Arrow in Connecticut was just under 87866186, 6% so.
Even though we're allowed to 9.25% are we we've been sort of operating underneath that.
Measure since since the settlement in 2018, so I would expect that we will continue to operate that franchise effectively I can't really predict at.
At this moment.
We might might look like there, but I can assure you that we're going to do everything possible to first provide customers with the outstanding service that they they deserve and we fully expect to deliver and do that in an efficient and effective way.
In terms of when we file our next rate case.
The ink is just dry on the settlement and we can't go in.
There's nothing that we can implement before 2024 and as I said.
With the four year sort of legislative requirement.
We wouldn't mandated to be in there until 2025 so.
We haven't really thought about that at this point.
Thinking about how we operate our Ah franchises and effective manner for customers.
[noise] got it thanks for that and maybe pivoting over towards offshore here now that we have schedules across all three projects. When do you think it might be inappropriate.
Give me an increased disclosures here on the project economics.
Specifically, how do you think about I guess roll forward guidance here for long term EPS growth given.
The offshore when it's going to be hitting kind of our earnings growth on rates going forward.
Yeah, that's a great question and one that.
We've been asked and we've been thinking about.
What our expectation is we generally would update our our long range plans in February with our year end results and then we'll talk about sort of Ah.
Our forecast so we plan to do that again this year will roll forward our forecast like we've done in the past drop a year at at at a year out of 2026.
And as you point out given the schedule of the projects.
We're going to see.
Significant contribution from the bigger projects.
In that timeframe. So the expectation is that as we.
Rollout that next forecast in February there'll be.
More.
Clarity more transparency more information on that segment so that.
Be able to either model it in a way that you want in a way that makes sense. So I'd say that we're getting close to that in the expectation is in our February.
Update will roll the wind.
In a more.
I guess discrete.
And a more definitive way.
Got it that's helpful. Just real quick one if I could at least like Emerson didn't participate in the most recent Massachusetts RFP process and would you be able to talk about I guess next opportunities do you see the AD incremental projects and just any high long thoughts on the broader industry returning at this point.
Yeah, Thanks, Jeremy it's Joe I'll take that.
Massachusetts is unique in that they will give for the lowest price did not looking for economic development opportunities like some of the other states.
That is now changing the governor is very very interested in economic development opportunities in this business. When you look at states like New York that are kind of dedicated to what I was in upstate New York for.
Pretty big announcement around foundations, which.
Nice to bring some of the supply chain.
Here to America, and that was a big Big step I think for offshore wind opportunities, we're seeing for for offshore wind Rfp's end in 2022 looking at New York.
Potential in Connecticut, as well as in Rhode Island, and Massachusetts.
So I think there's opportunities everywhere I think the first one you will see will be New York, they're very very aggressive.
With their targets and.
It's a place that.
We know, we'll we'll put out another big RFP.
Got it that's very helpful I'll leave it there thanks.
Thanks, Jeremy next question is from Steve Fleischman from Wells the morning, Steve.
Hey, good morning.
So just in terms of supply chain issues and the like could you just talk to her.
How you're feeling about the the.
The current schedules for your three main projects and managing.
Right now.
Yes, Steve This is Phil good morning.
We've talked about this is certainly about a topic that people have been been interested in.
As well as the project and the company. So we feel like we're in a very good position in terms of our contracts.
Track thing.
What.
Substations or turbans or foundations.
We have in place for a strategy for vessels et cetera. So.
Our supply chain exposure.
I'd say there is some supply chain exposure, but we've done a very good job in solidifying most of that sort of not make it an issue for us so.
As I've talked about before there are puts and takes for all these projects some cost maybe move in one direction and other things are moving in a in a different direction. So taking all of that.
If there are price changes or if there are schedule impacts all of that allows us to be confident in the schedules that we've put out to date and in our estimate and our expectations that these projects will earn in the mid teens in terms of <unk>. So.
There are there are a number of factors that come at you every every day on these projects and we still feel good about the schedules and the.
