Q1 2025 Eversource Energy Earnings Call
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Operator: Good day, and thank you for standing by. Welcome to the Eversource Energy first quarter 2025 earnings call. At this time, all participants are in listen-only mode.
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Good day, and thank you for standing by.
To the ever source energy first quarter 2025 earnings call at this time, all participants are in listen only mode.
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Rima Hyder: I would like to hand the conference over to our first speaker today, Rima Hyder, Vice President of Investment Relations. Please go ahead. Good morning, and thank you for joining us today on the first quarter 2025 earnings. During this call, we'll be referencing slides that we posted this morning on our website. As you can see on slide one, some of the statements made during this investor call may be forwarded. These statements are based on management's current expectations and are subject to risk and uncertainty. which may cause the actual results to differ materially from forecast and projected.
Speaker Change: Like to hand, the conflicts over to your first speaker today Rima Hyder Vice President Investor Relations. Please go ahead.
Speaker Change: Good morning, and thank you for joining us today on the first quarter of 2025 earnings call. During this call we'll be referencing slides that we posted this morning on our website as you can see on slide one some of the statements made during this investor call maybe forward looking.
Speaker Change: These statements are based on management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts 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 in our explanation of non-GAAP.
Rima Hyder: We undertake no obligation to update or revise any of these statements.
Rima Hyder: Additional information about the various factors that may cause actual results to differ in our explanation of non-GAAP measures and how they reconcile to GAAP results is contained within our news release, the slides we posted last most recent 10Q and 10Q.
Speaker Change: Measures and how they are reconciled to GAAP results is contained within our news release the slides we posted last night.
Speaker Change: Most recent 10-Q and 10-K.
Rima Hyder: Speaking today will be Joe Nolan, our Chairman, President and Chief Executive Officer, and John Moreira, our Executive Vice President and Chief Financial Officer and Treasurer.
Speaker Change: Speaking today will be Joe Nolan, our chairman, President and Chief Executive Officer, and John Moreira, Our executive Vice President and Chief Financial Officer and Treasurer.
Rima Hyder: Also joining us today is Jay Booth, our Vice President and Controller.
Speaker Change: Also joining us today is Jay Buth, our vice President and controller I will now turn the call over to Joe.
Joe Nolan: I will now turn the call over to Joe. Thank you, Rima. Good morning, everyone, and thank you for joining us today for our first quarter earnings call. I am pleased to share our results and discuss the progress we have made towards our key initiatives in the first quarter of this year. This quarter, we saw strong growth across our transmission and distribution businesses versus last year, and we are pleased to reaffirm our 2025 EPS guidance, as well as our long-term EPS growth rate of 5 to 7 percent through 2029. As shown on slide four, as a pure play pipes and wires regulated utility, we are uniquely positioned to leverage our strengths in transmission and distribution investment operations.
Speaker Change: Thank you remarks, good morning, everyone and thank you for joining us today for our first quarter earnings call I am pleased to share our results and discuss the progress we have made towards our key initiatives in the first quarter of this year.
Speaker Change: This quarter, we saw strong growth across our transmission and distribution businesses versus last year and we are pleased to reaffirm our 2025 EPS guidance as well as our long term EPS growth rate of 5% to 7% through 2029.
Speaker Change: As shown on slide four as a pure play types and why is regulated utility we are uniquely positioned to leverage our strengths in transmission and distribution investment opportunities are rare.
Joe Nolan: Our regulated status provides stability and predictability, allowing us to focus on long-term growth and sustainability that will continue to deliver on customer expectations. Over the five-year forecast period, we are projecting rate-based growth at 8%, with numerous additional opportunities outside of this forecasted period. As shown here, the composition of our rate base is strategically shifting toward higher distribution spend in Massachusetts, primarily to meet the state's electrification goals set in the Electric Sector Modernization Plan, and conversely, the reduction of capital investment in Connecticut. We are excited to partner with the Commonwealth of Massachusetts on its decarbonization strategy and to make necessary investments to meet these goals and enhance reliability.
Speaker Change: Status provides stability and predictability, allowing us to focus on long term growth and sustainability that will continue to deliver on customer expectations.
Speaker Change: Over the five year forecast period, we are projecting rate base growth at 8% with numerous additional opportunities outside of this forecast period.
Speaker Change: You don't hear the composition of our rate base is strategically shifting toward higher distribution spend in Massachusetts, primarily to meet the state's electrification goals set in the electric sector modernization plan at <unk>.
Speaker Change: Firstly, the reduction of capital investment in Connecticut.
Speaker Change: We are excited to partner with the Commonwealth of Massachusetts, honest tea capitalization strategy and to make necessary investments to meet these goals and enhance reliability.
Joe Nolan: We have strong investment opportunities beyond our five-year forecast. We were pleased to see that ISO New England recently issued a new RFP to solicit longer-term proposals from transmission operators to address the region's future load growth in connection with their 2050 Transmission Study. We are examining numerous opportunities, and we look forward to working with ISO New England on this unique opportunity to address the region's energy transition and maintain system reliability. Another area of growth for us is the acquisition of the MISTIC site in Everett. With its strategic location, flexibility, and existing infrastructure, this facility stands out as one of the most promising multi-use interconnection points for a wide range of energy resources in New England, representing a unique opportunity to support the region's energy goals, spur economic development, and create jobs.
We have strong investment opportunities beyond our five year forecast period.
Speaker Change: We were pleased to see that ISO new England recently issued a new RFP just solicit longer term proposals from transmission operators to address the region's future load growth in connection with the 2050 transmission study we are examining numerous opportunities and we look forward.
Speaker Change: Working with ISO new England on this unique opportunity to address the regions energy transition in maintain system reliability.
Speaker Change: Another area of growth for US is the acquisition of the mist exciting effort with its strategic location flexibility and existing infrastructure. This facility stands out as one of the most promising multi use interconnection points for a wide range of energy resources in new England.
Speaker Change: <unk>, a unique opportunity to support the region's energy goals spur economic development and create jobs.
Joe Nolan: These future transmission and distribution opportunities give us confidence for growth for years to come as well as ensuring that our customers receive safe and reliable service.
Speaker Change: These future transmission and distribution opportunities give us confidence for growth for years to come as well as ensuring that our customers receive safe and reliable service.
Joe Nolan: At the heart of our operation is our commitment to customer innovation and affordability. We continue to invest in advanced technologies and innovative solutions that enhance the reliability and efficiency of our transmission and distribution networks. Our focus on affordability ensures that we deliver value to our customers while maintaining reasonable rates. We have launched several initiatives aimed at improving customer experience and reducing costs in the long term. As shown on slide five in Massachusetts, our AMI project remains on track, with significant progress made on standing up, integrating, and testing the necessary systems. We began deployment on AMI Communication Network in Western Massachusetts at the start of this year and is now 40% complete.
Speaker Change: At the heart of our operation is our commitment to customer innovation and affordability, we continue to invest in advanced technologies and innovative solutions that enhance the reliability and efficiency of our transmission and distribution networks are focus on affordability and choice.
Speaker Change: We deliver value to our customers, while maintaining reasonable rates.
Speaker Change: We have launched several initiatives aimed at improving customer experience and reducing costs in the long term.
Speaker Change: As shown on slide five in Massachusetts, Our Ami project remains on track with significant progress made on standing up integrating and testing the necessary systems.
Speaker Change: He began deployment on Ams communication network in Western Massachusetts at the start of this year and is now 40% complete we expect to complete the <unk> network before the first smart meter is deployed in July.
Joe Nolan: We expect to complete the AMI network before the first smart meter is deployed in July. We are excited about this technology and how it will empower customers to make data-driven decisions about their energy usage and provide customers with more control than ever before. Additionally, with feedback from our customers, through our robust Voice of the Customer program, we have implemented many user experience enhancements, including redesigning and streamlining the digital customer experience for managing their account needs. More importantly, we added greater functionality and created a new, redesigned account overview page on our website, making it easier for our customers to compare their bills and better understand their usage.
Speaker Change: We are excited about this technology and how it will empower customers to make data driven decisions about their energy usage and provide customers with more control than ever before.
Speaker Change: Additionally, with feedback from our customers through our robust voice of the customer program, we have implemented many user experience enhancements, including redesigning and streamlining the digital customer experience for managing their account needs.
Speaker Change: More importantly, we added greater functionality and created a new redesigned account overview page on our website, making it easier for our customers to compare their bills and better understand their usage health.
Joe Nolan: Helping our customers understand their bill, educating them on energy-related topics, and making it seamless for customers to interact with Eversource is a key objective for us.
Speaker Change: Helping our customers understand their bill educating them on energy related topics and making it seamless for customers to interact with ever source is a key objective for us.
Joe Nolan: on the regulatory front. We continue to make progress across three states. Earlier this year, there was a call to action in Massachusetts from our customers, communities, and state policymakers to address affordability, stabilize rates, and provide transparency on energy. This was in response to high gas bills following the rate adjustments and increased demand due to a very cold winter. In collaboration with state leaders, we developed a plan to reduce winter rates for our gas customers by approximately 10% to smooth bill impacts during high usage. which went into effect beginning March 1st.
Speaker Change: On the regulatory front.
Speaker Change: We continue to make progress across three states earlier. This year, there was a call to action in Massachusetts from our customers communities and state policymakers to address affordability stabilize rates and provide transparency on energy bills. This wasn't response.
