Q4 2023 Eversource Energy Earnings Call

Operator: www. Eversource.org Ladies and gentlemen, thank you for standing by. The Eversource Energy Q4 and full year 2023 earnings call will begin shortly. If you would like to submit a question at any time, please press star one on your telephone keypad. Thank you, www. EnergyEnergyEnergy.org. Hello, and welcome to the Eversource Energy Q4 and full year 2023 earnings call. My name is Elliot, and I'll be coordinating your call today.

Ladies and gentlemen, thank you for standing by the episodes LNG Q4, and full year 2023 earnings call will begin shortly if you would like to register a question at any time. Please press star one on your telephone keypad. Thank you.

[music].

Okay.

Speaker Change: Hello, and welcome to the episodes energy Q4, and full year 2020 earnings call.

Elliot: My name is Elliot so normally COVID-19 are cold stacked.

Operator: If you would like to register a question during today's event, please press star followed by one on your telephone keypad. I'd now like to hand over to Bob Becker, Director of Investor Relations. The floor is yours, please go ahead.

If you would like to register your question Jon stage. Please press star followed by one on your telephone keypad.

Elliot: I would now like to hand over to Paul Becca Director for Investor Relations. The floor is yours. Please go ahead.

Paul Patterson: Good morning, and thank you for joining us on bought Becker of resource energies director for Investor Relations. During this call we'll be referencing slides, we posted yesterday on our website and as you can see on slide one some of the statements made during this investor call may be forward looking these statements are based.

Robert Becker: During this call, we'll be referencing slides we posted yesterday on our website, and as you can see on slide one, some of the statements made during this investor call may be forward-looking. Statements are based on management's current expectations and are subject to risk and uncertainty, which may cause actual results to differ materially from forecasts and projections. We undertake no obligation to update or revise any of these statements.

Paul Patterson: On management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecast and projections. We undertake no obligation to update or revise any of these statements additional information about the various factors that may cause actual results to differ and our explanation of non-GAAP measure.

Robert Becker: Additional information about the various factors that may cause actual results to differ and our explanation of non-GAAP measures and how they reconcile to GAAP results is contained in our news release, the slides we posted last night, and in our most recent 10-K and 10-Q. Speaking today will be Joe Nolan, our Chairman, President, and Chief Executive Officer, and John Marrera, our Executive Vice President and CFO. Also joining us today is Jay Booth, our Vice President and Controller. Now, I will turn the call over to Joe.

And how they reconcile to GAAP results is contained within our news release the slides, we posted last night and in our most recent 10-K and 10-Q speaking today will be Joe Nolan, Our chairman, President and Chief Executive Officer, and John Moreira, Our executive Vice President and CFO also joining us today is Jay.

Joe Nolan: Our vice President and controller now I will turn the call over to Joe.

Joe Nolan: Thank you, Bob, and thank you all for joining us on the call this morning and for your interest in Eversource. Let me begin with the pathway for a full exit from our offshore wind business on slide four. When we started down this path in 2016, we were very excited for the opportunity to bring much needed renewable energy to our region. However, the high supply prices in the Northeast are not good for anyone, particularly our customers. Until we can reduce the region's reliance on gas-fired electric generation, price volatility will continue to cause difficulties for our customers. These difficulties were largely a result of the pandemic.

Joe Nolan: Thank you Bob and thank you all for joining us on the call. This morning and for your interest in <unk>.

Joe Nolan: Let me begin with the pathway for a full exit of our offshore wind business on slide four.

Joe Nolan: When we started down this path in 2016, we were very excited for the opportunity to bring much needed renewable energy to our region.

Joe Nolan: The high supply prices in the northeast and not good for anyone particularly our customers.

Joe Nolan: Until we can reduce the region's reliance on gas fired electric generation price volatility will continue to cause difficulties for our customers.

Joe Nolan: State mandates for offshore wind procurement provided a strong impetus for our engagement along with the recognition that offshore wind is one of the few renewable resources that can be produced a quantity to reduce reliance on natural gas and dampen the volatility of our region's electric prices. Unfortunately.

Joe Nolan: Supply Chain Disruption, Rising Interest Rates, and Uncertainty around Available Resources for Installation Vessels and Fabrication of Turbine Foundations. We are not alone, as several other offshore wind developers have also experienced similar challenges. These challenges, coupled with the lack of pricing flexibility inherent in contracts approved by state regulators, result in projected investment returns substantially below our required threshold.

Joe Nolan: Our offshore wind investment experienced difficulties as early stage projects.

Joe Nolan: These difficulties were largely a result of the pandemic supply chain disruptions rising interest rates and uncertainty around available resources for installation vessels and fabrication of turbine foundations. We are not alone as several other offshore wind developers have also experience.

Joe Nolan: Similar challenges.

Joe Nolan: These challenges coupled with the lack of pricing flexibility inherent in contracts approved by state regulators result in a projected investment returns substantially below our required thresholds.

Joe Nolan: At the same time, our core business is well-positioned to deliver solid operational and financial results as we move forward in supporting the region's transition to a cleaner energy environment. This led us to seek out a path to refocus our investment portfolio on our utility, with its strong opportunities for growth. For this reason, I am pleased about our announcement that we have reached an agreement to sell our existing 50% interest in the South Ark and Revolution Wind Projects to Global Infrastructure Partners, a leading infrastructure investor that will generate approximately $1.1 billion of cash. With the pending sale to GIP, our announcement last month regarding the conditional sale of Sunrise Wind to Orsted, and the sale of the offshore wind lease area that closed last year, I'm pleased to say that we have the John will discuss the impairment in more detail.

Joe Nolan: At the same time, our core business is well positioned to deliver solid operational and financial results as we move forward in supporting the region's transition to a cleaner energy environment.

Joe Nolan: This led us to seek out a path to refocus our investment portfolio on our utility business with its strong opportunities for growth.

Joe Nolan: For this reason I am pleased about our announcement that we have reached an agreement to sell our existing 50% interest in the South Fork and Revolution wind projects to global infrastructure partners, a leading infrastructure investor that will generate approximately $1 1 billion of cash.

Joe Nolan: Proceeds.

Joe Nolan: With the pending sale to Gi.

Joe Nolan: Our announcement last month regarding the conditional sales of Sunrise wind to <unk> and the sale of the offshore wind lease area that closed last year I am pleased to say that we have the pathway in place to finalize a full exit from the offshore wind business.

Joe Nolan: For the year, we have taken a noncash cumulative impairment charge of approximately 195 billion after tax John will discuss the NPM. It in more detail. However, I will say that the impairment reflects assumptions that our board views as appropriate.

Joe Nolan: However, I will say that the impairment reflects assumptions that our board views as appropriate given the uncertainty around the ultimate outcome of the Sunrise Wind Rebid process. As John will discuss, the terms of the agreement with G.I.P. are assumed and reflected.

Joe Nolan: Given the uncertainty around the ultimate outcome of the Sunrise wind rebid process.

Joe Nolan: As John will discuss the terms of the agreement with GIC are assumed and reflected.

Joe Nolan: In the <unk> <unk> charge in our long term financing plan.

Joe Nolan: By taking this impairment charge, we are accounting for our full exit from offshore wind. We are pleased to be in the final stage of this long journey, and we feel confident that we are turning over the reins of the wind business. Capable and Committed Partners, through our tax equity investment in self-bought. I'll close my comments on offshore wind with a brief update, as the first utility-scale offshore wind farm in commercial operation in the U.S., South Fork Wind has been supplying power to Long Island since late November of 2023, when the first turbine was installed. We are now in the process of installing the twelfth and final turbine. We expect all turbines to be producing power by March.

Speaker Change: By taking this CPM a judge we are accounting for a full exit from offshore wind.

Speaker Change: We are pleased to be in the final stage of this long journey.

Speaker Change: We feel confident that we are turning over the reins of the wind business two capable and committed parties. We will remain involved in managing onshore construction for all three projects and through our tax equity investment in South Florida.

Speaker Change: I'll close my comments on offshore wind with a brief update on the status of the project construction activity.

Speaker Change: As the first utility scale offshore wind farm in commercial operation in the U S. South Park wind has been supplying power to long island since late November of 2023, when the first turbine was installed we've got now in the process of installing the 12th and final term.

Speaker Change: But we expect all turbines to be reducing power by March.

Joe Nolan: We continue to advance on both onshore and offshore construction of Revolution Wind after reaching a positive final investment decision in October of last year. Work on the site of the new onshore substation in Rhode Island has been underway since late last year, and seabed preparation for the installation of wind turbine foundations is currently in progress.

Speaker Change: We continue to advance on both onshore and offshore construction of Revolution wind after reaching a positive final investment decision in October of last year.

Speaker Change: Work on the site of the new onshore substation in Rhode Island has been underway since late last year.

Speaker Change: <unk> preparation for the installation of wind turbine foundations is currently in process.

Joe Nolan: Lastly, on Sunrise Wind, we continue to get closer to the BOEM's record of decision while we await the results of our latest submission to New York's RFP4. We made this submission jointly with ORSTED on January 25th. Next, let me discuss the water distribution announcement we made last, shown on slide five. Our water business is a valuable, well-performing, and well-managed company. Although the water business is earnings accretive to Eversource, we see the potential sale of our water business as an opportunity to reduce equity needs and improve our regulatory diversity, with its current $1.3 billion rate, in a National Reputation for Operational Excellence. The water business has a strong potential to be of substantial value to another owner as part of a larger water business or strategic infrastructure platform. As a result, we plan to launch a process for Evaluating Market Interest in a Transaction for the Water Bill, with the objective of delivering value to both customers and investors. If successful, the proceeds from the sale will provide a source of cash without going to the equity fund, thereby enhancing our balance.

Speaker Change: Lastly on Sunrise wind, we continued to get closer to the bombs record of decision while we await the results of the latest submission into New York RFP for.

Speaker Change: We made this submission jointly with <unk> on January 25th.

Speaker Change: Next let me discuss the water distribution announcement, we made last evening.

Speaker Change: Shown on slide five our water business is a valuable well performing and well managed company.

Speaker Change: Although the water business is earnings accretive to ever source, we see the potential sale of our water business as an opportunity to reduce equity needs and improve our regulatory diversity.

Speaker Change: With its current $1 3 billion rate base in a national reputation for operational excellence. The water business has a strong potential to be a substantial value to another owner as part of a larger water business, our strategic infrastructure platform.

Speaker Change: As a result, we plan to launch a process for evaluating market interest in a transaction for the water business with the objective of delivering value to both customers and investors. If successful the proceeds from the sale will provide a source of cash without going to the equity market.

Speaker Change: Thereby enhancing our balance sheet.

Joe Nolan: Moving forward, Eversource will focus on the delivery of clean, safe, reliable energy to our customers, in preparing for the clean energy future that our states, our customers, and our investors expect. Now I'll turn to our excellent financial and operating performance results on slide six. Starting with the financials, we delivered another strong year, with recurring earnings of $4.34 per share in 2023, representing growth of nearly 6% over 2022. Our board has approved a dividend for the first quarter of 2024 of 71.5 cents per share, which amounts to $2.86 per share on an annualized basis.

Speaker Change: Moving forward ever source, we will focus on the delivery of clean safe reliable energy to our customers and preparing for the clean energy future that our states our customers and our investors expect.

Speaker Change: Now I'll turn to our excellent financial and operating performance results on slide six starting with the financials. We delivered another strong year with reoccurring earnings of $4 34 per share in 2023, representing growth of nearly 6%.

Speaker Change: Over 2022.

Speaker Change: Our board has approved a dividend increase for the first quarter of 2024 of 71.5 cents per share, which amounts to $2.86 per share on an annualized basis.

