Q4 2021 Eversource Energy Earnings Call

Speaker 1: reconciled to GAP results is contained within our news release and the slides we posted last night and in our most recent 10k and 10q

GAAP results is contained within our news release and the slides, we posted last night and in our most recent 10-K and 10-Q.

Speaking today will be Joe Nolan, our president and Chief Executive Officer, and Phil Lembo, Our executive Vice President and CFO .

Speaker 1: And speaking today will be Joe Nolan, our President and Chief Executive Officer, and Phil Lembo, our Executive Vice President and CFO .

Speaker 1: Also joining us today are John Marrera, our Treasurer and Senior VP for Finance and Regulatory, and Jay Booth, our VP and Controller. Now I will turn to slide 3 and turn over the call to Joe.

Also joining us today are John Moreira, our treasurer, and senior VP for finance and regulatory and Jay Buth, our VP and controller.

Now I will turn to slide three and turnover the call to Joe.

Good morning, Thank you, Jeff I will start with an overview of our teams 2021 operating accomplishments update you on offshore wind projects and discuss recent progress executing our clean energy strategy I will then turn it over to Phil for a review of our financial performer.

Speaker 2: Good morning. Thank you, Jeff. I will start with an overview of our team's 2021 operating accomplishments, update you on offshore wind projects, and discuss recent progress executing our clean energy strategy. I will then turn it over to Phil for a review of our financial performance and new five-year forecast.

It's a new five year forecast.

Speaker 2: We accomplished a great deal in 2021, as you can see on slide four. We had a terrific year operation.

We accomplished a great deal in 2021 as you can see on slide four we had a terrific year operationally, we were able to put closure around a challenged set of regulatory proceedings in Connecticut.

Speaker 2: We were able to put closure around a challenged set of regulatory proceedings in Connecticut. We made very significant progress on offshore wind projects. And we have enthusiastically engaged the entire company around our target of having operations be carbon neutral by 2030.

Made very significant progress on offshore wind projects and we Havent <unk> engaged the entire company around our target of having <unk>.

Operations be carbon neutral by 2030.

Turning to slide five in operations, you can see that our electric service reliability and restoration performance were top decile and top quartile respectfully.

Speaker 2: You can see that our electric service reliability and restoration performance were top decile and top quartile. Respect.

And our safety metrics as well, we're well above average.

Speaker 2: And our safety metrics, as well, were well above average.

Speaker 2: We continue to invest to enhance our customers electric service reliability.

Continue to invest to enhance our customers' electric service reliability.

And the results are apparent even during a year when we had 20 major storm events in dozens of less severe events around our three states.

Speaker 2: and the results are apparent. Even during a year when we had 20 major storm events and dozens of less severe events around our three states.

Speaker 2: We also continue to refine our emergency response efforts, which were on display again just two and a half weeks ago, when a weekend blizzard clobbered southeastern Massachusetts with hurricane-force winds and snow depths up to two and a half feet. Thousands of our employees and contractors worked through biting cold to restore about 300,000 out-of-jails.

We also continue to refine our emergency response efforts, which were on display again, just two five weeks ago, when a weekend Blizzard club at southeastern Massachusetts, with Hurricane force winds and snow depths up to two five feet.

<unk> of our employees and contractors worked through biting cold to restore about 300000 outages.

Wins were still holding after the snowfall ended but our crews were able to get our customers back online within two days.

Speaker 2: Winds were still howling after the snowfall ended, but our crews were able to get our customers back online within two days.

Most of our storm damage was <unk> related we continue to work closely with our regulators and the communities. We serve to ensure that we are installing more resilient equipment on our system and addressing the heavy vegetation along our roadways.

Speaker 2: Most of our storm damage was pre-related. We continue to work closely with our regulators and the communities we serve to ensure that we are installing more resilient equipment on our system and addressing the heavy vegetation along our roadways.

Speaker 2: We are committed to making the important investments needed to maintain high levels of electric service reliability and providing the grid resiliency needed to support our region's aggressive clean energy goals.

We are committed to making the important investments needed to maintain high levels of electric service reliability, and providing the grid resiliency needed to support our regions aggressive clean energy goals.

In addition, we continued to accelerate the replacement of our most leak prone natural gas and water infrastructure.

Speaker 2: In addition, we continue to accelerate the replacement of our most leak-prone natural gas and water infrastructure.

Turning to slide six.

Speaker 2: you can see that despite strong results, we, like many other high-performing utilities, underperformed both our peers in the broader markets in 2021 from a total return standpoint.

You can see that despite strong results.

Like many other high performing utilities underperformed, both our peers and the broader markets in 2021 from a total return standpoint.

Speaker 2: This comes after some very strong years of relative outperformance by Eversource that continues to place our medium and long-term total return significantly above the EEI index.

This comes after some very strong years of relative outperformance by ever source that continues to place our medium and long term total return significantly above the EI index.

There are solid reasons for our strong long term record first.

Speaker 2: There are solid reasons for our strong long-term record.

Speaker 2: Since the 2012 merger that created Eversource, we have consistently achieved short-term and long-term earnings per share growth of about 6%. Going forward, we continue to expect our regulated businesses to support EPS growth in the upper half of the range of 5% to 7%.

Since the 2012 merger that created ever source, we have consistently achieved short term and long term earnings per share growth of about 6%.

<unk> forward, we continue to expect our regulated businesses to support EPS growth in the upper half of the range of 5% to 7%.

That earnings growth has enabled us to achieve attractive long term dividend growth as well as you can see on slide seven earlier this month.

Speaker 2: That earnings growth has enabled us to achieve attractive long-term dividend growth as well. As you can see on slide 7, earlier this month our board approved a $0.14 per share increase in our annualized dividend, an increase that is consistent with our long-term growth projection.

Our board approved a 14% per year increase in our annualized dividend an increase that is consistent with our long term growth projections.

Not only.

Speaker 2: is that level of dividend growth attractive to our investors, the low 60s payout ratio that it represents allows us to reinvest more than $500 million of earnings annually back into our business, reducing our incremental debt needs and supporting our strong credit rating.

Is that level of dividend growth attractive to our investors the low 60% payout ratio that it represents allows us to reinvest more than $500 million of earnings annually back into our business, reducing our incremental debt needs and supporting our strong credit rating.

Turning to slide eight.

Our offshore wind business had more positive developments over the past 13 months than we experienced over the previous three years combined.

Speaker 2: had more positive developments over the past 13 months than we experienced over the previous three years combined. Last week, as you can see on the slide, New York Governor Hochul joined in breaking ground in South Park, the first offshore wind project we are building under our 50-50 partnership with Orsted.

Last week as you can see on the Slide New York Governor Hogan joined and breaking ground on South Park. The first offshore wind project. We are building under a 50 50 partnership with <unk>.

Speaker 2: Land-based construction has commenced on Long Island, where the 130-megawatt 12-turbine project will connect into Long Island Power Authority grid, providing greatly needed source of clean power.

<unk> based construction is convinced test commenced on long island with 130 megawatt 12 turbine project will connect into long Island power authority grid greatly providing greatly needed source of clean power.

We expect <unk> to begin operating in late 2023, and thank the federal state and local regulators and local elected officials who have worked on the review of this project for years.

Speaker 2: We expect Southwalk to begin operating in late 2023 and thank the federal, state and local regulators and elected officials who have worked on the review of this project for years.

2021 also was a pivotal year.

Speaker 2: 2021 also was a pivotal year.

Of our two much larger projects Revolution wind and Sunrise wind.

Speaker 2: of our two much larger projects, Revolution Wind and Sunrise.

Speaker 2: As you can see on slide nine, we are well into the federal and state siting process for both projects.

As you can see on slide nine we are well into the federal and state siting process for both projects.

Speaker 2: last year the Bureau of Ocean and Energy Management set schedules for review of those two projects, which we expect will culminate in the final siting approvals in the second half of 2023. Assuming those schedules are met, we expect both projects to enter service in 2025, with Revolution Wind likely entering service first.

Last year, the Bureau of Ocean Energy management set schedules for review of those two projects, which we expect will culminate in the final siting approvals in the second half of 2023.

Assuming those schedules are met we expect both projects to enter service in 2025 with Revolution wind likely entering service first.

We have made significant progress securing materials and services for our three projects, we have 80% of the cost of the portfolio walked in it.

Speaker 2: We have made significant progress securing materials and services for our three projects. We have 80% of the cost of the portfolio locked in. It seems that every few weeks we are announcing another contract.

It seems that every few weeks, we are announcing another contract.

Speaker 2: Many of those contracts are with domestic manufacturers and service providers that are located in states where we are contracting for our offshore wind projects.

Many of those contracts are with domestic manufacturers and service providers that are located in states, where we are contracting for our offshore wind projects.

Speaker 2: Slide 10 has an overview of some of the publicly announced contracts.

<unk> 10 is an overview of some of the publicly announced contracts.

Speaker 2: However, over just the past few months, we have seen higher than planned costs for such items as offshore wind foundations, certain installation vessels, and logistics, as well as offshore substations.

However.

Over just the past few months, we have seen higher than planned cost for such items as offshore wind foundations shirt installation vessels and logistics as well as offshore Substations all stirred reference some of these cost increases during its investor call two weeks ago.

Speaker 2: during its investor call two weeks ago.

The pandemic and global growth in offshore wind have rapidly tightening the market and supply chain for offshore goods and services. Fortunately, we procured the largest scopes of work prior to the inflationary pressure taking hold our wind turbine agreement with Siemens and wind turbine.

Speaker 2: The pandemic and global growth in offshore wind have rapidly tightened the market and supply chain for offshore goods and services. Fortunately, we procured the largest scopes of work prior to the inflationary pressure taking hold. Our wind turbine agreement with Siemens and wind turbine installation vessel charter with Dominion Energy, which makes up a significant portion of the project's costs, are two prime examples.

Installation vessel charter with Dominion energy, which makes up a significant portion of the project costs are two prime examples.

Speaker 2: Throughout the projects, we and our partner Orsted have been successful in finding ways to offset increases with savings in other areas.

Throughout the projects, we and our partner <unk> have been successful in finding ways to offset increases with savings in other areas.

Speaker 2: I am optimistic that our teams will find additional improvements opportunities as we move forward with the project.

I am optimistic that our teams will find additional improvements opportunities as we move forward with the projects.

One of our key contracts.

Speaker 2: One of our key contracts is for the Connecticut State Pier in New London.

As for the Connecticut State Pier in New London.

Speaker 2: State of Connecticut, Eversource, and Orsted are funding a $200 million project to create an important staging area for offshore wind construction, including our South Fork Wind, Revolution Wind, and Sunrise Wind projects.

The state of Connecticut.

<unk> and Allstate are funding a $200 million project to create an important staging area for offshore wind construction, including our South Fork wind Revolution wind and Sunrise wind projects. It is probably the best site for this work between Norfolk, Virginia, and how effects <unk>.

Speaker 2: It is probably the best site for this work between Norfolk, Virginia and Halifax, Nova Scotia. In only 60 to 65 miles from our nearest...

<unk> and only 60 to 65 miles.

From our nearest turbine locations.

As you can see on slide 11, the Connecticut Port Authority commenced onshore work last summer and a couple of months ago. The authority received approval from the Army Corps of engineers for the in water construction.

Speaker 2: As you can see on slide 11, the Connecticut Port Authority commenced onshore work last summer, and a couple of months ago the authority received approval from the Army Corps of Engineers for the in-water construction.

We consider the new London lease to be a tremendous source of future economic development for the state of Connecticut, and a key strategic advantage for our partnership.

Speaker 2: We consider the new London lease to be a tremendous source of future economic development for the state of Connecticut and a key strategic advantage for our partners.

The site is quite close to a 550 square mile area, where we in <unk> expect to build projects with at least 4000 megawatts over the coming years.

Speaker 2: The site is quite close to our 550 square mile area where we in Austin expect to build projects with at least 4,000 megawatts over the coming years.