Speaker Change: To high gas bills, following the rate adjustments and increased demand due to a very cold winter.
Speaker Change: In collaboration with state leaders, we developed a plan to reduce winter rates for our gas customers by approximately 10% to smooth bill impacts during high usage periods, which went into effect beginning March one.
Joe Nolan: We have also organized many events. to work with and educate customers and communities we serve about the various options they have to manage their bills, including energy efficiency programs. We recognize there's more to do to address transparency and affordability, and we are actively working with the administration, legislators, communities, and regulators on long-term solutions to smooth rate shocks and address affordability. In Connecticut, Pura Commissioners Marissa Gillette and David Arcante have been confirmed by the state legislature, and we look forward to working with them to ensure customers continue to receive the safe, reliable electric, gas, and water delivery services that they have become accustomed to over the years.
Speaker Change: We have also organized many events to work with and educate customers and communities. We serve about the various options they have to manage their bills, including energy efficiency programs.
We recognize there is more to do to address transparency and affordability and we are actively working with the administration legislators communities and regulators on long term solutions to smooth the rate shocks in address affordability.
Speaker Change: In Connecticut.
Speaker Change: <unk> Commission as Marissa Gillett and David are Conti have been confirmed by the state legislature and we look forward to working with them to ensure customers continue to receive safe reliable electric gas and water delivery services that they have become accustomed to over the years.
Joe Nolan: and New Hampshire, we look forward to working with the new administration and partnering with them on meeting their energy goals.
Speaker Change: In New Hampshire, we look forward to working with the new administration and partnering with them on meeting their energy goals.
Joe Nolan: We continue to execute on many fronts to strengthen our balance sheet. One of our key strategic initiatives was to divest aquarium water, which is anticipated to close by the end of the year. Last month, we filed for regulatory approval in all three states. The Aquarian proceeds, along with our regulatory recoveries, will enable us to improve our FFO to debt ratio from 2024 level.
Speaker Change: We continue to execute on many fronts to strengthen our balance sheet one of our key strategic initiatives was to divest aquarium water, which is anticipated to close by the end of the year last month, we filed for regulatory approval in all three states.
Speaker Change: The aquarium proceeds along with our regulatory recoveries will enable us to improve our <unk> to debt ratio from 2024 levels.
Joe Nolan: Turning to a brief update on Offshore Wind and Revolution Wind Project, we are pleased to report that the construction of the onshore substation, which Eversource continues to oversee, is progressing very well. The onshore substation is the critical path. to the project going into service. We continue to monitor the project's overall construction progress closely.
Speaker Change: Turning to a brief update on offshore wind and Revolution Wind project. We are pleased to report that the construction of the onshore substation, which ever source continues to oversee is progressing very well.
Speaker Change: Onshore substation is the critical path.
Speaker Change: The project going into service, we continue to monitor the project's overall construction progress closely.
Joe Nolan: Currently, given the latest construction updates and cost estimates we have been provided, we have concluded that we do not need to change the contingent liability that we recorded in the third quarter of 2024.
Speaker Change: Currently given the latest construction updates the cost estimates we have been provided.
Speaker Change: We have concluded that we do not need to change the contingent liability that we recorded in the third quarter of 2024 in summary.
Joe Nolan: In summary, our first quarter results reflect unwavering commitment to customer innovation, affordability, financial strength, and sustainability. We are focused on our 2025 key priorities, as shown on slide six. In the first quarter results clearly demonstrate our successful execution of these goals, showcasing our commitment to sustained growth and strategic vision as a pure play pipes and wires regulated utility. We are confident in our ability to continue driving value for our customers and shareholders as we move forward. Our prudent and longstanding approach to financial and operational management ensures that we can continue to invest in critical infrastructure and innovation while delivering consistent returns to our shareholders.
Speaker Change: Our first quarter results reflect our unwavering commitment to customer innovation affordability financial strength and sustainability.
Speaker Change: We are focused on our 2025 key priorities as shown on slide six in the first quarter results clearly demonstrate our successful execution of these goals showcasing our commitment to sustained growth and strategic vision as a pure play pipes.
Speaker Change: Why is regulated utility we are confident in our ability to continue driving value for our customers and shareholders as we move forward.
Speaker Change: Our prudent and long standing approach to financial and operational management ensures that we can continue to invest in critical infrastructure and innovation, while delivering consistent returns to our shareholders.
Joe Nolan: Thank you for joining us today.
Speaker Change: Thank you for joining us today I will now turn the call over to John Moreira to discuss our financial results.
John Moreira: I will now turn the call over to John Moreira to discuss our financial results. Thank you, Joe, and good morning, everyone. This morning, I will review first quarter earnings results, provide a regulatory update, and also discuss our balance sheet, progress, and credit metrics.
John Moreira: Thank you Joe and good morning, everyone. This morning, I will review first quarter earnings results.
John Moreira: A regulatory update and also discuss our balance sheet progress and credit metrics.
John Moreira: I'll start with our first quarter results on slide 8. Gap and recurring earnings results for the first quarter were $1.50 per share, compared with gap and recurring earnings of $1.49 per share last year. Higher utility earnings were largely offset by a decrease in parent and other earnings. Starting with transmission, higher electric transmission earnings of $0.04 per share were due to increased revenues from continued system investments to address agent infrastructure, reliability and load growth, partially offset by the impact of share dilution. higher electric distribution earnings of $0.03 per share benefited from grid modernization and system improvement rate mechanisms. Additionally, base distribution rate increases in New Hampshire and Massachusetts provide a timely recovery of investments, partially offsetting these revenue adjustments where higher property taxes, interest, depreciation, and share dilution.
John Moreira: I'll start with our first quarter results on slide eight GAAP and recurring earnings results for the first quarter were $1 50 per share.
John Moreira: Compared with GAAP and recurring earnings of $1 49 per share last year.
John Moreira: Utility earnings were largely offset by a decrease in parent and other earnings.
John Moreira: Starting with transmission higher electric transmission earnings of <unk> <unk> per share were due to increased revenues from continued system investments to address aging infrastructure.
Reliability and load growth, partially offset by the impact of share dilution.
John Moreira: Higher electric distribution earnings of <unk> <unk> per share benefited.
John Moreira: <unk> benefited from grid modernization and system improvement rate mechanisms. Additionally base distribution rate increases in New Hampshire, and Massachusetts provided timely recovery of investments partially offsetting these revenue adjustments were higher property taxes.
John Moreira: Stress depreciation and share dilution.
John Moreira: The improved results of $0.06 per share at Eversource's natural gas segment were due primarily to higher revenues from continued investments to replace aging infrastructure, resulting in base distribution rate increases at our Massachusetts gas businesses, including the EGMA rate-based roll-in that became effective November 1st of 2024, in accordance with the 2021 settlement For more information visit www.fema.gov offsetting these higher natural gas revenues where higher O&M interest. Appreciation, Property Taxes, and the Impact from Shared Dilution.
John Moreira: The improved results of <unk> <unk> per share at ever Source's natural gas segment were due primarily to higher revenues from continued investments to replace aging infrastructure, resulting in base distribution rate increases at our Massachusetts gas businesses, including the GMA.
John Moreira: Rate base ROE and that became effective November <unk> of 2024 in accordance with the 2021 settlement agreement.
John Moreira: Offsetting these higher natural gas revenues were higher O&M interest.
John Moreira: Appreciate than property taxes, and the impact from share dilution.
John Moreira: Water earnings were comparable year over year, as the first quarter is typically a very low usage period. Eversource parent losses increased $0.12 per share in 2025. Lower results were as expected, primarily due to higher interest expense and the impact from the absence of capitalized interest associated with our former offshore wind investment. Overall, our first quarter earnings were in line with our expectations, and we are pleased to start 2025 with such a solid performance.
John Moreira: Water earnings were comparable year over year as the first quarter is typically a very low usage period.
John Moreira: <unk> parent losses increased 12 cents per share in 2025 lower results were as expected primarily due to higher interest expense and the impact from the absence of capitalized interest associated with our former offshore wind investment.
John Moreira: Overall, our first quarter earnings were in line with our expectations and we are pleased to start 2025 with such a solid performance.
John Moreira: Moving to our key regulatory items as highlighted on slide nine. Starting with New Hampshire, where we currently have a pendant rate proceeding. Hearings in this proceeding are scheduled to stop next week. In addition to recovery of previous system investments and deferred storm costs, we have proposed implementing a four-year performance-based rate-making plan, including a capital support mechanism that would adjust rates annually. We anticipate a final decision in July for rates to become effective August 1.
John Moreira: Moving to our key regulatory items as highlighted on slide nine.
John Moreira: Starting with New Hampshire, where we currently have a pending rate proceeding.
John Moreira: Earrings in this proceeding are scheduled to start next week. In addition to recovery our previous system investments and deferred storm costs. We have proposed implemented a four year performance based ratemaking plan, including our capital support mechanism that would.
John Moreira: Yes rates annually.
John Moreira: We anticipate a final decision in July for rates to become effective August Trust.
John Moreira: In Massachusetts, on November 1 of 2025, new rates will be effective for NSTAR gas under the annual PBR adjustment. and a rate-based role. In addition, rates reflect in the second phase of the 2024 rate-based roll-in for EGMA of approximately $62 million.
John Moreira: In Massachusetts on November one of 2025, new rates will be effective for star gas under the annual PBR adjustment.
