Q2 2025 Eversource Energy Earnings Call
Michelle: Good day, and thank you for standing by. Welcome to the Eversource Energy Q2 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one-one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star one-one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to our first speaker, Rima Hyder, Vice President of Investor Relations. Please go ahead.
Good day, and thank you for standing by. Welcome to the eversource energy, Q2 2025 earnings conference call. At this time, all participants are in a listen-only mode.
After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising you, your hand is raised to a draw your question. Please, press star. 1 1 again, please be advised. That today's conference is being recorded. I would now like to turn the conference over to your first Speaker. Reema Haider.
Vice president of investor relations. Please go ahead.
Rima Hyder: Good morning, and thank you for joining us today on the second quarter 2025 earnings call for Eversource Energy. During this call, we will 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 forward-looking. 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 and our explanation of non-GAAP measures and how they reconcile to GAAP results is contained within our news release, the slides we posted last night, and in our most recent 10-Q and 10-K.
Good morning, and thank you for joining us today on the second quarter 2025 earnings call for eversource. During this call, we'll be referencing slides that we posted this morning on our website as you can see on slide 1, some of the statements made during this investor call may be forward-looking
These statements are based on Management's, current expectations, and are subject to risk and uncertainty, which may cause the actual results to defer materially from forecasts and projections.
We undertake no obligation to update or revise, any of these statements,
Rima Hyder: Speaking today will be Joe Nolan, our Chairman, President, and Chief Executive Officer, and John Moreira, our Executive Vice President, Chief Financial Officer, and Treasurer. Also joining us today is Jay Buth, our Vice President and Controller. I will now turn the call over to Joe.
Additional information about the various factors that may cause actual results to defer and our explanation of non-gaap measures, and how they reconciled to Gap. Results is contained. Within our news release, the slides we posted last night and in our most recent NQ and 10K,
speaking today will be Joe, Nolan our chairman and president and chief executive officer
And John Moreira, our Executive Vice President, Chief Financial Officer and treasurer.
Also, joining us today, is Jay Booth, our vice president and controller. I will now turn the call over to Joe
Joe Nolan: Thank you, Rima, and good morning, everyone. Thank you for being with us today. Starting on slide four, we have made great progress halfway through the year, executing our key strategic priorities while maintaining our commitment to being a pure-play pipes and wires regulated utility. As anticipated, electric demand continues to rise both in the near term and throughout our 10-year forecast horizon. We recognized this growth trajectory early on and worked closely with key stakeholders to position ourselves to effectively meet the challenge. In several regions, demand is expected to outpace existing infrastructure capacity, underscoring the critical need for strategic upgrades and new development. The accelerating electrification of transportation and heating sectors, driven by decarbonization efforts, is further fueling this upward trend.
Thank you, Rima, and good morning everyone. Thank you for being with us today.
Starting on slide 4, we have made great progress, halfway through the year. Executing our key strategic priorities while maintaining our commitment to being a pure play, pipes and wires regulated utility
As anticipated electric demand continues to rise both in the near term. And throughout our tenure forecast Horizon, we recognize this growth trajectory early on in work closely with key stakeholders to position ourselves to effectively meet the challenge.
In several regions demand is expected to outpace existing infrastructure, capacity underscoring. The critical need
For strategic upgrades and new development.
Joe Nolan: Notably, load growth through the first half of 2025 has exceeded 2%, nearly double the rate observed during the same period last year, reinforcing our expectations and validating the investments we've made to capitalize on this momentum. A clear indication of this is the 10% increase in our five-year infrastructure investment plan that we announced in February. Our balance sheet is strengthening, and our FFO to debt ratio continues to improve as a result of constructive regulatory outcomes, as well as our execution on cash flow enhancements that we laid out last year, such as exiting the offshore wind business and the planned divestiture of our water business. Turning to our quarterly accomplishments on slide five, once again, this quarter, we saw solid earnings growth from our transmission and distribution businesses versus last year's results. Earnings for the second quarter were $0.96 a share, in line with our expectations.
In heating, sectors driven by decarbonization efforts is further fueling this upward trend.
Notably low growth through the first half of 2025 has exceeded 2%, nearly double the rate of observed, during the same period last year, reinforcing our expectations, in validating the Investments, we've made to capitalize on this momentum. A clear indication of this is the 10% increase in our 5-year infrastructure investment plan that we announced in February.
Our balance sheet is strengthening, and our FFO to debt ratio continues to improve as a result of constructive regulatory outcomes, as well as our execution on cash flow enhancements that we laid out last year, such as exiting the offshore wind business and the planned divestiture of our water business.
Joe Nolan: We are reaffirming our 2025 EPS guidance range of $4.67 per share to $4.82 per share, as well as our long-term EPS growth projection of 5% to 7% through 2029. In addition to our solid financial results, we had other significant accomplishments across the company. During this hot summer, we continued to maintain our top decile reliability performance, even during record-breaking heat waves. I'd like to briefly acknowledge the severe weather event that impacted parts of Connecticut, southeastern Massachusetts, and Cape Cod during the July 4th holiday weekend. This storm had damaging winds well above 70 miles per hour. These dangerous conditions posed significant operational challenges, but our team responded swiftly to ensure safety and service continuity. I would like to thank all our employees, including crews, operations, and customer services teams who worked around the clock to restore power to our customers.
Turning to our quarterly accomplishments on slide 5. Once again, this quarter we saw solid earnings growth from our transmission and distribution businesses versus last year's results. Earning to the second quarter for 96 cents a share in line with our expectations. We are reaffirming our 2025 EPS guidance, range of $4.67 per share to $4.88
2 cents per share, as well as our long-term EPS growth, projection of 5 to 7% through 2029.
In addition to our solid Financial results, we had other significant accomplishments across the company.
During this hot summer, we continue to maintain our top decile reliability performance even during record-breaking heat waves.
I would like to briefly acknowledge the severe weather event that impacted parts of Connecticut and Southeastern Massachusetts, including Cape Cod, during the July 4th holiday weekend. This storm had damaging winds well above 70 miles per hour.
These dangerous conditions, post significant, operational challenges. But our team responded swiftly.
To ensure safety and service continuity, I would like to thank all our employees, including the Crews Operations and Customer Service teams, who worked around the clock to restore power to our customers.
Joe Nolan: This is also a testament to our continued investment in grid modernization, which has significantly enhanced system resilience, enabling faster and more efficient storm restoration efforts that minimize customer outages and support long-term reliability. We issued our annual sustainability report, which is available on our website. The report highlights some of our most innovative sustainability and governance achievements, including our network geothermal pilot project, our Cape Cod Solutions transmission project, and our efforts to develop the future energy workforce. Shifting focus to the regulatory front, let me begin with an update on Connecticut. The Connecticut legislative session ended in early June, and the General Assembly passed Senate Bill 4, SB 4, on a bipartisan basis. SB 4 is a comprehensive energy reform bill with the stated intention of making electric bills more affordable and the utility regulation process more transparent. The bill was signed into law by Governor Ned Lamont.
This is also a testament to our continued investment in Grid modernization which has significantly enhanced system resilience.
Enabling faster and more efficient Storm. Restoration efforts that minimize customer outages and support long-term reliability.
We issued our annual sustainability report, which is available on our website.