Joe Nolan: This reflects an increase of 6% over 2023's dividend level. Moving to operations, I am extremely proud of our team, once again, for delivering reliable electric, natural gas, and water service to our 4.4 million customers. As you can see, our electric reliability ranks in the top decile among our peers. We're focused on providing reliable electric service to our customers, who on average have gone nearly two years without an outage. In 2023, Eversource again outperformed its target injury rate. Our teams are keeping a strong focus on safe work practice, not just during major storm events when conditions are tough, but every day on every job. On natural gas safety, once again, the team delivered another strong year, replacing 145 miles of natural gas pipeline and Delivering On-Time Emergency Response times of 98% within 45 minutes, a performance that well exceeds our regulatory requirements.

This reflects an increase of 6% over 2020 threes dividend level.

Speaker Change: Moving to operations I am extremely proud of our team once again for delivering reliable electric natural gas and water service to a $4 4 million customers as you can see our electric reliability ranks in the top decile among our peers.

Speaker Change: We're focused on providing reliable electric service to our customers who on average have gone nearly two years without an outage.

Speaker Change: In 2023 ever source again outperformed its target injury rate.

Speaker Change: Our teams are keeping a strong focus on safe work practices not just during major storm events when conditions are tough, but everyday on every job.

Speaker Change: Our natural gas safety once again the team delivered another strong year, replacing 145 miles of natural gas pipeline.

Speaker Change: And delivering on time emergency response.

Speaker Change: <unk> of 98% within 45 minutes, a performance that well exceeds our regulatory requirements.

Joe Nolan: I want to congratulate the Eversource team on these accomplishments. I am very proud of the skill and commitment of the entire team and the way that our employees are aligned with our shared vision of providing the highest level of safety, innovation, service quality, and Financial Discipline for the benefit of our customers. Turning to slide 7, at Eversource, we know our customers expect us to not only deliver energy today but also to be prepared for the future. To that end, we are actively engaging with our states to enable the clean energy future that our customers and our communities envision. At the end of January, we submitted our Electric Sector Modernization Plan, or ESMP, to the Massachusetts Department of Public Utilities after extensive input from the Grid Modernization Advisory Council and stakeholders across the Commonwealth, this filing specifically addressed. Coming 5.

Speaker Change: I want to congratulate the <unk> team on these accomplishments.

Speaker Change: I am very proud of the skill and commitment of the entire team in the way that our employees are aligned in our shared vision of providing the highest level of safety innovation service quality and financial discipline for the benefit of our customers.

Speaker Change: Turning to slide seven and ever source, we know our customers expect us to not only deliver energy today, but also to be prepared for the future to that end. We are actively engaging with our states to enable the clean energy future that our customers and our communities and vision.

Speaker Change: At the end of January we submitted our electric sector modernization plan, our SMP to the Massachusetts Department of public utilities. After extensive input from the grid modernization advisory council and stakeholders across the Commonwealth.

Speaker Change: The SMP is the roadmap for building out the electric infrastructure and technology platforms to enable a reliable transition to a clean energy future.

Joe Nolan: 10 Years with a Vision Toward an 85% Reduction in Greenhouse Gas Emissions by 2050. Eversource has taken a leadership role in this endeavor and is viewed as a trusted partner at the table in planning the clean energy future for Massachusetts. We expect the Department of Public Utilities to issue a final decision on our plan in August of 2024, addressing approximately $600 million of proposed incremental investment among other components. In Connecticut, we are continuing to work on our comprehensive outreach, with participation from across the company. We are leveraging our internal talent to educate Connecticut stakeholders on the importance of infrastructure investment to our customers and the broader Connecticut economy, as well as the affordability programs that we offer to customers. This approach has proven to be productive in terms of raising awareness about the value of utility investment and the point that Eversource is the partner that is ready, willing, and able to help Connecticut meet its clean energy goals. Waxley is in New Hampshire.

Speaker Change: <unk> with the state's clean energy plan.

Speaker Change: The filing specifically addresses the coming five and 10 years with a vision toward an 85% reduction in greenhouse gas emissions by 2050.

Speaker Change: <unk> has taken a leadership role in this endeavor and is viewed as a trusted partner.

Speaker Change: At the table and planning the clean energy future for Massachusetts, We expect the department of public utilities to issue a final decision on our plan in August of 2020 for addressing approximately 600 million.

Speaker Change: Our proposed incremental investment among other components.

Speaker Change: In Connecticut, we are continuing to work on our comprehensive outreach plan with participation from across the company. We are leveraging our internal talent to educate connecticut stakeholders on the importance of infrastructure investment to our customers and the broader Connecticut economy.

Speaker Change: As well as the affordability programs that we offer to customers.

Speaker Change: This approach has proven to be productive in terms of raising awareness on the value of utility investment and on the point that Atlas was is the partner that is ready willing and able to help Connecticut meet its clean energy goals.

Speaker Change: Lastly, in New Hampshire, we are gearing up for a number of regulatory initiatives, including a potential PBR proposal.

Joe Nolan: We are gearing up for a number of regulatory initiatives, including a potential PBR proposal, in evaluating ways to help the state advance clean energy projects, such as large-scale solar development. We're excited about the role Eversource will continue to play to enable a clean energy future that's affordable and equitable for all customers and to move this massive, complex effort forward. Turning to slide eight, as you may know, Eversource is an industry and market leader in environmental, social, and governance. We will continue that focus in 2023. We expanded the charter of the Board's Governance, Environmental, and Social Responsibility Committee to extend its oversight to include climate-related matters.

Speaker Change: Evaluating ways to help the state advance clean energy projects, such as large scale solar development.

Speaker Change: We're excited about the role <unk> will continue to play to enable a clean energy future, that's affordable and equitable for all customers.

Speaker Change: We'll continue to engage with all stakeholders to move this massive complex effort forward.

Speaker Change: Turning to slide eight as you may know ever source is an industry and market leader in environmental social and governance, we continue that focus in 2023.

Speaker Change: We expanded the charter of the boards governance, environmental and social responsibility committee to extend this oversight to include climate related matters.

Joe Nolan: The full board received regular reports on our climate-related goals and Key Industry Updates. Policy Activity through the Eversource Climate School. We continue to make progress on reaching our carbon neutrality goal by 2030, and we submitted our application for a new science-based target in December. I'm pleased to report that due to our continued leadership on ESG, last week Eversource was named one of America's most just companies, as announced by Just Capital on CNBC for the fifth consecutive year.

Speaker Change: The full board received regular reports on our climate related goals key industry updates and policy activity through the ever source climate scorecard.

Speaker Change: We continue to make progress on reaching our carbon neutrality goal by 2030.

Speaker Change: And we submitted our application for a new science based targets in December.

Speaker Change: I am pleased to report that due to our continued leadership on ESG last week <unk> was named one of America's most just companies as announced by just capital and CNBC for the fifth consecutive year.

John Morera: I will now turn the call over to John Morera. Thank you, Joe. And good morning, everyone.

Speaker Change: We have a very exciting future here at <unk> focused on what we do best.

Speaker Change: I will now turn the call over to John Moreira.

John Moreira: Thank you Joe and good morning, everyone. This morning, I will cover our 2023 financial results the offshore wind impairment.

John Morera: This morning, I will cover our 2023 financial results, the offshore wind impairment, the 2023 regulatory update, and the update of our five-year investment forecast for our regulated business. And I'll wrap up with our 2024 recurring earnings guidance. Long-Term Financing Plan, and Five-Year Earnings and Dividend Growth Guidelines. I'll start with 2023 results on slide 10. Our gap, Results for the year were a loss of $1.26 per share compared with gap earnings of $4.05 per share in 2022. In the fourth quarter, Results were a loss of $3.68 per share compared with gap earnings of $0.92 per share in the fourth quarter of 2022.

The 2023 regulatory update.

John Moreira: Update of our five year investment forecasts for our regulated businesses.

John Moreira: And I'll wrap up with our 2020 for recurring earnings guidance.

John Moreira: Long term financing plan and five year earnings and dividend growth guidance.

John Moreira: I'll start with 2023 results on slide 10, our GAAP results for the year were a loss of $1 26 per share compared with GAAP earnings of $4 <unk> per share in 2022.

John Moreira: In the fourth quarter.

John Moreira: Results were a loss of $3 68 per share compared with GAAP earnings of 92 per share in the fourth quarter of 2022.

John Morera: Results for the full year 2023 include an after-tax impairment charge of $5.58 per share related to our offshore wind investment and a two-cent per share after-tax charge related to our non-recurring costs. Results for 2022 include a 4 cent per sphere charge primarily related to transition costs associated with a completed integration of EGMS, excluding these charges. In the offshore wind impairment, our non-GAP recurring earnings were $4.34 per share in 2023, as compared to $4.09 per share in 2022. Breaking down our 2023 full year non-gAP recurring earnings of $4.34 into segments. Electric transmission earned $1.84 per share for 2023 as compared with earnings of $1.72 per share in 2022. Improved results were driven by continued investments in our transmission system and lower income tax. Our Electric Distribution Earnings were $1.74 per share in 2023 as compared with earnings of $1.71 per share in 2022; a base distribution increase at NSTAR Electric was partially offset by higher interest expenses. Property taxes and depreciation.

John Moreira: Results for the full year 2023 include an after tax impairment charge of $5 58 per share related to our offshore wind investment and a <unk> <unk> per share after tax charge related to a nonrecurring costs.

John Moreira: Results for 2022 include a <unk> <unk> per share charge, primarily related to transition costs associated with the completed integration of Egfr.

John Moreira: Excluding these charges.

John Moreira: In the offshore wind and <unk>, our non-GAAP recurring earnings were $4 34 per share in 2023 as compared to $4 <unk> per share in 2022.

John Moreira: Breaking down our 2023 full year non-GAAP recurring earnings of $4 34 in two segments.

John Moreira: Electric transmission earned $1 84 per share for 2023 as compared with earnings of $1 72 per share in 2022.

John Moreira: Improved results were driven by continued investments in our transmission system and lower income tax expense.

John Moreira: Our electric distribution earnings.

John Moreira: Were $1 74 per share in 2023 as compared with earnings of $1 71 per share in 2022.

John Moreira: A base distribution increase at end Starr electric was partially offset by higher interest expense property taxes and depreciation.

John Morera: Our natural gas distribution segment earned $0.64 per share in 2023 as compared to $0.67 per share in 2022 due to increases in depreciation and interest expense. Additionally, a higher effective tax rate and the impact of certain reconciliation charges exceeded the revenues we received from capital trackers and base rate increases at NSTAR Gas and EGMA that became effective November 1st, 2022. Our water distribution segment earned $0.09 per share in 2023 compared with $0.11 per share in 2022. Lower results were driven by higher depreciation.

John Moreira: Our natural gas distribution segment earned <unk> 64 per share in 2023 as compared to 67 per share in 2022.

John Moreira: Increases in depreciation and interest expense higher effective tax rate and the impact of certain reconciliation charges exceeded the revenues, we receive firm capital trackers and base rate increases at star gas and GMA that became effective.

John Moreira: November one of 2022.

John Moreira: Our water distribution segment earned <unk> <unk> per share in 2023, compared with 11 per share in 2022 lower results were driven by higher depreciation.

John Moreira: <unk> expense.

John Moreira: And interest expense.

John Moreira: The results reflect the impact of the very disappointing decision in Connecticut from PURA for the aquarium water rate case.

John Morera: O&M Expense, and Interest Expectancy, which is under appeal. Eversource parent and other companies' earnings were $0.03 per share in 2023, as compared with a loss of $0.12 per share in 2022. The improved results reflect a lower effective tax rate and a gain on our planned liquidation of a renewable energy fund, partially offset by higher interest expense and a contribution to the Eversource Charitable Foundation. Let me now turn to offshore wind, starting with the highlights of our sale of South Fork and Revolution Wind to GIP. The terms of the transaction include a capital cost-sharing agreement. Under this agreement, capital expenditure overruns incurred for the 50% interest in the project, up to approximately $240 million, will be shared equally between Eversource and GIP. Above this threshold, 50% of any project cost overruns would be borne by Eversource.

John Moreira: Is under appeal.

John Moreira: <unk> parent and other companies' earnings were <unk> <unk> per share in 2023 as compared with a loss of <unk> 12 per share in 2020 to the.