John Moreira: And a rate base rolling.
John Moreira: In addition rates, reflecting the second phase of the 2020 for rate base relevant for <unk> of approximately $62 million.
John Moreira: Moving to Connecticut, we are pleased to report that the average CLMP residential customer will see a 6% reduction on May 1 due to the implementation of the annual rate adjustment mechanism. We appreciate the progress made by Pura. from the proposed decision to the final decision to provide customers with this benefit.
John Moreira: Moving to Connecticut, we are pleased to report that the average <unk> residential customer will see a 6% reduction on may one due to the implementation of the annual rate adjustment mechanism.
John Moreira: We appreciate the progress made by PURA.
John Moreira: From the proposed decision to the final decision to provide customers with this benefit.
John Moreira: Also in Connecticut, we have an ongoing Yankee Gas rate case where we seek to recover a revenue deficiency of $209 million, reflecting critical investments and cost increases since our previous rate review in 2018. Hearings are scheduled for June, with the final decision scheduled at the end of October for rates effective November 1st of this year.
John Moreira: Also in Connecticut, we have an ongoing Yankee gas rate case, where we seek to recover a revenue deficiency of $209 million.
John Moreira: Reflecting critical investments and cost increases since our previous rate review in 2018 hearings are scheduled for June with a final decision scheduled at the end of October for rates effective November <unk> of this year.
John Moreira: Next, let me reaffirm our five-year capital plan of $24.2 billion as shown on slide 10, which reflects our five-year utility infrastructure investments by segment. This plan is a 10% increase over the last five-year plan. As a reminder, this forecast includes only those projects that we have a clear line of sight on from a regulatory approval perspective. The plan includes nearly $7 billion of transmission infrastructure investments over the next five years, greatly enabled by efforts in Massachusetts last year, including the state's Clean Energy Bill, that reformed siting and permitting of energy facilities, as well as the Massachusetts Department of Public Utilities' approval of the Electric Sector Modernization Plan, or ESMP.
John Moreira: Next let me reaffirm our five year capital plan of $24 2 billion as shown on slide 10, which reflects our five year utility infrastructure investments by segment.
John Moreira: This plan is a 10% increase over the last five year plan. As a reminder, this forecast includes only those projects that we have a clear line of sight on from a regulatory approval perspective.
John Moreira: The plan includes nearly $7 billion of transmission infrastructure investments over the next five years greatly enabled by efforts in Massachusetts last year, including the state's clean energy Bill that we formed siting and permitting of energy facilities as well as the Massachusetts.
John Moreira: The continent of public utilities approval of the electric sector modernization plan or SMT.
John Moreira: It also includes the Greater Cambridge Energy Project that commenced construction earlier this year. As a reminder, this project consists of a 35,000 square foot underground substation at a projected capital cost of $1.8 billion, with nearly 80% of this investment to be recovered through our transmission tower. Turning to electric distribution, the capital forecast reflects over $10 billion of planned utility infrastructure investment. with investments related to Massachusetts operations making up 60% of this capital plan. This includes $850 million for the AMI program in Massachusetts that Joe discussed. We have already realized significant benefits for our customers from the new billing system implemented to support AMI.
John Moreira: It also includes the greater Cambridge Energy project that commenced construction earlier this year.
John Moreira: As a reminder, this project consists of a 35000 square foot underground substation at a projected capital cost of $1 8 billion with nearly 80% of this investment to be recovered through our transmission tariff.
John Moreira: Turning to electric distribution capital forecast reflects over $10 billion of planned utility infrastructure investments with investments related to Massachusetts operations, making up 60% of this capital plan.
John Moreira: This includes $850 million for the Army program in Massachusetts that Joe discussed.
John Moreira: We have already realized significant benefits for our customers from the new billing system implemented to support and we look forward to providing customers with additional benefits as we begin meter installation later this year.
John Moreira: And we look forward to providing customers with additional benefits as we begin meter installation later this year.
John Moreira: In addition to our base capital investment forecast, we continue to see opportunities that could provide additional investments in the range of $1.5 to $2 billion within the forecast period. And as Joe mentioned, we have other growth opportunities that could materialize towards the back end of our forecast period and beyond.
John Moreira: In addition to our base capital investment forecast, we continue to see opportunities that could provide additional investments in the range of one $5 billion to $2 billion within the forecast period.
Joe Nolan: And as Joe mentioned, we have other growth opportunities that could materialize towards the backend about forecast period and beyond.
John Moreira: Let me now turn the subject of potential tariffs and how they could impact our O&M and capital investment. First, we see minimal, if any, impact on our operation and maintenance. Secondly, we could potentially see cost increases resulting from the tariffs impact in our capital investment plan, but we expect them to be managed. While tariffs are disruptive to our supply chain, we have been managing through supply chain disruption for the past five years, especially through the pandemic year. The work we have done to expand and diversify our supply chain prior to the tariffs has positioned us well to mitigate this potential tariff risk.
Joe Nolan: Let me now turn to the subject of potential tariffs and how they could impact our O&M and capital investment plan.
Joe Nolan: First we see minimal if any impact on our operation and maintenance expense.
Joe Nolan: Secondly, we could potentially see cost increases, resulting from the tariff impact on our capital investment plan, but we expect them to be manageable, while tariffs are disruptive to our supply chain, we have been managing through supply chain disruption for the past five years.
Joe Nolan: Especially through the pandemic years.
Joe Nolan: The work, we have done to expand and diversify our supply chain prior to the tariffs has positioned us well to mitigate this potential tariff risk.
John Moreira: Through this strategic planning, we have almost no direct exposure to China where the tariff impact is slated to be the highest. Overall, we believe the potential cost increase to our capital projects will be approximately three to six percent.
Joe Nolan: Through this strategic planning, we have almost no direct exposure to China, where the tariff impact is slated to be the highest.
Joe Nolan: Overall, we believe the potential cost increase to our capital projects will be approximately 3% to 6% should these potential tariffs put pressure on inflation keep in mind that in Massachusetts, where we currently have performance based rates that include an inflationary adjustment which would.
John Moreira: Should these potential tariffs put pressure on inflation, keep in mind that in Massachusetts where we currently have performance-based rates that include an inflationary adjustment which would allow us to recover a portion of this inflation impact. In addition, we have proposed PBR rate mechanisms in the PSNH and Yankee rate files.
Joe Nolan: Allow us to recover a portion of this inflation impact. In addition, we have proposed PBR rate mechanisms in the PSNH and Yankee rate filings.
John Moreira: Turn it to slide 11. To efficiently finance our customer-focused investments, we have taken a number of steps to enhance our cash flow position and improve our balance sheet profile. Our plan to enhance our cash flows is well-balanced alongside our equity needs of $1.2 billion.
Joe Nolan: Turning to slide 11 to efficiently finance are customer focused investments, we have taken a number of steps to enhance our cash flow position and improve our balance sheet profile.
Joe Nolan: Our plan to enhance our cash flows as well balanced alongside our equity needs of $1 2 billion.
John Moreira: the majority of which we expect to issue towards the back half of our five-year forecast. This plan also supports our FFO to debt ratio target, which we expect to improve significantly over 2024 actual results, and certainly above the rating agency downgrade threshold. We continue to expect our FFO to debt targets for 2025 to be well above 100 basis points over the rating agency threshold. As you can see on the slide, we have provided you with the rating agency thresholds at both S&P and Moody's, as well as the actual 2024 results.
Joe Nolan: The majority of which we expect to issue towards the back half of our five year forecast period.
Joe Nolan: This plan also supports our <unk> to debt ratio target, which we expect to improve significantly over 2020 for actual results and certainly above the rating agency downgrade thresholds. We continue to expect our <unk> to debt targets for 2025 to be well above.
Joe Nolan: 100 basis points over the rating agency thresholds as you can see on the slide we have provided you with the rating agency thresholds at both S&P and Moody's as well as the actual 2024 results.
John Moreira: As we shared with you last quarter, and as shown on slide 12, we have executed on all of the items necessary to improve our cash flows and strengthen our balance sheet.
Joe Nolan: As we shared with you last quarter.
Joe Nolan: As shown on slide 12, we have executed on all of the items necessary to improve our cash flows and strengthen our balance sheet.
John Moreira: Next, I will turn to 2025 earnings guidance on slide 13. With the first quarter in the book. We are reaffirming our 2025 recurring earnings per share in the range of $4.67 to $4.82. and our long-term EPS growth rate of five to seven percent off of the 2024-8.
Joe Nolan: Next I will turn to 2025 earnings guidance.
Joe Nolan: On slide 13, with the first quarter in the books.
Joe Nolan: We are reaffirming our 2025 recurring earnings per share in the range of $4 67 to $4 82.
Joe Nolan: And our long term EPS growth rate of 5% to 7% off of the 2024 days.
John Moreira: Our EPS growth profile will continue to strengthen as we execute on the strategic plan with customer-focused transmission and distribution infrastructure investments recovered through constructive rate mechanisms. In addition, the progress with the recovery of deferred storm costs throughout the system and continued O&M cost discipline provide a solid foundation for Eversource to return value to our investors for years to come.
Joe Nolan: Our EPS growth profile will continue to strengthen as we execute on the strategic plan with customer focused transmission and distribution infrastructure investments recovered through constructive rate mechanisms. In addition to progress.