The return estimates.
Okay cause I know the the Empire Wind project, which I think was awarded at the same time.
Sunrise is now saying May 26.
But obviously different people different situations so.
And then I think they've had some issues with the New York ISO.
Connect agreement.
So it sounds like you're not seeing that kind of delay.
No Steve this is Joe.
I mean, they get announced that the way we do not expect any similar delays on our projects. We have good visibility on it we feel very confident.
Great and then.
Maybe just high level.
The bite and.
And for a plan to reconciliation one.
Could you talk to who is anything broadly in there that would impact the way you are looking at your.
Plan in terms of just new credits cash flows.
Any anything that you are most focused on.
Yeah, obviously, we would like to take advantage of tax credits to to help our customers in any way, we can as well as our improve our projects, but that's really what our focus would be on that on the <unk>.
Okay, great. Thank you.
Thanks I appreciate it.
Question is from Julian from Bank of America morning, Julia.
Hey, good morning, and thanks for the time I appreciate the help that you can act.
So let.
Let me start with a higher level of question for you guys.
Asleep looking at them.
[noise] outcome of the election in Maine here, how are you thinking about Massachusetts renewable procurement at large I know, it's very fresh here, but any prospects for revisiting, perhaps some of the legacy projects that we've all talked about for for a long time and or frankly revisiting alternatives.
The long distance transmission, given the pushed back in New Hampshire, and Maine historically here.
Mommy and then give you the same.
It's the same might apply to us the gas and accents northeast, while while we're at it as well.
Good morning, Julia Thanks for the question. If the question is are we going to dust off northern past. The answer is no. We will not dust. It off is there an opportunity for for projects I think is definitely opportunity in Massachusetts around when I think the governor's appetite for additional renewable projects.
His desire to change the legislation, which requires it to be lower than the previous hour is definitely on the table.
We've had discussions not only with the Governable with key legislative leaders around this and I think that if they see <unk>.
<unk> is up there I would not be surprised if we see.
Some bids healthier rfp's out there.
In the near term Joseph.
What our future holds for other types of opportunities in this space I think it's it's premature I mean, I don't think they're finished counting the votes in Maine, but we will certainly take a good hard look at that and see what opportunities might be available.
Got it alright turn it off.
And it it sounds like accents northeast not necessarily in the same vein on the table, but if I can pick up a little bit more locally right now talking to you know, Massachusetts.
Situated opportunities I mean, how are you thinking about enabling distributed resources themselves. There's been some interesting filings in various dockets here that seem to suggest some pretty meaningful opportunities for you all visa would be just simply interconnection, whether that's on the distribution or transmission side and I'm also cognizant that you update your <unk>.
Look with fourthquarter here, but any initial thoughts there around distributed assets and enabling them.
I'll just tell you that our interests on this issue around the smart grid, and allowing folks to connect and am I. All of those are <expletive> agenda is with our key regulated as policymakers in all in Connecticut in Massachusetts, particularly.
<unk> and I think we talked about Connecticut, what happened down there on a settlement I think this really starts the.
Starts the opportunity for us to really begin to look at my end of smart grid and opportunities for unlocking access our greater access to.
Kind of renewables of distributed generation for folks that are the eager to interconnect so.
I do think I think it's I think you'll see a lot of activity in 2022 O lakefield kind of talk a little bit around the.
Financial piece of it so.
So Julian as you suggest we do update in February as we've all.
Discussed and I think what is the area that we're looking at we refresh all of our plans all of our investment activity. So in the area of transmission.
No.
Certain categories I'd say broadly.
We would expect to take another look at and and identify opportunities that may exist, just or maybe in three different categories. One being just the end of life sort of asset replacement.
Kinds of projects, what do we have out there what do we have an expectation wise.
Certainly electrification is a category with the states have targets we have.
To meet we have to enable those targets to be met so that could be additional.
Transmission in that category and the third category and one that you highlight is sort of connecting distributed energy resources to the grid.