John Moreira: The improved results reflect a lower effective tax rate and the gain on our planned liquidation of renewable energy fund, partially offset by higher interest expense and a contribution to the <unk> charitable Foundation.

John Moreira: Let me now turn to offshore wind starting with the highlights of our sale of South Fork and Revolution wind <unk> IP.

John Moreira: With South Fork when expected to be in service before the transaction closes our construction contingencies primarily related to revolution.

John Moreira: In terms of the transaction include a capital cost sharing agreement under this agreement capital expenditure overruns incurred for the 50% interest in the project up to approximately $240 million will be shared equally between <unk> and <unk>.

John Moreira: Above this threshold, 50% of any project cost overruns would be borne by <unk>.

John Morera: If the final project costs come in under the current construction forecast, Eversource will receive a payment for this difference. The terms and pricing of this agreement with GIP are assumed in the impairment charge and in our long-term financing plan. Let me review the offshore wind impairment. As shown on slide 11, in 2023, we recorded impairment charges on our offshore wind investment of approximately $2.17 billion pre-tax or $1.95 billion after-tax. As you can see on this slide, the impairment charge was driven by a lower than expected sales value of approximately $400 million for the three projects after completing our strategic review in the second quarter of last year.

John Moreira: If the final project costs come in under the current construction forecast <unk> will receive a payment for this difference the terms and pricing of this agreement with GE IP are assumed in the impairment charge and in our long term financing plans.

John Moreira: Let me review the offshore wind impairment as shown on slide 11, and 2023, we recorded impairment charges on our offshore wind investment of approximately $2 $1 7 billion pre tax or $1 95 billion. After tax as you can see on this slide the impairment charge.

John Moreira: <unk> was driven by a lower than expected sales value of approximately 400 million for the three projects. After completing our strategic review in the second quarter of last year.

John Morera: As a result of adverse developments in the fourth quarter, including the further reduction in the expected sales price driven by higher project costs and the October 2023 denial of the OREC pricing petition for Sunrise Wind, we realized an additional impairment charge in the fourth quarter of approximately $1.77 billion. The Sunrise Wind Project drove about $1.22 billion of the impairment charge, in large part due to the OREC reprice and denial, which led to lower assumed revenues and ultimately an evaluation of the potential abandonment cost of Sunrise if it was unsuccessful in the New York RFP-4 solicitation. As a reminder, to participate in the process to submit a rebid in the solicitation, NYSERDA requires any existing project to terminate their current OREC agreement, and Ultimate Project Viability, and any related termination costs were factored into our impairment analysis. Therefore, we assume that if Sunrise is not successful in the rebid, this would result in no sales proceeds and no value attributable to the ITC Adder. These items, coupled with estimated cancellation costs for the project, net of any salvage value, drove the additional impairment charge.

John Moreira: As a result of adverse developments in the fourth quarter included.

John Moreira: The further reduction in the expected sales price driven by higher project costs and the October 2023 denial of the <unk> price and petition for Sunrise win.

John Moreira: We realized an additional impairment charge in the fourth quarter of approximately $1 77 billion.

John Moreira: The Sunrise wind project drove about 122 billion of the impairment charge in large part due to the repricing denial, which led to a lower lower assumed revenues and ultimately an evaluation of the potential abandonment cost of Sunrise.

John Moreira: It is unsuccessful in the New York RFP for solicitation.

John Moreira: As a reminder to participate in the process to submit a rebid in the solicitation nice charter required any existing projects to terminate their current <unk> agreements.

John Moreira: This potential loss of both a contract revenue stream and ultimate project viability and any related termination costs was factored into our impairment analysis.

John Moreira: Therefore, we assume that if sunrise is not successful in the rebid. This would result in no sales proceeds and no value attributable to.

John Moreira: The ITC adder these items, coupled with estimated cancellation costs for the project.

John Moreira: Net of any salvage value drove the additional impairment charge.

John Morera: Although we have factored this downside set of assumptions and probabilities into our impairment analysis, if Sunrise is ultimately successful in the RFP, Eversource would then sell its ownership interest in the project to Orsted under the terms of our recently announced agreement. With the completion of that sale, our interest in Sunrise would be terminated. We would not be subject to any further construction contingencies or project cancellation costs. If we are successful in selling Sunrise to Orsted, it would provide a full exit from the offshore wind business. Turn it to slide 12.

John Moreira: Although we have factored this downside set of assumptions and probabilities into our impairment analysis. If sunrise is ultimately successful in the RFP ever source with then sell its ownership interest in the project to cost debt under the terms of our recently announced <unk>.

John Moreira: Lehman's.

John Moreira: With the completion of that sale.

John Moreira: Our interest in Sunrise would be terminated.

John Moreira: We would not be subject to any further construction contingencies or project cancellation costs.

John Moreira: If we are successful selling sunrise to offset it will provide a full exit for the offshore wind business.

John Moreira: Turning to slide 12, I'll walk you through the carrying value of our offshore wind investments as of December 31, 2023.

John Morera: I'll walk you through the carrying value of our offshore wind investment as of December 31st, 2023. The Carrion Value. As you can see, the value of both Sunrise and Revolution was impacted by the fourth quarter impairment charge; the value of South Fork was not impacted. The fourth quarter impairment charge assumes a set of scenarios regarding potential construction contingencies for Revolution Wind. The chart also assumes that sunrise wind would be abandoned. We are very disappointed by the financial impact recognized on these early stage offshore wind projects.

John Moreira: The carrying value.

John Moreira: That I will discuss reflects the impact of our fourth quarter impairment charge by project.

John Moreira: As you can see the value of both Sunrise and Revolution.

John Moreira: We're impacted by the fourth quarter impairment the.

John Moreira: The value of South Fork was not impacted.

John Moreira: The fourth quarter impairment charge assumes a set of scenarios regarding potential construction contingencies for revolution wind.

John Moreira: The charge also assumes that sunrise win would be abandoned.

Speaker Change: We are very disappointed by the financial impact recognized on these early stage offshore wind projects.

John Morera: However, we are comfortable with the impairment challenge assumption. We have reflected these assumptions in a long-term financial plan, which I'll cover in a minute. As we move forward and finalize the sale of these projects, including the result of the recent New York RFP 4, the ultimate carrying value of our offshore wind investment could change accordingly. On the regulatory front, we had another busy year.

Speaker Change: However, we are comfortable with the impairment charge assumptions.

Speaker Change: We have reflected these assumptions in our long term financial plan, which I'll cover in a minute.

Speaker Change: As we move forward and finalize the sale of these projects, including the result of the recent New York RFP for the ultimate carrying value of our offshore wind investment could change accordingly.

Speaker Change: On the regulatory front, we had another busy year, our key 2023 regulatory items are highlighted on slide 13.

John Morera: Our key 2023 regulatory items are highlighted on slide 13. Starting with Massachusetts, we completed proceedings on our 2018 to 2021 storm cost recovery request of approximately $136 million. I'm pleased to report that the Massachusetts DPU conducted a very thorough review, and we received approval to recover 100% of our requests.

Speaker Change: Starting with Massachusetts, we completed proceedings on our 2018 to 2021 storm cost recovery request of approximately $136 million.

Speaker Change: I am pleased to report that the Massachusetts, GPU conducted a very thorough review.

Speaker Change: And we received approval to recover 100% of our request.

John Morera: This approval highlights the importance of our storm response and acknowledges the tremendous effort from my Eversource colleagues and our contractors to restore customers as quickly and as safely as possible. Also, in Massachusetts, we received approval of our first annual revenue adjustment under Enstar Electric's PBR plan. This adjustment included an increase in a capital adjustment factor, or K-bar, as we call it.

Speaker Change: This approval highlights.

Speaker Change: The importance of our storm response and acknowledges the tremendous effort from my <unk> colleagues and our contractors to restore customers as quickly and as safely as possible.

Speaker Change: Also in Massachusetts, we received approval of our first annual revenue adjustment under and Star Electric's PBR plan.

Speaker Change: This adjustment included an increase of a capital adjustment factor or K bar as we call it.

John Morera: Turning to New Hampshire, we received the final order approving $47 million of Storm Cross Recovery for weather events occurring in 2020 and in 2021. Again, we were granted nearly 100% of our requests. We expect to file a general rate review in New Hampshire later this year to recover the cost of investments that we have made over the last four years to significantly improve reliability for customers in New Hampshire. In total,

Speaker Change: Turning to New Hampshire, we received a final order approving $47 million of storm cost recovery for weather events occurring in 2020 and in 2021 again, we were granted nearly 100% of our request.

Speaker Change: We expect to file a general rate review in New Hampshire later this year to recover the cost of investments that we have made over the last four years to significantly improve reliability for customers in new Hampshire.

Speaker Change: In total we.

John Morera: We are now recovering approximately $400 million in rates over the next five years for storm costs in Massachusetts and New Hampshire. In Connecticut, at the end of December, we filed our request for a prudency review of approximately $635 million of storm costs relating to weather events that occurred from 2018 through 2021. The Connecticut filing contains more than 10,000 pages of support for costs incurred for these significant weather events.

Speaker Change: We are now recovering approximately $400 million in rates over the next five years for storm costs in Massachusetts.

Speaker Change: And.

Speaker Change: New Hampshire.

Speaker Change: In Connecticut at the end of December we filed our request for a prudency review of approximately $635 million of storm costs related to weather events that occurred from 2018 through 2021.

Speaker Change: The Connecticut filing contains more than 10000 pages of support for cost incurred for these significant weather events.

John Morera: We look forward to working through the prudency review with Pura in 2024. Lastly, in Aquarion's appeal of its March 2023 rate decision, oral arguments were held on January 11th, and we expect a court decision in the coming months. Turning to our regulated utility capital plan, slide 14 reflects our five-year utility infrastructure investments by segment, updated through 2028. As a reminder, this plan reflects projects that we have a good line of sight on from a regulatory approval perspective. Over this five-year period, we expect to invest approximately $23.1 billion in our regulated electric, natural gas, and water business to continue providing customers with safe and reliable service to meet ongoing load growth and to achieve progress on clean energy objectives. Starting with transmission, our plan includes nearly $6 billion of transmission infrastructure investments over the next five years. These investments include replacement of aging infrastructure to harden the system and increase resiliency during extreme weather events, innovative substation projects undertaken for reliability and electrification purposes, and interconnection projects adding clean energy resources to the grid.

Speaker Change: We look forward to working through the Prudency review with PURA in 2024.

Speaker Change: Lastly, in our aquarium appeal of its March 2023 rate decision oral arguments were held on January 11th and we expect the court decision over the coming months.

Speaker Change: Turning to our regulated utility capital plan Slide 14 reflects our five year utility infrastructure investments by segment updated through 2028.

Speaker Change: As a reminder, this plan reflects projects that we have a good line of sight on from a regulatory approval perspective.

Speaker Change: Over this five year period, we expect to invest approximately $23 $1 billion.

Speaker Change: In our regulated electric natural gas and water businesses to continue providing customers with safe and reliable service to meet ongoing load growth and to achieve progress on clean energy objectives.

Speaker Change: Starting with transmission. Our plan includes nearly $6 billion of transmission infrastructure investments over the next five years.

Speaker Change: These investments include replacement of aging infrastructure to harden the system and increase resiliency during extreme weather events.

Speaker Change: Innovative substation projects undertaken for reliability in electrification purposes, and interconnection projects, adding clean energy resources to the grid.

John Morera: Our Transmission Capital Plan includes a large-scale, innovative project to build a substation in Cambridge, Massachusetts, completely underground. We are working closely with the city on this project, which includes nearly $1 billion of investments to interconnect four existing transmission lines. This project will increase capacity to enable electrification and improve the reliability of electric service for customers.

Speaker Change: Our transmission capital plan includes a launch scale innovative project to build a substation in Cambridge, Massachusetts completely underground.

Speaker Change: We are working closely with the city on this project, which includes nearly $1 billion of investments to interconnect for existing transmission lines.

Speaker Change: This project will increase capacity to enable electrification and improve the reliability of electric service for customers.