Joe Nolan: With the recovery of deferred storm costs throughout the system and continued O&M cost discipline provide a solid foundation for ever source to return value to our investors for years to come.
Rima Hyder: I will now turn the call over to Rima to begin the Q&A session. Thank you, John. Marvin, we are ready for our questions and answers now. Thank you.
Speaker Change: I will now turn the call over to <unk> to begin the Q&A session.
Joe Nolan: Okay.
Joe Nolan: Thank you John Marvin we are ready for questions and answers now thank you.
Operator: At this time, we will conduct a question and answer session. As a reminder to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and a follow-up.
Joe Nolan: Thank you at this time, we will conduct a question and answer session.
Speaker Change: To ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and a follow up please.
Operator: Please stand by while I compile the Q&A roster.
Joe Nolan: Please standby will compile the Q&A roster.
Durgesh Chopra: Our first question comes from the line of Durgesh Chopra of Evercore ASI. Your line is now open. Good morning, Durgesh. Hey, good morning, Joe. Thanks for giving time. Good morning, John. Guys, I just appreciate the tariff commentary. We've been getting a lot of questions on the offshore project, obviously under construction. Can you just frame for us if you already have the equipment on hand? I know there's one monopile that is being manufactured. There's also some storage, some equipment you've stored in Canada, maybe just a little bit more color on the tariff exposure. Sure, I appreciate the question.
Joe Nolan: Our first question comes from the line of <unk> Chopra of Evercore ISI. Your line is now open.
Chopra: Good morning.
Speaker Change: Good morning, Joe Thanks for again, one time good morning, John.
Joe Nolan: Got it.
Speaker Change: I appreciate the tariff commentary.
Joe Nolan: We've been getting a lot of questions.
Joe Nolan: On the offshore project.
Joe Nolan: Mostly under construction can you just frame for us if you already have the equipment on hand, I know, there's one mono pile that is being manufactured.
Joe Nolan: Theres also some storage.
Joe Nolan: Some equipment gets stored in Canada, maybe just a little bit more color.
The tariff exposure crude evolution. Please.
Sure I appreciate the I appreciate the question.
Joe Nolan: We have all items procured. As you mentioned, there is a monopile that's being constructed that we do expect in the fall, but the remaining items, even the item that is the substation that's being stored in Canada, has already come to the United States.
Joe Nolan: All items procured.
Joe Nolan: As you as you mentioned there is a monopod thats being constructed that we do expect in the fall, but the remaining items even the item that is the substation that's being stored in Canada has already come to in the United States.
Joe Nolan: Already been here, so we don't anticipate or expect any.
Joe Nolan: <unk> related challenges of anything around revolution. Other than you know there is one more deposit is coming thats under construction, but we feel very good about it as we had mentioned this.
Joe Nolan: Project is is very very mature.
Joe Nolan: It is going along very very well. It's construction are very very pleased with the progress as you know we do oversee the construction of the substation in Rhode Island, and I will tell you that both John and I get daily updates on the progress and Im very very impressed with the team.
Joe Nolan: They are and what they have been able to do to bring that station to fruition. So we don't feel as though there's going to be anything.
Joe Nolan: That's going to challenge us around tariffs as it relates to resolution but.
Joe Nolan: But, you know, Dagesh, I also want to talk to you a little bit about our business and some of our capital investments. You know, when COVID hit, we made a concerted effort to go and kind of fill the warehouses with a lot of components and parts that, you know, might be challenging to get. So, you know, fortunately, Eversource is blessed with a very robust warehouse operation that hopefully will insulate us from anything that's very, very challenging. But, again, you know, it is an issue we need to look at. We do look at it all the time.
Joe Nolan: I also want to talk to you a little bit about our business and some of our capital investments when Covid hit.
Joe Nolan: We made a concerted effort to go in and fill kind of field warehouses with a lot of components and parts that might be challenging to yet so fortunately ever sources blessed with a with a very robust.
Joe Nolan: Operation.
Joe Nolan: Hopefully will insulate us from anything Thats.
Joe Nolan: Very very challenging but again.
Joe Nolan: It is.
Joe Nolan: It is an issue we need to look at we do look at it all the time John It does oversee the.
Durgesh Chopra: John does oversee the warehousing and procurement, so it's in very, very good hands, and I know that he'll do everything he can to mitigate any risk that tariffs could have on the company. Got it. Got it, Joe. That's very thorough. Thank you. Sounds like you don't see it as a major risk. Okay.
Joe Nolan: The warehousing a procurement so it's been very very good hands and I know that you will do everything you can to mitigate any risk that tariffs could have on the company.
Joe Nolan: Got it got it okay. That's very thorough thank you.
Joe Nolan: Sounds like you don't see it as a major risks, okay really quickly shifting gears aquarian still on track for year end, and then what kind of regulatory approval timeline.
Joe Nolan: Really quickly, shifting gears, Aquarian still on track for year-end? And then what kind of regulatory approval timeline, you know, as you think about approvals through different states, should we be expecting, please? Thank you. Sure. Yeah. The Aquarian filing has been made. We anticipate that that transaction will close in 2025. We don't see any bumps in the road. As you know, we will pass through Connecticut, Massachusetts, and New Hampshire, the regulatory bodies. But it's a pretty straightforward filing. And I think that, obviously, when you look at the buyer of the assets, you know, they're a very competent buyer that is already operating in the jurisdiction.
Speaker Change: As you think about approvals through two different states are you should we be expecting please thank you.
Joe Nolan: Sure Yes.
Joe Nolan: We are filing has been made we anticipate that that transaction will close in 2025.
Joe Nolan: Don't see any bumps in the road as you know, we will pass through Connecticut, Massachusetts, and New Hampshire.
Joe Nolan: Regulatory.
Speaker Change: Our bodies.
Speaker Change: It's a pretty straightforward filing and I think that obviously when you look at the buyer of the of the assets.
Speaker Change: They are very competent buyer that is already operating in the jurisdiction. So we don't see any issues at all.
Durgesh Chopra: So we don't see any issues at all. Got it.
Durgesh Chopra: Is there a specific timeline for Connecticut to rule on this? Yes, they have the timeline would be October, so five months range. Thank you. All righty. Thank you.
Speaker Change: Got it is there a specific timeline for Connecticut.
To rule on this.
Speaker Change: Yes, they have the timeline would be October.
Speaker Change: So five months range.
Speaker Change: Thank you.
Speaker Change: Alrighty.
Speaker Change: Thank you one moment for our next question.
Shahriar Pourreza: Our next question comes from Line of Shahriar Pourreza of Guggenheim Partners. Your line is now open. Hey guys, good morning. It's actually James on for sure. Happy Friday. Good morning, James. Thank you, James. Good morning.
Speaker Change: Our next question comes from the line of sharp <unk> of Guggenheim Partners. Your line is now open.
James: Hey, guys. Good morning, it's actually James on for sure.
James: Good morning, James James Good morning.
James: So maybe just starting off in Connecticut, a lot of moving pieces on the legislative front. I think one of them is securitization potentially for the storm cost reg assets. I guess if you receive that, you know, would it change your thoughts on the timing, the quantum of the current ATM equity? I think you had said back half, but just any kind of thoughts there for us.
James: Maybe just starting off in Connecticut.
James: A lot of moving pieces on the legislative front.
James: I think one of them is securitization potentially for the storm cost rig assets.
James: I guess, if you receive that would it change your thoughts on the timing the quantum of the current ATM equity I think you had said back half, but just any kind of thoughts there.
John Moreira: Yeah, hey, James, this is John. Yes. So obviously, as I communicated in February, we did not assume securitization as part of our financing strategy. But certainly, if we get that, and we get that cash in the door on an accelerated basis, we would revisit our equity needs at that point. Okay, perfect.
James: Yes, Hey, James John Yes, So obviously as I communicated in February we did not assume securitization as part of our financing strategy, but certainly if we get that and we get that cash in the door on an accelerated basis.
James: We would revisit our equity needs at that point in time.
John Moreira: And then just any updated thoughts or expectations for movement in the AMI process at this point? Well that docket James is under the final one we did file for reconsideration to try to get some clarity and some certainty around the recovery of dollars that we might spend and so we'll see how that plays out there but we just want to get comfortable and obviously we'll spend what Connecticut wants us to spend but we do need to have line of sight on recovery. Excellent. Thanks guys. I'll leave it there. Thank you.
James: Okay, perfect and then just any updated thoughts or expectations for movement and the Ams prospects at this point.
James: Well that docket James is under.
James: The final what we did file for reconsideration to try to get some clarity and some certainty around the recovery of dollars that we might spend and so we will see how that plays out there, but we just wanted to get comfortable.
James: And obviously, we will spend what Connecticut wants us to spin, but we do need to have line of sight on recovery.
James: Excellent. Thanks, so whatever.
James: Thank you. Thank you.
James: Thank you Amit for next question.
Carly Davenport: Our next question comes from the line of Carly Davenport of Goldman Sachs, your line is now open. Good morning, Carly. Good morning. Thanks for taking the questions.
Speaker Change: Our next question comes from the line of Carly Davenport of Goldman Sachs. Your line is now open.
Carly Davenport: Good morning, <unk>. Good morning, Thanks for taking the questions.