The report highlights, some of our most Innovative sustainability in governance achievements, including our Network geothermal pilot project. Our Cape Cod Solutions transmission project in our efforts to develop the Future Energy Workforce.
Shifting Focus to the regulatory front. Let me begin with an update on Connecticut.
The Connecticut legislative session ended in early June.
And the general assembly passed Senate, Bill 4, sb4 on a bipartisan basis.
Sb4 is a comprehensive energy Reform Bill.
With the stated intention of making electric bills more affordable and the utility regulation process more transparent.
The bill was signed into law by Governor heed Lemont.
Joe Nolan: SB 4 allows for securitization of storm costs incurred by Eversource Energy from 2018 to 2025, which is important for customer bill predictability, as well as strengthening our balance sheet. The new law also clarifies the requirements of the Public Utility Regulatory Authority, including requiring that all five commissioners sit on all rate request proceedings moving forward. Additionally, the law allows the state to use bonds to cover the cost of some public benefit programs, which are also currently recovered through a separate charge on our customers' bills. This is expected to modestly reduce their overall bill impact. We appreciate that leaders on both sides of the aisle in the General Assembly are committed to ensuring a transparent and constructive process for utilities in Connecticut to deliver safe and reliable service. Staying with Connecticut, the aquarium divestiture process continues to progress well.
Sb4 allows for securitization of storm costs. Incurred by eversource, from 2018 to 2025, which is important for custom of Bill predictability as well as strengthening our balance sheet.
The new war also clarifies the requirements of the public utility regulatory Authority, including requiring, that all 5 Commissioners, sit on all rate, request, proceedings. Moving forward.
Additionally, the law allows the state to use bonds to cover the cost of some public benefit programs which are also currently recovered through a separate charge on our customers bills. This is expected to modestly reduce their overall. Bill impact
Of a safe and reliable service.
Joe Nolan: We are well into the regulatory approval proceedings in all three states, and we expect to close the seal by the end of the year. We also received a decision from the Connecticut Supreme Court on aquariums' appeal from its 2023 rate case results. We are encouraged by the court's findings on the applicability of the legal standards for rate-making, including the application of prudency standards, as well as utility companies being entitled to carrying charges on deferred costs. This court ruling was an important development for future investments and cost recovery. Our focus in this legal challenge has always been to get clarity from the court on the applicability of prudent standards in order to support and defend capital investments in the future.
Staying with Connecticut, the Aquarian divestiture process continues to progress. Well, we are well into the regulatory approval proceedings in all 3 states and we expect to close the seal by the end of the year. We also received a decision from the Connecticut Supreme Court on aquarians appeal from its 2023 rate, case results we are encouraged by the Court's findings on the applicability of the legal standards for rate making including the application of prude standards as well as utility companies being entitled to carrying charges on deferred costs,
This Court ruling was an important development for future Investments and cost recovery.
Joe Nolan: Having the rules of the road clarified by the court is critical in this regard and is of greater value than the evidentiary disputes on aquariums' 2023 rate case. Moving north, we received a constructive decision on the rate case for Public Service Company of New Hampshire. We are pleased with the commission's collaborative approach on this rate case proceeding. This decision, which was in line with our expectations, largely supports our investments in grid modernization, system reliability, and necessary energy infrastructure needed to continue delivering safe, affordable, and sustainable electricity to our New Hampshire customers. John will cover the details of this recent decision. We're pleased to announce that during the second quarter, we finalized contracts that maintain positive, constructive relationships with several of our key unions representing electric and natural gas employees in Massachusetts. It's important to Eversource that we maintain these relationships with our union partners.
Our focus in this legal challenge, has always been to get clarity from the court on the applicability of prudent standards in order to support and defend Capital investments in the future.
Having the rules of the road clarified, by the court is critical in this regard and is of greater value than the evidentiary disputes on aquarians 2023 rate case.
Moving North.
We received a constructive decision.
On the rate case for Public Service Company of New Hampshire, we are pleased with the commission's collaborative approach on this rate case proceeding.
This decision which was in line with our expectations, largely supports our investments in grid modernization system, reliability.
And and necessary energy infrastructure needed to continue, delivering safe affordable and sustainable, electricity to our New Hampshire customers. John will cover the details of this recent decision.
We're pleased to announce that during the second quarter, we finalized contracts that maintain positive constructive relationships with several of our key unions representing electric and natural gas employees in Massachusetts. It's important to ever source that we maintain these relationships with our Union partners.
Joe Nolan: Turning to slide six, as we invest in modernizing our infrastructure and supporting the energy transition of the future, we are equally focused on keeping costs manageable for the families and businesses we serve. Affordability is not just a goal; it's a cornerstone principle in every investment we make. Through innovative solutions and strategic grid enhancements, we're enabling the integration of renewable energy resources and preparing for the increase in electric demand expected in our region. Our Advanced Metering Infrastructure rollout in Massachusetts is progressing very well, and we reached a major milestone in July. The Advanced Metering Infrastructure communication network, which started deployment earlier this year in Western Massachusetts, is substantially complete. This was a critical foundational step prior to the meter installation. We have also started the construction of the communication network in Eastern Massachusetts.
Turning to slide 6 as we invest, in modernizing our infrastructure and supporting the energy transition of the future. We are equally focused on keeping costs manageable for the families and businesses. We serve affordability is not just a goal, it's a Cornerstone principle in every investment. We make
Through innovative solutions and strategic grid enhancements. We're enabling the integration of renewable energy resources and preparing for the increase in electric demand expected in our region.
Our Advanced metering infrastructure rollout in Massachusetts is progressing very well. And we reached a major milestone in July, the Ami communication Network, which started deployment earlier this year in, Western Massachusetts is substantially complete.
This was a critical foundational step prior to the meter installation. We have also started the construction of the communication Network in the Eastern, Massachusetts.
Joe Nolan: I am pleased to report that following a successful system launch last week, we have begun the installation of the first Advanced Metering Infrastructure meters in Western Massachusetts. The transition to Advanced Metering Infrastructure meters for all Eversource Massachusetts Electric customers is expected to take approximately three years to complete. We are very excited to bring Advanced Metering Infrastructure to Massachusetts. This initiative aims to bring transparency, efficiency, and reliability to energy distribution while empowering customers to make informed decisions about their energy consumption. Even more exciting is our key project, the Cambridge Underground Substation, the first of its kind in the United States. Construction is moving ahead well since breaking ground earlier this year. Boston Properties, our partner on this project, is now advancing toward the final depth of approximately 105 feet.
I am pleased to report that falling is successful system. Launched last week, we have begun the installation of the first Ami meters in Western Massachusetts.
The transition to Ami meters for all other source. Massachusetts, electric customers is expected to take approximately 3 years to complete.
We are very excited to bring Ami to Massachusetts this initiative aims to bring transparency efficiency and reliability to energy distribution while empowering customers to make informed decisions about their energy consumption.