Speaker Change: Turning to electric distribution.

John Morera: Our updated capital forecast now reflects nearly $10 billion of planned utility infrastructure investment, with a continued focus on system resiliency and our top-tier reliability for electric service. Our planned electric distribution investments include over a half a billion dollars of our AMI program in Massachusetts. The AMI program will allow customers to save money through heightened... Thank you all for joining us today. On the natural gas side, our five-year plan reflects nearly $5.5 billion of investment and is centered around reliability and safety. The plan is highlighted by our bare steel and cast iron pipe replacement programs in Massachusetts and Connecticut.

Speaker Change: Our updated capital forecast now reflects nearly $10 billion of planned utility infrastructure investments with a continued focus on system resiliency and our top tier reliability for electric service.

Speaker Change: Our planned electric distribution investments include over half a billion dollars of our <unk> program in Massachusetts.

Speaker Change: The AML program will allow customers to save money through heightened.

Speaker Change: <unk> over their own energy consumption and two experienced highest service levels through faster outage restoration and other service functions.

Speaker Change: On the natural gas side, our five year plan reflects nearly $5 5 billion of investments and is centered around reliability and safety.

Speaker Change: The plan is highlighted by our bare steel and cast iron pipe replacement programs in Massachusetts and Connecticut.

John Morera: Across our natural gas system, we'll continue to thoughtfully engage with our states to ensure our investments enable an equitable transition to a clean energy future. Turning to the water segment, our five-year investments are forecasted to be over $1 billion, supporting investments in water treatment facilities and water main replacements to improve water quality. Rounding out our Eversource Capital Plan are investments in technology and facilities that are forecasted at $1.1 billion. Moving to slide 15, our updated capital plan reflects a $1.6 billion increase in utility infrastructure investments from 2024 through 2027 versus the prior. This increase reflects greater visibility on the work needed to serve our customers over the next four years. An important consideration in relation to our five-year capital plan is what has not been included.

Speaker Change: Across our natural gas system, we will continue to thoughtfully engage with our states to ensure our investments enable equitable transition to a clean energy future.

Speaker Change: Turning to the water segment, our five year investments are forecasted to be over $1 billion.

Speaker Change: Supporting investments in water treatment facilities and water main replacements to improve water quality.

Speaker Change: Rounding out our <unk> capital plan, our investments in technology and facilities that is forecasted at one 1 billion.

Speaker Change: Moving to slide 15, our updated capital plan reflects a one 6 billion dollar increase in utility infrastructure investments from 2024 through 2027.

Speaker Change: Versus the prior plan.

Speaker Change: This increase reflects greater visibility on the work needed to serve our customers over the next four years.

Speaker Change: An important consideration in relation to our five year capital plan is what has not been included.

John Morera: On the right-hand side of the slide, we show some potential infrastructure investments not currently included in our forecast, which would be additive to the plan. These opportunities total up to $2 billion in the forecast period, with Connecticut AMI at the top of the list at nearly $700 million. The resulting impact from our updated capital plan is shown on slide 16. The customer-focused core business investments included in our capital plan would result in 7.7% growth in the rate base from 2022 through 2028. Next, I will turn to our 2024 earnings guidance on slide 17. We are projecting a non-GAAP recurring earnings per share range of $4.50 to $4.67 per share for 2024.

Speaker Change: On the right hand side of the slide we show some potential infrastructure investments not currently included in our forecast, which would be additive to the plan.

Speaker Change: These opportunities total up to $2 billion in the forecast period with Connecticut Ami at the top of the list and nearly $700 million.

Speaker Change: The resulted impact from our updated capital plan as shown on slide 16, the customer focused core business investments included in our capital plan would result in seven 7% growth in rate base from 2022 through 2028.

Speaker Change: Next I will turn to our 2024 earnings guidance on Slide 17, we are projecting a non-GAAP recurring earnings per share range of $4 50.

Speaker Change: Two $4 67 per share for 2024.

John Morera: Positive drivers this year include transmission investments for system resiliency and increased electric demand, distribution base rate increases in Massachusetts and New Hampshire, continued focus on controlling O&M expense, and a lower effective tax. In 2024, our planned distribution rate increases include the first rate-based roll-in for EGMA, which will adjust rates to recover six years of capital investment. This rate adjustment will take effect in November of this year. However, these positive drivers are expected to be partially offset by higher expenses related to increased capital investments and share dilution.

Speaker Change: Positive drivers. This year include transmission investments for system resiliency and increased electric demand.

Speaker Change: Distribution base rate increases in Massachusetts, and New Hampshire continued focus on controlling O&M expense and a lower effective tax rate.

Speaker Change: In 2024 hour planned distribution rate increases included the first rate base ROE and for <unk>.

Speaker Change: Which will adjust rates to recover six years of capital investments.

Speaker Change: This rate adjustment will take effect in November of this year.

Speaker Change: These positive drivers are expected to be partially offset by higher expenses related to increased capital investments and share dilution.

John Morera: As I said earlier, our wind impairment reflects a set of assumptions that we have also embedded in our long-term financing plan. Let me walk you through what is assumed in our financing plan. First, we assume cash inflows from the announced sale of South Fork and RevWin of $1.1 billion. These proceeds include the value of the 10% ITC adder for RevWin of approximately $170 million. Also assumed in our financing plan is the realization of our tax equity investment in South Fork Wind, which we expect will bring in around $500 million of cash over the next 24 months. The last item is related to our sale of Sunrise Wind to Austin, which is not assumed in our long-term financing plan.

Speaker Change: Turning to our long term financing plan I'll start with our cash flow assumptions regarding offshore wind as shown on slide 18 as.

Speaker Change: As I said earlier, our wind impairment reflects a set of assumptions that we have also embedded in our long term financing plan.

Speaker Change: Let me walk you through what is assumed in our financing plan.

Speaker Change: First we assume cash inflows from the announced sale of South Fork and Rev win of $1 1 billion. These proceeds include the value of the 10% ITC Adder for Revolution wind of approximately $170 million.

Speaker Change: Also assumed in our financing plan is the realization of our tax equity investment in self for wind.

Speaker Change: Which we expect will bring in around $500 million of cash over the next 24 months.

John Morera: If Sunrise is successful in the New York RFP4, that would be a positive to our plan. I'll now cover a number of drivers that are expected to enhance our FFO to debt ratio from 2023 to 2025, as you can see on slide 19. These drivers include the offshore wind proceeds that I just discussed, and planned rate increases at our utilities. And recovery of the Storm Cost Deferral.

Speaker Change: The last item is related to our sale of Sunrise wind to Austin, which is not assumed in our long term financing plan.

Speaker Change: If sunrise is successful in the New York RFP for that would be a positive to our plan.

Speaker Change: I will now cover a number of drivers that are expected to enhance our <unk> to debt ratio from 2023 to 2025 as you can see on slide 19. These drivers include offshore wind proceeds that I just discussed.

John Morera: Scheduled equity issuances and proceeds from a potential sale of our water business. In terms of the equity assumed in our plan, over the next several years, we expect to issue up to $1.3 billion of equity through our existing ATM program. We will also continue to be opportunistic with our alternatives. As Joe mentioned, we are undertaking a review of our water distribution business. Proceeds from a successful sale are assumed in our long-term financing plan, reducing the level of equity that would otherwise be needed.

Speaker Change: <unk> rate increases at our utilities recovery of storm cost deferrals.

Speaker Change: <unk> equity issuances and proceeds from a potential sale of our water business.

Speaker Change: In terms of the equity assumed in our plan over the next several years, we expect to issue up to $1 3 billion of equity through our existing ATM program. We will also continue to be opportunistic with our alternatives.

John Morera: As you can appreciate, we cannot provide any additional details beyond what we've disclosed. We will keep you updated on any decisions arising from this evaluation and any changes in our financial guidance. Closing out on slide 20, our robust five-year capital plan and long-term financing plan drive our 5-7% EPS growth rate through 2028. To be clear, the 5-7% is based on our 2023 recurring EPS of $4.34. Before we get to your questions, I'll turn the call over to Joe for his closing remarks. Thank you, John.

Speaker Change: As Joe mentioned, we are undertaking a review of our water distribution business <unk>.

Speaker Change: <unk> from a successful sale are assumed in our long term financing plan, reducing the level of equity that would otherwise be needed.

Speaker Change: As you can appreciate we cannot provide any additional details beyond what we've disclosed.

Speaker Change: We will keep you updated on any decisions from this evaluation and any changes in our financial guidance.

Speaker Change: Closing out on slide 20, our robust five year capital plan and long term financing plan drive our 5% to 7% EPS growth rate through 2028 to be clear the <unk>.

Speaker Change: 5% to 7% is based off of our 2023 recurring EPS of $4 34.

Joe Nolan: As I previously said, I'm very excited as I look ahead to the future of Eversource. This amazing team that delivers every day is on the brink of a critical energy transformation that will benefit our customers, our communities, and our environment. The need for utility infrastructure investment has never been greater.

Speaker Change: Before we get to your questions I will turn the call over to Joe for his closing remarks. Thank you John as I previously said I'm very excited as I look ahead to the future of ever source. This amazing team that delivers every day is on the brink of a critical energy transformation.

Speaker Change: It will benefit our customers our communities and our environment.

Joe Nolan: The need for utility infrastructure investment has never been greater in fact, and a draft study released last year, ISO new England projected a need.

Joe Nolan: In fact, in a draft study released last year, ISO New England projected a need for up to $15 billion of transmission investment to meet the region's 2050 clean energy objective. As we look ahead, we see a tremendous need for a collaborative approach to leverage our utility infrastructure development and superior operating skills in Massachusetts, New Hampshire, and Connecticut. On that note, I want to thank you for your interest in Eversource, and I look forward to seeing you soon. I'll now turn the call back over to Bob, and we look forward to answering your questions. Thanks, Joe.

Joe Nolan: For up to $15 billion of transmission investment to meet the region's 2050 clean energy objectives.

Joe Nolan: As we look ahead, we see a tremendous need for a collaborative approach to leverage our utility infrastructure development and superior offerings skills in Massachusetts, New Hampshire and Connecticut.

Joe Nolan: On that note I want to thank you for your interest in ever source and I look forward to seeing you soon I will now turn the call back over to Bob and we look forward to answering your questions.

Bob: Thanks, Joe I'll turn the call back to the operator to begin Q&A.

Robert Becker: I'll turn the call back to the operator to begin Q&A. The first question comes from Shah Pourreza with Guggenheim Partners. Your line is open, please go ahead. Hey guys, good morning. Come on in, Shahriar.

Speaker Change: Thank you, Okay I would like to ask a question. Please press star followed by one color on Japan.

Speaker Change: If you would like to withdraw your question. Please press star followed by.

Speaker Change: One pertains to ask a question. Please ensure your devices on mute locally.

Speaker Change: Next question comes from Sean <unk> with Guggenheim Partners. Your line is open. Please go ahead.

Shahriar Pourreza: Good morning, Joe. Let me ask you a question. On the up to $1.3 billion equity, I guess without seeing sort of market interest with the Inquire and Sell and details around Sunrise, where you could get more proceeds than you would in bed and plan, depending on how things shake out, right, which you just alluded to in your preparations, what's kind of given you confidence around the $1.3 billion? Can you beat it?

Sean: Hey, guys good morning.

Sean: Good morning morning Shar.

Sean: Good morning.

Sean: Joe Let me ask a question on the up to one 3 billion equity.

Sean: I guess without seeing sort of market interest with the aquarian cell and details around Sunrise, where you could get more proceeds than you embed in plan, depending on how things shake out right, which you just alluded to in your prepared.

Sean: What's kind of giving you confidence around the one three.

Joe Nolan: And how are you thinking about the timing and the means of raising that equity? Sure. Good question, Sean.

Sean: You beat it and how are you thinking about the timing and the means of raising that equity.

Sean: Sure.

Joe Nolan: Thank you. I would start off by saying that, you know, we view aquariums as a very valuable and attractive asset portfolio. Companies, you know, well-managed, and well-recognized as a water distribution company in their leadership.