Carly Davenport: Maybe just to follow up on Connecticut, just could you provide your latest thoughts just around some of the noise on the forward composition of Pura, just in terms of filling those other two seats. Anything you can share and how you're thinking about the timing of when potentially we could get some certainty on that? Yeah, you know, great question. You know, we are indifferent on whether it's three or whether it's five. We do feel as though there's a movement that, you know, hopefully we'll see some activity down there on that and get some clarity. But you know, unfortunately, I cannot predict for you when when we might see it or whether it's three or whether it's five.
Speaker Change: Maybe just to follow up on on Connecticut, just could you provide your latest thoughts are on some of the noise on on the forward composition of para just in terms of filling those other two seats anything you can anything you can share and how youre thinking about the timing of when potentially we could get some certainty on that piece.
Carly Davenport: Yes, great question.
You know we are indifferent on whether it's three or whether it's five we do feel as though there is a movement that hopefully we'll see some activity down there on that and get some.
Carly Davenport: Clarity, but unfortunately I cannot predict for you when when we might see at all whether it's three or whether it's five.
Joe Nolan: You know, we are obviously for a stable regulatory climate in that jurisdiction. So we'll continue to monitor it. And we will hope that we do get a transparent regulatory environment that allows us to continue to operate in that state.
Speaker Change: Obviously eager for.
Carly Davenport: A stable regulatory climate in that jurisdiction.
Carly Davenport: So we'll continue to monitor it and we will hope that we do get a transparent regulatory environment that allows us to continue to operate in that state.
Carly Davenport: Great, appreciate that.
Speaker Change: Great I appreciate that and then maybe just shifting to the balance sheet and Thats a photo that I. Appreciate the detail that you shared in the slides. There. So is there anything you can provide in terms of conversations in particular with Moody's in terms of what they need to see to sort of shift from the negative watch and how you feel about the path to executing.
John Moreira: And then maybe just shifting to the balance sheet and FFO to debt. Appreciate the detail that you shared in the slides there. Just anything you can provide in terms of conversations, in particular with Moody's, in terms of what they need to see to sort of shift from the negative watch and how you feel about the path to executing on that goal. Yes, Carly, I would say what they need to see is us to continue to execute on our plan that we have put before them. We're going through a refresh of that plan. next month with all three agencies, but suffice it to say, as you'll see in our first quarter statement of cash flows, you'll see a significant improvement in our operating cash flows, and it's really execution of what we've been saying for the past year.
Carly Davenport: On that call.
Colin: Yes Colin.
Colin: I would say when they need to see is us.
Colin: For us to continue to execute on our plan that we have put before them.
Colin: Going through a refresh of that plan.
Colin: Next month with all three agencies, but suffice it to say as Youll see in our first quarter results.
Colin: Statement of cash flows you'll see a significant improvement in our operating cash flows and it's really.
Colin: Execution of what we've been saying for the past year the recovery of previously under recovered regulatory cost have.
John Moreira: The recovery of previously under-recovered regulatory costs have come in and will continue to come in. That, in and of itself, is probably, will generate and benefit FFO2Debt and Moody's of about 300 bases. So everything that we've been executing on, everything that we've been communicating to you all has materialized and will continue to materialize.
Colin: They have come in and we will continue to come in that in and of itself. It's probably will generate a benefit of <unk> to debt and Moody's have about 300 basis points. So everything that we've been executing on everything that we've been communicating to you all has materialized and we will continue to materialize.
John Moreira: Great. Thank you for the color. Thank you.
Speaker Change: Great. Thank you for the color.
Jeremy Tonet: One moment for our next question. Our next question comes from the line of Jeremy Tonet of JP Morgan Securities. Your line is now open. Hey, Jeremy. Good morning, Jeremy. Good morning. Thank you for the call here today.
Colin: Thank you for our next question.
Speaker Change: Our next question comes from the line of Jeremy Tonet of J P. Morgan Securities. Your line is now open.
Speaker Change: Hey, Jeremy Hi, good morning, Jeremy.
Speaker Change: Good morning.
Colin: Thank you for the color here today.
Jeremy Tonet: Just want to pick up with the FFO to debt commentary that you provided in the slide there. Just wondering if you had thoughts you could share with regards to where you think you'd land in 2026. Sure. I mean, the groundwork that we've laid to get us to a much better spot in 2025, that'll continue with the reduction of about $2.4 billion of debt just related to the aquarium sale. That's going to continue to persist. And what I think is very, very important for you all to understand is that this huge under-recovery, what's really important and what I feel so optimistic about and confident is that the future costs and rates have been set to align with those costs.
Speaker Change: Just wanted to pick up with the <unk> to debt.
Speaker Change: The commentary that you provided on the slide there just wondering if you had thoughts you could share with regards to where you think you would land in 2026.
Speaker Change: <unk> to debt in both.
Speaker Change: Agency metrics there.
Speaker Change: Sure.
Speaker Change: The the groundwork that we've laid to get us to a much better spot in 2025 that will continue.
Speaker Change: With the reduction of.
Speaker Change: Two $4 billion of debt just related to the acquiring on sale that's going to continue to persist and what I think is very very important for you all to understand is that this huge under recovery, what's really important and what I feel so optimistic about and confident is that the future costs.
Speaker Change: Rates have been set to align with those costs. So we should not.
John Moreira: So we should not see significant swings in under-recoveries in the future. So that, having that sustainable cost incurred with the revenues to match it is a major, major benefit. Got it. And so I guess, do you expect FFO to debt will improve from the numbers outlined in 2025 100-bit cushion. Our FFO2 debt will continue to enhance. Obviously, that's contingent. We have to look at where our capital forecast is over our five-year period.
Speaker Change: See significant swings and under recoveries in the future.
Speaker Change: Having that sustainable cost incurred with the revenues to match. It is a major major benefit for us.
Got it and so I guess do you expect.
Speaker Change: <unk> that will improve from that.
Speaker Change: Numbers outlined in 2000 2500 Bip question.
Speaker Change: Our <unk> to debt will continue to enhance obviously that's contingent we have to look at where our where our capital forecast is over a five year period.
John Moreira: As I've communicated to you all, there's potentially one and a half to two billion kind of sitting on the sidelines, and that we'll hope to have clarity, certainly within the next six to 12-month period.
Speaker Change: As I've communicated to Walt is potentially one five to 2 billion is kind of sitting on this on the sidelines at that we'll hope to have clarity certainly within the next.
By six to 12 month period.
John Moreira: And as we typically do, we'll update you all on our finance and plan annual. Thank you.
Speaker Change: And as we typically do we'll update you all on our financing plan annually.
Speaker Change: Got it thank.
John Moreira: And then just as it relates to the RevWin cost estimates, just wondering, I guess, how the process works with Orsted there. You guys kind of work together in formulating those estimates, those expectations of tariff impact. We would expect them to kind of say the same thing, where the independent process is just wondering if, you know, how that process... No, it's a collaborative. We get updates, as Joe mentioned, from them. You know, they share their forecast, update. routinely. So we're much aligned. Obviously, the deal that we struck with GIP gives us that line of sight and clarity.
Speaker Change: Thank you and then just as it relate.
Speaker Change: It relates to the Rev win cause.
Speaker Change: Cost estimates just wondering I guess, how the process works with or set there you guys kind of work together in formulating those those estimates those expectations of tariff impact.
Speaker Change: We would expect them to kind of say the same thing where the independent processes just wondering if.
Speaker Change: How that process works.
Speaker Change: It's a collaborative we get updates as Joe mentioned from them this year.
Speaker Change: Sure their forecast update.
Speaker Change: Routinely.
Speaker Change: We're much.
Speaker Change: <unk>, obviously the deal that we struck with VIP gives us better line of sight and clarity so.
John Moreira: So we have access to OSDET and we're constantly engaged with GIP.
Speaker Change: We have access to our debt and we're constantly engaged with Gi pain.
John Moreira: Okay, great. Thank you.
Speaker Change: Okay, great. Thank you I'll leave it there.
Amit: Thank you Amit next question.
Sophie Karp: Our next question comes from the line of Sophie Karp of KBCM. Your line is now open.
Speaker Change: Our next question comes from the line of Sophie Karp of KBC Ann Your line is now open.
Sophie Karp: Good morning, Sophie. Good morning. Thank you for taking my question. I was wondering about the upcoming millstone recontracting rates. So kind of along the lines of would that present an opportunity to either maybe improve affordability for ratepayers or at least make it clearer to ratepayers in Connecticut what they're paying for, because I think right now it's rolled into a something called public benefit charge and from the PR standpoint, would that benefit you in any way? Yeah, I mean, if that contract is up in 2029, obviously having 1,000 megawatts of clean energy at baseload generation in the region is helpful and in a region where we are actually losing generation.
Sophie Karp: Sophie and good morning.
Sophie Karp: Good morning.
Sophie Karp: Thank you for taking my question.
Sophie Karp: I was wondering about the upcoming millstone any country.
Sophie Karp: <unk> 10, right so.
Sophie Karp: And then along the lines of would that present, an opportunity to either maybe improve affordability for repairs or at least make it clearer to rate payers from Connecticut.
Sophie Karp: What they are paying for it because I think right now it's sold into something called public benefit charge.
Sophie Karp: From a Trs standpoint would that benefit you in anyway.
Sophie Karp: Yes.
Sophie Karp: Is that contract is up in 2029, obviously, having a 1000 megawatts of clean energy is baseload generation in the region is helpful. And then a region, where we are actually losing generation. So it's very helpful. But I think it's too early right now sanofi to be looking at.