We expect to continue to seek new opportunities for our lease here off, Massachusetts, while continuing to be disciplined and strategic in our bidding.

Speaker 2: We expect to continue to seek new opportunities for our lease area off Massachusetts, while continuing to be disciplined and strategic in our bidding.

In Massachusetts Governor Baker has proposed new energy legislation that among other items could amend certain restrictive pricing language that contributed to having only two bidders and the state's most recent offshore wind RFP.

Speaker 2: In Massachusetts, Governor Baker has proposed new energy legislation that, among other items, could amend certain restrictive pricing language that contributed to having only two bidders in the state's most recent offshore wind hour.

Speaker 2: The bill is currently in the House and is expected to move on to the Senate during the current legislative session that ends in mid-July. We will keep you apprised of its progress.

The Bill is currently in the house and is expected to move on to the Senate. During the current legislative session that ends in mid July we will keep you apprised of its progress.

Separately as many of you are aware the.

Speaker 2: Separately, as many of you are aware, the Eversource-Orsted joint venture did not seek

The <unk> joint venture did not seek.

To be Prequalify for next week's New York bite auction, we are very comfortable with our current uncommitted acreage and think its strategically located to provide us with a competitive advantage and future Rfps in new England and New York.

Speaker 2: be pre-qualified for next week's New York Byte auction.

Speaker 2: We are very comfortable with our current uncommitted acreage and think it's strategically located to provide us with a competitive advantage in future RFPs in New England and New York. Once the bite auction is complete, our understanding is that New York likely will move swiftly to its next offshore lease.

Once the bite auction is complete our understanding is that New York likely will move swiftly.

To what's next offshore wind RFP.

Our offshore wind partnership is just one of several major initiatives, we have underway to help our states combat climate change.

Speaker 2: At the same time, we are focused on reducing admissions within our own operation.

At the same time, we are focused on reducing admissions within our own operations.

Slide 12 notes that the five key areas, where we are seeking to reduce greenhouse gas emissions in our efforts to be carbon neutral by 2030.

Speaker 2: CLI 12 notes that the five key areas where we are seeking to reduce greenhouse gas emissions in our efforts to be carbon neutral by 2030.

No U S utility on natural gas utility has a more aggressive target date for achieving carbon neutrality for scope, one and scope two emissions.

Speaker 2: No U.S. utility or natural gas utility has a more aggressive target date for achieving carbon neutrality for Scope 1 and Scope 2 admissions.

Speaker 2: We are currently looking to enhance our climate leadership by taking a closer look at emissions across the value chain, including examining what a science-based target would entail for a company with our profile.

We are currently looking to enhance our climate leadership by taking a closer look at emissions across the value chain, including examining what a science based target would entail for a company with our profile.

This includes downstream admissions from our customers and us clearly our energy efficiency programs offer many benefits in this regard.

Speaker 2: This includes downstream admissions from our customers.

Speaker 2: Clearly, our energy efficiency programs offer many benefits in this regard.

Last year, we invested approximately $600 million.

Speaker 2: Last year we invested approximately $600 million on initiatives that will help our customers reduce their lifetime greenhouse gas emissions by approximately 4 million tons.

On initiatives that will help our customers reduce their lifetime greenhouse gas emissions by approximately 4 million tons.

Speaker 2: our new DPU-approved three-year energy efficiency plan.

Our new GPU approved three year energy efficiency plan.

We will expand those efforts with the growing focus on electrification it will provide our Massachusetts electric and natural gas customers with the tools necessary to meaningfully reduce their carbon footprint and help place to state on the path to be net.

Speaker 2: We'll expand those efforts with a growing focus on electrification. It will provide our Massachusetts electric and natural gas customers with the tools necessary to meaningfully reduce their carbon footprint and help place the state on the path to be net GHG neutral.

G HG neutral by 2050.

Speaker 2: The $1.7 billion plan maintains our longstanding mission of helping all residents and businesses reduce their energy usage and manage energy costs.

The $1 $7 billion plan maintains our longstanding mission of helping all residents and businesses reduced their energy usage and manage energy costs.

And it is also focused on service to customers and environmental Justice communities in low and moderate income households.

Speaker 2: It is also focused on service to customers in environmental justice communities in low and moderate income households.

<unk> now approved programs, we expect to electrify more than 23000, new and existing residential households, as well as more than 20 million square feet of commercial space.

Speaker 2: Through our now-approved programs, we expect to electrify more than 23,000 new and existing residential households, as well as more than 20 million square feet of commercial space.

Separately and star gas last month rolled out an innovative community geothermal project for Framingham, Massachusetts.

Speaker 2: Separately, Enstar Gas last month rolled out an innovative community geothermal project for Framingham, Massachusetts.

Speaker 2: that was enabled in our 2020 NSTAR gas rate decision. It is shown on slide 13.

That was enabled in our 2020 and star guests right decision. It is shown on slide 13.

We are also preparing an integrated program to combine our opportunity to build more rate based solar in Massachusetts with the potential to tie in storage and micro grids.

Speaker 2: We are also preparing an integrated program to combine our opportunity to build more rate-based solar in Massachusetts, with the potential to tie in storage in microgrids.

Speaker 2: We expect to file initial proposed projects with the DPU within a few months.

We expect to file initial proposed projects with the GPU within a few months.

Speaker 2: This is part of our comprehensive climate resilience efforts that are consistent with the goals of state policy.

This is part of our comprehensive climate resilience efforts that are consistent with the goals of state policymakers.

Speaker 2: Finally, I want to comment on our relationships in Connecticut. Compared with a year ago, I believe we are in a much better place.

Finally, I want to comment on our relationships in Connecticut.

With a year ago I believe we are in much better place.

Speaker 2: Our October rate settlement was approved by Pura and significant customer credits lowered CL&P customer bills in December of 2021 and January of 2022.

Our October rate settlement was approved by PURA in significant customer credits lowered C. LNP customer bills in December of 2021 and January of 2022.

Speaker 2: Pura has issued final orders on storage and electric vehicle programs, which are now being launched.

PURA has issued final orders on storage and electric vehicle programs, which are now being launched.

Speaker 2: We sense a broad level of support for AMI as it lowers costs and improves service to customers.

We sense, a broad level of support for AMRI as it lowers cost and improves service to customers significantly advances the pace of integration of renewable energy resources and enables achievement of the state's clean energy goals, We believe PURA will move forward with the Doc.

Speaker 2: significantly advances the pace of integration of renewable energy resources and enables achievement of the state's clean energy goals. We believe Pura will move forward with the docket in approvals for deployment at some point later this year.

In approved which the deployment at some point later this year.

Thanks again for your time I will now turn the call over to Phil Lembo.

Speaker 2: Thanks again for your time. I will now turn the call over to Phil Wembley.

Thank you Joe and this morning, I'm going to cover several areas 2021 results.

Speaker 3: Thank you, Joe. And this morning, I'm going to cover several areas, 2021 results.

2022 earnings guidance and update.

Speaker 3: Our 2022 earnings guidance, an updated five-year regulated investment plan and long-term outlook.

An updated five year regulated investment plan and long term outlook.

Speaker 3: An update on some of the current regulatory proceedings and finally additional details around our offshore wind investment plan.

An update on some of the current regulatory proceedings and finally additional details around our offshore wind investment plan.

Speaker 3: So let me get started, start with the 2021 results on slide 15.

So let me get started start with the 2021 results on slide 15.

Speaker 3: Our gap earnings for 2021 were $3.54 per share compared to $3.55 in 2020.

GAAP earnings for 2021 were $3 54.

Her share compared to $3 55 and 2020.

Speaker 3: In the fourth quarter of 2021, gap earnings were 89 cents per share compared with gap earnings of 79 cents in the fourth quarter of 2020.

In the fourth quarter of 2021, GAAP earnings were <unk> 89 per share compared with GAAP earnings of <unk> 79.

In the fourth quarter of 2020.

Speaker 3: All those periods include acquisition costs primarily related to our purchase in 2020 of the assets of Columbia Gas in Massachusetts, which we now call Eversource Gas of Massachusetts or EGMA.

All of those periods include acquisition cost primarily related to our purchase in.

In 2020 of the assets of Columbia gas of Massachusetts, which we now call every source gas of Massachusetts or <unk>.

As I noted on our third quarter call two.

Speaker 3: 2021 full year results also include charges related to the settlement agreement in Connecticut.

2021 full year results also include charges related to the settlement agreement in Connecticut.

Speaker 3: Excluding those non-recurring charges, we earned $3.86 per share in 2021. That's up 6% from $3.64 in 2020. For the fourth quarter, excluding these charges, we earned $0.91 per share in 2021, compared with earnings of $0.85 in the fourth quarter of 2020.

Excluding those nonrecurring charges, we earned $3 86 per share in 2021, that's up 6% from $3 64 in 2020 for.

For the fourth.

Fourth quarter. Excluding these charges, we earned <unk> 91 per share in 2021 compared with earnings of 85 in the fourth quarter of 2020.

To breakdown the earnings into segments electric transmission earned $1 58 per share for the full year 2021.

Speaker 3: To break down the earnings into segments, electric transmission earned $1.58 per share for the full year 2021, compared with earnings of $1.48 in 2020.

Compared with earnings of $1 48 in 2020.

Speaker 3: Higher earnings resulted from continued investment in our transmission system. We invested just over $1.1 billion in our transmission facilities in 2021.

Higher earnings resulted from continued investment in our transmission system <unk>.

We invested just over $1 1 billion in our transmission facilities in 2021.

That compared to just about $960 million, 964% to be precise in 2020.

That's fair.

Speaker 3: And that's for – the reason for that was it's mostly replacing obsolete equipment and improving reliability and resilience in the region. Our electric distribution segment –

Reason for that is it's mostly replacing obsolete equipment and improving reliability and resilience in the region.

Our electric distribution segment earned $1 61.

Speaker 3: per share in 2020, excluding the settlement charge, excluding the settlement charge, just compared to $1.60 in 2020.

<unk> per share in 2020, excluding the settlement charge.

Excluding the settlement charge this compared to $1 60 in 2020.

Speaker 3: The higher revenues will largely offset by higher O&M, depreciation, property tax, and interest expense.

The higher revenues were largely offset by higher O&M depreciation property tax and interest expense and.

Speaker 3: And really these higher expenses stem from our ongoing investments to improve service and reliability.

And really these higher expenses stem from our ongoing investments to improve service and reliability for our customers.

Speaker 3: We invested about one and a quarter billion dollars in our electric distribution system in 2021. And this is up from just under $1.2 billion in 2020.

We invested about one and a quarter $1 billion in our electric distribution system in 2021, and this is up from just under $1 2 billion in 2020.

Speaker 3: Our natural gas distribution segment earned $0.59 per share in 2021 compared with earnings of $0.40 in 2020.

Our natural gas distribution segment earned <unk> 59 per share in 2021 compared with earnings of 40 in 2020.

Speaker 3: This growth was driven primarily by having a full year of EGMA earnings included in our financials in 2021, and this is compared to less than three months of EGMA earnings in 2020.

This growth was driven primarily by having a full year of EMEA earnings included in our financials in 2021, and this is compared to less than three months of <unk> earnings in 2020.

This also includes the ongoing investment in safety and reliability of our natural gas systems, where we invested about $800 million.

Speaker 3: This also includes the ongoing investment in safety and reliability of our natural gas

Speaker 3: where we invested about $800 million in 2021.

In 2021.

Our water distribution segment earned <unk> 11 per share in 2021, and this is down a penny.

Speaker 3: Our water distribution segment earned $0.11 per share in 2021, and this is down a penny from $0.12 in 2020. The small decline primarily reflects the sale of the water delivery system around Hingham, Massachusetts that occurred in 2020.

From 12 in 2020, the small decline primarily reflects the sale of the water delivery system.

Around Hingham, Massachusetts that occurred in 2020.

We continue to invest in clean and reliable water delivery with investments in our water segment totaling $144 million in 2021.

Speaker 3: We continue to invest in clean and reliable water delivery with investments in our water segment totaling $144 million in 2021. This is up 13%.