Speaker Change: Question that Shaun. Thank you I would start off by saying that aquarium, we view Aquarius is a very valuable and attractive.

Shaun: Asset portfolio companies, well managed well recognized as a water distribution company and its leadership so were.

Joe Nolan: So we're, you know, based on that fact pattern, we've sized and we've estimated what we feel we could harvest from a potential sale. And just to be clear, the 1.3 is up to 1.3 billion of equity over the next several years. So we have some flexibility.

Shaun: Based on that fact pattern.

Speaker Change: We've sized and we've estimated what we feel we can harvest from a potential sale and just to be clear.

Speaker Change: The 1.3 is up to one 3 billion of equity over the next several years. So we have some flexibility. So we can flex that dependent on the ultimate proceeds that we receive.

Joe Nolan: So we can flex that dependent on the ultimate proceeds that we receive. Thanks, Sean, but sorry, but the timing and the means of that equity, any sense there? Yeah, well, I mean, we've been guiding the street right along for the past several years at a one billion need, right? And now we're going up to 1.3.

Speaker Change: Thanks, Joe, but sorry, but the timing and the means of that equity any sense there.

Joe Nolan: Yes, well I mean, we've been guiding the street right along for the past several years at a 1 billion need right and now we're going up to one three so.

Joe Nolan: So I think it'll happen over the next several years. We, you know, we do plan to be in a position to issue shares to go to the equity markets over the coming months. And we're going to be extra on... And Shah, just one other note, that's why we specifically indicated that we would be executing our equity needs through our ATM program to give us the flexibility that we need. Great, thanks for that!

Speaker Change: I think it will it will happen over the next several years, we do plan to be in a position.

Speaker Change: To issue to go to the equity markets over the coming months.

Speaker Change: <unk>.

Speaker Change: On.

Speaker Change: And just one other note that's why we specifically indicated that we will be executing our equity needs.

Speaker Change: Through our ATM program to give us the flexibility that we do.

Speaker Change: That we need.

Speaker Change: Great. Thanks for that and then just lastly on this one is just on resolution cost sharing John.

Shahriar Pourreza: And then, just lastly, on this one, it's just on revolution cost sharing. John, can you maybe walk us through the pathways for overages on the project? I mean, what can go wrong?

Speaker Change: Chuck can you just maybe walk us through the pathways for Overages on the project I mean, what can go wrong anyway to sensitize some of the puts and takes either on the construction side I E. How expensive does it get put in the crew on standby on the O&M and availability side. Thanks guys.

John Morera: Any way to sensitize some of the puts and takes, either on the construction side, i.e., how expensive does it get putting the crew on standby, or on the O&M and availability side? Thanks, guys. Yeah, sure, Shaj, Joe. I'll take that. You know, I'll tell you, I'm really, really proud of the work that's taken place on Southwark.

Speaker Change: Sure, It's Joe I'll take that I'll tell you I'm really really proud of the.

Joe Nolan: The work that's taken place on self work, it's been a opportunity for us to really.

John Morera: It's been an opportunity for us to really, you know, dry run, get a sense as to what's involved in this installation. You know, this is a 12-turbine installation. We have 11 out in the lease area now. The 12th one is loaded on the barge in New London. It will go there this weekend.

Joe Nolan: Dry run and get a sense as to what's involved. This is installation. This is a 12 turbine installation we have 11 out in the lease area now that <unk> is loaded on the barge in new London. It will go live this weekend.

John Morera: You know, we have been delivering power since November to folks on Long Island, which we're very, very proud of. So, you know, given that we are the first off-scale offshore wind farm in the United States, that has given us a great opportunity for us to be able to understand what's involved in that. So, in the fall, we were able to take a real good look at the costs, all the charges associated with constructing Southwark as we began to kind of refresh the revolution costs. And I will tell you that, you know, we have accounted for the vessel strategy that we have to utilize now. You know, we're utilizing a feeder barge to a European vessel. It's been going very, very well. Those are some of the big charges. Those are the things that have caused increases in offshore wind costs for everybody, not just us. The lack of American vessels is certainly going to be a challenge for anyone in this business.

Joe Nolan: We have been delivering power since November two focused on long island, which we're very very proud of so given that we are the first of scale offshore wind farm in the United States that brought.

Joe Nolan: Brought a great opportunity for us to be able to understand what's involved in that so in the fall we were able to take a real good look at the costs all the charges associated with constructing self walk as we begin to kind of refresh the revolution.

Joe Nolan: Our cost and I will tell you that we have accounted for the vessel strategy that we have to utilize now we're utilizing a feat of barge jewel European vessel.

Joe Nolan: It's been going very very well and also some of the big charges. Those are the things that have caused increases in offshore wind cost for everybody not just us the lack of American vessels.

Joe Nolan: <unk> is certainly going to be a challenge for anyone in this business, but I will tell you that we have successfully executed we will have.

John Morera: But I will tell you that we have successfully executed the project. We will have – the project will be done in March in Southwark. All of the kind of lessons learned, all of the challenges, everything that we've experienced in this offshore wind market associated with Southwark has been brought to the table on revolution so that we know exactly what this is going to cost. We feel very comfortable with this number, you know, this exposure at 240, given what we have already factored in.

Joe Nolan: The project will be done in March and so forth all of the the kind of.

Speaker Change: Lessons learned all of the challenges.

Speaker Change: That we've experienced in this offshore wind market associated with self book has been brought to the table on revolution. So that so that we know exactly what this is going to cost we feel very comfortable with this number.

Speaker Change: This exposure at 240, <unk>, given what we have already factored in so I have a great deal of confidence that we will be able to.

John Morera: So I have a great deal of confidence that we will be able to bring this in and not have to worry about any overruns. Perfect, guys. Thank you so much.

Speaker Change: To bring this thing and not have to worry about.

Speaker Change: In the overruns.

Speaker Change: Perfect guys. Thank you so much that's quite an update thank you shar.

Steve Fleishman: That's quite an update. Thank you, Shahriar. Thank you. We now turn to Steve Fleishman with Wolf Research. Your line is open, please go ahead. Yeah, hi, good morning.

Speaker Change: <unk>.

Speaker Change: Yeah.

Speaker Change: We now turn to Steve Fleishman with Wolfe Research. Your line is open. Please go ahead.

Steve Fleishman: Yes, hi, good morning, thanks, everyone.

Steve Fleishman: Thanks, everyone. So just to close, maybe the loop on the equity issuance, I think, John, I heard you say, after using the ATM, that you are also opportunistic with our alternatives. Yeah. Could you just clarify what you mean by that?

Steve Fleishman: Just can't close maybe the loop on the equity issuance I think China I heard you say after using the ATM also opportunistic with our alternatives yes.

Speaker Change: Could you just clarify that.

John Morera: Yeah, I mean, we like the ATM program for the reasons I just stated; it gives us tremendous opportunity, and we can take advantage of the market. But if we encounter a very favorable, attractive value, then we can do something, you know; we'll look to do something else, whether it's a block or some other deal. So right now, we want to have the greatest sense of flexibility to execute and maximize the value that we have.

Steve Fleishman: Yes, I mean that was.

Speaker Change: We like the ATM program for the reasons I just stated it gives us tremendous opportunity and we can take advantage of the market, but if we encounter a very favorable.

Speaker Change: <unk>.

Speaker Change: <unk> then we can do something.

Speaker Change: We'll look to do something else, whether it's a block or some of the some of the deal. So it right now.

Speaker Change: Want to have the most.

Speaker Change: The greatest sense of flexibility to execute and maximize the value that we harvest.

John Morera: Okay. All right. That's, that's very, On the second question, just on the FFO to debt slide, do you have a starting point for 2023? Yeah, I mean, we have been challenged by our operating cash flows, primarily driven by the turnaround in the methodology that we have been required to use as part of guidance from Pura. So, for example, we've been significantly under-recovered at the CO&P franchise in 2023 by a sizable amount, close to a billion dollars. So that's going to turn around, and that's going to turn around in 2024 and 2025, we'll get that cash in. So right now, we expect to be in the low single digits by 2023.

Speaker Change: Okay Alright.

Speaker Change: Alright.

Speaker Change: That's very clear.

Speaker Change: On the second question just on the <unk> that slide do you have.

Speaker Change: Kind of a starting point for 2023 actual.

Speaker Change: First.

Speaker Change: Yes, I mean, we.

Speaker Change: 2023, we have been challenged by our operating cash flow is primarily driven by the turnaround and the methodology that we have been.

Speaker Change: Required to.

Speaker Change: Use as part of guidance from PURA. So for example, our we've been significantly under recovered.

Speaker Change: At the CMP franchise.

Speaker Change: In 2023 by a <unk>.

Speaker Change: Sizable amount close to $1 billion. So that is going to turn around and that's going to turnaround in 2024, and 2025, we will get that cash in.

Speaker Change: So right now we expect to be in the low single digits for 2023, we're still kind of working through those numbers through but moving forward.

John Morera: We're still kind of working those numbers through. But moving forward, I feel confident that we'll be in that 14 to 15% FFO to debt range, as I indicate in slide 19. I'm sorry; I said low single digits. I'm sorry; I meant low double digits.

Speaker Change: I feel confident that we'll be in that 14.

Speaker Change: The 15% <unk> to debt.

Speaker Change: And as I've.

Speaker Change: As I indicated in slide 19.

Speaker Change: I'm, sorry, I said low single digits, I'm, sorry, low double digits low double.

John Morera: Okay. Yeah, and then just a few of the pieces that you highlight here on the improvement. So, just maybe the South Fork part, the tax equity investment, how much like FFO to debt percentage points is that? And, Is that just all hits 24, 25, and then it goes away?

Speaker Change: Okay.

Speaker Change: Yeah, and then just a few of the pieces that you highlight here on the improvement so.

Speaker Change: Just maybe.

Speaker Change: South Park, the tax equity investment how.

Speaker Change: Much like excellent for the debt percentage points inside.

Speaker Change: Is that just all hits 24, 25, and then it goes away.

John Morera: And then I guess you fill it in with more operating cash? Exactly. So, the utilization of that, Steve, will happen based on our taxable income. So a lot can happen, storm costs being one of them. We take the deduction as we incur those storm costs, and that can lower the utilization of that ITC.

Speaker Change: And then I guess you fill it in with more operating cash.

Speaker Change: Exactly so.

Speaker Change: Utilization of that Steve will happen based on our our taxable.

Speaker Change: Taxable income so a lot can happen storm costs being one of them that.

Speaker Change: We take the deduction as we incur those storm costs and that can lower the utilization of that ITC. So right now we have model that over the next 24 months, but if we have further deductions from an operating standpoint that would.

John Morera: So, right now, we've modeled that over the next 24 months, but if we have further deductions from an operating standpoint, that would slip into 24. Okay, but for now, just take that 500 million and spread it over 2 years if we want to calculate that.

Speaker Change: That would.

Speaker Change: Slip into <unk> into 'twenty six.

Speaker Change: Okay, but for now just take that $500 million and spread it over.

Speaker Change: The two years, if we want to calculate that.

John Morera: Correct, that's a reasonable approach. Okay. And then there is just one other question on that slide.

Speaker Change: Correct, that's a reasonable approach.

Speaker Change: Okay.

Speaker Change: And then just one other question on that slide.

John Morera: The storm cost recovery, is that just related to Massachusetts and New Hampshire? Are you assuming you're able to get StormCross Recovery in Connecticut somehow, or is that after this? Yeah, we don't have, you know, Connecticut is not factored in, as you, we just said in the formal remarks, we filed for the prudency review, that's going to take some time. So none of that, it's all really predicated on Massachusetts and New Hampshire.

Speaker Change: The storm cost recovery is that just related to Massachusetts, and New Hampshire.

Speaker Change: Are you, assuming youre able to get.

Speaker Change: Storm cost recovery in Connecticut.

Speaker Change: Somehow or insight.

Speaker Change: After this period.