Joe Nolan: We are pleased that we can meet the growing needs and enable clean energy resources for Cambridge, a global center of innovation. The Eversource team behind our innovative Outer Cape Battery Energy Storage was recognized for their work on the project by the Energy Systems Integration Group. This group is an independent, not-for-profit organization that galvanizes the expertise of the technical community to support grid transformation and energy systems integration. Our system was recognized for its state-of-the-art nature and the seamless implementation of the first-of-its-kind systems to improve reliability for customers. Since full commissioning in December of 2022, this system has been dispatched on several occasions, avoiding sustained outages for thousands of customers during storms and other unexpected events. Turning to a brief update on Revolution Wind on slide seven, you may recall that in early May, Orsted announced that the project was approximately 75% complete.
Even more exciting is our key project. The Cambridge underground substation the first of its kind in the United States Construction is moving ahead well since breaking ground earlier. This year, Boston properties are partner on this project is now advancing toward the final depth of approximately 105 ft
We are pleased that we can meet the growing needs and enable clean energy resources for Cambridge. A global Center of innovation.
The other source team behind our Innovative Outer. Cape battery, energy storage was recognized for their work on the project by the energy systems integration group.
Integration.
Our system was recognized for its state-of-the-art nature and the seamless implementation of the first of its kind systems to improve reliability for customers.
Since full commissioning in December of 2022, this system has been dispatched on several occasions. Avoiding sustained outages for thousands of customers during storms and other unexpected events.
Joe Nolan: We expect Orsted to update the overall project status soon. The onshore substation construction, which Eversource oversees, is progressing well. We expect the onshore substation construction to be substantially complete this month. The testing and commissioning process is underway, which will allow the substation to provide back feed power to the offshore facilities in early 2026. This construction progress significantly reduces the critical path risk for Eversource. Before we conclude today's call, I want to thank all of you, our employees, partners, and investors, for your continued trust and support. This quarter's results reflect our team's unwavering commitment to operational excellence, customer service, and long-term value creation. This quarter wasn't just about performance. It was about our over 10,000 employees working together every day to keep the lights on and provide superior customer service.
Turning to a brief update on Revolution, wind on slide 7. You may recall that in early May oersted announced that the project was approximately 75%, complete
We expect oersted to update the overall project status soon.
The onshore substation construction which ever Source overseas is progressing. Well,
we expect the onshore substation construction to be substantially complete this month, the testing and commissioning processes underway, which will allow the substation to provide back feed power to the offshore facilities in early 2026.
This construction progressed significantly. Reduces the critical path risk for eversource.
Before we conclude today's call, I want to thank all of you. Our employees partners, and investors for your continued trust and support this quarter's results. Reflects our team's unwavering commitment to operational, excellence, customer service and long-term value creation.
This quarter wasn't just about performance. It was about our over 10,000 employees working together every day to keep the lights on and provide Superior customer service.
Joe Nolan: From our line workers restoring power in the dark to our engineers designing the grid of tomorrow to customers and shareholders who trust us every day, we're proud to serve over 4 million customers across three states. As we look ahead, we remain focused on delivering safe, reliable, and sustainable energy while navigating an evolving regulatory and economic landscape. I will now turn the call over to John Moreira to discuss our financial results.
From our line workers restoring power in the dark to our Engineers designing the grid of tomorrow to customers and shareholders, who trust us every day. We're proud to serve over 4 million customers across 3 States.
As we look ahead, we remain focused on delivering safe, reliable and sustainable energy while navigating and evolving Regulatory and economic landscape.
John Moreira: Thank you, Joe, and good morning, everyone. This morning, I will review Q2 earnings results, provide a regulatory update, and discuss our balance sheet and credit metrics progress. I will start with our Q2 results on slide 9. GAAP and recurring earnings results for Q2 were $0.96 per share compared with GAAP and recurring earnings of $0.95 per share last year. Higher utility earnings were largely offset by a decrease in parent and other earnings. Looking at the quarter results, starting with transmission, higher electric transmission earnings of $0.02 per share were due to increased revenues from continued investments in the transmission system and lower interest expense, partially offset by the impact of share dilution. Next, we have higher electric distribution earnings of $0.02 per share that benefited from distribution rate increases in New Hampshire and Massachusetts, providing cost recovery of the infrastructure investments in our distribution system.
I will now turn the call over to John Moreira, to discuss our financial results.
Hey, Joe, and good morning everyone. This morning, I will review second quarter, earnings results, provide a regulatory update and discuss our balance sheet in credit metrics progress.
I'll start with our second quarter results on slide 9 Gap, and recurring earnings results for the second quarter, where 96 cents per share compared with gap and recurring, earnings of 95 cents per share last year.
Higher utility earnings were largely offset by a decrease in parent and other earnings.
Looking at the quarter results, starting with transmission higher, electric transmission, earnings of 2 cents per share. Were due to increase revenues from continued investments in the transmission system and lower interest expense partially offset by the impact of shared dilution.
John Moreira: These higher revenues were partially offset by higher property taxes, interest, depreciation, and the impact from share dilution. The improved results of $0.02 per share at Eversource's natural gas segment were due primarily to base distribution rate increases at both Massachusetts utilities to also provide timely recovery of investment in our natural gas segment. These revenue increases were partially offset by higher O&M, interest, depreciation, property tax expenses, and the impact from share dilution. Water distribution earnings improved $0.02 per share year over year as a result of higher revenues and lower interest expense. Eversource parent losses increased $0.07 per share for the quarter. Lower results were, as expected, primarily due to higher interest expense resulting from the absence of capitalized interest after the sale of our offshore wind business. Overall, our Q2 earnings were in line with our expectations, and we are pleased with this solid performance.
Next we have higher electric distribution earnings of 2 cents per share that benefited from distribution rate increases in New Hampshire and Massachusetts providing cost recovery of infrastructure investments in our distribution system.
These higher revenues were partially offset by higher property, taxes interest appreciation and the impact from shared dilution.
The improved results of 2 cents per share at eversource Natural Gas segment, where due primarily to base distribution rate increases at both Massachusetts. Utilities
to also provide timely recovery of investment in our natural gas segment. These Revenue increases were partially offset by higher onm.
Interest depreciation, property tax expenses, and the impact from shared dilution.
Water distribution earnings improved 2, cents per share year-over-year, as a result of higher revenues and lower interest expense.
Eversource parent, losses increased 7 cents per share for the quarter lower results. Were as expected primarily due to higher interest expense resulting from the absence of capitalized interest after the sale of our offshore wind business.
Overall.
John Moreira: Moving to our key regulatory items, beginning with New Hampshire on slide 10. On July 25th, we received the order on the PS&H rate proceeding. We had proposed an increase of $103 million, which was amended from the original proposal of $182 million, primarily to exclude deferred storm costs, which will be considered by the commission in another docket. The order approved a permanent rate increase of $100 million based on an ROE of 9.5% and a 50/50% capital structure. This increase includes the previously approved temporary rate increase of $61 million. The PUC also approved a new performance-based rate mechanism with a four-year term that includes annual inflation adjustments and 142 basis point add-up. This rate order is effective as of today. We will continue to evaluate all of the components of the rate order to determine next steps.
Our second quarter earnings were in line with our expectations and we are pleased with the solid performance.
Beginning with New Hampshire on, slide 10.
On July 25th, we received the order on the PSNH rate, proceedings.
We have proposed an increase of 103 million, which was amended from the original proposal of 182 million.