Joe Nolan: So it's very helpful, but I think it's too early right now, Sophie, to be looking at that contract and maybe what's going to happen going forward. As you know, this was a desire of the administration, the previous administration, to contract for this power, and we'd have to work collaboratively with the administration on what's important to them.
Sophie Karp: That contract and maybe what's going to happen going forward. As you know this was a desire of the administration of previous administration to two contracts with us powering.
Sophie Karp: We'd have to work collaboratively with the administration on what's important to them.
Sophie Karp: And thank you very much. That's all for me. You're welcome.
Speaker Change: Okay. Thank you very much that's all for me.
Operator: Thank you.
Sophie Karp: Welcome. Thank you.
Sophie Karp: All right.
Sophie Karp: One moment for our next question.
Anthony Crowdell: Our next question concerns the line of Anthony Crowdell of Mizuho. Your line is now open. Good morning, Anthony. Good morning. Hey, good morning. Let's go Knicks, right? I think I heard that in the background. We'll see what happens Monday.
Speaker Change: Our next question comes from the line of Anthony <unk> of Mizuho. Your line is now open.
Sophie Karp: Good morning, Anthony and good morning, Good morning, Hey, Good morning, Let's go next right I think I heard that in the background.
Speaker Change: Well see what happens.
Anthony Crowdell: I don't think the Knicks have a chance, but just some odds and ends. In Connecticut, the securitization, the public benefit and the storm cost recovery, are those rolled up together in same legislation or it's not decided yet?
Speaker Change: And I don't think the Knicks haven't changed but just some odds and ends.
Speaker Change: In Connecticut, the securitization the public benefit and the storm cost recovery.
Speaker Change: Are those rolled up together in same.
Speaker Change: It's not decided yet.
Speaker Change: Well, yes, no. It is it is rolled up I mean, not that it would be allowing securitization.
Speaker Change: <unk> costs, but in the SB $50 60.
Speaker Change: All of those issues are.
Speaker Change: <unk> discussed and contemplated.
Speaker Change: So, but again, that's just to allow the recovery of storm costs. As you know we do have a prudence review underway, a pure and we will continue to work through that process, but.
Speaker Change: It's going very very well.
Joe Nolan: Great, and then if I move to a... Massachusetts, I think on Wednesday there was a Berkshire gas decision that maybe changed some of the rules on the GSEP. Does that impact you guys or what kind of exposure do you have with the new rules on the GSEP? Well, the GCEP filing impacted NSTAR Gas and EGMA. where they, you know, they lowered the... The ceiling from 3% cap to two and a half, so in and of itself I don't see that as something that's devastating. We can certainly manage to that. Obviously our focus will continue to make sure that we provide safe and reliable gas services to our customers.
Speaker Change: Great and then if I move to.
Speaker Change: Massachusetts, I think on Wednesday, there was a fair share of gas decision.
Speaker Change: And that may be changed some of the rules on the Atkins I think its GSE P.
Speaker Change: Does that impact you guys or what kind of exposure do you have with the new rules on the GSE paid.
Speaker Change: The <unk> filing impacted.
Speaker Change: And star gas and <unk> Anthony.
Speaker Change: Are they.
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: The ceiling from 3% cap to a two and a half so in and of itself I don't see that as something thats devastating we can certainly manage to that obviously, our focus will continue to make sure that we provide safe and reliable.
Speaker Change: Gas services to our customers, that's first and foremost.
Joe Nolan: That's first and foremost. And once again, I think we're still going through that review process and we haven't determined what action we would take, so I think it's a bit early in that process. So there's more to come, but we don't see that as a major impact to us. It's not as though they don't want us to make the investments, they continue to support it, which is, but they're basically saying, hey, consider other non-pipe alternatives. So that's really what the message and what they've communicated to us and we're very supportive of that concept. Great.
Speaker Change: And once again I think we're still going through that review process.
Speaker Change: We haven't determined what action, we would take so I think it's a bit early in that process. So there's more to come but we don't see that as a major.
Speaker Change: As a major impact to us it's not as though they don't want us to make the investments they continue to support it which is.
Speaker Change: But.
Speaker Change: Basically, saying hey.
Speaker Change: Consider other non pipe alternatives. So that's really what the message and what they have communicated to us.
Speaker Change: Very supportive of that concept.
Anthony Crowdell: If I could just squeeze one more in, it follows off of Durgesh's questioning earlier. Have you guys stated what percentage of the revolution project is complete, you know, 50, 40, 30? Have you guys quantified what percent of the project is completed? We have not. I will just tell you that construction is going very, very well. Great.
Speaker Change: Great if I could just squeeze one more one more and it follows up on <unk> question earlier have you guys stated what percentage of the Revolution project is complete 50 40 30 have you guys quantified what percent of the project is completed.
Speaker Change: We have not I will just tell you that construction is going very very well.
Anthony Crowdell: Thanks for taking my questions in Nixon 7. Bye for now. Thank you.
Speaker Change: Great. Thanks for taking my questions and Nixon seven.
Speaker Change: Thank you.
Speaker Change: Thank you our next question.
Travis Miller: Our next question comes from the line of Travis Miller of Morningstar. The line is now open. Good morning, Travis. Good morning, everyone. Good morning.
Speaker Change: Our next question comes from the line of Travis Miller from Morningstar. Your line is now open good morning, Tom and good morning, everyone. Good morning.
Travis Miller: Back sticking on the regulatory under-recoveries, I wonder if you could just give a little bit of a list here, what you got in, in the first quarter, and... The ones you expect or what you expect to get in over the next, say, two quarters or even through the end of the year? I know you said New Hampshire one's outstanding, Connecticut's a bit outstanding, but you have one? Well, I would say the most significant one, Travis, is the RAM docket, which recovers some of the millstones, Seabrook, you know, kind of all the public benefits charged, some bad debt recovery.
Speaker Change: Hey, Barry.
Speaker Change: On the regulatory under recover I was wondering if you could just give a little bit of a list here what you got in in the first quarter ends.
Speaker Change: The one that you expect or what you expect to get in over the next say two quarters or even through the end of the year.
Speaker Change: The New Hampshire one's outstanding, Connecticut is a bit outstanding, but yes I.
Speaker Change: I would say the most significant one Travis is the the Ram docket, which recovered some of the Millstone Seabrook.
Speaker Change: Kind of all that the public benefits charge, some bad debt recovery as you know, we had a $900 million rate increase to collect those under recoveries and to set rates for the current year at a much more reasonable level. So that was a $900 million rate increase that went live July for us okay. So.
John Moreira: As you know, we had a $900 million rate increase to collect those under-recoveries and to set rates for the current year at a much more reasonable level. So that was a $900 million rate increase that went live July 1st, and that runs from July through April 30th of this year. And then recently, as I stated in my formal remarks, we just got the final decision on the RAM for this year that'll go live May, that went live May 1st, which lowered the recovery by $142 million. So we have a very good line of sight, but suffice us to say, in that 300 basis point that I just mentioned, that includes the bulk of the RAM decision.
Speaker Change: And that runs from July through April 30 of this year.
Speaker Change: And then recently.
Speaker Change: As I may as I stated in my formal remarks.
Speaker Change: We just got the.
Speaker Change: The final decision on the Ram.
Speaker Change: For for this year that will go life may.
Speaker Change: Like me for Us, which.
Speaker Change: Low with the the recovery by $142 million. So so we have very good line of sight, but suffices to say in that 300 basis point that I. Just mentioned that includes the bulk of the the Ram decision.
John Moreira: Recovery of those cars.
Speaker Change: Recovery of those costs.
John Moreira: Okay, and then the New Hampshire, and then any kind of result in future Connecticut? I would characterize it in this fashion, Massachusetts and New Hampshire, we have timely recovery. So if they could, you know, within a very short period of time, we adjust rates, whether it's an over-recovery or under-recovery. And they're not significant balances, Travis. Yep, yep.
Speaker Change: Okay, and then the New Hampshire, and then any kind of result.
Speaker Change: I'd make sure Connecticut.
Speaker Change: To characterize it in this fashion in Massachusetts, and New Hampshire, we have timely recovery so if they could.
Speaker Change: Within a very short period of time, we adjust.
Speaker Change: Rates, whether it's no recovery under recovery and then.
Travis Miller: Not significant balances Travis.
John Moreira: Okay, very good.
John Moreira: And then just real quick, that one and a half to 2 billion CapEx opportunity, anything different or changed in that? Bucket since the last quarter or since February? Well, there's, you know, we always continue to progress and look at it a little bit early. And obviously embedded in that is the AMI in Connecticut. And I think Joe addressed that. Okay, very good.
Speaker Change: Okay very good and then just real quick.
Speaker Change: I wanted to ask the $2 billion capex opportunity anything differ.
Speaker Change: Different or changed in that.
Speaker Change: Bucket since last quarter or since February.
Speaker Change: It is.
Speaker Change: We always continue to progress and look at it it's a little bit early and obviously embedded in that is the Ami in Connecticut.
Speaker Change: I think Joe address that.
Travis Miller: Thanks a lot. Thank you.
Speaker Change: Okay very good thanks, a lot.
Speaker Change: Yep.
Speaker Change: Thank you one moment for our next question.