This is up 13%.

From the prior year and about double from where it was when we first acquired aquarium in 2017.

Speaker 3: from the prior year and about double from where it was when we first acquired Aquarion in 2017.

Excluding acquisition related charges. The <unk> pattern segment lost <unk> <unk> per share in 'twenty, one compared to earnings of <unk> <unk>. In 2020. This change is largely due to a higher effective tax rate.

Speaker 3: Excluding acquisition-related charges, the Eversource pattern segment lost 3 cents per share in 21, compared to earnings of 4 cents in 2020. This change is largely due to a higher effective tax rate.

Overall as Joe covered in his remarks, we're very pleased with the strong year, we had as we successfully overcame many challenges and delivered very positive results for our customers and for all of our stakeholders.

Speaker 3: Overall, as Joe covered in his remarks, we're very pleased with the strong year we had as we successfully overcame many challenges and delivered very positive results for our customers and for all of our stakeholders.

Speaker 3: From 2021 results, I'll turn to our 2022 guidance in slide 16.

From 2021 results I'll turn to our 2022 guidance in slide 16.

Speaker 3: We are projecting recurring earnings of between $4 and $4.17 per share this year.

We are projecting recurring earnings of between $4 $4 17 per share this year.

Speaker 3: Compared with 386, we earned in 2021. The midpoint of that range reflects a 6% increase over 2021. This range excludes the remaining cost we expect to incur as we complete the integration of EGMA operations.

Compared with 386, we earned in 2021, the midpoint of that range reflects a 6% increase over 2021.

This range excludes the remaining cost we expect to incur as we complete the integration of <unk> operations.

Speaker 3: from NYSORS to Eversource Systems in 2022.

From nice source to every source systems in 2022.

Speaker 3: The primary growth drivers are our ongoing investment in our electric transmission segment, where we expect to invest approximately $1.1 billion in 2022.

The primary growth drivers.

Our ongoing investment in our electric transmission segment, where we expect to invest approximately $1 1 billion.

In 2022.

Speaker 3: The higher revenues from our distribution segments, much of it relates to ongoing reliability and resiliency investments with existing recovery mechanisms in a performance-based revenue adjustment at NSTAR Electric.

The higher revenues from our distribution segments much of it relates to ongoing reliability and resiliency investments with existing recovery mechanisms and our performance based revenue adjustment at <unk> electric.

Speaker 3: Those higher revenues will be partially offset by anticipated increase in depreciation, property tax, and interest expense related to our customer-focused investment.

Those higher revenues will be partially offset by anticipated increase in depreciation property tax and interest expense related to our customer focused investments.

On Slide 17, you see that we are reiterating our long term earnings per share guidance in the upper half of the 5% to 7% growth rate from our core regulated businesses with 2021 recurring EPS of $3 86, as the base level to.

Speaker 3: On slide 17, you see that we are reiterating our long-term earnings per share guidance in the upper half of the 5 to 7 percent growth rate from our core regulated business.

Speaker 3: with 2021 recurring EPS of $3.86 as the base level. To be clear, this guidance excludes earnings from offshore wind projects.

To be clear this guidance excludes earnings from offshore wind projects.

And on Slide 18, you can see that the primary driver of this growth is a regulated capital program, which continues to make our energy and water delivery system safer more reliable and more resilient for our customers.

Speaker 3: And on slide 18, you can see that the primary driver of this growth is our regulated capital program, which continues to make our energy and water delivery systems safer, more reliable, and more resilient for our customers.

Speaker 3: We expect to invest approximately $18.1 billion in those systems over the five-year period of 2022 through 2026.

We expect to invest approximately $18 1 billion.

In those systems over the five year period of 2022 through 2026.

That compares with $17 billion investment plan, we discussed with you a year ago, which was for the period of 2021 through 2025.

Speaker 3: That compares with a $17 billion investment plan we discussed with you a year ago, which was for the period of 2021 through 2025.

On the distribution side, we assume that we will invest nearly $400 million over the next five years on grid modernization and electric vehicle charging infrastructure in Massachusetts.

Speaker 3: On the distribution side, we assume that we'll invest nearly $400 million over the next five years on grid modernization and electric vehicle charging infrastructure in Massachusetts.

Speaker 3: which is somewhat above our recent spending levels there.

Which is somewhat above our recent spending levels there.

Speaker 3: We receive timely recovery of these investments with a return.

We received timely recovery of these investments with the return.

Speaker 3: In Connecticut and New Hampshire, we have not assumed any grid mod investments at this time.

In Connecticut, and New Hampshire, we have not assumed any grid mod investments at this time.

Speaker 3: As you can see on slide 19, these investments in our core business are projected to produce a rate-based CAGR of approximately 7.1% over the forecast period.

As you can see on slide 19. These investments in our core business are projected to produce a rate base CAGR of approximately seven 1% over the forecast period.

Slide 20 lists the investments that are included in the five year estimate and what remains outside of it.

Speaker 3: Slide 20 lists the investments that are included in the five-year estimate and what remains outside of it.

Note that we continue to exclude <unk>.

Speaker 3: Note that we continue to exclude AMI from our core capital program.

<unk> from our core capital program as.

Speaker 3: As Joe indicated in his remarks, dockets to implement AMI are very active in both Massachusetts and Connecticut and may be concluded later this year. However, they are not yet at the point where we should be including them in our capital forecast.

As Joe indicated in his remarks dockets to implement <unk> are very active in both Massachusetts, and Connecticut and May be concluded later this year. However, they are not yet at the point, where we should.

Be including them in our capital forecast.

Altogether implementing am I in the two states would require about $1 billion of investment in order to deliver long term customer savings enhance grid resiliency and enable clean energy benefits.

Speaker 3: Altogether, implementing AMI in the two states would require about $1 billion of investment in order to deliver long-term customer savings, enhance grid resiliency, and enable clean energy benefits.

Also excluded from our five year forecast or certain transmission investment opportunities ISO new England studies indicate that about $500 million of onshore investment would be needed to interconnect nearly 3000 megawatts of offshore wind through Cape Cod.

Speaker 3: Also excluded from our five-year forecast are certain transmission investment opportunities.

Speaker 3: ISO New England studies indicate that about 500 million of onshore investment would be needed to interconnect nearly 3,000 megawatts of offshore wind through Cape Cod in the southeastern portion of our service territory.

In the southeastern portion of our service territory.

Speaker 3: since the nature and timing of these investments are still on under evaluation we have excluded it from our capital uh... guide

Since the nature and timing of these investments are still under evaluation, we have excluded it from our capital guidance.

Speaker 3: I should emphasize that we would expect such projects to be incremental investments in our core regulated business. They are not related to our three offshore wind projects, which as you saw in the earlier slide connect through New York and Rhode Island.

Should emphasize that we would expect such projects to be incremental investments in our core regulated business.

Not related to our three offshore wind projects.

As you saw in the early slides connect through New York and Rhode Island.

In addition, it.

Speaker 3: So in addition, it is also becoming clear that significant additional transmission investment beyond the $500 million will be needed to reliably tie in the 9,000 megawatts of offshore wind that Massachusetts, Connecticut, and Rhode Island are targeting.

It is also becoming clear that significant additional transmission investment beyond the $500 million will be needed to reliably tie in the 9000 megawatts of offshore wind that, Massachusetts, Connecticut, and Rhode Island are targeting.

Speaker 3: These investments will extend beyond our forecast period and such are not included. They are excluded from the forecast.

These investments will extend beyond our forecast period and such are not <unk>.

Included they are excluded from our forecast.

Finishing up my discussion on the regulated business.

Speaker 3: Finishing up my discussion on the regulated business, I'll first turn to a review of our current regulatory items.

First turning to a review of our current regulatory items as.

Speaker 3: As you can see on slide 21, we continue to await FERC's rulings on several items.

As you can see on slide 21, we continue to await FERC ruling on several items. The first of the four complaints that were filed beginning back in 2011 challenging the return on equity authorized for all the new England electric transmission owners.

Speaker 3: first of the four complaints that were filed beginning back in 2011, challenging the return on equity authorized for all the New England Electric transmission owners.

The others are generic dockets, one looking at the 50 basis point <unk> adder in another looking at transmission incentives.

Speaker 3: One looking at the 50-basis point RTO adder, and another looking at transmission incentive.

On the distribution side, we are currently operating under multiyear rate plans in most of our distribution jurisdictions.

Speaker 3: On the distribution side, we are currently operating under multi-year rate plans in most of our distribution jurisdictions.

Speaker 3: The LNP's base rate freeze was approved as part of the comprehensive settlement Joe mentioned earlier.

<unk> base rate freeze was approved as part of the comprehensive settlement Joe mentioned earlier.

PSNH.

Speaker 3: PSNH is currently in the second year of a multi-year rate plan.

In the second year of a multiyear rate plan.

Our two Massachusetts natural gas delivery utilities are operating in the early years of of eight and 10 year rate plans.

Speaker 3: our two massachusetts natural gas delivery utilities are operating in the early years of of eight and ten-year rate plan

Yankee gas is nearing the four year Mark since its most recent rate review and we are currently evaluating when its next review will take place.

Speaker 3: Yankee Gas is nearing the four-year mark since its most recent rate review, and we are currently evaluating when its next review will take place.

Therefore, our primary rate review this year will be at <unk> electric in Massachusetts.

Speaker 3: Therefore, our primary rate review this year will be at NSTAR Electric in Massachusetts.

Slide 22 covers the key elements of the review.

Speaker 3: Slide 22 covers the key elements of the review.

Speaker 3: We filed it a month ago and expect a decision around December 1st.

We filed it a month ago and expect a decision around December 1st.

Speaker 3: with new rates to take effect at the beginning of 2023.

With new rates to take effect at the beginning of 2023.

There are several components to the filing and a couple of the key ones are noted on the slide.

Speaker 3: There are several components to the filing and a couple of the key ones are noted on the slide.

So let me pause here to summarize.

Speaker 3: So let me pause here to summarize. We expect to deliver another very positive year of performance for our customers, shareholders, and all stakeholders in 2022.

We expect to deliver another very positive year performance for our customers shareholders and all stakeholders in 2022.

Our long term earnings growth continues to be in the upper half of the 5% to 7% range through 2026 from our core regulated business.

Speaker 3: Our long-term earnings growth continues to be in the upper half of the 5 to 7 percent range through 2026 from our core regulated business.

Our long term growth rate is supported by a projected rate base growth of seven 1%.

Speaker 3: Our long-term growth rate is supported by a projected rate-based growth of 7.1 percent.

We have upside opportunities in the areas of grid modernization.

Speaker 3: We have upside opportunities in the areas of grid modernization, AMI, and incremental transmission development that are not part of our current forecast.

<unk>.

An incremental transmission development that are not part of our current forecast.

The investments I discussed thus far has been in our regulated business now I'll turn to our offshore wind partnership with <unk>.

Speaker 3: The investments I've discussed thus far have been in our regulated business. Now I'll turn to our offshore wind partners.

Joe mentioned earlier, our JV with <unk> has signed contracts in place for about 70, 560 megawatts of offshore wind and.

Speaker 3: Joe mentioned earlier, our JV with the worst debt has signed contracts in place for about 1760 megawatts of offshore wind.

And we've locked in approximately 80% of the cost we need to bring on three projects into service.

Speaker 3: And we've locked in approximately 80% of the cost we need to bring our three projects into service.

Speaker 3: To date, we've invested about $1.2 billion in the JV, which includes some development and acquisition costs that are not directly related to the three projects.

To date, we've invested about $1 2 billion in the JV, which includes some development and acquisition costs that are not directly related to the three projects.

In 2022, we expect to invest an additional $900 million to $1 billion and the three projects.

Speaker 3: In 2022, we expect to invest an additional $900 million to $1 billion in the three projects.

Over the remaining years of our forecast, we expect to invest an additional $3 billion to $3 6 billion to complete and bring into service all three projects.