Primarily to exclude the first storm costs which will be considered by the Commission. In another docket the order approved a permanent rate increase of 100 million based on an Roe of 9.5% and a 50/50 percent capital structure. This increase includes the previously approved temporary rate increase of of 61 million.
The puc also approved. A new performance-based rate mechanism with a 4-year term that includes annual inflation adjustments and 142 basis point Adam.
This rate order is effective as of today.
John Moreira: While not all components of our rate proposal were adopted, we are encouraged by this constructive rate outcome that was in line with our expectations. Moving to slide 11, in Massachusetts, on November 1st, new rates are expected to go into effect for Enstar Gas under the annual PBR adjustment and a potential rate-based roll-in, which are elements of our approved 10-year PBR plan for Enstar Gas. In addition, EGMA will have a rate increase of approximately $62 million, also effective on November 1st, reflecting the second phase of the 2024 rate-based roll-in. Moving to Connecticut, we have completed the discovery phase of the hearings of our Yankee Gas rate proceeding and have provided strong support for our system infrastructure investments and cost structure. We expect a final decision in this rate proceeding in October for rates to be effective November 1st.
We will continue to evaluate all of the components of the rate order to determine next steps.
While not all components of our rate. Proposal were adopted, we are encouraged by this constructive rate. Outcome that was in line with our expectations.
Moving to slide 11 in Massachusetts on November 1st, new rates are expected to go into effect for NSTAR Gas under the annual PBR adjustment in a potential rate-based rolling, which are elements of our approved 10-year PBI plan for NSTAR Gas. In addition, each GMA will have a rate increase of approximately $62 million, also effective on November 1st, reflecting the second phase of the 2024 rate-based rolling.
Moving to Connecticut, we have completed the discovery phase of the hearings of our Yankee Gas rate proceeding and have provided strong support for our system infrastructure investments in our cost structure.
John Moreira: As a reminder, this filing seeks to recover an adjusted revenue deficiency of approximately $190 million, reflecting the recovery of critical investments and cost increases since the previous rate review back in 2018. We also received a draft decision in the Connecticut PBR docket in July. While we appreciate PURA's work on advancing this important regulatory construct, we continue to have concerns with certain core components of this framework and are working with PURA and other stakeholders to ensure that we have alignment with the PBR structure that we can support. Next, let me reaffirm our five-year capital plan of $24.2 billion, as shown on slide 12, which reflects our five-year utility infrastructure investments by segment. This plan reflects a 10% increase over the last five-year plan, and as we have discussed previously, it only includes projects for which we have a clear line of sight from a regulatory perspective.
We expect a final decision in this rate proceeding in October for rates to be effective November 1st.
as a reminder, this violence seeks to recover, an adjusted Revenue, deficiency of approximately 190 million reflecting the recovery of critical Investments and cost increase since since the previous rate review back in 2018,
we also received the a draft decision in the Connecticut PBR Docket in July,
while we appreciate pura's, work on advancing. This important regulatory construct, we continue to have concerns with certain core components of this framework and our working with pure and other stakeholders to ensure that we have alignment with the PBR structure that we can support.
Next, let me reaffirm our 5-year, Capital plan of 24.2 billion as shown on slide 12, which reflects our 5-year utility infrastructure Investments by segment. This plan reflects a 10% increase over the last 5 year plan. And as we've discussed previously, it only includes projects for which we have a clear line of sight from a regulatory perspective.
John Moreira: Through June of 2025, we have executed on $2.2 billion of our $4.7 billion infrastructure investment plan. We are very pleased with this progress, and we are on track to meet our planned target for the year. We continue to see additional capital investment opportunities in the range of $1.5 to $2 billion within this five-year forecast period. Turning to slide 13, we remain highly focused on improving our cash flow position and strengthening our balance sheet condition. Our plan to enhance our cash flows is balanced by our equity needs of $1.2 billion, the majority of which is expected to be issued towards the back half of our five-year forecast period. As I have stated before, we expect our FFO to debt ratios for 2025 to be approximately 100 basis points above the rate and agency thresholds.
Through June of 2025, we have executed on 2.2 billion dollars of our 4.7 billion dollar infrastructure investment plan.
We are very pleased with this progress, and we are on track to meet our plan target for the year.
We continue to see additional capital investment opportunities in the range of 1.5 to 2 billion dollars within this 5-year, forecast period.
Turning to slide 13, we remain highly focused on improving our cash flow position and strengthening our balance sheet condition.
Our plan to enhance our cash flows is balanced by our equity needs of $1.2 billion.
The majority of which is expected to be issued towards the back, end, half of our 5-year forecast, period.
John Moreira: In fact, our Moody's FFO to debt ratio as of the first quarter of this year of 11.5% reflects an improvement of over 200 basis points from December 31, 2024. In early September, we met with all three rating agencies and received positive feedback on our execution of cash flow enhancements. Moody's recently reaffirmed its ratings for both Eversource Energy and Enstar Electric, which we were very pleased to see. Unfortunately, Moody's also announced a downgrade for Connecticut Light and Power to BAA1 from A3. Moody's cited the Connecticut regulatory environment as their reason for the downgrade. As we shared with you last quarter, and as shown on slide 14, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet condition.
200 basis points from the December 31st 2024?
In early September, we met with all 3, great and agencies and received positive feedback on our execution of cash flow enhancements Moody's. Recently reaffirmed, its ratings for both eversource energy and NSTAR Electric which we were very pleased to see. Unfortunately, Moody's also announced a downgrade for Connecticut, lightning power to ba1 from A3.
Moody cited the Connecticut regulatory environment as their reason for the downgrade.
John Moreira: As a result, our operating cash flows have continued to improve, increasing over $1 billion year over year through the first half of this year. We also see further opportunity for customer bill stabilization and balance sheet enhancement through Senate Bill 4 in Connecticut by establishing a legal foundation for securitization of storm costs. This would certainly benefit our cash flow position and our balance sheet improvement efforts. As a reminder, our forecast did not assume securitization as the cost recovery for the Connecticut deferred storm costs. Staying with Connecticut, we recently supplemented our storm cost recovery filing with an additional $171 million of storm costs for the period of February 2023 through December of 2023. This brings the total balance of deferred storm costs currently with PURA for prudency review to $980 million.
As we shared with you last quarter, and as shown on slide 14, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet conditions as a result. Our
Operating cash flows have continued to improve increasing in over 1 billion dollars year-over-year through the first half of this year.
We also see further opportunity for customer builds stabilization and down sheet enhancement through Senate. Bill 4 in Connecticut, by establishing A Legal Foundation for securitization of storm quests. This would certainly benefit our cash flow position and our balance sheet Improvement.
As a reminder.
Our forecast did not assume securitization as the cost recovery for the Connecticut deferred storm costs.
Staying with Connecticut. We recently supplemented our storm cost recovery filing with an additional 171 million of storm costs for the period of February 2023 through December of 2023.
John Moreira: We continue to believe that all of the storm restoration costs we filed were prudently incurred and should be recovered from customers. It is important to note that we now have approximately 85% of the $2 billion of deferred storm costs balance being recovered in rates or in the prudency review process across all three states. Moving to slide 15, I would like to share a progress update on debt maturities at the parent level and also cover our at-the-market equity issuance program. Our plan to retire $600 million of maturing parent debt during 2025 is progressing as planned, and we are prepared to manage the final maturity this month with existing resources as shown on the slide. We anticipate no new long-term debt issuances this year at the parent company. During the second quarter, we issued approximately $200 million of equity under the ATM program.