Julien Dumoulin Smith: Our next question comes from a line of Julien Dumoulin Smith of Jeffries. Your line is now open. Good morning, Julien. Hey, good morning, team. Hey. Hey, hey. How you guys doing? Great. Good. Excellent. Thank you for the time.
Speaker Change: Our next question comes from the line of Julien Dumoulin Smith of Jefferies. Your line is now open.
Speaker Change: Good morning, David Good morning team.
Speaker Change: Hey, guys good.
Speaker Change: Excellent. Thank.
Julien Dumoulin Smith: Look, I just wanted to come back to where Jeremy was a second ago. If we could talk a little bit more about the FFOTA DAT numbers and just try to understand like the numerator and denominator a little bit, because clearly hearing your comments about the 100 basis points of latitude, just wanted to understand a little bit more about how you're seeing that happen, because if I remember right, I think last quarter you guys were talking about this, I think it was a 45% number on improvement in operating cash flows. So I think that was a good proxy for thinking about the numerator improving, but is that still the case?
Speaker Change: Thank you for the time look I just wanted to come back to where Jeremy was is that going to go if we can talk a little bit more about that numbers and just trying to understand like the numerator and denominator a little bit because clearly hearing your comments about 100 basis points of latitude just wanted to understand a little bit more about how youre seeing that happen because if I remember right I think last quarter you guys were talking about this I think it was a four.
Speaker Change: 5% number on improvement in operating cash flow. So yeah. That's a good I think that was a good proxy for thinking about the numerator improving but is that still the case or how do you think about that moving versus the CFO to get to that 100 basis points of latitude you talk about from the 9% Julian I would say that the enhancement in cash flow.
John Moreira: Or how do you think about the debt moving versus the CFO to get to that 100 basis points of latitude you talk about from the 9%? Julien, I would say that the enhancement in cash flows is obviously, when you look at the calculation, it's much more impactful to have a dollar come in in cash flows than it is to have a dollar reduction in debt. So the improvement, and I stated in my former remarks that we are looking to be well over 100 basis points, not only for 2025, but on a sustainable basis throughout our forecast period, driven by enhanced cash flows from operations.
Speaker Change: It's obviously.
Speaker Change: When you look at the calculation, it's much more impactful to have $1 come in in cash flows than it is to have $1 reduction in debt. So.
Speaker Change: The improvement and I stated in my formal remarks that we are looking to be well over 100 basis points not only for 2225, but on a sustainable basis throughout our forecast period, driven by enhanced cash flows from operations.
Julien Dumoulin Smith: The 45% is still relevant though, right? Or is it better than that now? I mean, I haven't done the math recently, but it's probably slightly enhanced. And as I said, you'll see when we file our 10-Q on Monday, you'll see that there's been about a $750 million improvement quarter over quarter in our cash flow sum operations. So that's very sizable and that moves the needle quite a bit. Got it. All right. Awesome. Thank you, guys, for that. I appreciate it.
Speaker Change: The 45% still is still relevant though right.
Speaker Change: Better than that now.
Speaker Change: Sure.
Speaker Change: I mean, I haven't done the math recently, but it's probably slightly enhanced.
Speaker Change: And as I said Youll see when we file our.
10-Q on Monday, you will see that there's been about a 750 $50 million improvement quarter over quarter and our cash flows from operations. So thats very sizable and that moves the needle quite a bit.
Speaker Change: Got it alright awesome. Thank you guys for that I appreciate it and then Chris if I can come back just a little bit nitty gritty here, but looking a little cleanup on the on the corporate drag just to talk about the Super quickly I've seen 16 cent drag in <unk>.
John Moreira: And then, quickly, if I can come back, just a little bit nitty-gritty here, but we'll do a little cleanup. On the corporate drag, just to talk about that super quickly, I see the $0.16 drag, and I think for full year 24, you had about $0.16. How do you think about 1Q, you know, being a run rate versus what's in there that you should be excluding, right? Like, you know, there's a lower tax rate, some other dynamics here. What should we be watching, you know, from the taking away from that? I know you mentioned some of it in the prepared remarks, but I'm curious if there's anything you'd flag.
Speaker Change: I think for full year 'twenty for you at about 16 says how do you think about <unk> being a run rate versus what's in there that you should be excluding right like there's a lower tax rate. Some other dynamics here what should we be watching from the takeaway from that I know you mentioned some of it in the prepared remarks, but.
John Moreira: Like, kind of, what's a glean from the 1Q for full year corporate?
Speaker Change: Curious, if there's anything you'd flag like kind of what the gleaned from the <unk> for full year.
John Moreira: So, let me start by saying that items that run through the parent and other category, that segment, is becoming less. a lot of items that are impacting. It's really two, it's interest and tax. For the $0.16 impact in Q1 of 2025, let me remind you, in Q1 of 2024, we were still capitalizing interest on the offshore wind. That has now tailed off, effective Q3 with the final sale to GIP. So we will see a bit more of an impact in the first couple of quarters until we catch up. In addition, the first quarter, we didn't have the full impact of the $1.4 billion holding company debt that we issued in mid-April.
Speaker Change: Corporate let.
Speaker Change: Let me start by saying that items that run through the parent and another category that segment is becoming less.
Speaker Change: Less items that impact and it's really it's really too.
Speaker Change: Interest and taxes.
Speaker Change: The <unk> 16 impact in Q1 of 2025, let me remind you in $2000 in Q1 of 2024, we were still capitalizing the interest on the offshore wind.
Speaker Change: That has now tailed off effect of Q3 with the sale of the final sale to Gi P. So we will see a bit more of an impact in the first couple of quarters until until we catch up in addition to first quarter. We didn't have the full impact of the $1 4 billion holding company debt that we issued in mid April.
John Moreira: So this quarter, you're seeing the full brunt of both of those items. As we progress through the year, year over year, quarter over quarter, it'll be far less significant. The only item that will create that is the tax benefits. And as I said, those tax benefits are typically recognized in Q3 and in Q4. Got it. So is there a good full year tax rate you'd be running with given those benefits that you talk about lit in the back half of the year? Yes, so our Our tax rate for 2025 is in the range of 22.5% to 23.5%.
Speaker Change: So this quarter, you're seeing the full brunt of both of those items as we progress through the year year over year quarter over quarter, it'll be far less significant the only item that will create that is being the tax benefits and as I said in.
Speaker Change: Those tax benefits are typically recognized in Q3 and in Q4.
Speaker Change: Got it so is there a good full year tax rate you'd be running with given the benefits that you've talked about in the back half of the year.
Speaker Change: Yes, so our.
Speaker Change: Our tax rate for 2025 is in the range of 22, 5% to 23, 5% last year. It was in the upper teens.
John Moreira: Last year it was in the upper teens. Yeah, no, absolutely. Okay, that includes everything and so relevant. All right.
Speaker Change: Yeah, no absolutely okay that includes everything and corolla alright excellent guys Hey, Thank you so much for your time and patients have a great day guys great. Thanks, Jeff.
Operator: Excellent, guys. Hey, thank you so much for your time and patience, right? Have a great day, guys. Great to chat. Thank you.
Speaker Change: Thanks.
Speaker Change: Yeah.
Operator: We'll move on to our next question.
Speaker Change: Thank you our next question.
Paul Patterson: And our next question comes from the line of Paul Patterson of Glenrock Associates. The line is now open. Good morning, Paul. Hey, good morning. So, a lot of questions have been answered, but just really...
Speaker Change: And our next question comes from the line of Paul Patterson of Glen Rock Associates. Your line is now open.
Speaker Change: Hey, good morning.
Speaker Change: So a lot of questions have been answered, but just really.
Paul Patterson: Following up on the PBR, Assuming that these guys get it done by the end of the year, as you mentioned in the prepared remarks, when do you think that the first practical impact on rates... would be experienced if, I mean, if you can, if you have a sort of a rough estimate as to when we might see. It's actually impacting you, if you follow what I'm saying, as opposed to just the... Sure thing, Paul. So the first thing is you have to file a rate case, number one. And in the Yankee case, we currently have proposed a PBR structure.
Speaker Change: Following up on the on the PBR.
Speaker Change: Assuming that these guys get it done by the end of the year as you mentioned.
Speaker Change: In the prepared remarks, when do you think that.
Speaker Change: First.
Speaker Change: Practical.
Speaker Change: Impact on rates.
Speaker Change: Would be experiencing if I mean, if you can if you have sort of.
Speaker Change: Rough estimate as to when.
Speaker Change: You might see.
Speaker Change: It actually impacting you if you follow what I'm, saying as opposed to just yet.
Speaker Change: Sure thing Paul So the first thing is you have to file a rate case number one and in the Yankee case, we currently have proposed.
Joe Nolan: So we were proactive. So we need to see how things continue to pan out. We did see a revised straw proposal at the end of February. So we hope to see a draft and a final decision kind of mid-year, July-August time frame. So I think we still have more to come.
Speaker Change: PBR structure. So we were proactive so we need to see how things continue to pan out we did see the.
Speaker Change: Our revised swap proposal at the end of February So we hope to see a drop in our final decision kind of midyear July timeframe July August timeframe. So I think we still have more to come.
Joe Nolan: Right, so the Yankee case, just to refresh my memory, would the PBR, and it's these giant sort of, you know, dockets or whatever, when would those be, would those be, I apologize now for being unfamiliar exactly, but when would those potentially impact the Yankee case, would those impact the Yankee case, or would that be at a later time? I think that's to be determined, Paul, to be quite honest with you, because we have proposed our PBR structure that we're very familiar with and we've had it for nearly a decade in Massachusetts. So the timing is going to be a bit tight.