Speaker 3: Over the remaining years of our forecast, we expect to invest an additional $3 billion to $3.6 billion to complete and bring into service all three projects.

These estimates fully reflect certain cost increases that we've encountered over the past few months that we're covered earlier.

Speaker 3: These estimates fully reflect certain cost increases that we've encountered over the past few months that were covered earlier in Joe's remarks, as well as our estimates of cost going forward.

Joe's remarks, as well as our estimates of <unk>.

Cost going forward.

Speaker 3: Last year, we told investors that we would provide more visibility into our financial expectations for our offshore wind investments. So providing you with the range of expected, of the expected investment levels over the next several years is part of that.

Last year, we told investors that we would provide more visibility into our financial expectations for our offshore wind investments. So providing you with a range of expected of the expected investment levels over the next several years as part of that.

And as we said before the benefit on earnings from the large projects into service in 2025 is not projected to be significant however, assuming.

Speaker 3: And as we said before, the benefit on earnings from the large projects into service in 2025 is not projected to be significant.

Speaker 3: However, assuming Revolution Wind and Sunrise Wind enter service in 2025, we expect offshore wind earnings to add between 6% to 8% to the net income we expect from our core regulated business in 2026.

Revolution wind and Sunrise wind into service in 2025, we expect offshore wind earnings to add between 6% to 8% for the net income we expect from our core regulated business in 2026.

Speaker 3: The benefit on every source's cash flow beginning in 2026 is likely to be much more significant.

The benefit on every source of cash flow beginning in 2020 is likely to be much more significant.

Speaker 3: Since Eversource is currently a cash taxpayer and we expect to remain one, we expect to use investment tax credits and accelerated depreciation for tax purposes in a highly efficient and effective manner. And that's just based on today's tax code.

Since every sources currently a cash taxpayer and we expect to remain one we expect to use investment tax credits and accelerated depreciation for tax purposes, and a highly efficient and effective manner and thats just based on todays tax code.

Changes.

Speaker 3: Changes are currently being considered in Congress to spur more clean energy investment.

Currently being considered in Congress to spur more clean energy investment.

Speaker 3: that could significantly enhance our projected cash flows and returns.

That could significantly enhance our projected cash flows and returns.

Speaker 3: Potential changes include utilization of a direct pay option, allowing an increase of tax credits to 40% for meeting certain domestic content requirements, and raising production tax credits to the ITC equivalent of 30%.

Potential changes include utilization of a direct pay option.

Allowing an increase of tax credits to 40% for meeting certain domestic content requirements and raising production tax credit to the <unk>.

<unk> production tax credits to the ITC equivalent of 30%.

Any of these potential changes could have significant positive implications for this business and cash flows and none of these changes is reflected in the offshore wind guidance that I noted earlier.

Speaker 3: Any of these potential changes could have significant positive implications for this business and cash flows, and none of these changes is reflected in the offshore wind guidance that I noted earlier.

Speaker 3: Historically, we have guided that our offshore wind projects were expected to generate mid-teens returns based on a standard Eversource 6040 debt equity structure.

Historically, we have guided that our offshore wind projects were expected to generate mid teens returns based on a standard ever saw a 60 40 debt equity structure.

Those returns are higher are achievable with enhanced clean energy benefits contemplated by the build back better plan.

Speaker 3: Those returns are higher, are achievable with enhanced clean energy benefits contemplated by the Build Back Better Plan.

But even with no changes.

Speaker 3: to the current tax code. We now expect our offshore wind equity returns to be in the 11 to 13 percent range.

So the current tax code, we now expect our offshore wind equity returns to be in the 11% to 13% range. So still accretive for the <unk> investor and highly supportive of our state's aggressive clean energy goals.

Speaker 3: So still a creative for the Eversource investor and highly supportive of our state's aggressive clean energy goals.

So to summarize offshore wind our projects are making excellent projects progress and continue to project in service States as previously forecast.

Speaker 3: So to summarize Offshore Wind, our projects are making excellent progress and continue to project in-service states as previously forecast.

Speaker 3: We, like other developers, have very recently experienced higher costs associated with global supply chain and vendor capacity issues.

We like other developers have very recently experienced higher costs associated with global supply chain and vendor capacity issues.

Speaker 3: But perhaps, like most other US developers, we have a very clear line of sight on 80% of our costs.

But perhaps like most other U S developers, we have a very clear line of sight on 80% of our costs.

Speaker 3: And we continue to work closely with Orsted to identify savings opportunities.

And we continue to work closely with <unk> to identify savings opportunities.

Speaker 3: Despite some higher costs, we continue to project offshore wind earnings that are higher than in our regulated business.

Despite some higher costs, we continue to project offshore wind earnings that are higher than in our regulated businesses.

The closing out today's call I want to discuss our financing plans.

Speaker 3: To closing out today's call, I want to discuss our financing plan.

Speaker 3: As we've always done, we expect to finance our capital needs in a balanced way through a combination of internally generated funds, new debt issuances, and common equity.

As we've always done we expect to finance our capital needs in a balanced way through a combination of internally generated funds new debt issuances and common equity.

We intend to maintain the existing strong credit ratings that we currently have with the rating agencies.

Speaker 3: We intend to maintain the existing strong credit ratings that we currently have at the rating.

Speaker 3: Given the level of investments contemplated in this five-year outlook, we are planning to add an incremental $500 million to our equity needs over the next several years.

Given the level of investments contemplated in this five year outlook, we are planning to add an incremental $500 million to our equity needs over the next several years.

When we first discussed issuing equity three years ago, we outlined a multi pronged plan to raise equity capital for.

Speaker 3: When we first discussed issuing equity three years ago, we outlined a multi-pronged plan to raise equity capital. The first $2 billion plan was comprised of $1.3 billion in block equity and $700 million through an at-the-market or ATM program.

The first $2 billion plan was comprised of $1 3 billion in block equity and $700 through an at the market or ATM program.

Separately, we announced that we would use about $100 million a year in treasury shares rather than open market purchases to fund that dividend reinvestment and employee stock programs.

Speaker 3: Separately, we announced that we would use about $100 million a year in Treasury shares rather than open market purchases to fund our dividend reinvestment and employee stock program.

Speaker 3: So to help fund the updated investment plan and allow us to maintain our strong financial profile and credit rate.

So to help fund the updated investment plan and allow us to maintain our strong financial profile and credit ratings. We are now increasing the size of our expected ATM program by 500 million so to a total of $1 2 billion.

Speaker 3: We are now increasing the size of our expected ATM program by $500 million, so to a total of $1.2 billion.

In addition, we expect to continue to fund our dividend reinvestment and employee stock programs using treasury shares and this is expected to be about 600 million.

Speaker 3: In addition, we expect to continue to fund our dividend reinvestment in employee stock programs using treasury shares. And this is expected to be about $600 million over the next five years.

Over the next five years.

Speaker 3: Finally, as you can see on slide 23, we continue to remind investors of our long track record of positive performance.

Finally, as you can see on slide 23, we continue to remind investors of our long track record of positive performance.

Speaker 3: This slide shows that over the decade since Eversource was created, we have consistently achieved the earnings and dividend growth we targeted back in 2012, while achieving very strong operating profits.

This slide shows that over the decade since the since <unk> was created.

We have consistently achieved the earnings and dividend growth, we targeted even back in 2012.

While achieving very strong operating performance.

Speaker 3: We also have significantly enhanced our ESG profile, which certainly ranks among the best, if not the best in the industry.

We also have significantly enhanced our ESG profile, which certainly ranks among the best if not the best in the industry.

So we thank you again for joining us this morning, and I'll turn the call back to Jeff for Q&A.

Speaker 3: So we thank you again for joining us this morning, and I'll turn the call back to Jeff for Q&A.

Thank you, Phil and I'm going to return it to John just to remind you how to enter questions John .

Speaker 1: Thank you, Phil. And I'm going to return it to John just to remind you how to enter questions.

Thank you if you do have a question press Star then one on your Touchtone phone.

Speaker 4: Thank you. If you do have a question, press star, then one on your touchtone phone. If you wish to remove from the from the queue, press the pound sign or the hash key. Once again, the star than one on your.

With stream from them from the queue press pound sign or the hash key once again Thats Star then one on your Touchtone phone.

Great. Thank you John first question. This morning is from Steve Fleishman from Wolfe Good morning, Steve.

Speaker 1: Great. Thank you, John . First question this morning is from Steve Fleishman from Wolf. Good morning, Steve. Yeah. Hey, good morning.

Yeah, Hey, good morning, Thanks, everybody.

Just maybe one.

Speaker 5: Just maybe one question, just there's a lot of offshore wind disclosures that you gave here in the call. Is there?

Question, just theres a lot of offshore wind disclosures.

You gave here in the call is there.

Speaker 5: a reason that none of this is in like the fly deck and and the like just some color on that it's helpful

A reason that none of this is in the slide deck.

And the like.

Some color on that it's helpful to have it but just yes.

Speaker 3: Yeah, it's all included in our 10-K, Steve, that is being released today, too. So the nature of all those disclosures is included there. So the combination of the comments and the 10-K, I think, provide all the information.

Yes.

It's all included in our 10-K, Steve.

Being released today too so.

The nature of all of those disclosures is included there.

So.

The combination of the comments and the 10-K I think provide all the information.

Great and then just.

Speaker 5: Just to summarize, when I'm looking out to 2026 and thinking about the changes from the six to seven percent.

Just to summarize what I am looking out to 2026 and thinking about.

The changes from the 6% to 7%.

Speaker 5: 6 to 7 percent regulated growth or upper half of 5 to 7. We have in 26 an incremental 6 to 8 percent net income so that of

6% to 7% regulated growth.

Or have a five to seven.

We have 26, an incremental 6% to 8% net income.

So from.

From offshore wind so that's.

Take the base of the growth rate of the regulated add 6% to 8% net.

Speaker 5: take the base of the growth rate of the regulated, add 6% to 8% net income.

Net income.

And then my share count would basically be a $500 million more of equity that we would have had previously.

Speaker 5: And then my share count would basically be $500 million more of equity than we would have had previously.

Yeah, Yeah that.

So is that to your question how do you get to the calculation, yes that I'm, just trying to kind of get to kind of thinking.

Speaker 3: Is that your question? How do you get to the calculation? Yes, I'm just trying to kind of get to kind of thinking of the, you know, kind of EPA. Yep, it's a little bit more than the five because what we did, we increased the.

Yes.

Yes, it's a little bit more than the five because what we did we increase the.

That dividend reinvestment.

Speaker 3: That dividend reinvestment, about $100 million, we would, before it was like $100 million a year for five years, or $500 million now, it's about $120 million for five years, so it's the...

About $100 million and we would before it was like a $100 million a year for five years 500 million now it's.

About $120 million for five years so so.

It's the incremental.

Speaker 3: It's the incremental ATM program and then $100 million more on the drip.

<unk>.

ATM program, and then $100 million more on the drip side.

Speaker 5: I'm sorry. If I wanted to look at, so just on that, the part on the DRIP side. So my recollection is you were doing $100 million a year previously for Treasury and DRIP.

I'm, sorry, if I wanted to look at.

Just on that part on the.

The drip side. So my recollection that you were doing $100 million a year.

Yes, Thats very treasury and Greg.

Speaker 5: and now you're going to be doing how much per year? It's just 120. 120. Okay. Yeah. So basically over five years, that's another 100 million of equity. Right. Incremental. But I mean 600 million overall incremental equity.

And now youre going to be doing how much for you.

120.

Okay.

So basically over five years, that's another 100 million of equity incremental.

$600 million.

Overall incremental equity yes.

Okay.

Speaker 5: Okay, that's helpful. And then, just in terms of just

Helpful.

And then.

Just in terms of just.

Speaker 5: How are you feeling about the timelines on revolution? I think there's a comment in the 10k about that you're still analyzing those. Could you just give a little more color on that, please?

How are you feeling about the timelines on Revolution I think there is.

There's a comment in the 10-K about that.

We're still analyzing those could you just give a little more color on that please.