This brings the total balance of deferred storm cost. Currently with Pura for Prudence TV, view to 9800 million,
We continue to believe that all of the Storm Restoration costs. We filed were prudently incurred and should be recovered from customers.
To note that we now have approximately 85% of the $2 billion of deferred storm costs balanced, being recovered in rates or in the prudence review process across all three states.
Moving to slide 15, I would like to share a progress update on debt maturities at the parent level and also cover our at-the-market equity issuance program.
I plan to retire, $600 million of maturing.
Parent death during 2025 is progressing as planned. And we are prepared to manage the final maturity this month with existing resources, as shown on the slide, we anticipate, no new long-term debt issuances this year at the parent company,
John Moreira: We will closely manage further issuances in the second half of the year as we monitor the status of the aquarium transaction and our short-term debt commercial paper balances. Next, I will turn to 2025 earnings guidance as shown on slide 16. With the first half of the year in the record books, we are reaffirming our 2025 recurring earnings per share in the range of $4.67 to $4.82 and our longer-term EPS growth rate of 5% to 7% off of 2024 EPS base. We remain confident in our EPS growth outlook underpinned by the disciplined execution of our strategic plan, our customer-focused investments in electric transmission and distribution that are supported by constructive regulatory mechanisms, ensuring timely cost recovery for the majority of our businesses.
during the second quarter, we issued approximately million dollars of equity under the ATM program,
We will closely manage further issuances in the second half of the year. As we monitor the status of the Aquarian transaction and our short-term debt commercial paper, balances.
Next, I will turn to 2025 earnings guidance as shown on slide 16.
With the first half of the year in the record books. We are reaffirming our 2025 recurring earnings per share in the range of $4.67 to $4.82.
And our longer-term EPS growth rate of 5% to 7% off of the 2024 EPS base.
We remain confident in our EPS growth outlook. Underpinned by the discipline and execution of our strategic plan, our customer-focused investments in electric transmission and distribution are supported by constructive regulatory mechanisms.
Sure, and timely cost recovery for the majority of our businesses.
John Moreira: At the same time, ongoing progress on storm cost recovery and O&M cost discipline are expected to provide a solid foundation positioning Eversource Energy to provide consistent long-term value to our shareholders. I will now turn the call back to Rima Hyder to begin our Q&A session.
At the same time, ongoing progress on storm cost recovery and on andm cost discipline, our expected to provide a solid function to position in eversource to provide consistent long-term value to our shareholders.
I'll now turn the call back to Reema to begin our Q&A session.
Rima Hyder: Michelle, we're ready to begin our Q&A session.
Michelle: Thank you. As a reminder, to ask a question, please press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one-one again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Carly Davenport with Goldman Sachs. Your line is open. Please go ahead.
Michelle. We're ready to begin. Our Q&A sessions.
please press star 1 1, again, 1 moment while we compile our Q&A roster,
Our first question is going to come from the line of Carly Davenport, with Goldman Sachs, your line is open, please go ahead.
John Moreira: Good morning, Carly.
Rima Hyder: Hey, Joe. Thanks for taking the questions. Maybe just to start on the balance sheet, I appreciate the updates there. So the 11.5% FFO to debt at the end of Q1, can you walk us through the confidence levels in hitting that 14% level by the end of the year and some of those drivers in addition to the asset sale, which if I recall was expected to add about 100 basis points to that ratio?
John Moreira: Hey, Carly. It's John. Good morning. Very highly confident. The biggest driver to enhance our FFO to debt is in rates, and that is the recovery of the deferrals, albeit I don't expect to see the significant sizable improvement in the second half of the year because we have already recovered the $900 million that went into rates July 1 of last year. So we're on track. It's not just the public benefits. We also have cost recovery of deferrals, as I mentioned, storms in my formal remarks, and other regulatory assets that we have coming into rates in the other jurisdictions. In my formal remarks, I mentioned that we will monitor the progress that we're making on the regulatory approval for Advanced Metering Infrastructure. That in and of itself, we're at about 100 bps.
Good morning, Carly. Hey, Joe. Hey, thanks for for taking the questions, um, maybe just to start, um, on the balance sheet, appreciate the updates there, so the 11 and a half percent ffo to debt at the end of 1 Q. Just can you walk us through kind of the confidence levels and hitting that 14% level by the end of the year? And some of those drivers in addition to the asset sale, which if I recall, was expected to add about 100 basis points to to that ratio, hey colleagues, this is John and good morning uh, very highly uh, confident. Um, the the biggest, uh, driver, uh, to enhance our, uh, effort for the debt is in in rates and that is the, the recovery of the deferrals, albeit. I don't expect to see the significant sizable Improvement, um, in the second half of the year because we have already recovered. Uh, the 900 million that went into rates, uh, July 1 of last year. Uh, so we're on track. It's not just, um, the public benefits, we also
John Moreira: So highly confident that we'll reach the 13 handle with the Advanced Metering Infrastructure closing towards the end of the year. That'll contribute approximately 100 bps to get us to that nice cushion.
We have cost recovery from the referrals. As I mentioned in my formal remarks, there are storms and other regulatory assets that we have coming into rates in other jurisdictions. In my formal remarks, I mentioned that we will monitor the progress we are making on the regulatory approval for the aquarium. That, in and of itself, is about 100%. So, I am highly confident that we'll reach the 13 handle. With the aquarium closing towards the end of the year, that will contribute approximately 100 basis points to get us to that. Any questions?
Rima Hyder: Got it. Great. Thank you. On Connecticut, you mentioned the securitization of the storm cost was not in your base plan. Could you talk a little bit about how that potentially could impact the longer-term FFO to debt levels? From a logistics perspective, how should we think about the timing to filing for that securitization and when that could ultimately have an impact on the balance sheet?
John Moreira: Sure, sure. Let me start with your first question. First question is how that impacts. Right now, we are not moving from the $1.2 billion need. Clearly, everything else being equal, that would certainly have an impact on our financing needs. The fact of the matter is within six months, we are going to do a clean refresh, and in February, we will give you an update of what our revised equity needs. When we roll out our equity needs at that point in time, we will certainly take into consideration the securitization aspects of those costs. Your second question as to how it would work, where we stand right now, we just two weeks ago filed another wave of storm costs, about $171 million into PURA. That puts the total cost, storm costs under the prudency review, close to a billion dollars.
Got it. Great. Thank you. And then, uh, just on Connecticut, you know, you mentioned, obviously, the securitization of the storm cost was not in your base plan. So could you talk a little bit about how that potentially could impact? The longer term, ffo debt levels? And then just from a logistics perspective, how should we think about the timing to filing for that securitization and when that could ultimately have an impact on the balance sheet? Sure sure. Let me, let me stop with the, with the, with your first question first, question is, um, how about an impact right now? Um, we're not moving from the 1.2 billion need, uh, clearly. Everything else, being equal and I would certainly have an impact on our finance and needs. You know, the fact of the matter is, within 6 months, we're going to do a clean refresh. And in February, we'll give you an update of what our revised Equity needs. And when we roll out, our Equity needs at that point in time, we'll certainly take into consideration the securitization.