Speaker Change: Yes, we don't have.

Speaker Change: Connecticut is not factored in as we just said in our formal remarks.

Speaker Change: We filed for the Prudency review, that's going to take some time.

Speaker Change: So none of that it's all really predicated on.

Speaker Change: Massachusetts, and New Hampshire, However, once the Connecticut storm cost recovery kicks in that will give us more inflow of cash for the outer years beyond 2025.

John Morera: However, you know, once the Connecticut storm cost recovery kicks in, that'll give us more inflow of cash for the years beyond 2025. Okay. Great. I'll let others ask questions. Thanks for your time.

Speaker Change: Okay.

Speaker Change: Great I'll, let others ask questions. Thanks for your time.

Speaker Change: Thank you Steve.

Speaker Change: Our next question comes from Nicholas Campanella with Barclays. Your line is open. Please go ahead.

Nicholas Campanella: Hey, good morning, Thanks for.

Nicholas Campanella: Thank you, Steve. Our next question comes from Nicholas Campanella with Barclays. Your line is open, please go ahead. Hey, good morning. Thanks. How's everyone doing?

Nicholas Campanella: Hey, How's everyone doing.

Nicholas Campanella: Great Hey, good to see good to see you.

Nicholas Campanella: Reaffirming the five to seven I guess, just you previously used to say high end of that range I. Just wanted to clarify if you have any message on where you stand in the five to seven at this point and then how do we kind of think about aquarian sales kind of impact to that five to seven is it baked into the put you somewhere else in the range depending.

Nicholas Campanella: Um, great. So, hey, good to see you reaffirming the five to seven, I guess just you previously used to say, you know, the high end of that range. I just want to kind of clarify if you have any message on where you kind of stand in the five to seven at this point, and then how do we kind of think about Aquarian sales as a kind of impact on that five to seven? Is it baked in or not?

Nicholas Campanella: On those outcomes there.

Speaker Change: Sure Nick So let me start with the latter question the aquarium potential sale is baked into that guidance as I mentioned.

Speaker Change: So we are assuming that and.

Speaker Change: And then the five to seven as I want to reiterate it's a growth aspiration of 5% to 7%.

Speaker Change: We're not giving any indication where on that spectrum will be will ultimately land right now we're comfortable with that a lot can happen that can move us up but until we have that more transparency and more clarity.

John Morera: Does it put you somewhere else in the range, depending on those outcomes there? Thanks. Sure, Nick. So let me start with the latter question. The aquarium potential sale is baked into that guidance, as I mentioned. So we are assuming that. And then the 5-7, as I want to reiterate, it's a growth aspiration of 5-7%. We're not given any indication where on that spectrum we will ultimately land.

Speaker Change: We're sticking with 5% to seven growth rate will continue to update you all.

Speaker Change: As things progress on our.

Speaker Change: On our long term guidance growth.

Speaker Change: Okay I appreciate that and then.

Speaker Change: Yes.

Speaker Change: Sticking with Aquarian, obviously, youre trying to find ways to mitigate equity issuance.

Speaker Change: And the five year plan.

Speaker Change: Whats inspiring your confidence to kind of come back to do another sales process at this point.

Speaker Change: Do you feel confident it's not going to be drawn out as the last one and then just how do we kind of think about like the timeline and then also the agencies willingness to kind of see through another asset sale, just given you're still on negative outlook.

Nicholas Campanella: Right now, we're comfortable with that. A lot can happen that could move us up. But until we have that more transparency and more clarity, we're sticking with the 5-7 growth rate. We'll continue to update you all as things progress on our long-term guidance. Okay, I appreciate that. And then I guess just sticking with Aquarian, you know, obviously you're trying to find ways to mitigate equity issuance in the five-year plan. What's inspiring your confidence to kind of come back to do another sales process at this point? You know, do you feel confident it's not going to be as drawn out as the last one?

Speaker Change: Yes, well I mean, a couple of things I'm not going to give a timeline on the.

Speaker Change: On the asset yield, but I will tell you that it's a very different animal aquarium.

Speaker Change: We're talking about.

Speaker Change: Wind partnership with another party, we only own 50% and we talked about the fact that it's very challenging when you don't own the entire asset we own all of aquarium.

Speaker Change: Next thing is a lot less complex. This asset is very very attractive we've been in this business now for several years.

Speaker Change: It's a great business, it's a seventh largest water company in the country.

Speaker Change: But the fact of the matter is there were 50000 water companies in the country too.

Speaker Change: To try to do.

Speaker Change: To assemble water companies. It takes it takes time it takes effort.

Nicholas Campanella: And then just how do we kind of think about like the timeline and then also the agency's willingness to kind of see through another asset sale just given you're still on negative outlooks? All right, thanks so much. Have a great day.

Speaker Change: But something of this magnitude certainly is attractive to many many folks so I won't give you a timeline, but I will tell you that it's not nearly as complex it's not even in the same category as the of the wind assets. So I feel very very good about it and I would just add Joe spot on from an execution. This is a totally different animal.

David Alcaro: Thanks, Nick. Our next question comes from David Alcaro with Morgan Stanley. Your line is open, please go ahead. Oh, hey, good morning. Hey, David.

Speaker Change: And then from your latter question on how the agencies as long as we have a pathway.

Speaker Change: This avoid this.

Speaker Change: Kind of mitigates any further equity needs that we may have so it's still.

David Alcaro: Thank you for taking my question. Yep. Hey.

Speaker Change: Cash coming in the door, which is very appealing and supportive of our of our credit metrics.

John Morera: Let's touch on cost savings initiatives. I think you mentioned that you're expecting lower O&M in 2024. I guess, how much lower? What are the levers you're pulling there?

Speaker Change: Alright, thanks, so much have a great day.

Speaker Change: Thanks, Nick.

Speaker Change: Our next question comes from David Arcaro with Morgan Stanley. Your line is open. Please go ahead.

David Arcaro: Oh, Hey, good morning, Davis for taking my question.

David Arcaro: Yeah, Hey.

David Arcaro: Could you just touch on cost savings initiatives I think you mentioned that youre expecting lower O&M in 2020 for I guess, how much lower would it.

John Morera: And what are you thinking kind of going forward? Yeah, I would say that in 2023, we did experience some higher O&M levels that we don't think will reoccur in 2024. So that's one of the drivers, David. And then, you know, we are still in the technology deployment phase. Right now, we are going through a new CIS system as part of the Massachusetts AMI deployment. And we think that there's savings there, efficiencies that we can harvest as well. We already have one of our operating, you know; Western Masses went live a couple of weeks ago. So we think that there's savings there as well that we can harvest. So those are the major drivers.

David Arcaro: The levers you're pulling there and what are you thinking kind of going forward off of a 2024 base there too.

Speaker Change: Yes, I would say that.

David Arcaro: In 2023, we did experienced some.

Speaker Change: Higher O&M levels that we don't think will reoccur in 2024, so thats one of the drivers David.

Speaker Change: And then we are still in the technology deployment.

Speaker Change: Now we're going through.

Speaker Change: Our new CIM system as part of the Massachusetts, Ami deployment, and we think that there is savings there are efficiencies that we can harvest as well we already have one of our operating western masses went live a couple of weeks ago.

Speaker Change: So we think that there's the savings there as well that we can harvest. So those are the major drivers and as well as.

John Morera: And as well as, you know, other efficiencies throughout the organization. Okay, great. Thanks for that color, auction.

Speaker Change: Other efficiencies throughout the organization.

Speaker Change: Okay, great thanks for that color.

David Alcaro: How could that change the outlook? Are you saying the proceeds from Orsted are not currently contemplated in the equity? Equity Needs Guidance. Did that come down from where it is now based on being successful?

Speaker Change: And then I just wanted to clarify maybe on the New York for outcome.

Speaker Change: Auction, how could that change the outlook is we're using the proceeds from warrants that are not currently contemplated in the equity.

Speaker Change: Equity need guidance and could that come down from where it is now based on being successful in that auction.

David Alcaro: That is absolutely correct. It's not any proceeds from an ultimate sale to us that has not been factored into our financing plan. So it would adjust our equity needs. And then for that reason, among other things, that's why we went out with an up-to valuation. Yeah, so you're thinking about the right one.

Speaker Change: That is absolutely correct, it's not any proceeds from an ultimate sale to us that has not been factored into our financing plan.

Speaker Change: So.

Speaker Change: It would adjust our equity needs and that for that reason among other things. That's why we went out with an up to valuation.

Speaker Change: So youre thinking about it correctly okay.

David Alcaro: Yep. And then just wanted to quickly clarify, does the $1.3 billion include the DRIP, or what do you expect that to be on an annual basis? The up to 1.3 does not include the drip, so that level is pretty consistent, about 100 to 120 per year. And that will continue.

Speaker Change: Yes makes sense and then just wanted to quickly clarify just the $1 3 billion does that include the drip.

Speaker Change: What do you expect that to be on an annual cadence going forward.

Speaker Change: The one point the up to $1 three does not include.

Speaker Change: The drip.

Speaker Change: So that level is pretty consistent at about 100 to 120.

Speaker Change: Per year.

Speaker Change: And that will continue.

Speaker Change: Okay, great. Thanks, so much.

Durgesh Chopra: Thank you. We now turn to Durgesh Chopra with Evercore ISI. Your line is open, please go ahead. Hey, good morning, team. Thanks for... Hey, good morning, John. Thanks for giving me time. Good morning. Can I go? Good morning, Joe. Just can I go back to Aquarian and, in relation to you kind of alluding to the 5% to 7% incorporated in Aquarian's sale, you have the CapEx baked into your five-year plan, the Aquarian CapEx currently. I'm just... I guess what I'm trying to ask is how do you fill the earnings hole for Aquarian? I understand it's small.

Speaker Change: Thank you.

Speaker Change: We announced <unk> Chopra with Evercore ISI. Your line is open. Please go ahead.

Chopra: Hey, good morning. Thanks.

Chopra: Hey, good morning, John Thanks for taking the time this morning.

Chopra: Good morning, Joe.

Chopra: Just can I go back to aquarian and in relation to you kind of alluding the 5% to 7%.

Chopra: It incorporates an aquarium sale.

Chopra: You have the capex baked into your five year plan, the equator and Capex family I'm, just I guess, what im trying to ask is how do you fill the findings hole for clearing I understand it's small is it basically debt reduction from the proceeds or Capex could go elsewhere.

Chopra: To substitute aquarium earnings.

Chopra: I would say, it's a combination of both.

Chopra: Yes, we did we did lead the capex their capex in our forecast, but its clear in its delineated you can see how much that relates to the fact that in my.

Durgesh Chopra: Is it basically debt reduction from the proceeds, or CapEx could go elsewhere to substitute Aquarian earnings? I would say it's a combination of both, got up to 1.6 billion. And in my previous remarks, I also indicated that we should be mindful of what has not been included in our five-year forecast. And that amount could be up to $2 billion, once again, within this forecast period. So we feel very, very optimistic that we'll be able not only to replace the earnings but also mitigate any of the dilution. Understand, that's very clear. And then just, what, can you just remind us your earned ROEs in Connecticut as of 2023? And what are you modeling as you think about the 5% to 7% EPI growth target going forward? Yeah, I mean, obviously, they have dipped a little, you know, we've been out of Connecticut for quite some time, you know, we've had the settlement agreement, I would say that they're probably, you know, in the CO&P is hovering around 8%, and Yankee is around 7%. Thank you. Thank you. And then just, what are you modeling?

Chopra: Formal remarks, I highlighted we have it in the slide on the deck that if you look at the forecast period forecast over forecast were up one 6 billion.

Chopra: And in my formal remarks, I also indicated that we should be mindful of what has not been included in our five year forecast and that amount could be up to one two up to $2 billion. Once again within this forecast period.

Chopra: So we feel very very optimistic that we'll be able not only to.

Chopra: Replace the earnings but also mitigate any dilution.

Speaker Change: Understood that's very clear and then just.

Speaker Change: What can you just remind us your earned ROE is in Connecticut.