Speaker Change: So.
Speaker Change: Keith just a refresh my memory.
Speaker Change: <unk>.
Speaker Change: Yes, Sir.
Speaker Change: Dockets or whatever.
Speaker Change: Do you think.
Speaker Change: Salt itself for being.
Speaker Change: Exactly but when would that potentially impact the <unk>.
Speaker Change: Those impacts.
Speaker Change: Would that be at a later time.
I think thats to be determined Paul to be quite honest with you because we have proposed a PBR structure that we're very familiar and we've had it for nearly a decade and Massachusetts. So the timing is going to be a bit tight.
Joe Nolan: We do expect... a decision in the Yankee case in October time frame, so if Pura issues its guidance in the July or August time frame, that's really, really close. So we just, we're getting a little bit ahead of ourselves here, so that would ultimately shake out. I appreciate that.
We do expect.
Speaker Change: A decision.
Speaker Change: In the Yankee case in.
Speaker Change: In October timeframe, so a pure issues its guidance.
Speaker Change: In the July August timeframe, that's really really close.
Speaker Change: So we.
Speaker Change: We just.
Speaker Change: We're getting a little bit ahead of ourselves here. So yes, it would be near term.
Speaker Change: That would ultimately shake out.
Joe Nolan: And then in Massachusetts, it seems like the governor, for the most part, has been oriented towards sort of expanding low income assistance and sort of the phase-in issue or the avoiding rate shock approach, if I understand it correctly. Is there anything else we should think about? And just one of the things I have heard sort of in the past is sort of an income determination, energy burden approach. Do you think that would be expanded greatly? Or do you just see this as sort of what I just talked about, just expanding low income assistance and and the avoidance of rave shock.
We see it then.
Speaker Change: In Massachusetts.
Speaker Change: It seems like the governor for the most part has been oriented towards sort of expanding low income assistance and sort of the phasing issue, where the avoiding rate shock approach if.
Speaker Change: If I understand it correctly.
Speaker Change: Is there anything else, we should think about just one of the things I have heard sort of in the past is.
Speaker Change: Sort of an income determination.
Speaker Change:
Energy burden approach.
Speaker Change: Do you think that would be expanded greatly or do you just see this as sort of what I just talked about just expanding low income assistance and.
Speaker Change: Sure.
Speaker Change: And.
Speaker Change: Boyd and separate shock.
Joe Nolan: Yeah, I mean, I guess the one great thing I'll tell you about Governor Healey and this administration is that they're very collaborative and thoughtful. I participated in many a discussion around the table. We were looking at opportunities to try to help customers that are in need, and I think it's been very, very productive. We continue to look at that, and I think if you look at the 10% reduction we were able to help our customers achieve, that's just another example of, you know, when you collaborate, when the utilities collaborate with regulators and administrations, you get very positive outcomes that are a win-win for everybody.
Speaker Change: Yes, I mean, I guess, the one great thing I'll tell you about it.
Speaker Change: Both Governor Haley and this administration is that they are very collaborative and thoughtful I was I participated in and many of discussion around the table were looking at opportunities to try to help.
Speaker Change: Customers that are in need and I think it's been very very productive. We continue to look at that and I think if you look at the 10% reduction we were able to help our customers achieve that's just another example of when you collaborate when the utilities collaborate with our regulators and administrations youll get very positive outcomes that are win win for every.
Operator: So I think everything is on the table. I'm not saying that that particular one, I do remember it being discussed, but how it plays out, you know, it's still pretty early on. Okay, great. I really appreciate it. Have a great one. Thank you. One moment for our next question.
Speaker Change: So I think everything is on the table I'm not saying that.
Speaker Change: That particular, one I do I do remember it being discussed.
Speaker Change: But how it plays out.
Speaker Change: Still pretty early on in that.
Speaker Change: Okay, Great I really appreciate it have a great well. Thank you. Thank you.
Speaker Change: Thank you for questions and again as a reminder to ask a question you will need to press star one on your telephone.
Operator: And again, as a reminder to ask a question, you'll need to press star 1-1 on your telephone.
Andrew Weisel: And our next question comes from the line of Andrew Weisel of Scotiabank, your line is now open. Good morning, Andrew. Hey, good morning, everyone. First, to follow up on the FFO to debt, just to clarify, which threshold are you referring to when you talk about the 100 basis point cushion? Is it the 12% at S&P, so you're talking about 13% or higher? I'm talking about the both thresholds at S&P. Okay, so each of them on a corresponding calculation basis? Correct, Andrew. Correct. Okay, great.
Speaker Change: And our next question comes from the line of Andrew Weisel with Scotia Bank. Your line is now open.
Speaker Change: Good morning, Andrew.
Andrew Weisel: Hey, good morning, everyone.
Speaker Change: First to follow up on the episode of debt just to clarify what's the threshold are you referring to when you talk about the 100 basis point because is it the 12% at S&P, So youre talking about 13% or higher.
Andrew Weisel: I'm talking about the both thresholds at S&P and Moody's.
Speaker Change: Okay. So each of them on a corresponding calculation basis correct Andrew correct.
John Moreira: Thank you for clarifying. Next, maybe I need a little bit of a reminder. But when you talk about tariffs and the Massachusetts mechanism around performance-based rate making and inflation, please just remind me, how would that work? And would you expect to fully pass on the effect? I think you mentioned an estimate of three to 6% impact. Is your expectation that that would be fully passed on or just some portion Well, the reference to the three to six percent that I mentioned was on our capital program. So that would be capital projects related. I also said in my formal remarks that we see very little impact on O&M or O&M.
Speaker Change: Okay, great. Thank you for clarifying.
Maybe I need a little bit of a reminder, but when you talk about tariffs and the Massachusetts mechanism around performance based ratemaking and inflation. Please just remind me how would that work and would you expect to fully pass on the effect I think you mentioned an estimate of 3% to 6% impact is your expectation that that would be fully passed on or just simple.
Speaker Change: <unk> of it would be the reference to the 3%, 6% that I mentioned was on our capital program, so that would be capital projects related.
Speaker Change: I also said in my formal remarks that we see very little impact on O&M our O&M.
John Moreira: What I'm trying, the reference that I made about the PBR mechanism, if these tariffs put inflationary pressure on the commodities that we purchase from a material from an O&M perspective or general inflation that we've seen across the board. The PBR mechanism that we have in Massachusetts, and we've had it for, as I said, nearly a decade now. The first layer of that mechanism is an adjustment for inflation using the JDPPI mechanism. That adjustment, that inflationary adjustment is capped at 5%. So in our last year's... PBR adjustment for NSTAR Electric, for example, that took effect January 1 of this year, that inflation adjustment was about 3, 3.25%.
Speaker Change: Im trying.
Speaker Change: The reference that I made about the the PBR mechanisms. If these tariffs quite inflationary pressure on the commodities that we purchased from a material from an O&M perspective, or general inflation that we've seen across the board.
Speaker Change: The PBR mechanism that we have in Massachusetts, and we've had it for as I said it on nearly a decade now the first layer of that mechanism is.
Speaker Change: And adjustment for inflation using the GDP pi mechanism that adjustment that inflationary adjustment is capped at 5%.
Speaker Change: So last in our last years.
Speaker Change: PBR adjustment for for.
Speaker Change: <unk> Electric for example, I took effect January one of this year.
Speaker Change: That inflation adjustment was about three 3.25%.
John Moreira: So if inflation were to creep up to 6%, we would at least get up to 5% of that rate. I see.
Speaker Change: So if inflation were to creep up to 6%.
Speaker Change: <unk> get up to 5%.
Speaker Change: Of that <unk> impact.
John Moreira: Thank you for clarifying that. So two different things, the O&M versus the capital, different bucks. Correct. Thank you for clarifying. Got it.
Speaker Change: I see thank you for clarifying that so two different things the O&M versus the capital different correct. Thank you for clarifying got it and one last one if I may can you just give us your latest thoughts on timing of a potential C. LNP rate case would that be something for 2025.
John Moreira: And one last one, if I may, can you just give us your latest thoughts on timing of a potential CL&P rate case? Would that be something for 2025? We're still assessing. As I've continuously communicated to you, the earliest we would likely file would be in the fall. We're still assessing the timing.
Speaker Change: We're still we're still assessing as we continuously communicate it to you. The earliest we would likely file would be in the fall but.
Speaker Change: As you know.
Speaker Change: We're still assessing the timing of that.
Andrew Weisel: Okay, thank you very much. Thanks, Andrew. Thank you.
Speaker Change: Okay. Thank you very much thanks, Andrew.
Operator: I'm showing no further questions at this time.
Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to Joe Nolan for closing remarks.
Joe Nolan: I'll now turn it back to Joe Nolan for closing remarks. Great. Well, thank you all for taking the time to join us this morning. We really appreciate it. And you've got eight minutes to get on the emerant call with my good friend, Marty Lyons. So, enjoy. Thank you, everyone. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Joe Nolan: Great well. Thank you all for taking the time to join US. This morning, we really appreciate it and you've got eight minutes to get on the Amarin called my good friend Marty Lyons so enjoy.
Speaker Change: Thank you everyone.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
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Speaker Change: Thanks.
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Speaker Change: Yes.
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