Aspects of of those costs.
Your your, um, second question as to how it would work. Uh, where we stand right now, we just 2 weeks ago filed, another wave of, um, uh, storm costs about 171 million, um, into Pura. So that puts, um, the total, um,
John Moreira: That is a very sizable amount for the authority to review and go through it. In light of that filing, that latest filing, PURA did update their schedule, their procedural schedule to take us out through March of next year with hearings and briefs being filed. I do not right now, we do not have an approval date for that review. But once we get the review, which is the most critical aspect of it, because we already have the legislation, we will be off to the running with the securitization process, which we expect would take in and of itself about 12 to 18 months to get complete. So likely now, we were hoping that we would be able to get that cash in the door by the end of 2026. With this push out in the schedule, it is looking more like 2027.
Cost on cost under the prudent sea review, close to a billion dollars. So that is a very sizable amount for the authority to, to review and go through it. Um, in light of that file on that latest filing. Pure did update their schedule, their procedural scheduled, uh, to take us out through March of next year with, um, hearings in briefs being filed. So, I don't right now. We don't have a, um, an approval date for those, uh, for that review. Um, but once once we get the review, which is the most critical aspect of it because we already have the legislation, we will, um, be, you know, off to the running with uh, the securitization process, which we expect would take in of itself about 12 to 18 months, uh, to get complete. So, likely now and we were hoping that we would be able to get that cash in the door by the end of 26. So with this, uh, push out in the schedule, it's looking more like 2027.
Rima Hyder: Great. That's super helpful. Thank you for the time.
John Moreira: Thank you, Carly.
Great, that's super helpful. Thank you for the time.
Michelle: Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Jeremy Tonet with JPMorgan Securities. Your line is open. Please go ahead.
Thank you Colleen. Thank you and 1 moment as we move on to our next question.
John Moreira: Morning, Jeremy.
Our next question is going to come from the line of Jeremy tonette with JP Morgan, Securities. Your line is open. Please go ahead.
Joe Nolan: Hey, Jeremy.
John Moreira: Hi. Good morning. I just wanted to kind of follow up with some of the points that were discussed there. I think the slides highlight the ending Q1 FFO to debt. I was just wondering if you could share updated metrics for the Q2 for Moody's and S&P and how you stand against those thresholds at this point. For S&P, we are already in a strong position there. Let me speak to Moody's. We have line of sight. I would tell you that every quarter we will continue to make progress. As I have said, this quarter on a 12-month basis, rolling basis, we improved over 200 bps, which is very, very sizable just in one quarter. I expect that momentum to continue. I would say in the coming quarters, we will be at that 13%.
Morning, Jeremy. Hey, Jeremy.
Hi, good morning. Um, I just want to kind of follow up with, uh, some of the points on, uh, that discussed there. I think the slides Highway, um, the first ending first quarter f, a photo of debt. I was just wondering if you could share, uh, updated uh, metrics for the second quarter, uh, for, for Moody's and S&P. And how you stand against those, uh, um, thresholds. At this point.
Do that every quarter will continue to make progress. As I've said, you know, this quarter on a 12-month um um basis rolling basis, we improved over 200 basis points, which is very, very sizable just in 1 quarter. I expect that momentum to continue. Um, and I, I would say in the coming, quarters will be at that 13%.
Joe Nolan: Got it. Thank you for that. I was just wondering if we could turn to New Hampshire a little bit here, if there's any other, you know, I guess, process takeaways that you have from the outcome there, views, I guess, on settlements versus full litigation, and you know, how you think things progressed there.
Joe Nolan: Yeah, Jeremy, I think it was fantastic. We hadn't been in the rate arena since 2018. Every single case that we had had been settled prior to that. I talked to a lot of the folks. We don't have any recollection of any time we've had a litigated case. I think it was a very, very good case that allowed us to flush a lot of the issues out. I think that the regulatory climate there is very favorable. Obviously, in a situation like that, you don't get everything you want. The fact of the matter, it was constructive. It was fair. It was transparent. We asked for, after we netted out storms, we asked for 103. We ended up getting, we got 100. We got an ROE of 9.5%.
Got it. Uh, thank you for that and it was just uh, wonder if you could turn to uh New Hampshire a little bit here. If there's any other, um, you know, I guess process takeaways that you have from from the outcome there and, uh, views I guess on settlements versus full litigation. And, you know, how, how, how do you think things progress there?
Joe Nolan: What I like about it is it's very constructive, not only with the commission, but with all of the parties that were involved. Going forward, I think it's an example for other jurisdictions that this is really a nice way to kind of handle a rate case in a professional manner. So we're pleased. Obviously, we're looking at the order, and there's some puts and takes and some things that we might like to have tweaked. At the end of the day, it's a good order for not only the customers, but it's a good order for the company as well.
Yeah. No, uh, Jeremy. I think it was, uh, fantastic. You know, we had been in the raid Arena since 2018, uh, every single case that we had had been settled prior to that, you know, I talked to a lot of the folks, we don't have any any, uh, recollection of any time. We've had a litigated case. But, you know, I think it was a very, very good case. Uh, that allowed us to flush a lot of the issues out. Uh, and I think that the regulatory climate there is very, uh, favorable obviously, you know, in the in the situation like that, you don't get everything you want. Uh, but the fact of the matter was constructive, it was fair. It was transparent, you know, we asked for, uh, you know, after we netted out storms, we asked for 103, we ended up getting, you know, we got a 100, you know, we got an Roe of 9 and a half percent. Um, but what I like about it is it's very constructive, not only with
John Moreira: I would just add, let's not lose sight that we did get the PBR structure, which was important to us, and we hope that that prevails. Very, very pleased that ultimately the revenue level that the rate case provided for us is very supportive, as that is kind of the cast-off basis, if you will, for future rate increases as we move into this, our PBR environment.
The commission, but with all of the parties that were involved. Um, so, you know, going forward, I think it's an example, uh, for other jurisdictions that, you know, this is a really a nice way to kind of handle a rape case and a professional manner. Uh, so we're, we're, we're pleased. Obviously, we're looking at the order and there's some puts and takes, and some things that, you know, we, we might like to have tweaked, but at the end of the day, it's a, it's a good order for not only the customers, uh, but it's a good order for the company as well.
And I, and I would just add, let's not lose sight that we did get the PBI structure, which was an important to us. And we hope that, um, that prevails, um, and very, very pleased that ultimately, the, uh, you know, the revenue, uh, level was, uh, that we, um, that the rate case, uh, provided for us is is very supportive as that is. Kind of the cast off basis, if you will for future rate increases as we move into this, uh, our uh, PBR environment
Joe Nolan: Got it. Thank you for that. I will leave it there.
John Moreira: All right. Thanks, Joe.
Got it. Thank you for that. I'll leave it there.
Michelle: Thank you. One moment as we move on to the next question. Our next question is going to come from the line of Andrew Weisel with Scotiabank. Your line is open. Please go ahead.
All right, thanks Sharon.
Joe Nolan: Morning, Andrew.
Thank you, 1 moment, as we move on to the next question. Our next question is going to come from the line of Andrew Weaver with Scotia Bank. Your line is open, please go ahead.
Morning, Andrew.