Chopra: As of 2023, and what are you modeling as you think about the 5% to 7% EPS growth target going forward.

Chopra: Yes.

Chopra: Obviously, they have dipped a little bit now.

Chopra: Of Connecticut for for quite some time, we've had the settlement agreement I would say that they're probably.

Chopra: And the.

Chopra: <unk> pay is around hovering around 8% and Yankee.

Chopra: In the seven range.

Speaker Change: And then just what are you modeling like a new modeling our improvement ROE staying the same perhaps going lower as you think about the 5% to 7% growth rate.

John Morera: Like, are you modeling, are we improving? Are we staying the same, perhaps going lower as you think about the 5 to 7% growth? Well, I mean, we were, you know, we're saying we've determined that we're going to stay out for at least another year or longer. So we're modeling the appropriate assumptions as we normally do with any rate proceeding in our five-year forecast. Okay, thanks so much; I appreciate the time.

Speaker Change: I mean, we.

Chopra: Where where state we've determined that we're going to stay out of.

Chopra: For at least another year or longer so in the model and the appropriate assumptions as we normally do with any rate proceeding.

Chopra: <unk> five year forecast.

Chopra: Okay.

Speaker Change: Thanks, so much I appreciate the time.

Angie Storozynski: Now, I turn to Angie Storozynski with Seaport. Your line is open, please go ahead. Good morning.

Chopra: Now turning to Andrew <unk> with Seaport. Your line is open. Please go ahead.

Angie Storozynski: So just maybe first assumptions. Good morning behind the equity needs. So again, if I just look at the 1.3 and what I would expect Aquarian could bring, you know, that's a little bit. It seems like we're getting close to 3 billion in equity. Again, my estimate, that seems large versus our prior expectations. And I'm just wondering what kind of credit assumptions you've embedded in it. So do you expect that that amount, whatever the number is eventually, allows you to keep current ratings, credit ratings, especially with the S&P? Yeah, so we're, Angie, we're very mindful of what the downgrade thresholds are and our financing plan. We feel confident that it'll meet those thresholds, particularly at S&P, which has moved us up to a 14% threshold.

Andrew: Good morning, So just maybe first starting assumption good morning behind we add the equity needs.

Andrew: Again, if I just looked at the 1.3 and what I would expect aquarian could bring you know that's a little bit.

Andrew: It seems like we're getting close to 3 billion in liquidity event and I ask that.

Speaker Change: That seems large.

Andrew: Versus our prior expectations and I'm, just wondering what kind of credit assumptions here from better than that.

Chopra: Do you expect that that amount whatever the number is eventually allows you to keep current ratings credit ratings, especially with the S&P.

Chopra: Yes.

Chopra: Andrew we're very mindful of what the downgrade thresholds are and our financing plan.

Chopra: We feel we feel confident that it will.

Chopra: Meet that that those thresholds, particularly at S&P, which has moved us up to a 14% threshold.

Chopra: Oh.

Speaker Change: Yes, and then secondly, you have this.

John Morera: And then secondly, you know, you have this court challenge in the Aquarium rape case, and I'm just wondering if, one, there's an outcome we need for that sale process to be successful, and two, if you approach the regulator in Connecticut about this potential sale. Yeah, so Angie, this is Joe. You know, the court case was heard, and we felt that it went very well. We do expect a decision in the next few months. And our expectation is that it will go back to Pura, and it will have no impact on our ability to transact. So you know, we're still very, very confident in that case and the outcome. And Angie, I would just add that, quite honestly, as Joe mentioned, we should see that court decision in the next couple of weeks. That's our expectation, and that's actually behind us before we execute.

Chopra: Court challenge for aquariums.

Chopra: And I'm just wondering if.

Chopra: One there is an outcome, we need for that sale process to.

Chopra: To be successful until if you.

Chopra: Approach the regulator in Connecticut about this potential sale.

Chopra: Yes, so Andrew this is Joe.

Joe Nolan: The court case was heard we felt that the it went very well we do expect a decision in the next few months.

Joe Nolan: And our expectation is that it would go back to Europe will have no impact on our ability to to transact.

Joe Nolan: So we're still we're very very confident.

Joe Nolan: In that case and the outcome.

Speaker Change: And Andrew I would just add.

Joe Nolan: Okay.

Andrew: I would just add that quite honestly as Joe mentioned, we should see that court decision on the next couple of weeks since our expectation and that's actually be behind us before we execute on the transaction.

Joe Nolan: Okay, and no discussions with Pura around that potential sale or putting the asset on the block? Yeah, no, we've had communication with the governor. I did talk to the governor, and I let him know about this transaction. As you know, it's a quasi-judicial board, the Purer, and there's certain things they can and can't talk about.

Andrew: Okay.

Joe Nolan: Discussions with terror around that potential sale or putting the asset on the block.

Speaker Change: Yes, no we've had communication with the government on how to talk to the governor and I'll, let him know.

Speaker Change: This transaction as you know it's <unk>.

Speaker Change: Quasi judicial board, the pure and there's certain things they can and can't talk about so what we're trying to be very mindful of that.

Joe Nolan: And then lastly.

Joe Nolan: Yeah.

Joe Nolan: The dividend growth profile.

Joe Nolan: So we try to be very mindful of that. And then lastly, the dividend growth profile, is it basically mimicking the earnings growth, the EPS growth? Angie, you're spot-on. You know, as you heard from me, our growth rate, 2023 compared to 2022, hovered around 6%. We just, as Joe mentioned, the board just approved, on an annualized basis, another 6% dividend increase. So we have a longstanding record of continuing to grow our dividend in line with our earnings. Good, Thank you. Thanks, Angie. Our next question comes from Anthony Crowdell with Mizuho. Your line is open, please go ahead. Hey, excuse me.

Joe Nolan: Yes.

Joe Nolan: Making the earnings growth the EPS growth.

Angie: Angie you're spot on.

Angie: As you heard from me or our growth rate 2023, compared to 22 hovered around a 6% growth rate. We just as Joe mentioned the board just approved on an annualized basis.

Angie: And another 6% dividend increase so we have a long a long standing record of continuing to grow our dividend in line with our earnings.

Speaker Change: Alright, thank you.

Speaker Change: Thanks, Andrew.

Speaker Change: Our next question comes from Anthony <unk> with Mr.

Anthony: Your line is open. Please go ahead.

Anthony: Hey, good excuse me good morning, guys, just I guess two quick ones.

Anthony Crowdell: Good morning, guys. Just, I guess, two quick ones. I want to follow up on Steve's question. I think you were talking about maybe some ITCs and your FFO debt metrics. Any chance you could tell us the amount of ITCs you've booked in 23 earnings and what your forecast is in 24 earnings? Yeah, Anthony, this is John. So the ITC that Steve was alluding to relates to the South Fork equity investment that we just completed last year, and the size of that breadbox is about $500 million. We have not recognized any of those ITCs.

Anthony: I wanted to follow up on Steves question. I think you were talking about maybe some <unk> in your <unk> to debt metrics any chance you could tell us what.

Speaker Change: Amount of ITC that you booked in 'twenty three earnings and what your forecast is in 2000 and for earnings.

Speaker Change: Yes, Anthony this is John so.

John Moreira: See that Steve was alluding to relates to the South Fork equity investment that we just completed last year and the size of that Red box is about $500 million, we have not recognized any of those itc's and E.

John Morera: And I would view those ITCs as being cash driven and not earnings driven. Great. And then just lastly, on the 8K you filed this morning, that gave some more details on the transaction, I believe in it, you guys have guaranteed an IRR to the buyer of roughly 13%. If you use your best estimate today of what you think the project would cost and your, you know, your best estimate, you know, forecasting everything, where do you think the IRR stands today? Yeah, with the cost pressures that we've had, I want to make sure I understand your question. Well, I guess I'm wondering if it's at 13%.

John Moreira: I wouldn't view those ITC thats being cash.

Angie: Driven and not earnings driven.

Speaker Change: Great and then just lastly on the 8-K you filed this morning that gave some more details on the transaction.

Angie: I believe you guys have guaranteed an IRR to the buyer of roughly 13%.

Angie: Do you use your best estimate today of what you think the project would cost.

Angie: Your best estimate forecasting everything where do you think the IRR stands today.

Angie: Yes.

Angie: With the cost pressures that we've had.

Speaker Change: We want to make sure I understand your question.

Angie: Well I guess I'm wondering it's at 13% we were may be forecasting a lower IRR. The project based on our assumptions and so we're thinking that.

Anthony Crowdell: We were maybe forecasting a lower IRR for the project based on our assumptions. And so we're thinking that, you know, or is there, from day one, that you assume that there's a payment going out to the buyer to get to the 13% IRR? That's been, it's already been baked into the transaction. That's what, you know, that's a portion of the impairment, which would allow them to be able to get the return that they expect. So that's already been factored in.

Angie: Or is there.

Angie: From day, one that you assume that there is a payment going out to the buyer to get to the 13% IRR.

Angie: That's been it's already been baked into the in the transaction Thats what.

Angie: That's a portion of the impairment, which would allow them to be able to get the return that they expect so that's already been factored in.

John Morera: And that that was accounted for. Yes. Great, thanks for taking my question. Thank you. We now turn to Paul Zimbardo with Bank of America. Your line is open. Please go ahead. All right, team. Thanks for squeezing me in. What's the forecast for capital investment into offshore wind into 2024 and specifically kind of before the close of the transaction? Yeah, Paul, we really haven't said that.

Speaker Change: That was a counterpart, yes, that's right.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: Thank you.

Speaker Change: We now turn to Paul Zimbardo with Bank of America. Your line is open. Please go ahead.

Speaker Change: Okay.

Paul Andrew Zimbardo: Hi, Thanks for squeezing me in.

Angie: Okay.

Paul Andrew Zimbardo: What's the forecast for capital investment into offshore wind into 2024, specifically kind of before the close of the transaction.

Speaker Change: Yes, Paul we really haven't said that.

Paul Andrew Zimbardo: You know, there's time sensitivities as to when funding obligations transfer, not only to GIP but also to AUSTED as well. But I can tell you that it's not a significant issue, and all of those assumptions have been baked into our finances. And whatever we put in comes back to us; it's not as if we're going to be out anymore. OK. And then on the lower effective tax rate in 2024, could you quantify what that benefit is, kind of what you had in 2023 from the lower effective tax rate and how much the improvement is in 2024? Yeah, I mean, where we landed in 2023, I would say the high teens.

Speaker Change: This time sensitivities as to when.

Angie: Funding obligations transfer not only to both <unk>, but also to offset as well, but I can tell you that it's a it's not a significant level.

Angie: And all of those assumptions have been baked into our financing plan.

Angie: Whatever we put in comes back to us it's not as if we're going to be out any money.

Angie: Okay.

Angie: And then on the lower effective tax rate in 2024 could you quantify what that benefit is kind of what you had in 2023 from lower effective tax rate and how much the improvement that's at 24.

Speaker Change: Thank you.

Speaker Change: Where we landed in 2023 I would say it's high teens.

John Morera: And where we project to be in 2024 is also in the high teens; I would say 18 to 20% is the effective tax rate. So some of the benefits that we were able to recognize, we see those reoccurring and, Okay, thank you. Thanks, Paul. Our next question comes from Ryan Levine with Citi. Your line is open, please go ahead. Hi, everybody. Hey, Ryan.

Speaker Change: And where we project to be in 2024 is also in the high teens, I would say 18% to 20%.

Speaker Change: <unk> tax rate so some of the benefits that we were able to.

Speaker Change: Recognize.

Speaker Change: We see those recurring in 2024.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Paul.

Speaker Change: Our next question comes from Ryan Levine with Citi. Your line is open. Please go ahead.

Ryan Levine: Hi, everybody.

Ryan Levine: Why don't we start off sharing the, Morning, on the cost sharing or earn out callback-like structure, what's the timeline where you would receive cash payments if costs were lower than targets? And conversely, if there's any cash flows? Cash Out Close, and any sense of timing when you'd expect those payments to come in?

