Q2 2023 Eversource Energy Earnings Call
As many of you know we're also expanding our emission reduction efforts through the commitment to adopt an ambitious science based target committing to a science based target is a best practice that places us among a handful of industry leaders in the U S and we plan to have our targets submitted by 2000.
24.
Turning now to our clean energy effort in 2022, we invested nearly $800 million.
In clean energy, including offshore wind battery storage electric vehicle charging and first of a kind utility scale network geothermal energy pilot in Massachusetts.
Although we announced our plans to divest of offshore wind assets <unk> remains committed to supporting the development of it.
Of important regional clean energy solutions.
Slide six.
Reflects the many clean energy initiatives underway in Massachusetts to enable the clean energy transition as you can see on this slide, Massachusetts has a constructive regulatory framework that will facilitate over $2 billion.
Of clean energy investments over the next five years. This includes approximately $200 million.
Our first approved transmission projects that would enable offshore wind generation to interconnect to our grid.
We could potentially see an additional $350 million of transmission.
<unk> investment when Massachusetts issues. Its next RFP for additional offshore wind generation.
And certain certainly we can expect this transmission interconnection need to grow as additional offshore generation is procured for the region.
We continue to emphasize the need for system investments to support increased electrification and distributed generation to help ease the current reliance on natural gas generation in the region.
<unk> had ever source, while we are focused on enabling clean energy transition. We're also focused on enabling an equitable transition. This means protecting communities industries and people that are at risk of being disadvantaged in the clean energy transition now.
Now moving to offshore wind as you see here on slide seven we continue to make progress in the development of our offshore wind projects through our joint venture with <unk> with.
We recently achieved some major milestones with the South Fork wind project construction.
Of the projects U S built onshore substation and transmission cable is complete and the installation of the offshore substation in the subsea transmission cable were recently completed Additionally, wind turbine pre assembly is underway in new London, Connecticut.
And installation of offshore towers will begin soon.
Sulzbach wind is on track to become the nations first completed utility scale offshore wind farm in federal waters, and we will soon deliver enough clean renewable energy to power nearly 70000 homes.
Also we continued to make good progress on our Revolution wind project.
As on July 17th we received the environmental impact statement from bone setting the process for our record of decision and construction and operations plan approvals over the next few months.
In May we announced the sale of our uncommitted lease area to offset for $625 million in an all cash transaction last week, we received federal approval on the lease transaction clearing the way toward a closing we are now working on finalizing the transaction.
For the sale of our interest in the three development projects.
We have substantially completed the due diligence phase and commercial terms on this transaction. We are now truly near the goal line of wrapping up this deal.
We are now making now working through the various agreements needed to complete this transaction and expect to make an announcement soon.
Moving to slide eight as you can see here the expected spending and in service dates have not changed for the three offshore wind projects, but what has changed is that our procurement costs for the three projects are now at 93% as we are getting close to commencing construction activities.
<unk> on Revolution wind.
John will discuss the path forward toward our CEO of these projects as well as some visibility on the impairment charge.
On the offshore wind investments Inc.
In closing as we continue our focus towards enabling a clean energy future. Our nearly 10000 employees and I have one goal in mind to serve our customers well that means making sure we understand our customers needs.
Continuing to provide reliable and safe service.
And making the necessary investments to deliver energy and clean water today tomorrow and for the years to come we have made a commitment to make the appropriate investments to enable the transition into clean energy future I couldnt be prouder of the effort that the <unk> team performs everyday and I look forward to.
For the future with great excitement.
Thank you again for your time and I will now turn the call over to John Moreira.
Thank you Joe and good morning, everyone. Today I will review our results for the second quarter of 2023, including our offshore wind impairment charge and I'll also discuss our recent.
Offshore lease sale transaction give you a status update.
And review our 2023 financing activity. So let me start with slide nine our GAAP earnings were four cents per share in the second quarter of 2023, compared with GAAP earnings of 84 in the second quarter of 2022.
As we announced in May based on our completion of the offshore wind strategic review and the status of dependent project sale process. The results for the second quarter included an after tax impairment charge of $19 95 per share related to <unk> Energy's.
Total offshore wind investment.
I will review details of this impairment in a few minutes results for both years include transaction and transition costs related to the acquisition of <unk> gas company of Massachusetts, and other charges that totaled $6 2 million in the second quarter of 2000.