Rima Hyder: Hi. Good morning, everyone.
Hi, good morning, everyone.
John Moreira: Hey, Andrew.
Rima Hyder: First, one more on the balance sheet. The ATM issuances of about $220 million during the quarter after it was off during the first quarter. I know the commentary still shows the majority of equity toward the back half of the forecast period. So how should we think about that? What made you turn it on during the last quarter? I know last year you had that similar run rate of $1 billion over the year, about $250 million per quarter on average. So what should we expect going forward?
John Moreira: You know.
Rima Hyder: Before you acted in July?
Uh, first 1 more on the balance sheet. So the ATM issuances of about 220 million during the quarter after, or it was off during the first quarter, I know the commentary still shows the majority of equity toward the back half of the forecast period. So how should we think about that? What made you turn it on during the last quarter? And I know last year you had that similar run rate a billion dollars over the year about 250 million per quarter on average. So what should we expect going forward? And at a minimum, were you active in July?
John Moreira: You will see that when we are in the third quarter, Mr. Jeremy Tonet. In my formal remarks, I said, "Look, our equity needs for this year will be dictated by how the approval progresses and what our short-term debt balances are." We saw a window of opportunity in June, and we did that raise all in the month of June as a way to provide liquidity for us, which is very important to us. I have said that time and time again, what we need for this year is going to be based on the timing of the and our short-term balances. Once again, I think the guidance that I just reiterated still holds. Once we close, I do not see the need to raise any equity for some time.
Well, you'll see that when we, when we in the third quarter, it happens Jeremy. Uh, so um obviously in my former remarks I said, look our Equity needs for this year will be dictated by how the aquarium, um, approval progresses and what our short-term debt. Balances are so we we saw a window of opportunity in June and we did we did that raise all in the month of June. Um, as a way to um provide liquidity for us, which is very important to us. So, um, I've said that, uh, you know, time and time again. Uh, what we need for for this year um,
It's going to be based on you know the timing of the aquarium and our short-term um balances. So um I once again I think the guidance that I just reiterated still holds um
Once we close aquarium, I don't see the need to raise any equity for, um, you know, for you know some time.
Rima Hyder: Okay. Thank you. That's helpful.
John Moreira: No problem.
Rima Hyder: Then a longer-term question on Connecticut. Between the legislative updates and the Connecticut court ruling, do you think your position to redeploy some of the capital back into the state? In the past, you diverted some money away from Connecticut into other states, given the uncertainty. Do you think you are ready to reallocate, or would you want to see some more constructive data points from the commission itself first?
John Moreira: We would like to see some more constructive data points coming out of the commission before we reassess our capital redeployment.
Okay, thank you. That's helpful. No problem then longer term. Uh, question on Connecticut between the, uh, legislative updates and the Connecticut Court ruling, do you think your position to redeploy some of the capital back into the state in the past year, diverted, some money away from Connecticut into other states. Giving the uncertainty, do you think you're ready to reallocate or would you want to see some more constructive data points from the commission itself first?
We would like to see some more constructive data points coming out of the Commission before we...
reassess our um, Capital, uh, redeployment
Rima Hyder: Okay. Do you think there's opportunity between now and the year-end update when you formally refresh the capital forecast, or do you think it will take a little more time than that?
Okay, do you think there's opportunity between now and the year-end update when you formally refresh the capital forecast or do you think it'll take a little more time than that?
John Moreira: That's tough, difficult to predict. But one of the events that we're watching very closely is what the outcome of the Yankee Gas case proceedings.
Joe Nolan: We also have a reconsideration in on Advanced Metering Infrastructure. If we get some clarity around that and some rules of the road that are fair to us, then that is also an opportunity as well.
It's it's that's that's tough the difficult to project but 1 of 1 of the events that we're watching very closely is what the outcome of the Yankee. Uh, gas case proceeding
And we also have a reconsideration in on Ami if we get some clarity around that, uh, and some rules of the road that are fair, uh, to us then that's also an opportunity as well.
Rima Hyder: Great. That's really helpful. Thank you so much.
Great, that's really helpful. Thank you so much.
Michelle: Thank you. One moment as we move on to the next question. Our next question will come from the line of Anthony Crowdell with Mizuho. Your line is open. Please go ahead.
Thank you, and one moment as we move on to the next question.
Our next question will come from the line of Anthony Cordell with meizuo. Your line is open, please go ahead.
John Moreira: Good morning, Anthony.
Joe Nolan: Hey, good morning. Hey, Joe. I do not want to start off on a bad foot, but the last earnings call, I made a call that Knicks would beat the Celtics.
Good Morning, Anthony. Hey, good morning. Good morning. Hey Joe, I don't want to uh, um, you know, cause start off on a bad foot, but the last earnings call, I made a call that, uh, Nicks would be to Celtics,
John Moreira: Yeah, I know.
Joe Nolan: are good. You are good. I thought you were going to tell me, "Happy 40th anniversary." Today is my 40th anniversary at the company. I start my 41st year, Anthony. I mean, I thought you would have something nice like that.
John Moreira: Wow. Congratulations.
Joe Nolan: Yeah, thank you.
Yeah, I know. Yeah, you're good. You're good. I thought you were going to tell me happy 40th anniversary, Jay. It's my 40th anniversary at the company, and I’m starting my 41st year, Anthony. I mean, I thought you'd have something nice like that. You have to—wow! Congratulations! Wow. Yeah, thank you.
John Moreira: I worked at a utility, and people were very fortunate. There's a lot of, like, you do a lot of different jobs. Your career really moves to different things. How many different jobs do you think you had over the 40 years?
Joe Nolan: It's heartbroken. I had a start in customer service. I thought it was terrible. I wanted to be in communications. Look at what happened. It was probably the best job I ever had starting in customer service because I ended up going back and running it, and I've done everything. There's not really a job that I haven't done. So it's been a great, great run.
John Moreira: Congratulations, 40 years.
How many I worked at a utility? And and people were very fortunate. Like there's a lot of like you, you you you do a lot of different job like you your career really moves to different things. How many different jobs do you think you had over the 40 years? Oh, it's heartbroken. I had to start in customer service. I thought I was terrible, I wanted to be in Communications and look at. Look, what happened. There was probably the best job I ever had starting in customer service because I ended up going back and running it. And I've done everything, there's not really a job that I haven't done. So, uh, it's been a great, great run.
Joe Nolan: Thank you.
John Moreira: is very impressive.
Joe Nolan: You're the most thoughtful analyst to call and really wish me a happy anniversary. I appreciate that, Anthony.
John Moreira: I hope I make 30 years of work. So 40, I do not know. I just had some housekeeping questions in New Hampshire. What is the percentage breakout in rate base in New Hampshire? I think you guys have a decent amount of FERC rate base there. Just a percentage between, I guess, what is regulated by the New Hampshire regulators and what is regulated by FERC. Then just a follow-up, the equity layer at the FERC assets in New Hampshire. Are they based on an actual equity ratio or, you know, what is set in rates, like a hypothetical structure? Anthony, on the FERC side, the FERC side is based on a tavern for all of New England, and it is based on, you know, the actual. Great.