Speaker 2: show good morning steve uh... you know we feel very very good and you know i we had a good opportunity to spend some time with uh...

Good morning, Steve.

We feel very very good I'm, you know we had a good opportunity to spend some time with.

Speaker 2: with the uh... interior secretary last friday uh... we've got tremendous support down there and no all indications are that uh... you know we continue to

With the interior Secretary last Friday, we've got tremendous support down there and all indications are that.

We continue to make.

Speaker 2: to make great progress. We expect the draft environmental impact statement July of this year, and all our approvals are expected by 2023, with construction beginning shortly after that. So we don't anticipate, although, never say never, but things have been very, very smooth in this. I had mentioned in my.

Great progress, we expect the draft environmental impact statement July of this year.

And all of our approvals are expected by 2023 with construction beginning shortly after that so we don't we don't anticipate although.

Never say never but things have been very very smooth and as I had mentioned in my.

Speaker 2: My prepared remarks, you know, we've accomplished more this past year than we have in the three previous years. So I'm very, very optimistic of the schedule.

My prepared remarks, we've accomplished more this past year than we have in the three previous years, so I'm very very optimistic and.

Of the schedules.

Speaker 5: Last question, I assume you probably updated the rating agencies on the offshore wind capital plan and your updated financing plan. I just want to kind of check that you expect that this should kind of keep stable rating.

Last question just.

I assume you probably update of the rating agencies.

The offshore wind capital plan and your updated financing plan.

I just want to kind of check that you expected.

It should kind of keep stable ratings.

Yes, we have as you can imagine Steve were in.

Speaker 3: Yes, we have. As you can imagine, Steve, we're in.

Speaker 3: uh... frequent contact with the agencies you know uh... whether they'd be whether it's on that capital spending plan you know the regulatory developments in the various states or uh... such so uh... we have and uh... we will continue to keep them updated throughout this year

Frequent contact with the agencies.

Whether they'd be whether it's on the capital spending plan.

The regulatory developments in the various states are such so.

We have and.

We will continue to keep them updated throughout this year.

Speaker 5: Great. I will let other people ask questions. Thanks so much for your time. Thank you, Steve.

Great I will let other people ask questions. Thanks, so much for your time.

Thanks, Steve next question is from <unk> Kim from Goldman Good morning in soup.

Speaker 1: Thanks, Dave. Next question is from Insu Kim from Goldman. Good morning, Insu.

Hey, good morning.

Speaker 5: Hey, good morning. First question also on offshore wind. Could you just clarify, first of all, that the total cost, I guess, of your 50% I think I heard a billion in 2022 about another three to three and a half billion over the remaining few years. Is that correct? So if I think about

First question also on offshore wind.

Just a question.

My Crystal ball at the total cost of your 50% I think I heard a $1 billion in 2022 about in another three to $3 5 billion of her.

Many few years is that correct. So if I think about.

$4 5 billion for your statements.

Speaker 5: $4.5 billion for your state. That's about $9 billion total for the entirety of the three different projects. So, taking 1.7, 1.8 gigawatts for those reflect about $5,000 per KW all in. Is that the right ballpark?

About 9 billion total for the entire entirety of it three different projects. So picking 1718 gigawatts for those reflect about $5000 per kw all that is that the right ballpark for Matt.

Speaker 3: Doing the math that you just did, that's where you would get to.

Doing the math that you just did that's where you would get through yes.

Okay.

Speaker 5: Okay. And then related to that, just thinking about the new offshore wind returns of 11 to 13 versus somewhere in that machines you were talking prior, you know, given 80% of your project costs are largely locked in, so we're talking mostly in that other 20% of costs, are those, from a timing perspective, something that you'll have to lock in pretty

And then related to that just.

About the the new offshore wind returns will be 11% to 13% somewhere in that mid teens, we're talking acquire.

Given 80% of your project costs are largely locked in for we're talking mostly about other 20% of costs are those from a timing perspective.

Locking pretty yes.

Speaker 5: you know, soon at these inflated levels that, you know, get your estimates to a lower level, or do you have more time to see potentially if there's some subsiding of a cost?

Soon.

Inflated level.

Your estimates to a lower level or do you have more time to see it.

I think there's some subsiding subsiding of costs.

Speaker 2: Yeah, good morning. Thank you. Well, you know, great question. So, you know, the remaining 20%, you know, we think we have opportunities there to look for. We're not going to rush to sign a contract just to sign a contract. You know, we are.

Yes. Good morning. Thank you great question so.

The remaining 20% we think we have opportunities to look we're not going to rush to sign a contract just to sign a contract we are going to be thoughtful and deliberate one of the things that has taken place.

Speaker 2: to be thoughtful and deliberate. I mean, one of the things that has taken place, um...

Speaker 2: in this offshore wind business. I was up in Albany for the

In this offshore wind business, we were up I was up in Albany for the for our foundation construction, we're onshoring adhere in America. So there's a lot of the supply chain is really moving very fast. So we think the remaining 20, we there's a great opportunity here for us to to have some competitive opportunities and not rush just to sign a contract for the <unk>.

Speaker 2: for a foundation, construction, we're on-shoring it here in America. So there's a lot of, the supply chain is really moving very fast. So we think the remaining 20, there's a great opportunity here for us to have some competitive opportunities and not rush just to sign a contract for the sake of signing a contract. So the long answer to your short question is we think we have some time for the remaining 20 in that we will remain disciplined in terms of executing any contract.

Suddenly contract so the long answer to your short question as we think we have some time for the remaining 20 and that we will remain disciplined in terms of executing any contracts.

Got it and just one quickly if I could on that upper half of the five to seven through 26 that embeds that investment will be offshore wind and the financing costs that are associated with that at all.

Speaker 5: Got it. And just one quickly, if I could, on that upper half of the 5 to 7 through 26, that embeds, you know, that investment of the offshore wind and the financing costs that are associated with that as well.

Speaker 3: Yes, in the, correct, yes, the, during construction, you know, we basically capitalized the interest cost to the projects, but that does embed that in there, into.

Yes, correct.

Correct, yes during construction, we basically capitalize the interest cost.

So the projects, but that does embed that in there into.

Alright.

Thank you so much.

Speaker 1: Thank you. Thanks, Anshu. Next question is from Durgesh Chopra from Evercore. Good morning, Durgesh.

Thank you.

So next question is from <unk> Chopra from Evercore good morning <unk>.

Speaker 4: Hey, good morning, Jeff. I just had one quick clarification on why the questions were asked. On the equity, the equity, the $1.2 billion ADM and the $600 million through DRIP and others, that's for the regulated side, right? That doesn't cover, you know, your $4.5 billion roughly investment on the offshore side.

Hey, good morning.

Jeff I just had one quick clarification on my other questions were asked on the <unk>.

On the equity the equity the $1 2 billion in ADM, and the 600 million through drip and others, that's where the regulated side right that doesn't cover.

$4 5 billion of free medicine on the offshore side.

Well what.

What we've incorporated in terms of financing incorporates what we believe is an appropriate level for our long range outlook that we've outlined here so.

Speaker 3: What we've incorporated in terms of financing, incorporate.

Speaker 3: what we believe is an appropriate level for our long-range outlook that we've outlined.

Speaker 3: You know, it's not a plan that you set it and forget it, right, like the commercial. You put it in the oven and set it and forget it. But this is something we continuously will monitor. We'll look at our plan, including our financing needs. And if there are adjustments that are needed as we move through the next few years, we'll do that. But right now, what I've indicated to you is to support the full investment activities that I've outlined.

It's not a plan that you.

You set it and forget it right like the.

Like the commercial you put you put it in the oven insert it and forget it but this is something that we continuously.

We'll monitor we'll look at our plan, including our financing needs and if there are adjustments that are needed as we move through the next few years, we will do that but.

Right now that what I've indicated to you is to support the full investment activities.

I've outlined.

Speaker 4: Got it. Thanks. That's all I had, guys. Thank you. All right. Thank you, Dhirgesh. Next question is from Nick Campanella from Credit Suisse. Welcome to our call, Nick. Hey, thanks.

Got it. Thanks, that's all I had guys. Thank you alright. Thank you <unk> next question is from Nick Campanella from Credit Suisse welcome to our call today.

Hey, Thanks, a lot everyone really appreciate the time.

Speaker 6: I guess just, you know, thanks for all the color on the offshore wind stuff, just looking at the base business, you know, O&M, combating inflation, you've done a pretty good job of keeping things flat, historically, just what's in your forecast in this five year plan for O&M?

I guess just thanks for all the color on the offshore wind stuff I'm, just looking at the base business O&M combating inflation.

You've done a pretty good job of keeping things flat historically.

And your forecast in this five year plan for O&M.

Speaker 3: In the long-range forecast, it's maintaining that same approach, you know, in that flat, so maybe up slightly as we move through, but certainly well below.

In the in the long range forecast, it's maintaining that same approach in that.

Flat to maybe up slightly as we move through but certainly well below.

Speaker 3: uh... sort of an inflation level you know we've been very good about

Sort of an inflation level, we've been very good about finding efficiencies and opportunities in our processes.

Speaker 3: finding efficiencies and opportunities in our processes.

Speaker 3: You know, when we go in for rate cases, distribution rate cases.

<unk>.

You know when we go in for rate cases distribution rate cases.

Speaker 3: uh... you know we'd like to be able to portray that uh... costs are lower today than they were you know x years ago when we went into the previous case so

We'd like to be able to portray that costs are lower today than they were you know X years ago. When we went into the previous case so.

Speaker 3: We're looking to maintain that discipline on our O&M costs and keep them flat-ish. They might, you know, go up slightly, but in that flat to less than 1 percent level.

We're looking to maintain that discipline on our O&M costs and keep them flattish they might go up slightly but.

In that flat to less than 1% level.

Got it that's really helpful.

And then I guess, just looking at the guide $4 or $4 17, and 17 range.

Speaker 6: And then I guess just looking at the guide, $4 to $4.17, it's a 17-cent range. I think it's just a bit wider than what you've historically provided in 21 and 20. Is that just law of large numbers playing out, or are you kind of seeing higher volatility in the base businesses?

I think it's just a bit wider than what you've historically provided in <unk> and in 'twenty, one and 'twenty.

That just law of large numbers, playing out or are you kind of seeing higher volatility in the base businesses.

Speaker 3: I think it's a combination, you know, some of it is just the numbers are bigger and that range, if you go back, you know, four or five years, it was, you know, maybe 10 cents and then it was 15 cents. So it's as the numbers have grown, sort of the range around it has grown.

I think it's a combination you know some of it is just the numbers are bigger.

And that range. If you go back four or five years. It was you know maybe 10 cents and then it was 15.

It's <unk>.

As the numbers have grown sort of the range.

Around that has grown in.

So there's nothing to read into it other than other than that and as I said the midpoint is really in that 6% area.

Speaker 3: So, there's nothing to read into it other than that, and as I said, the midpoint is really in that 6% area.

Thanks, a lot.

Alright. Thank you. Nick next question is from Angie <unk> from Seaport Good morning Angie.

Speaker 1: Thank you, Nick. Next question is from Angie Starzynski from Seaport. Good morning, Angie. Good morning. I just had a one follow-up on offshore wind. So, you guys mentioned the 11 to 13 percent. Are we talking about levered IRRs? And then, secondly, is there any difference in your expectations for profitability of the initial project versus those that are coming online in 2025?

Good morning, I, just had one follow up on all Sherwin. So you guys mentioned, the 11% to 13%.

Looking about.

<unk> IRR.

And secondly is there any difference in their expectations.

Stability of the initial project versus those that are coming on line in 2009.

Speaker 3: I didn't catch the last part of your question, but the first part is the number is a return on equity. So, that's, you know, I think Orsted may talk about IRRs, but, you know, we've always...

I didn't catch the last part of your question, but the first part is the number is a return on equity. So that's you know I.

I think that May talk about IRR, but we've always.

Speaker 3: you know for our uh... investor investors they like that to talk in terms of are we so it's a return on equity number

For our Investor Investor's, they like us to talk in terms of ROE. So it's the return on equity numbers.