Ryan Levine: Hey, Ryan Ryan loss sharing.

Ryan Levine: On the cost sharing our earn out call back like structure, what's the timeline, where you would receive cash payments if costs were lower than targets and Conversely, if theres any cash flows cash.

Ryan Levine: Our cash outflows.

Ryan Levine: On timing when you expect those payments can be made.

John Morera: Sure, I mean, they would all be resolved at COD. At COD, our contingent liability is resolved. You know, we plan to have the Revolution Project in service in the fall of 2025. So that should be the timing you should be thinking about.

Ryan Levine: Sure I mean, there would be all resolved at CODI.

Ryan Levine: Cody our contingent liability is resolved.

Ryan Levine: We plan to have the Revolution project in service in the fall of 2025, so that should be the <unk>.

John Morera: Okay, and then given the uncertainty of the contingent payments, would you look to wait to time your equity issuance once you have resolution on COD? Well, the equity issuance is a multi-year program, so it wouldn't be anything, and we'd be right. It's still the same window of time that we're talking about, John. Yeah, and that's been factored into our financing plan, you know, the timing of when that would reach COD and what, you know. So we feel good, you know, Joe in his formal remarks and some of the Q&A that he's responded to, we feel good where we are with the most current forecast, construction forecast, for a revolution, and that has become the baseline for the sharing. Okay, and then on the water sale, Or is it being initiated with the announcement?

Ryan Levine: Timing, we should be thinking.

Speaker Change: Okay, and then given the uncertainty of the contingent payments contingent payments would you look to wait to time your equity issuance. Once you have resolution on CRD.

Speaker Change: Well the equity issuances are multiyear.

Speaker Change: Programs. So it wouldn't be anything that would be right. It's still the same window of time that we're talking about John yes. That's been that's been factored into our financing plan the timing of when that <unk> and <unk>.

Speaker Change: <unk>.

Speaker Change: So we're we feel good Joe in his formal remarks, and some of the Q&A that he has responded too we feel good where we are with the most current forecast construction forecast.

Speaker Change: For our revolution and that has become the baseline for the sharing.

Speaker Change: Okay, and then on the water sales to the extent you can respond in the process already start or is it being initiated with the announcement last night.

John Morera: No, the process has not started. Last night we kicked it off, and we'll get to work on it as soon as this call is over. Great. And then last question for me: we've seen other utilities slow dividend growth to be less than EPS growth.

Joe Nolan: No. It's the process has not started its going to last night, we kicked it off and it will be.

Speaker Change: We'll get get to work on it as soon as this call's over.

Speaker Change: Great and then last question for me, we've seen other utilities slowed the dividend growth to be less than EPS growth is this management board.

Ryan Levine: Is management or the board considering a change in dividend policy on a going forward basis as the capital needs and equity needs evolve? No, we don't. I just reiterated what our expectations are for both long-term earnings, EPS growth of five to seven, and we have, and we expect to grow our dividend in line with earnings. Great, thanks for taking my question. Our next question comes from Travis Miller with Morningstar. Your line is open, please go ahead. Good morning, everyone. Thank you. Hey Travis,

Speaker Change: Considering change in dividend policy on a go forward basis.

Speaker Change: As the capital needs and equity needs evolve.

Speaker Change: No we don't I, just reiterated what our expectations are for both the long term.

Speaker Change: Earnings EPS growth of five to seven and we have we expect to grow our dividend in line with earnings growth.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: Thanks, Mike.

Speaker Change: Our next question comes from Travis Miller with Morningstar. Your line is open. Please go ahead.

Travis Miller: Good morning, everyone and thank you.

Travis Miller: Thanks Robert.

Travis Miller: On the revolution, what kind of involvement are you going to continue to have on the operational construction side, and I'm thinking, in part, to make sure that the costs stay in line with your estimate. Will you be involved in the project or more third parties? Yeah, no, no, great question. So we're actively involved in the land-based portion of that construction. You know, I've been down in Rhode Island; I was with Governor McKee.

Travis Miller: On the resolution what kind of involvement in are you going to continue to have on the operational construction side.

Travis Miller: And in part to make sure that the cost stay in line with your estimate will you be involved or.

Travis Miller: More third party.

Speaker Change: Yes, no no a great question. So we are actively involved in the land based portion of that construction you know ive been down in Rhode Island Dudman with Governor Mckee, we broke ground on the substation the conduit work that runs from the.

Joe Nolan: We broke ground on the substation, and the conduit work that runs from the point of entry from the ocean to the substation. We will play a very, very active role. And I think that, you know, having a seat at the table is important for all the reasons that you stated.

Speaker Change: The point of entry from the from the Ocean to the substation, we will play a very very active role and I think that having a seat at the table is important for all the reasons that you stated. So we will continue to play that role until such time as that project is in commercial operation.

Joe Nolan: So we will continue to play that role until such time as that project is in commercial operation. Okay, perfect. And then, kind of strategically over the years, I think one of the initial thoughts that you had behind all these non-utility investments was to reduce some of the exposure to Connecticut.

Speaker Change: Okay, perfect and then going back kind of strategic over the years I think one of the initial thoughts.

Speaker Change: Behind all these non utility investments was to reduce some of the exposure to Connecticut now it seems like you've come back in.

Travis Miller: Now, it seems like you've come back and now have more of that exposure. Post this, what's kind of changed here over the years to, in Connecticut, to suggest that you think perhaps a better operating environment, and investment environment there. Well, I would say the Aquarian transaction is predicated on the fact that, you know, our equity needs, that we need to raise equity, and this is an accretive, potentially accretive transaction that we are looking to execute.

Speaker Change: And now have more of that exposure post us what's kind of changed here over the years too.

Speaker Change: In Connecticut.

Speaker Change: Suggest that you think perhaps a better operating environment and investment environment.

Speaker Change: Sure.

Speaker Change: Well.

Speaker Change: I would say the aquarium transaction was more of it is predicated on the fact that.

Speaker Change: Our equity needs that we need to raise equity and this is an accretive potential accretive transaction that we are looking to them.

Joe Nolan: So that's really kind of the impetus for us pursuing a transaction for Aquarian. Okay, great. Thanks so much. I appreciate it. Thanks, everyone. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now. We now turn to Paul Patterson with Glenrock Associates. Your line is open, please go ahead. Hey, good morning. Just really quickly to make sure I understood the answer to Anthony Crowdell's question: there is no earnings impact associated with 2023 and.

Speaker Change: To execute so that's really kind of the impetus of us pursuing a transaction for aquarium.

Speaker Change: Okay, great. Thanks, so much I appreciate it.

Speaker Change: Thanks Ross.

Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad now.

Speaker Change: Now to answer Paul Patterson with Glen Rock Associates. Your line is open. Please go ahead.

Paul Patterson: Good morning.

Paul Patterson: Good morning, Paul.

Paul Patterson: Uh huh.

Paul Patterson: Just really quickly to make sure I understood the answer the answer to <unk> question.

Paul Patterson: No earnings impact.

Paul Patterson: Actually it was 2023.

Paul Patterson: 2024 with offshore wind on a non-gap basis and adjusted basis. Is that correct? I believe Anthony's question was more about the ATC. Okay. Yes, okay. Well, I'm just wondering, just generically speaking, is there any EPS impact on an adjusted non-gap basis for offshore wind in 2023-2024?

Paul Patterson: 2020 for offshore wind.

Paul Patterson: non-GAAP basis adjusted basis is that correct.

Paul Patterson: I believe Anthonys question was more on the ITC.

Paul Patterson: Okay.

Paul Patterson: Hum.

Paul Patterson: Okay.

Paul Patterson: Yes, okay.

Paul Patterson: Wondering just generically speaking is there any EPS impact on the <unk>.

Paul Patterson: Adjusted non-GAAP basis for offshore wind in 'twenty three.

Paul Patterson: No.

John Morera: No. Okay, great. And then we move to...

Paul Patterson: No.

Speaker Change: Okay great.

Speaker Change:

Paul Patterson: The PBR case, I noticed that in December you guys and also United Illuminating asked for the case to be withdrawn and then reinitiated as a new type of case, and without getting into the details because they're very complicated, but how do you see that case proceeding, I guess at this point? I know that the commission earlier this month said no to that proposal, but obviously, there are some concerns that you guys have about it that you voiced in your filings. Any thought process we should have about what the outlook is there? Yeah, Paul, there are a couple of things there. Number one, you know, quite honestly, we were a bit disappointed that that docket, or actually three of those dockets, got delayed or pushed out a bit. So I think it's still far too early for us to speculate because I think there are procedures that we wanted to take place, and now some of those will likely happen. So we can't speculate as to what the outcome would be at this point.

Paul Patterson: Moving to <unk>.

Paul Patterson: The PV Ortiz.

Paul Patterson: Notice that in December you, guys and also United illuminating.

Paul Patterson: As with the case to be withdrawn and then Reinitiate, it's a new type of case.

Paul Patterson: Without getting into the details.

Paul Patterson: They're very complicated for them.

Speaker Change: How do you see that proceeding I guess at this point I know that the commission earlier. This month said noted that proposal but.

Paul Patterson: There are some concerns that you guys have about it.

Paul Patterson: Voice in your filings.

Paul Patterson: Any thought.

Speaker Change: <unk> process, we should have about what the outlook is there.

Speaker Change #101: Yes, Paul a couple of things there number one quite honestly, we were a bit disappointed that that docket of that of those dockets is that actually three of them got delayed or pushed out a bit.

Speaker Change: So I think it's still far too early for us to speculate because I think there is there are proceedings that.

Speaker Change: We wanted to take place and now some of those will likely happen. So.

Speaker Change: We can't speculate as to what the outcome would be at this point I think there is a lot more work and a lot more discussion with pure there will have to take place.

John Morera: I think there's a lot more work and a lot more discussion with PURE that will have to take place. Thanks so much. I really appreciate it. Thanks, Paul. Have a good day. We now turn to Jeremy Tonet with JP Morgan. Your line is open, please go ahead. Hey, good morning. This is actually Aiden Kelly on for Jeremy.

Speaker Change: Great. Thanks, so much I really appreciate it.

Speaker Change: Thanks, Paul and good day.

Speaker Change: Okay.

Speaker Change: We now plan to Jeremy Tonet with Jpmorgan. Your line is open. Please go ahead.

Speaker Change: Hey, Good morning. This is actually eight and Kelly on for Jeremy Just one quick question on our end.

Jeremy Bryan Tonet: Just one quick question on our end. What was the parent interest expense drag in 23 versus 22? And could you just talk about the offsets behind that?

Speaker Change #100: What was the parent interest expense drag in 23 versus <unk> 22, and could you just talk about like the offsets behind that.

Speaker Change: Well I would say.

Speaker Change: The interest obviously, it's higher and we said that as an impact.

Jeremy Bryan Tonet: I would focus your attention more on the financing plan that we just disseminated and the EPS growth rate for 2024 and the longer-term growth rate. Got it. Thanks. I'll just leave it there. OK. Thank you. That concludes our Q&A. I'll now hand it back to Bob Becker for final remarks. Thanks, Elliot. And thank you, everybody, for joining us today. If you have any follow-up questions, please reach out to Investor Relations. Thank you, everyone. Thank you, everybody, ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines www.eversource.org

Speaker Change: But I.

Speaker Change #102: I would focus your attention more onto the financing plan that we just disseminated and.

Speaker Change: And the EPS growth rate and for 24 and the longer term growth growth rate.

Speaker Change: Got it thanks, so I'll just leave it there.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: This concludes our Q&A I'll now hand back to claw back for final remarks.

Claw Back: Thanks, Elliot and thank you everybody for joining us today, if you have any follow up questions. Please reach out to Investor relations.

Claw Back: Thank you everyone. Thank you everybody.

Claw Back: Ladies and gentlemen, today's call is now concluded I would like to thank you for your participation you may now disconnect your lines.

Claw Back: Yeah.

Claw Back: Yes.

Claw Back: Yes.

Claw Back: Yeah.