<unk> 23, compared with five 5 million in the second quarter of 2022.
Absent these charges and the offshore wind impairment.
Our recurring earnings were a $1 per share in the second quarter of this year compared with 86.
In the second quarter of last year.
Looking at looking at some additional details on our second quarter recurring earnings by segment, starting with our electric transmission segment, which earned 46 cents per share in the second quarter of 2023 compared with earnings of 44.
Per share in the second quarter of 2022.
Improved results were driven by our continued investments in ever sources electric transmission system to maintain high reliability performance.
Our customers.
Our second quarter 2023 electric distribution earnings were <unk> 47 per share compared with 37 in the second quarter of last year.
The improved results were primarily due to higher revenues, mainly from base distribution rate increases at <unk> electric.
An expected favorable.
Unexpected favorable regulatory decision in new Hampshire that provided the recovery of previously expense cost.
And lower O&M as a result of lowest storm restoration costs. These benefits were partially offset by higher interest expense depreciation and property taxes.
Our natural gas distribution segment earned <unk> <unk> per share in the second quarter of 2023 compared with earnings of <unk> <unk> in the second quarter of last year. The improved second quarter results were due primarily to higher revenues from capital tracking mechanisms.
Porting, our continued investments in Massachusetts, natural gas infrastructure as well as lower non tracked O&M expense.
These benefits were partially offset by higher depreciation.
Interest and property tax expense move.
Moving on to our water distribution segment that earned <unk> <unk> per share in the second quarter of this year really at the same level that we earned in the second quarter of last year.
<unk> parent and other companies' earnings were <unk> <unk> per share in the second quarter of 2023.
Compared with flat earnings in the second quarter of 2022 excluded.
The offshore wind impairment charge and the transaction and transition charges as I previously discussed.
Improved second quarter results, primarily reflect a lower effective tax rate.
The residual benefit of a disposition of ever sources interest in the clean energy fund, partially offset by higher interest expense.
Now turning to slide 10 to further expand on what Joe covered on the sale of our 50% interest in approximately 175 acres of undeveloped uncommitted lease area to offset for $625 in an all cash deal we have executed on.
A letter of intent with offset to use a portion of the proceeds from the lease area to provide tax equity to south Fork to the South Fork project through a new tax equity ownership interests that we are finalizing the terms of this new agreement as we speak.
On July 27th we received approval from the committee on foreign investment in the U S. Our <unk> that allows us to close on both the lease area as well as the tax equity investment in South Fork later this month.
Or early September .
As part of complete complete in our offshore wind strategic review <unk> evaluated its aggregate investment in the contracted projects the uncommitted lease area and other related capitalized costs and determined that the carrying value of the offshore.
Investment exceeded its carrying value.
The current estimate of fair value has been based on the sale price of the uncommitted lease area.
The expected sale price of ore sources, 50% interest in the three contracted projects based on the most recent deal pricing.
Investment tax credit qualifications for potential adders, and the expectation of a successful repricing.
Of the Sunrise win all rack.
Contract.
As a result, <unk> recognized an after tax impairment charge of $331 million or <unk> 95 per share in the second quarter of this year.
This charge will have no we will not have any impact on our cash flows from operations.
We have made good progress on advancing the sale of our existing 50% interest in the three contracted offshore wind projects as Joe mentioned, the due diligence phase is now substantially complete and behind us and we are advancing the transaction documentation. This.
This process is complex with multiple agreements that must be completed at the same time, such as a replacement joint venture agreement.
We recognize this process has taken a bit longer than expected, but we are now, but we are not going to rush through this documentation phase. It is important for us to have all agreements.
Good place with that said, we continue to remain focused on completing the final phase of this process and once again as Joe mentioned, we expect to announce the transaction soon.
As a reminder, our total offshore wind investment after accounting for the impairment charge is approximately $2 1 billion as of June <unk> of this year.
Now I'll turn to slide 11, we are maintaining our full year guidance of $4 25 to.
To $4 43 per share with a somewhat different quarterly earnings profile from 2022 due to a rate change as I previously discussed in our first quarter call as a reminder.
The rate change the rate design change at <unk> electric became effective at the beginning of this year, which eliminated higher summer summertime demand charges.
This change shifts $8 eight per share of after tax revenues out of the third quarter.
And into the first and fourth quarter and roughly equal to <unk> <unk> per share split.