Speaker 7: The second question was, I mean, I assume that it's an average return across the four projects. So is there, for example, higher profitability or higher returns on the initial projects coming online? And as time goes by, as those inflation pressures increase, potentially, then those projects that come online later have lower returns.

So then my second question, Yes. The second question was that.

I mean, it's something that it's an average return across.

The four projects.

Yeah.

For example, higher profitability, Ohio returns on the initial projects.

Projects coming online and as time goes by itself.

Inflation pressures increase potentially.

Then.

Those projects come on line later have lower returns.

Speaker 3: No, the number, we've always tried to talk about it as an average portfolio, so our portfolio of the three projects. You know, just keep in mind, though, when you look at the size, self-work is, you know, much smaller than the other two, so, you know, by definition, just due to size, it's going to have a less contribution when it comes online. The numbers we're talking about are kind of a portfolio number.

No.

Number we've always tried to talk about it as an average portfolio. So our portfolio of the three projects.

Just keep in mind, though when you look at.

At the five South Fork is much smaller than the other two so.

You know by definition, just just due to size, it's going to have less contribution.

When it comes online, but the numbers, we're talking about a kind of a portfolio.

Number.

Very good thank you.

Speaker 1: Thank you, Angie. Next question is from Sophie Karp from KeyBank. Good morning, Sophie.

Thank you Angie next question is from Sophie Karp from Keybanc Good morning Sophie.

Speaker 8: Hi, good morning, guys. Thank you for taking my questions. I have a couple of questions for you. It's first on the offshore wind, and just broadly speaking, maybe on your CAPEX program. So you have a sizable portion of it locked in, but could you discuss where you still have some sensitivities to price inflation, commodity price, and maybe how much is that in the escalators?

Hi, Good morning, guys. Thank you for taking my questions I have a couple of questions here.

It's first on the onshore wind and just broadly speaking media and your Capex program.

So you'll have a sizeable portion of it locked in but could you discuss.

Have some sensitivity.

Maybe how much of that is that in the escalators.

Speaker 8: in some of the parts that are already locked in otherwise, or is it all concentrated in the kind of 20% that's not locked in? Any comment on that could be helpful.

In sum of the parts that are already locked in otherwise or is it all right.

20%, that's not locked in.

Any color on that would be helpful.

Speaker 3: Yeah, I'd say essentially it's in the 20% that's not locked in.

Yeah, I'd say essentially its in the 20% that's not.

Locked in.

Speaker 3: you know, that, you know, there's still discussions on certain contracts for certain projects that, you know, we're working through with our joint venture partner. But I'd say, you know, the main, the more significant items are just the ones that haven't been done yet as opposed to anything special escalation-wise in the existing 80 percent.

You know that.

Theres still.

Discussions on certain contracts for certain projects.

We're working through with our joint venture partner, but I'd say the the main.

The more significant items are just the ones that haven't been done yet as opposed to anything special escalation wise in the existing 80%.

Got it thank you.

Speaker 8: Got it, thank you. And my second question was on the kind of surprise energy bills that people are receiving. Some of your peers in the Northeast have been in the press lately with their customers receiving surprise bills on the energy component predominantly, right? And that creates potentially political overhangs for your peers. What are you seeing in your territory? Because you're pretty far North and I know historically it's been, it could have been an issue.

The second question was on that kind of surprised energy deals that people are seeing in some of your peers.

And then in the press lately.

Their customers what they didn't surprise bill on the energy components predominantly right.

And that green with political overhang.

Peter.

And are you seeing in your territory, because you're pretty far into work and I know that historically.

<unk> had been an issue.

Speaker 8: What are you seeing this winter, and how are you responding to that situation?

What are you seeing this winter how do they play into it.

The way you should look at the horizon.

Speaker 2: Yeah, so, uh, you know, we get out in front of this in the fall. We spent a lot of time with our regulators, with the administrations, with the governors.

Yes so.

We got out in front of this in the fall we spent a lot of time with our regulators with the administrations with the governance to kind of.

Speaker 2: to kind of, you know, alert our customers of this volatility in the marketplace. You know, I think, I will tell you, it was well-received by all of our, you know, regulators and key stakeholders. I think we do a very good job around hedging, and I think that we've secured an awful lot. So the shocks that I think some folks are seeing, I mean, it certainly...

We're at our customers.

<unk>.

Volatility in the marketplace.

I think I will tell you. It was well received by all of our regulators and key stakeholders I think I think we do a very good job in and around hedging and I think that we had secured an awful lot. So the shocks that I think some folks are seeing I mean, it's certainly.

Speaker 2: Our customers, although you never like to have an increase, I do think that they understood and they were able to prepare and plan for it. We did a lot of outbound calling to get our customers to look around.

Our customers are.

Although it's you never like to have a increase I do think that they understood and they were able to prepare and plan for it we get a lot of outbound calling to get our customers to look around.

Some.

Two to do some budget billing so it allows them to kind of spread it out and take some of the some of the peaks off and I think that that went a long way and obviously, we spent a lot of time around energy efficiency. So I think all of those drivers no one likes to see a bill increase but I think if you.

Speaker 2: uh... to to uh... to do some budget billing so often to kind of spread it out take some of the some of the peaks off and i think that that went a long way obviously you know we spent a lot of time on energy efficiency so make all those drivers no one likes to see a uh... bill increase but i think if you uh... if you would farm customers and they understand is coming uh... they're able to properly prepare for it

If you inform customers and they understand that it's coming they were able to properly prepare for it.

Perfect. Thank you.

Speaker 1: Thank you, Sophie. Next question's from Julian from Banks America. Good morning, Julian. Hey, good morning.

Thank you Sophie next question is from Julien <unk> from Bank of America, Good morning Julien.

Hey, good morning team, thanks for the opportunity to connect.

Speaker 1: I just wanted to follow up in brief here, I'm just reconciling the percentages that you talked about a moment ago on the 6 to 8% additive, say, by 26 here seems like that implies something in the order of magnitude of like 140 ish million of net income.

Just wanted to follow up in brief here I'm just reconciling the percentages that you talked about a moment ago on the.

6% to 8% additives.

26 years.

That implies something in the order of magnitude of like a 140 billion.

Net income.

Speaker 1: I just want to reconcile it against the total quantum of CapEx that you all are contemplating investing here, right? If you think about a ballpark number like five and a half billion of CapEx, what kind of equity ratio and ROE are you trying to back into it? Because if I look at 12% ROE,

Wanted to reconcile that against the total quantum of Capex that you all are contemplating investing here.

Do you think about it.

Ballpark number like $5 5 billion of Capex, what kind of equity we issue an ROE kind of back into it because if I if I look at 12% or are we.

Speaker 1: and say a 40% equity ratio, it looks like it might be, you know, the mid 200s of net income. So I just want to reconcile like what approach we should be taking. Are you employing more leverage in the offshore effort here? And that's how you get the ROE a little higher here.

And say, a 40% equity ratio it looks like it might be.

Mid two hundreds of net income so I just want to reconcile like what proportion we should be taking are you employing more leverage in the offshore effort here and that's how you get there are we will hire here.

We're just.

How does that math tie between the two approaches and I'm sorry to go back on the call today.

Speaker 1: How does that math tie between the two approaches? I'm sorry to go back on the call.

Speaker 3: Yeah, no, no, that's a great question. And certainly, you know, you are.

Yes no.

That's a great question and certainly you know you are.

Your estimate of 2026 offshore wind would be based on your estimate of where we're going to be in terms of the base core business right because assuming you know.

Speaker 3: Your estimate of 2026 offshore wind would be based on your estimate of, you know, where we're going to be in terms of the base core business, right? Because assuming.

Speaker 3: you know, whatever growth assumption you use within our guidance for what our net income will be in 2026, that could, that's going to trigger, you know, your 68% calculation. So, you know, that could be higher than the number that you've thrown out there, but certainly your calculation.

Whatever growth assumption you use within our guidance for what our net income will be in 2026 that that could be.

That's going to trigger.

6% to 8% calculation so.

That could be higher than the number that you've thrown out.

There, but it's certainly.

Are your calculation there could be slightly better a leverage.

Speaker 3: There could be slightly better leverage contribution, you know, as we look out around the edges of the offshore wind capital structure versus the regulated business.

Contribution.

As we look out around the edges of the offshore wind capital structure versus the regulated business capital structure.

Speaker 3: capital structure, you know, as we, you know, we get approval for the regulated business capital structure. There's also, you know, more beneficial tax benefits on the offshore wind.

As we we get approval for the regulated business capital structure.

It is also you know.

More beneficial tax benefits on the offshore wind side that enable accelerated.

Speaker 3: side that enable accelerated depreciation, maker's depreciation. We're able to take that and use that efficiently, given our tax profile. So those are just some of the things.

Depreciation maker's depreciation, we're able to take that and use that efficiently given our tax profile. So those are just some of the some of the things.

Yeah.

Yeah.

Speaker 1: Yeah. And just to clarify that super quick is the five to seven, the upper half that applies through 26, right? Just to make sure I heard you right on that. And then the, if I, if I can, just to clarify the tax piece of it, cause I, you brought it up there a second ago. How were you thinking about electing it? Right. I mean, given the higher.

Yeah, and just to clarify that Super quick the five to seven in the upper half that applied through 'twenty six.

Great on that and then if.

If I can just to clarify the tax piece of it because you brought it up there a second ago.

How are you thinking about electing and ready to be given the higher.

That might be beneficial for ITC versus the PTC launching here can you can you talk about the ITC election decision and then what's the amortization period.

Speaker 1: like that might be beneficial for an ITC versus a PTC election here. Can you talk about the ITC election decision? And then what's the amortization period for that potentially to calculate that ROE? I think that might be one of the other discrepancies. And, you know. It could be. And certainly.

Where that potentially the calculus at all or are we I think that might be the app when they give it to Scott.

Yes.

Could be and certainly.

Speaker 3: You know, those tax items are kind of evolving, truly, as you can imagine. So, you know, there could be some, you know.

Those tax items are kind of evolving through and as you can imagine so there could be some.

If it.

Speaker 3: that there's going to be benefits from a clean energy bill, maybe it's called Build Back Better or something like that, that could enhance the PTC rate.

At Theres going to be benefits from.

A clean energy Bill, maybe it's called build back better or something like that that could enhance the PTC.

Right so.

Speaker 3: I think that's an issue that we ourselves and our models have run it different ways.

I think that that's an issue that where we ourselves and our models have run it different ways.

Speaker 3: uh... and i think that it'll become a lot clearer probably in the next you know what what what would be the best approach but certainly you know it's something that uh... is a consideration

And I think that it will become a lot clearer probably in the next 12 months.

What would be the best approach, but certainly it's something that is a consideration.

Got it but the baseline ITC.

Speaker 1: Got it. But a baseline IT seizure amortization period. I know we've talked about this in the past. Do you have a sense of what that would be if you ended up electing that?

<unk>.

You talked.

<unk> talked about that you have a sense of what that would be if you. If you ended up.

Yes, typically that's over the life of the asset.

Speaker 3: Yeah, typically it's over the life of the asset. OK. OK. Sorry. Thank you very much for the patience.

Hey.

Okay, sorry, thank you very much for the patients.

No problem. Thank you.

Alright. Thank you Julien. Our next question is from Andrew Weisel from Scotia, Good morning, Andrew.

Speaker 1: Thank you, Julian. Next question's from Andrew Wiesel from Scotia. Good morning, Andrew.

Hi, good morning, everybody.

First a question on the dividend how are you thinking about the pace of growth relative to consolidated earnings versus regulated earnings in other words should we expect 6% growth in the dividend through 2026, maybe something higher since youre expecting the upper half of the range, maybe higher because of offshore or could it be something lighter given the cap.

Speaker 3: First a question on the dividends, how are you thinking about the pace of growth relative to consolidated earnings versus regulated earnings?