Upgrades that are required to connect either currently contracted offshore wind or future offshore wind into the service territory.
There's a large desire.
Four.
Offshore wind across New England, New York.
And you know, making sure that we have the connect ability or interconnections and the transmission to not be a bottleneck for that that is likely to be some increased investment needed on the system. So I'd say those are the types of things that.
I think you'll see when we roll out our our update in February and.
In those categories.
Got it alright, well, we shouldn't wait for what those numbers amount too, but I wish you. The best of luck guys talk to you soon.
Thank thank you. Thank you next.
Next question is from David Arcaro from Morgan Stanley morning, David.
Hey, good morning, Thanks for taking my question.
I was wondering if you could just give an update on the equity needs. My apologies if I missed it in the prepared remarks, but just latest thinking on the amount and timing of equity here.
Yes, David this is Phil.
There's been no change and what our equity needs are going forward.
At this stage so that would mean that from what we had announced previously a few years ago. This $700 million of equity that we would plan to issue on some sort of.
ATM or at the market type of program.
That goes throughout our current forecasts or current forecast goes through 2025. So there's no specific timing of that at this point.
I mean, we continue to issue original issue shares from our dividend reinvestment.
QWERTY comp type of things and that's.
$101 million.
Year so.
There's been no change and that's where we are no.
No would increase our change in those needs.
Okay got it understood and then had a had a question on the turbine installation vessels that you're contracting with Dominion. Just wondering if you could talk a little bit about the amount of time there is between using methods for your projects Sunrise and Revolution, and then moving to dominions in 2026, just if there is any risk.
That you would lose access to the vessel in the case of any project delays or how you are thinking about that.
So thank you I'll take that.
Vessel. It's it's first port of call is going to be new London, we have an opportunity to use that vessel that would.
For both broad Sunrise as well as revolution window will not be ready for self what.
There's enough of a.
Of a cushion and it will allow for us to complete those projects. In addition, there's a day for day delay opportunity. So if the vessel is delayed.
Coming into two new one that we are the first customer that would be pushed out on the other end. So we do not anticipate any issues around.
The use of that state of the art vessel I mean as extraordinary vessels carry six wind turbine assemblies.
New London is only 70 miles.
From are we serious so we.
We think is the most efficient way to install a wind turbines and we're really excited about that I had an opportunity to spend a little time with the dominion folks in the vessel is on track and some of our folks will head down and.
Check on the progress, but that is going to be it's.
It's going to be quite a piece of equipment.
Okay, great. Thanks, so much.
Alright, Thanks, David Our next question is from Sophie Carp from Keybanc morning, Sophie.
Oh good morning.
My question.
Yeah.
Connecticut.
Okay, and and I appreciate the room Capex work accident changed and.
Since then the prime minister projects maybe between.
One of the members you can pull Europe.
Or that are in the next few years, there or what else I don't remember if you can pull too.
I'll step inflationary pressures in just a room I will send a message from there.
So so I think.
You know as I said in the past and we've we've commented on.
Our investments and our operations are geared to meeting our customer expectations. So.
Investments that we make in our system are driven by.
What our customer needs are how do we reinforced the system how do we provide we might be able to make.
Make a capital investment that offset some O&M cause. So that's that's also good for customers. So.
Our focus on our investment needs, whether they be transmission distribution gas electric water or on first and foremost what does it do for customers. So you know.
We wouldn't be looking at moving around investments.
Other areas for other reasons other than how it meets customer needs.
Does levers.
As I said.
I'd put our track record up against anybody's in the industry in terms of managing our operations in an efficient and effective manner.
How we.
Integrate.
<unk> into our family is going to provide some uplift we have opportunities there.
And how we rollout programs and effective manner. So I'd say that we're focused on managing our operations to meet customer needs.
And that'll be sort of the the the lever that we have to.
To get to where we want to get too in terms of our earnings profile.
God God and just.
Right now I guess.