There is no impact on the rate design change on the second quarter or the full year results.
In addition to reaffirming our long term EPS growth.
Growth rates solidly in the upper half of the 5% to 7% range. We also reaffirm our 21 5 billion five year regular regular regulated capital program.
That we shared during our February earnings call.
Capital expenditures totaled has totaled about $1 98 billion in the first half of 2023.
Moving to slide 12 here, we highlight several factors that we expect will contribute to an improvement in cash flows in 2023 as compared to 2022, we expect an improvement over last years.
And the ratio of funds from operation relative to total debt levels.
Items, we are highlighting on this slide include absence of 2022 onetime cash outflow items.
Net proceeds from the sale of our offshore wind investment both the projects and the lease area that will be used to lower debt balances.
<unk> of South Fork win investment tax credits.
Higher storm cost recoveries.
This distribution rate increases and the remaining equity issuance.
That we have discussed.
As.
You are all aware over the past several years, we have experienced several significant storm events, having an adverse impact on our cash flows with a sizable deferred storm balance in Connecticut alone at approximately $900 million at the end of June .
Our dedicated employees.
And the external contractor resources, we depend upon to restore service to our customers safely and efficiently.
Comprise the vast majority of the slow up the level of the FERC cost do an incredible job working around the clock in these severe weather events, but that does come at a cost.
In terms of the year to date financing activity.
Turn to slide 13, as you can see here in early May we issued $1 8 billion of parent debt and.
In three tranches at coupon rates ranging from 475.
Percent to 545% and we retired $450 million of parent company debt.
Our expectation is that debt issuances will be much much lower in the second half of 2023.
We have issued no additional equity under our ATM program through July of this year, we remain committed to complete and the remaining $1 billion in our ATM program. In addition, we anticipate raising additional equity through our dividend reinvestment and employee incentive programs.
Using treasury shares and through July we have issued 647000 shares.
Thank you very much for joining us this morning.
I look forward to seeing many of you soon I will now turn the call over to Bob.
For Q&A.
Thanks, Sean I'll now turn the call back to Emily to begin Q&A.
Thank you if you'd like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad.
Change your mind I would like to see remains from the queue. Please press star and then K one.
Turning to ask your question. Please ensure that your device is on mute.
Our first question comes from the line of Sean <unk> with Guggenheim Partners.
Please go ahead. Your line is now open.
Good morning, guys.
Good morning, Sean.
Can you hear me.
Yes, we can hear good morning, just a couple of questions here.
Joe just given.
The uncertainty that we're seeing nationally around just the offshore wind with a lot of project cancellations renegotiations, how I guess, how confident are you that you can get this transaction across the finish line kind of reason.
Twice and what does that sort of mean for the growth rate and the remaining portion of the ATM and so do you see any situations.
This deal, where we could see incremental financing aren't impacted.
5% to 7% EPS growth rate.
Yes, well, thank you Sharon I want to thank everybody for their patience around this complex offshore wind.
Phil.
And it's been very very complex and involves.
Multiple agreements that all have to be aligned.
We want to be sure that we get the most money for our shareholders out of that exit.
And we remain focused on completing this transaction to the point, we're not going to let John Moreira take any summer vacation until.
He has it all taken care of.
But back on one point this region is so dependent on Nash.
Natural gas for electric generation.
And that shift has to comments has to come in some form of alternative.
Generation and Thats, where wind given the the.
The energy practice in this region, we can you're going to wind availability factor out there.
40, 49% to 50% in the winter months is even greater when we peak. So we feel very strongly that wind is going to play a major role as we transition to this clean energy environment.
It performs especially well for us and for our customers. So I don't see any.
Any one taking their foot off the gas the policymakers are very very excited about wind.
No I don't I don't see that winning and I really feel the appetite for wind assets. Although there has been a few that have decided not to go forward. There are as you know we are out there very actively building.
I was excited to get a lot of reports out of the foundation is being installed for the new substation.
And we are we will be the first offshore wind company.
In service in the fall, which is very very exciting to me.
There are many parties that remain committed.
Two offshore wind our offshore wind leases.
We are very very prized assets.
They sit in an area that has all the fundamentals necessary to deliver.
Great.
Great wind speeds for any future bias. So thats why we feel good that it will continue to.
To do well here so.
All in all it's going to take place it didn't take place obviously at the pace that all of us would've likely to take place, but I just want to promise you that we are we are here at the one year online and that we are getting it over the goal I think.