Speaker 3: In other words, should we expect 6% growth in the dividend through 2026? Maybe something higher since you're expecting the upper half of the range, maybe higher because of offshore, or could it be something lighter given the capital needs to finance all the capex?

I'll need to finance all the Capex.

Our guidance is that we expect our dividend growth to be in line with our overall ever source.

Speaker 3: Our guidance is that we expect our dividend growth to be in line with our overall ever source earnings growth.

Earnings growth.

Speaker 3: So, you know, a half a penny or a penny on a dividend, you know, could, you know, make it a point something, you know, it makes a difference, but we've consistently been in that range. We've grown the dividend in line and maybe just slightly higher even than the earnings growth of Eversource. So that's the outlook that we would take going forward.

So you know that.

Half, a penny or penny on the dividend.

Could could.

Make it a point something.

It makes a difference but in and we've consistently been in that range.

Grown the dividend in.

In line and maybe just slightly higher even than the than the earnings growth of Evercore. So that's that's the outlook.

We would take going forward.

Speaker 4: Okay, but it was 5.7 most recently, right? That's a little below the midpoint. Was there anything behind that? That's what I was just trying to say is that, you know, you put another penny on 14, it brings it up to 6.2. I mean, you know, traditionally we've kept our dividend.

Okay, but it was $5 seven most recently right that's a little below the midpoint was there anything behind that.

That's what I was just trying to say is that.

You put it another penny.

2014.

It brings it up to six point to it I mean.

Traditionally we've we've kept our dividend we've.

Speaker 3: You know, we've had a few years at one rate. You know, we had it a few years at $0.12, and a few years at $0.13. So, you know, we decided to just keep it two years at the $0.14. It's 5.8%. Another penny would have moved it over.

We've had a few years at one rate you know we had a few years of 12 cents on a few years of 13th so.

We decided to just keep it two years at the at the 14 since its a five 8% another penny would've moved it over so it <unk>.

Speaker 3: Do you raise it a half a penny to get it to exactly six? But overall, when you look at two or three years, when you look at the trend, it's very consistent with our earnings growth.

Can you raise it a half a penny to get into exactly six but overall.

When you look at two or three years when you look at the trend, it's very consistent with our earnings growth.

Okay. It makes sense, yeah, I'll try not to obsess over rounding.

Speaker 4: Okay, makes sense. I'll try not to obsess over rounding. One other question. This might just be the math of it, but the rate-based CAGR, I believe it was 8.0%, now it's 7.1%. That caught my eye, especially with the big increase to the CapEx plan. I think it was 6.5% increase with the roll forward. How do we reconcile that? Is that just the higher base starting point?

One other question this might just be the math of it but the rate base CAGR I believe it was 8.0% now it's seven one <unk>.

Caught my eye, especially with the big increase to the Capex plan I think it was a half a percent increase with the roll forward. How do we reconcile that is that just a higher rate the higher base starting point.

Speaker 3: Yes, it is and if you recall last year it was a I'd say maybe unusually high in the sense that we added the

Yes, it is and if you recall last year it was.

I'd say, maybe unusually high in the sense that we added the.

Speaker 3: Eversource Gas of Massachusetts, the assets that we purchased from, you know, Night Source.

Every source gas in Massachusetts, the assets that we purchased from nice source.

Speaker 3: So, in the previous five-year rate-based growth, there was kind of zero in there for that. And then we put, you know, then we're adding a whole company to the CapEx plan. So, just the math of it, now we have that EGMA in the base. So, the growth is, you know, reflects that. That makes sense.

In in the previous.

Five year rate base growth it was kind of zero in there for that and then we put.

And then we're adding a whole company to the so the so the Capex plan. So just the math of it now we have that <unk> in the base. So the growth is.

Now reflects that.

That makes sense. Thank you very much youre welcome.

Speaker 1: Thanks, Andrew. Next question is from David Arcaro from Morgan Stanley . Good morning, David.

Thanks, Andrew next question is from David Arcaro from Morgan Stanley Good morning, David.

Hey, good morning, Thanks for taking my question.

Speaker 9: Good morning. Thanks for taking my question. I was wondering, I appreciate all the disclosure around Dr. Wind and the net income contribution in 2026. I was wondering if you could just characterize how much of a run rate level that might be. In other words, is that going to be, or maybe talk about some elements of how it could be lumpy beyond 2026, or is that going to be a fairly steady level to look for over the course of the contract?

I was wondering I appreciate all the disclosure around offshore wind and the net income contribution in 2026 I was wondering if you could just characterize how much of a run rate level that might be.

In other words is that going to.

B or maybe talk about some elements of how it could be lumpy beyond 2026 or is that going to be fairly steady.

Level to look for over the course of the contract.

Speaker 3: Well, David, you know, our guidance goes through 2026, so I'll preface my answer by saying it that way, you know, what it shouldn't be. It shouldn't be lumpy. You know, there are certain.

Well, David you know our guidance goes through 2026, so I'll preface my answer.

Saying it that way.

Yes.

What.

It shouldn't be it shouldnt be lumpy there aren't certain.

There are certain maybe tax items in particular years that could move things around a little bit.

Speaker 3: There are certain, you know, maybe tax items in particular years that could move things around a little bit.

Speaker 3: And I think to a previous question that was asked, you know, we're still finalizing sort of what the appropriate tax election would be. So I mean, that could make it a little bit lumpy at some years.

And I think to a previous question that was asked we're still finalizing sort of what what the appropriate tax election would be so I mean that could make it a little bit lumpy.

Lumpy.

Some years.

Speaker 3: You know, one of our contracts has an escalator in it that could, you know, that would vote towards improving.

Uh huh.

One of our contracts has an escalator in it.

That could that would that would vote towards improving.

That run rate going forward.

Speaker 3: that run rate going forward, you know, once the projects go into service.

Once the projects go into service.

Speaker 3: the biggest cost that you're going, you know, out the door is sort of O and M cost.

Biggest cost that youre going.

Out the door as sort of O&M costs.

Speaker 3: And we think we would have some opportunities to, you know, enhance that. You know, we have a vessel strategy lined up for that O&M activity. So, we think that that could actually improve the, you know, the years following.

And we think we would have some opportunities too.

Enhanced that.

We have a vessel strategy lined up for that.

O&M activity.

So.

We think that that could actually improve.

<unk>.

The years following et cetera.

Speaker 3: Certainly, if you have other tax changes...

Certainly if you if you have other tax changes.

Speaker 3: you know, going forward. That's not even considering if there's more tax implications. But I think, you know, tax items might be one of the things that moves the numbers around.

You know going forward, that's not even considering if there's more tax implications, but I think you know tax items might be one of the things that moves.

Let's see.

The numbers around a little bit more than others.

Got it that's helpful color.

Speaker 9: Got it. That's helpful, Culler. Then maybe on the regular CAPEX side of things, I was wondering, did you mention that there could be more incremental utility-scale solar in Massachusetts, and would that be further upside to the plan? I'm wondering if there's any potential size or scale or quantification you might be able to

Then maybe on the Capex side of things.

Wondering did you mentioned that there could be more incremental utility scale solar in Massachusetts and would that be further upside kind of planned wondering if theres any potential.

Potential size or scale or quantification.

You might be able to provide around that and then also.

Speaker 9: provide around that, and then also, in a similar vein, just with the transmission in New England, the onshore transmission piece of bringing offshore wind into the system, the $500 million that you mentioned, is there any preference for Eversource to build that, given it's in your service territory, or is that going to be kind of spread around New England transmission owners?

Just the transmission.

New England, the onshore transmission piece of bringing offshore wind into the system the $500 million that you mentioned.

Is there any preference forever source to build that given it.

In your service territory or is that going to be kind.

Kind of spread around new England transmission owners potentially thanks.

Speaker 3: Well, I'll start with the last one because there is a preference. We believe that we're the premier transmission builder in the region. Our track record speaks for itself in our ability to...

Well I'll start with the last one because there's a there is a preference.

We believe that we are.

For the.

Premier transmission builder in the region are our track.

Record speaks for itself and our ability to plan.

Speaker 3: plan projects to work closely with ISO to get them in service, on time, and below budget. And just the, uh, the, um...

Projects to work closely with ISO to get them in service on time and below budget and just the.

The.

Competitive process. The ISO ran for a power plant that was retiring in Everett, Massachusetts would demonstrate that.

Speaker 3: competitive process that the ISO ran for a power plant that was retiring in Everett, Massachusetts would demonstrate that, that we're able to come up with the most creative solutions in the most cost-effective way and get them done.

We were able to come up with the most creative solutions and the most cost effective way and get them done.

Speaker 3: on or ahead of schedule and below budget. So we definitely believe that we're a leading candidate to provide that type of transmission bill.

On or ahead of schedule and below budget. So we definitely believe that were.

A leading candidate to provide that type of transmission build.

Speaker 3: So, just to continue with transmission, there's kind of two components that's not in the forecast or that are not in the forecast. One is sort of the immediate, this $500 million that's in the forecast period that has been identified for existing contracts, and even though we, on our development side, haven't won the contract.

So just to.

Continuing with transmission, there's kind of two components, that's not in the forecast.

That are not in the forecast one is sort of the immediate this 500 million. That's in the forecast period that has been identified for existing contracts.

Even though we on our development side haven't won the contracts.

Speaker 3: There's regulated transmission that's needed. There's transmission bill that's needed in our service territory in Cape Cod because the landing area for a lot of that is there. So we're working, you know, on some of those activities right now but did not put anything into the forecast. So that would be upside and I would expect that you'll see that we will have upside in that.

There's regulated transmission that's needed this transmission build that's needed in our service territory and Cape Cod, because the landing area for a lot of that is there so.

Working.

On some of those activities right now but.

It did not put anything into the forecast so that would be upside and I would expect that.

You'll see that we will have upside in that in that $500 million range in.

Speaker 3: 500 million range. You know, in addition to that, the states are looking for more than the current offshore wind, you know, increasing to 9,000, you know, megawatts.

In addition to that.

States are looking for more than the current offshore wind you know increasing to 9000 megawatts.

Speaker 3: there's going to be a need for even more incremental capacity. And that cost is going to be probably higher in that, you know, the early years you're using up some of the excess capacity or, you know, some of the existing. But when you start to now look for 9,000 megawatts more, that's going to require more significant build-out, you know, to the interconnection point.

Going to be a need for even more incremental capacity and that that cost is going to be probably higher in that.

The early years, you're using up some of the excess capacity or.

Some of the existing but when you start to now look for 9000 megawatts more that's going to require more significant build out.

To the interconnection points.

Speaker 3: That, you know, if it comes, it would be near the end of our forecast, but then that would extend for many years beyond. So that's more of a longer term, you know.

That.

If it comes at.

It would be near the end of our forecast them, but then that would extend for many years beyond so that's more of a.

The longer term.

You know optionality for the company.

Speaker 3: In terms of rate-based solar, we're, you know, in our plan. We don't think right now there's opportunity to increase our five-year forecast. There could be opportunities beyond that. You know, we feel to build the 280 megawatts that we've identified.

In terms of rate based solar.

We are in our plan, we don't think right now there's opportunity to increase our.

Five year forecast, there could be opportunities beyond that.

We feel to two to build the 280 megawatts that we've identified.

Speaker 3: for, you know, that's in our plan, that it's going to take us, you know, throughout that our forecast period to do that. We can revisit whether incremental builds would be available beyond that time period. But right now, that's all that's, you know, that's in the forecast.

For that's in our plan, but it's going to take us throughout our forecast period to do that we can revisit whether incremental build wood would be available beyond that time period, but right now that's all of it.

That's in the forecast.

Okay, great that makes sense. Thanks.

Speaker 1: All right, thank you, David. Next question's from Paul Patterson from Glenrock. Good morning, Paul.

Alright, Thank you David.

Questions from Paul Patterson from Glen Rock Good morning, Paul.

Speaker 4: Hey, good morning, guys. Hey, Paul. Just sorry to go back to offshore wind, but just I want to make sure I've got the numbers correct.