Energy course.
Materials labor.
Please please.
Pressures within you.
Some changes is that something that is becoming material requires I guess, that's when that first of all that for you.
In that within the.
He.
Project are you, possibly think about that.
I'd say, it's it's had an impact but I wouldn't say it's been cigna.
Significant.
A year ago.
The supply chain team, who who's in sort of the financial organization.
Worked very closely with our engineers in our operating folks.
And at the at the start of this pandemic.
I think a lot of companies.
Like to have a just in time delivery model, we made a conscious decision.
Over a year ago.
Not do that to have to actually build up our inventories.
Paul Transformers wire cable all the types of things and if it's not in our facility we have provisions with our.
Suppliers to keep it on on their property.
And we're using a lot of it I mean, we have had Joe talking about storm right at the beginning we go through a lot of polls and wire et cetera, and there's a storm and and that's not that bad of a factor for US we've had supplies available to us now.
Now, having said that we certainly have our eyes on it there are types of equipment that that.
[noise] are getting more difficult and it may not be the whole piece of equipment. It could just be the plastic component of something is you can't get in.
So we.
So we expanded the types of suppliers, we have and.
Whereas the suppliers located in that type of thing. So it has had an impact.
<unk>.
Be fooling myself or anybody so we haven't had some delays and some products, but they haven't been Ah material.
A significant impact to us.
Got it thank you.
I'm on the gas supply situation I was kinda curious if you could quantify for us between the storage physical storage capacity contact what percentage of your.
Oh.
Demand I guess is.
This point in time.
Given the situation have you given any thought to maybe bring into your regulators.
Proposals to build more storage facilities on the system.
Yeah I'd say.
About a third of it if you look at what we have in storage.
And what's fixed I would say, it's about a third of that supply.
And as I mentioned, the remaining part of the supply.
We have the capability, we have the pipeline contracts to obtain it and we have the capability of obtaining it from a lower priced region than than the city gate.
Pricing so.
In terms of incremental storage.
We do have programs that we do have in place to refurbish some of our LNG facilities or make sure that they are operating at the at the maximum capacity, but we haven't.
Look too.
Spanned those facilities, we naturally expanded them just by the.
Acquisition of the purchase of Columbia gas with a Massachusetts, almost doubling the storage capacity that we have as a as an entity.
And.
Joe mentioned size matters in this case too I mean, it matters in terms of storm response, but it matters in this case too because we can operate.
Synergies by moving those two companies together between and Star gas in Massachusetts, and every source gas masks, we can use contracts better than each company couldn't use them individually and we can use a storage better than either company could so this unnatural benefits for us so.
Was a.
A point that we made in terms of getting the deal approved at the D. P. O. So I guess that is a way of saying we've increased the ability to have storage, but we're not looking to build.
Anything extra at this point.
Oh, thank you.
Thank you. Thank you so.
Next question from Travis Miller from Morningstar, Good morning Travis.
Good morning, everyone. Thank you.
On the offshore transmission. It sounds like you have a lot of the pieces in place for the self work project urge you correctly.
What's the status of the transmission side of the other projects are you feeling.
Yeah can you I'm not sure we understand the question traps you say the status of the transmission side.
Transmission.
Connections interconnections between offshore.
Offshore projects in Atlanta, essentially shows thanks, Travis I'll take all of those projects all the permitting and the sighting.
Applications are all in motion.
Haven't had any bumps in the road and where.
They were all on track so everything is.
A line of sight on it and is is in motion.
Okay, Okay, Great and then in Connecticut, you talked about the Trekkers there about what percent of the top actually you have over the next couple of years is subject to those truckers talked about.
It's about half its about half of our spend.
Okay great.
Great. That's all I have thanks, so much thank.
Thank you all.
Alright, Thanks, Travis and that was the last question. We have this morning. So we want to thank you all for joining US today, we look forward to seeing many of you at the conference next week and if you have any follow up questions. Please either call or email. Thank you.
Thank you.