Some of the announcements that we made today should give you greater clarity as to how much we really know about this transaction and that.
This really is the final stage.
We are really focused on redeploying the proceeds for debt Paydown and where we are reaffirming our <unk> equity issuance.
We provided to you on the year end 2022.
Earnings call. So for that reason I'm very confident that we'll complete the deal soon and thank you again for your patience.
Yeah.
No Joe Joseph.
Are you comfortable with the current financing thats out there.
Both rate post this transaction I mean, obviously youre still guiding horizon cross guarantees investors.
Yes, we added we are fully confident.
Okay.
Yes.
We are we are fully confident that and there's no.
No change.
Okay Perfect and then just lastly, obviously you've highlighted this deal is taking a lot longer to get over the finish line and there's obviously a lot of investor angst over the contingencies and downside exposure I guess can you just maybe elaborate what remains on the negotiation side.
How much of this kind of falls on <unk>, which is kind of out of your control and do you see the contingencies as being reasonable at this point in the discussion.
Thinking about upside and downside thanks, guys.
John Yes, yes sure Scott. This is John So yes, I mean, there are as Joe mentioned and I mentioned in my formal remarks, there are a multitude of agreements that needs to be executed.
Right.
Injunction with a purchase and sale agreement some of which we do not we will not be a party to those but we will help facilitate those working with the buyer to make sure that they get to a good a good place with where the offset is.
As far as the contingencies.
Whats on the table right now and we're not here to disclose those components, because we have and execute we do not have an executed agreement.
But I think we feel comfortable with that we can manage those well.
The offset and dispose.
It was both pluses and minuses downside and upside and we feel comfortable.
What.
While ultimate ultimately be at retail.
Okay, perfect I'll jump back in the queue, let others, yes, thanks, guys I appreciate it.
Thank you.
Our next question comes from Steve Fleishman with Wolfe Research.
Steve. Please go ahead your line is open.
Hi, good morning.
Thanks for the update Steve.
Hi.
So just.
I think you mentioned that the impairment that you took on the offshore wind.
Assuming you get the New York restructuring.
As well as the ITC at or is there any way to get a sense of what.
The.
The investment level would be if you don't get those.
Yes, so that.
That is correct.
We have included both of those components in our.
Impairment analysis, and obviously in order for us to be in a position to do that they needed to be a certain level of conviction and profitability and on both of those we feel very very good about I would say on average.
Folks can can certainly calculated but its probably 400 piece $400 million.
Okay.
Understood.
That's helpful color also on the profitability part.
And then my other question John just on the <unk> to debt.
Slide.
That's very helpful. In terms of the drivers is there any way to get a better sense of.
Started endpoints there are kind of the scale of any of those.
Dry rami buckets there.
Yes, and I think some of those items, we have already shared and they might even be disclosed in our 10-Q, but.
I would size kind of the first category is.
One timers that we experienced in 2022 that we will not materialize in 'twenty three.
I would say at least.
Quarter of a $1 billion.
So $250 million goes away.
The three categories of those where we were as part of the 2021, Connecticut CMP settlement agreement, we still had half a year of refunds in 202022, that's been that sees so that's behind us so that was about.
70, some odd million $78 million, we made early on in 2022, some capital contributions, which we don't expect to make at.
At least for the foreseeable future.
And then we had another property tax settlement in Massachusetts to the tune of about another $770 million that will not materialize this year.
So that's that first category and I think all the other ones. When you look at rate adjustments cost recovery of previously deferred costs those will start to kick in so in Massachusetts as part of the rate case, we have close to $400 million.
Rolling into rates, we had a piece of that that took effect earlier this year and we have another chunk that will take effect January one of 2024. So I think if you factor those items and clearly the biggest immediate.
Improvement in our cash flows is going to be.
Closing of these two transactions the offshore wind transaction.
So those are all the items and obviously as we've said we still have $1 billion left under our ATM program.
To be to be executed so all of those items gives me. It gives me comfort that we will certainly move.
Move in the right direction from an <unk> to debt.
Understood I'll, let others take from here. Thank you.
Thank you.
Our next question comes from Doug <unk> with Evercore ISI.
Please go ahead your line is open.
Hey, good morning team, Thanks for giving me the time Hey, John .
Quickly you mentioned hey, good morning, guys, you mentioned as part of that.