Good morning, guys.

Hey, Paul.

Just.

Sorry to go back to offshore wind, but just want to make sure I've got the numbers correct.

Speaker 4: I'm sort of calculating, including what you guys have invested to date, a total number now of $4.3 to $5.8 billion.

I'm calculating including what you guys have invested today. The total number now for three to 5.8 billion.

Speaker 4: Is that correct? And is that 11 to 13 percent?

Is that correct and is that 11% to 13%.

Or are we.

Speaker 4: uh... based on essentially forty percent of that roughly speaking that's their view uh... those uh... the numbers

Based on essentially 40% of that roughly speaking that's there.

The numbers.

Yeah.

Some of the numbers.

Would include.

Speaker 3: would include development costs that are not associated with the project, so.

Development costs that are not associated with the projects.

So.

Speaker 3: You know, there's some work done on unused lease areas that, you know, we would allocate to future projects.

You know there is some.

Work done on unused lease areas that.

We would allocate to future projects.

Okay. So I guess, what I'm. So okay. So that's what I'm sort of so so it was a little bit of 30% associated with the.

Speaker 4: Okay, so I guess what I'm so okay, so that's what I've served. So it was 11 to 13% associated with the 3.9 to 4.6, or is it a number higher? I guess it goes back to sort of a stop. It's not completely clear. I guess to me, and I apologize for this, but just following along.

The $3 90 to $4 six or is it a.

A number higher.

I guess it goes back to sort of stop so I completely clear ideas to me and I apologize for this but just following along I just.

Speaker 4: What's the 11 to 13% based on, I guess? What's the total capex that's based on that? And I guess that's 40% of that, that's roughly speaking what you guys have.

What's the 11% to 13% based on I guess, what's the what's the total capex that's based on that and I guess, that's 40% of that that's roughly speaking what you guys are.

Yeah.

Right.

Speaker 3: It would be that the first time you said, you know, four and a half, you know, five, you know, the total number. So we've already invested some through 2020 through the end of 2021.

It would be that the first time, you said you know four and a half.

Five.

The total number so we've already invested some through 2020.

Through the end of 2021.

Speaker 3: That's about $1.2 billion, but what I was saying is some of those costs in the $1.2 billion we've invested to date is for work on our unused leased area or for future development.

That's about $1 2 billion, but what I was saying is some of those costs in the $1 2 billion. We've invested to date is for work on our unused leased area or for future development. So the project costs are slightly below that number and then we're looking to spend.

Speaker 3: So the project costs are slightly below that number. And then we're looking to spend, invest 900 million to a billion in 2022 and 3 billion to 3.6.

Invest $900 million to $1 billion in 2022, and $3 billion to $3 six.

Speaker 3: you know, over the forecast period. So those, you know, adding those up, you get like, you know, 4.7, you know, 5.4, you know, in that range for the total project cost.

Over the forecast period, so those adding those up.

Like for seven five.

Four in that range for the total project cost.

Speaker 4: Okay, great. And then, just on the Massachusetts legislation, the Baker bill that you mentioned,

Okay, Great and then just on the Massachusetts legislation.

The Baker Bill that you mentioned.

Speaker 4: uh... it wasn't what uh... i apologize but what what is the but what is the up to what do you think the potential impact of that legislation uh... could you clarify that boy appalled show uh... you know so as you know massachusetts had a uh... a uh... provision in the legislation that uh... allowed it didn't allow any future bids to be any higher than the the previous bit and that obviously uh...

It was.

I apologize, but what is the what is the what do you think the potential impact of that legislation might be.

Could you clarify that.

Sure Paul.

Sure.

So as you know, Massachusetts had a.

Provision in the legislation that.

Oh, Wow didn't allow any future bids to be any higher than the previous pit and that obviously.

Speaker 2: really hampered the marketplace and the bids, and so that's why the last RFP.

Really hampered the marketplace in the bids and so that's why the last RFP.

Speaker 2: I ended up with only two bidders because

Ended up with only two bidders because.

Speaker 2: It just wasn't it wasn't productive. You know, you look at other states like Connecticut, you look at New York with a

It just wasn't it wasn't productive.

When you look at other states like Connecticut look at New York with a.

Speaker 2: where they introduce the idea around economic development and other factors. It's not strictly price. And I think that Governor Baker...

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Introduced the idea around economic development and other factors, it's not strictly price and I think the governor Baker.

Speaker 2: he recognized the fact that you know he was he was having a adverse impact on uh... the potential group of bidders that could participate so he is removing that cap he's also encouraging economic development uh... i think he sees all the benefits that states like connecticut states like new york and rhode island have uh... have witnessed with uh... with serious investment

He recognized the fact that you know.

He was he was having adverse impact on.

The potential group of bidders that could participate so he is removing that cap. He's also encouraging economic development.

He sees all the benefits that states like Connecticut States, like New York, and Rhode Island have.

Have witnessed with with serious investments.

Speaker 2: in the kind of supply chain around offshore wind. So that legislation is going to, basically, it's going to remove the cap and allow a much more vibrant RFP process and bidding process.

In the kind of supply chain around offshore wind so that legislation is going to basically its going to move the cap.

While I'm much more vibrant.

RFP process and bidding process.

Speaker 4: Okay. The rest of the questions I think have been answered. Thanks so much. Have a good one. Thank you.

Okay.

Most of the questions I think have been answered thanks, so much.

Thank you.

Speaker 1: Thanks, Bob. Next question is from Jeremy Tenet from JPMorgan.

Thanks, Bob next question is from Jeremy Tonet from JP Morgan.

Hi, good morning, its actually Ryan on for Jeremy.

Speaker 10: Hi, good morning. This is actually Ryan on for Jeremy. Thanks for the question. Just one maybe mechanical one on the schedule. Can you just remind us on the Dominion vessel and the availability there and what are the logistics on utilizing that? Sure. We

So my question.

Just wanted to be mechanical one on the schedule can you just remind us on the Dominion vessel.

The availability there and what are the logistics on utilizing that.

Sure.

We are the first customer.

Speaker 2: for that vessel. The team was down to Texas. They saw the construction underway. They're making significant progress. You know, Dominion is very confident that the ship will be delivered to us on time. It was scheduled to be completed in 2023. As you know, our schedule...

For that vessel the team was down to Texas, they saw the construction underway and making significant.

Progress dominion's very confident that the ship will be delivered to us on time.

It was scheduled to be completed in 2023 as you know our schedule.

Speaker 2: really begin construction in 2024, so we feel very, very good.

Really beginning construction in 2024, so we feel very very good.

Speaker 2: uh... you about that if you know if the vehicle if the if the vessels delayed uh... you know we have a date for date uh... carry on that so that it will just move forward and allow it

But if the vehicle if they if the.

Vessels delayed.

We have a day for day.

Carry on that so it will just move forward and allow us.

Speaker 2: to utilize it for the period of time that we need for those two projects.

Two <unk>.

To utilize it for the period of time that we need for those two projects.

Got it makes sense and then just one on Connecticut and appreciate all the positive updates there, but unless you guys kind of and it's still early stages, but this performance based rates.

Speaker 10: Got it. Makes sense. And then just one on Connecticut and appreciate all the kind of positive updates there, but you guys kind of, and it's still early stages, but this performance based rates kind of proceeding. That's in early stages. Any kind of expectations there? How, you know, you think this kind of might evolve over time and kind of changing the regulatory landscape. I mean, I think if you look at.

Kind of proceeding us.

Early stages any kind of expectations. There. How you know you think it's kind of might evolve over time and a ton of it.

Changing the regulatory landscape.

I mean, I think if you look at ever source.

Speaker 2: uh... in the states where we do a performance-based rates here in massachusetts uh... you know we perform very very well you know we were probably one of the early uh... adopters of that in this state so we feel very confident about it you know we're going to play an active role obviously

In the states, where we do a performance based rates here in Massachusetts.

Very very well you know we were probably one of the early.

Adopters of that are in the states. So we feel very confident about it we're going to play an active role obviously in and any proceeding around performance based rates, but I think if you look at our record you'll get outperformance you know as I had mentioned, what we did in 2021 and what the team did.

Speaker 2: in any proceeding around performance-based rates, but I think if you look at our record.

Speaker 2: You look at our performance, as I had mentioned, what we did in 2021 and what the team did was extraordinary. I think that all of our metrics, I think we hit the ball out of the park, and so we feel very, very good about it, and we'll play an active role.

It was extraordinary I think that you know all of our metrics I think we hit the ball out of the park and so we feel very very good about it and will play an active role in.

Speaker 2: uh... we we do very very well uh... in environments where there is performance-based rates

We do very very well in environments, where there is performance based rates.

Got it very helpful. Thank you for taking my questions.

Speaker 10: Got it very helpful. Thank you for taking my questions. All right. Thank you. Thanks Ryan next questions from Steve Fleishman from wealth

Alright. Thank you. Thanks, Brian next question is from Steve Fleishman from Wolfe.

Speaker 9: Yeah, thanks. I had one clarification question. I appreciate it. I believe your 5% to 7% growth rate

Yeah. Thanks, sorry, I had one clarification question I appreciate it.

I wanted to I believe your 5% to 7% growth rate.

Uh huh.

Speaker 9: uh has included the the billion the prior billion two of equity

Included the 1 billion the prior 1 billion two of equity.

Speaker 9: Uh, that was in your plan and I wanted to clarify whether the, the updated 5 to 7% growth rate.

That was in your plan and I wanted to clarify whether the the updated 5% to 7% growth rate.

Includes the full $1 8 billion of equity.

Speaker 9: includes the full $1.8 billion of equity.

In that.

Yes, it does Steve.

Speaker 3: Yes it does Steve, it does, it's all included.

It does it will include okay.

Speaker 9: So essentially the offshore wind net income benefit would all be net income without any more share count beyond what's the shares that are already embedded in your core growth rate.

So essentially the offer when net income benefit would all be net income without anymore.

Share count beyond what's the shares that are already embedded in your core growth rate.

Funding.

Yes, well the core growth rate when I say the shares are included in the growth rate. Those shares are the plans for issuing equity covers sort of our investments that we are planning to make over the over the five year period.

Speaker 3: Well, the core growth rate, when I say the shares are included in the core growth rate, those shares of the plans for issuing equity covers sort of our investment that we are planning to make over the five-year period.

Speaker 3: You know, we could, depending on, you know, what the plan looks like, if we have additional transmission investment, if the timing of certain offshore wind spend, you know, if we move forward with AMI, we're certainly going to have to look at that CAPEX and investment plan and make adjustments, but that is the plan at this stage for the foreseeable future.

We could depending on what the plan looks like.

If we have additional transmission investment.

The timing of certain offshore win spend.

Well move forward with AMRI, we're certainly going to have to look at that Capex and investment plan and make adjustments, but that is the plan at this stage for the for the foreseeable future.

That's good and just any sense on kind of the peak.

Speaker 9: That's good. And just any sense on kind of the pace of the equity issuance? I guess it would just be the ATM part of it.

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Equity issuance I guess it would just be the <unk>.

Part of it.

Speaker 3: You know, it's hard to say the nature of an ATM is to be opportunistic in the marketplace, but I would think that we're looking to do that over the next few years, type of issuance.

You know, it's hard to say that the nature of an ATM is to be opportunistic in the marketplace, but I would think that you know we're looking to do that over the next few years.

Type of issuance.

Yes.

Speaker 11: Great, thank you. Thanks Steve.

Great. Thank you. Thanks.

Thanks, Steve.

Sure.

Speaker 1: All right, folks, thank you very much. We don't have any more questions in the queue. If you have any follow-ups, please give us a call or send us an email. And have a great rest of your day.

Alright folks. Thank you very much we don't have any more questions in the queue. If you have any follow ups. Please give us a call or send us an E mail and have a great rest of your day.

Thank you ladies and gentlemen that concludes today's conference. Thank you for participating you may now disconnect.

Speaker 5: Ladies and gentlemen, that concludes today's conference. Thank you for participating, and you may now disconnect.