The impairment charge you assumed repricing on the Sunrise wind.
Can you just walk us through what the steps are over the next sort of milestones are you kind of.
Have filed for that.
So that re pricing and then what does that mean is that $400 million related to.
That re pricing if that's what you.
Quantified it as.
Yes. So so first let me say that the process is underway. There is a schedule out. There then nicer that has posted which could render a decision as soon as.
October and November so we expect it to be known by certainly by the end of this year so dependent on what the approval is.
We think it could be in the four to 450 million.
$1 range. So I think discovery has taken place.
Some requests so we're going through that phase.
That is going through that phase right now and toward the other bids are all we're all in the same.
A procedural schedule.
Got it thanks, and then just switching gears, you mentioned roughly like $900 million in.
The deferred storm cost balance and the filing coming up in Connecticut, and maybe can you just talk to that and what is the path to recovery and timeline of those costs.
Well the normal process in Connecticut is.
You will commence recovery of storm costs.
As part of a general rate proceeding.
And what we've done in the past is we filed for a prudency. So.
Its uncertain right now, where we're still compiling all of the necessary data that's needed for that.
Process to take place but.
To say that you will the recovery of those costs will happen. When there is a general rate proceeding and as we as we've said that the earliest that that will happen will be end of 2025.
Got it.
Cash flow walk there is nothing there from like 22 23, and then in terms of just improvement from recovery of those costs, that's more longer term David.
That balance is more longer term data we do have.
We do have some.
Some dock cost recovery in base rates embedded in base rates for <unk>, but it's not significant.
We cover that anytime soon.
Thanks, so much.
Thank you Doug.
The next question comes from David <unk> with Morgan Stanley . David. Please go ahead. Your line is open.
Hey, good morning, Thanks, so much for taking my questions.
Good morning. Good morning, I was wondering are you still expecting.
Still expecting two 1% to $2 4 billion in Capex in that 2024 to 2026 period and I think you've disclosed previously in our returns still at that same level in the 11% to 13% Roe range.
We refer US David is this offshore wind.
Yes, yes, sorry.
When 2024 to 2020, Capex plans any changes to the longer term capex.
No no.
No.
It's reflected on that slide that we presented so theres been no change in the overall.
Our capital forecast needs both for.
This year, because we did revise then on last quarter call.
But longer term no there's been no capital changes to that.
Okay got it thanks and then.
The impairment on the offshore wind.
Assets was slightly larger than the last estimate I was just wondering if you could elaborate on what might have changed since the last time.
Estimate when you announced the recent transactions.
Sure David So in May we were.
<unk> had completed its due diligence process, we haven't even filed for the request for Sunrise in New York. So a lot of things have have come together since we made that announcement.
And all of those.
Puts and takes have been factored into the impairment charge that we just recognized so I would say a lot more is known and measurable today certainly than it was back in May and that does reflect as we've said in my form as I said in my formal remarks to completion of due diligence and Canada.
Yes.
The current deal pricing.
Okay got it so a couple of moving pieces there.
It sounds like so in the original estimate of the write off that Didnt include a repricing of sunrise or the or.
Or the potential value of the tax credit adders.
It didn't include the New York repricing, but we've always felt comfortable on the tax.
On the tax component.
So what we did include okay.
At.
Got it understood thanks very much.
Thank you David.
The next question comes from Andrew Weisel with Scotiabank. Please.
Please go ahead your line is open.
Hey, good morning, everybody.
First one morning, Andrew just wanted to clarify there is no.
Hi.
And to clarify there is some confusion about the CMP rate case stay out.
Seven allow regulators or intravenous to call you and before October 25 or is it the settlement superseded new state law.
Our position is that our 2021 settlement agreement provides the ability all qualifies for that four year rate review in that four year rate review will expire in the fall of 2025.
Okay, great. Thank you.
Next I want to clarify the timing.
Excuse me.
Okay Alright.
I wanted to understand the timing I think you said you expect.
Can you hear me.
Yes, we can hear you.
Hello.
Yes, sorry about that must be my headset.
Anyway, you expect clarity on Sunrise for the ended the year October November and yet.
John you guys. Both use the word soon from our sale of Princeton announcements to be as clear as we can be to soon I mean before the repricing process is complete or will you and the potential buyer wheat until the future of Sunrise is known either by waiting to make an announcement or adding contingent keeping the contract.
No we will not we will not wait for the determination from the state of New York on that we will announce once the these documents as we've mentioned are ready to go.
Very good thank you and sorry for the technical issue.
No worries thank you.
Our next question comes from Gregg <unk> with UBS. Greg. Please go ahead. Your line is open.
Yes. Thank you.
Regarding anyway.
Hey.
Regarding the $1 billion related to the <unk>.
<unk> equity.
What's the.
The intent there for how long that would last.
Asked you to.
Fund the plan and then is there any update on the.
Aquarian rate case appeal.
Let me take the latter one.
So the Aquarian rate case appeal continues to move forward.
There's I think briefs are due.
Later this month on the 17th of August I believe and then refineries and we hope that by this if there is a hearing date scheduled for December 14th where.
The record will be closed and that belief is scheduled for.
Oral arguments at that point in time, so shortly thereafter, the judge could render a decision so that's where that's where we stand on that as.
As far as.
The $1 billion.
Equity remain in equity under the ATM program.
Certainly we send it over over several years.
We haven't issued any equity this year just based on valuation so.
The ATM provides us with the ability to take advantage and be opportunistic so is.
We'll continue to monitor things accordingly.
An issue.
The equity as we feel comfortable.
Thanks.
Our next question comes from Jeremy Tonet with Jpmorgan Jeremy. Please go ahead.
Hi, Good morning. This is actually rich Sunderland on for Jeremy can you hear me.
Yes.
Alright, great. Thank you.
A couple housekeeping items upfront the $400 million to $450 million and references for New York sort of pre tax or after tax for the year.
Pre tax.
Got it. Thank you and then on the quarter itself could you quantify the new Hampshire, retroactive piece and the parent tax item as well.
The parent tax item I would tell you that it's probably close to about 100 basis points different quarter over quarter and the effective tax rate.
So lapped last year's effective tax rate was like 24 and change and were running around 22 and change.
Got it and then that new Hampshire retroactive piece, just how much was that and is that baked into guidance.
It was baked into the guidance we were banking on that.
We were tracking the proceeding very very closing last year, and we felt we felt very good and comfortable about baking that in I would say, it's in if I remember correctly in the $15 million to $20 million range.
Okay.
Got it very helpful. And then just one higher level question, there's been a lot of attention on revised draft decision came out recently.
Fox on how this impacts your approach on the <unk> front for 25 or any thoughts on reviews, there to your aquarian appeal or just other thoughts on Connecticut overall in light of that draft decision.
Yes that was a draft as you know on July 21st it's not the final decision.
Obviously.
It appears to attract the aquarian decision discouraging investment in the state of Connecticut, We're obviously concerned.
About that decision.
We are hoping that between now and then.
Final decision that there are some changes in that as you know we will have our day in court and if this remains as is I assume that.
<unk> will be a quarter as well.
To talk about that 2025 is a long way away in terms of.
Sure.
What we expect will happen in 2025, so I don't want to speculate on that.
We will continue.
<unk> continued to monitor I continue to engage with.
Key policy makers in the state we have very good relations with the government with the attorney General with other parties their agenda. Our agenda is very much aligned around clean energy and clean energy investments. There are a number I mean, one of the things that's interesting with the state of Connecticut as the number of clean energy.
Technology companies in that state I mean, there are fuel cell companies battery companies all of them are looking to deploy the technologies.
So any type of a of a chill on investment in that state is not good for all of these startup companies and its obviously disappointing, but listen we're not going to we're.
We're not going to get decided we're not going to lose faith, we're going to continue to work that those relationships down there.
And try to get to a place that's fair.
For our customers and for our shareholders.
It gets us to a.
Much better cleaner environment with investments in that state. So again, it's very fluid situation.
We'll have to see what the final decision looks like.
I just want everybody to know that.
I am personally involved working this along with the.
The 9500 other employees of this company and we are going to.
To work through these issues and I am confident that we can get to too much better place.
Understood very helpful color. Thanks for the time today.
Thank you.
Our next question comes from Anthony crowd with Mizuho. Anthony. Please go ahead. Your line is open.
Good morning, Anthony Hey, Good morning, Joe Good morning, John Thanks for taking my questions I've been spending too much time up in Marlborough, Massachusetts, So I feel like a negative now.
I guess on slide 12, if I could jump on Steve's question.
Where did you end the quarter on an <unk> to debt basis, and if you could just give us a range as you are.
<unk> very close to finishing the sell of offshore wind on what the improvement could possibly book pay is it 200 basis points or 2% to $2 50, or one to 150, if youre willing to quantify what the type of pickup of D and <unk> already said I think what Steve you gave more of the <unk>, but not so much to metric.
Yes, no I hear you and I'm not.
We have not disclosed that and truth be told that want to have those discussions with the agencies before I share any of that detail with the broader audience.
So we are now given where we are with the the contracted project transaction.
Now we're at a point, where I can share some of that information some of the details with the rating agencies. So.
And I have a meeting schedule over the next several weeks to to be able to do that.
Great and then.
Just curious on the selling and I apologize I'm using just a different word you may have answered this with <unk> question.
Once the sale is announced and once the sale closes.
Are there is there the potential for further liabilities that you have to be concerned with or the expectation is once there is a sale and the sale closes.
No more impact to ever source.
Those are the what.
What we plan to disseminate once we execute the agreement, but as I said, there will be some potential movement up or down.
Okay.
Im sorry potential movements after the close that could be up or down.
Is that fair.
Correct.
Thanks, so much for taking my questions I really appreciate it.
Thank you.
Our final question today comes from the line of Julien Dumoulin Smith with Bank of America. Julian. Please go ahead. Your line is now open.
Yes.
Hey, good afternoon team or good morning, rather I should say, thank you guys very much for the time.
Just a following up on a few housecleaning items here from the prior questions.
Clearly one of your forecast do you assume Connecticut electric and natural gas rate case is obviously, you're holding to the upper end.
Wanted to clarify when you think you'll pursue those.
On the electric as we as we continue to state our settlement agreement allows us to meet the four year review period in that review period will expire in the fall of 2025.
So we do not expect to file our CMP case.
Prior to that date, and if you look at the.
The length of time it takes in a general rate proceeding youre looking at a year, so with that timeframe, you're probably looking at the earliest.
That rates would be change would be early 2027.
And then for Yankee gas right definitely.
We.
We have no no plans right now to file a rate proceeding.
So we will work and will continue to monitor that as we always do but we don't have any current plans to file.
Got it and no changes to your Capex forecast for now right in Connecticut.
That is correct.
Got it excellent and then just clarifying earlier, the <unk> to debt I know lots of questions pluses and minuses, but can you quantify the big building blocks as you think about through the forecast period, especially through 25 here I mean, I think I heard ITC earlier can you just clarify I know that you've got some legacy items that we talked about earlier.
Thank you again.
But on 'twenty, two but can you talk about the big puts and takes here that improve the metrics prospectively.
Through the forecast period.
Through the forecast period through.
Through 2027.
What.
Yeah, I'm thinking about not just like 'twenty, three 'twenty, four but really kind of getting that sustainable structural level right. As you think about sort of building blocks.
Yes, yes.
I would say.
The offshore wind will be the kickstart.
To that enhancement once we get those and offload.
Some debt.
If you look at the longer term rate mechanisms that we have in place certainly in Massachusetts.
That will drive enhanced operating cash flows.
And the recovery of a strong costs, although for CMP it'll be towards the latter part of the forecast period, but.
Thank all of those items when you look at.
The cash flows in Massachusetts, as I've mentioned, we will we are putting into rates.
About $400 million of deferred storm costs and as part of the rate case. The amount included in rate and rate base and base rates with significantly increase. So those are all of the items that will continue to have enhanced cash flows and then completing our $1 billion equity.
Equity program.
Over the coming years will certainly enhance that credit metric.
And then just to clarify Youre 24 metrics here do they benefit in <unk>.
Yes, no absolutely.
With everything else being equal, yes, we see 2023 as I mentioned in my formal remarks, moving moving in the right direction from where we landed in 2022 and I see that trend continuing over the certainly into 2024 and beyond.
Right and 24 includes the tax equity in Europe as well.
Yes.
Got it okay excellent. Thank you really appreciate all the details here I appreciate the cleanup, but best of luck guys curious.
Thank you.
Is all the questions. We have time for today, so I'll hand, the call back to Robert Becker for any closing remarks.
Thanks, Emily that concludes our call. Thank you for joining US today. If you have any follow up questions. Please reach out to Investor relations.
Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.
Yeah.
Okay.
Yeah.
Yeah.