Well, well congratulations, 40 years is very impressive. Um, I just double analyst most thoughtful analysts to call and really wish me a happy anniversary. I appreciate that. Anthony I hope I hope I make thirty years of work, so 40, I don't know. Um, just just I just had some housekeeping questions in New Hampshire, what's the percentage breakout in rate based in New Hampshire? I think you guys have a a decent amount of furk, the rate base there, just the percentage between I guess. What's regulated by the New Hampshire regulators and what's regulated by first? And then just a follow-up, the equity layer in uh, the at the first at furk assets in um, New Hampshire, are they based on an actual equity ratio or um, you know what what's set in REITs, like a hypothetical structure.
Anthony on the furk side. The furk side is based on a tower for all of New England, and it's based on, you know, the actual.
John Moreira: Then in New Hampshire, how much of, you know, if I think of PS&H, how much of that rate base is state regulated versus FERC regulated? State regulated, it is about $2.1 billion on the distribution side. On the FERC side, subject to check, I think it is 1.7, 1.8, if my memory serves me correct. I can double-check that. No, that is great. Just.
Great. And then in New Hampshire, how much of, you know, if I think of PSNH, how much of that rate base is...
State regulated versus first regulated State regulated, it's about 2.1 uh billion on the on the uh distribution side. And on the Furyk side, uh subject to check, I think it's um 1.7 1.8 5 uh for my memory serves me correct. But I, I can I can double check that.
Joe Nolan: Sorry, go ahead.
John Moreira: Rima can follow up with you and confirm that for you.
No, that's great. Um, just sorry, go ahead.
Joe Nolan: No problem. Joe, I mean, John, how many years do you have with Eversource or even the predecessor companies?
No, I was just going to say we can follow up with you and confirm that for you.
No problem, Joe. I mean, John, how many years do you have with Eversource, or even the president who has companies?
John Moreira: 25. Going on my 26th year. I have had numerous jobs, Anthony. Not as excited as Joe.
Joe Nolan: are like a rookie compared to 40s.
25 going on like 26th year. And I've had numerous jobs, Anthony not as exciting as that joke. So you like a rookie compared to 40.
John Moreira: I have been in the industry almost many years as Joe has.
but I've been in the industry, we almost 4 4 4, oh, and the same many years as Joe has
Joe Nolan: Thanks so much for taking my question, guys.
John Moreira: All right, Anthony. Thanks so much.
Thanks so much for taking my question, guys, I appreciate you. Thanks so much.
Michelle: Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Sophie Karp with Evercore ISI. Your line is open. Please go ahead.
Thank you, 1 moment, as we move on to our next question.
Rima Hyder: Morning, Angie.
Our next question is going to come from the line of Angie Stroh, Rosinski with Cport. Your line is open. Please go ahead.
Sophie Karp: Morning, guys. Good morning. Happy Friday. See everybody. Happy we made it. Just one question about the equity needs vis-à-vis the storm cost recovery in Connecticut. Obviously, we are waiting to see the outcome of the aquarium sale. But again, I am trying not to get too excited here that we will have lower equity needs. You are mentioning also additional CapEx, right? Assuming that at least the portion of that $1.5 to $2 billion comes in, that would carry additional equity needs, right? So it is not likely, even with the sale of aquarium and with securitization, that there is a reduction in the total equity amount, just that the equity is not going to rise meaningfully along with higher CapEx. Is this how I should think about it?
Morning, Angie. Good morning. Happy Friday to see everybody. You know, happy we made it. Okay, so, uh, so just 1, question about the, um, Equity needs of these
The um uh storm cost recovery in Connecticut. Um, obviously we were waiting to see the um, outcome of the aquarium sale. But
John Moreira: I think you are thinking about it correctly. As I said in the last question, in February, we are going to do a refresh. As you know, there is a lot of puts and takes. In February, we will know exactly where the aquarium transaction is, and I am hoping that it closes. Our guidance is still to close that transaction by the end of the year. So we will have that. That is obviously assumed in our plan already. Then securitization, we will see. We will have better clarity on the timing and the amount by that point in time. We will also do a refresh of our five-year capital plan at another year. We will know where the $1.5 billion to $2 billion potential adds are, as Joe Nolan mentioned, a good portion of that is the Advanced Metering Infrastructure in Connecticut.
Meaning, fully along with higher capex. Is this? How I should think about it?
I you're you're thinking
John Moreira: So we will see how that progresses. We will have much more clarity, certainly by the end of this year.
In February, we're going to do a refresh as you know there's a lot of puts and takes and in February, we'll know exactly where the uh, the aquarium uh, transaction. And you hope, I'm hoping that it closes. Our guidance is still to close that transaction by the end of the year. So we'll have that. And that's obviously assumed in our plan already. Uh, and then securitization will see we'll have better Clarity on the timing and the amount um by that point in time. And we'll also do a refresh of our 5 year Capital plan added another year. So uh and we'll know uh where the 1 Point uh 1.5 to 2 billion potential ads. Uh as Joe mentioned uh a good portion of that is the Ami in Connecticut. So we'll see how that uh progresses so we'll have much more clarity certainly by the end of the year.
Sophie Karp: Okay. Then on the Yankee Gas rate case vis-à-vis SB4. We obviously saw the comments from the Attorney General in Connecticut. You have been out of, you know, for quite, what is it, seven years, right, since the last rate case?
Okay, and then on the uh the Yankee Gas uh rate case uh Visa vsb4.
John Moreira: Yes, 2018.
Sophie Karp: Yeah. Is the SB4 going to apply here? All of the commissioners need to opine on the rate case? This is more like a test case how future rate cases in the state are likely to go?
Um, so, I mean, wherever you see here. So, the comments from the, uh, attorney general in Connecticut, um, you've been out of, uh, you know, for, for quite what is it? Uh, 7 years, right? Since the last 3 days, 2018. Um,
Joe Nolan: Yeah. I think it is highly unlikely they will see two more in the time that this decision will be coming out. Keep in mind, the Attorney General is an elected official. A lot of it is related to messaging for other audiences. We have a good working relationship with the Attorney General, and we are going to continue to work hard on that case to get a decision that is fair. It is fair for us and it is fair for our customers.
Yeah. And so I mean again, is the um, so so are we, so this SB 4 is going to apply here, so all of the Commissioners need to applying on the rate case. Um, so this is more like a test case. How future rate cases in the state are likely to go.
John Moreira: Yeah. As I said in my formal remarks, the team did a phenomenal job in presenting the justification for the investments that we've made to maintain that system very safe and reliable for our customers. We did an excellent job taking into account some of the issues that PURA had raised in other rate proceedings. We put a very, very strong case in front of them. We knew we had to, and we did. I am very, very pleased with how that process has progressed.
Yeah, I think I think it's highly unlikely. They'll see uh 2 more in the time that this decision will be coming out, you know, keep in mind the Attorney General is an elected official. I, you know, he's, you know, a lot of it is, uh, you know, is is related to, you know, messaging for, for other audiences. I I don't we have a good working relationship with the attorney general and, uh, I, you know, we're uh, you know, we're going to continue to work out on that case to get a, get a decision. That's that's fair. It's fair for us and it's fair for our customers. Yeah. And and, and Angie, as I said in my formal remarks, I, you know, um, the team did a phenomenal job in presenting uh the justification for the Investments that we've made uh to maintain that uh that system very safe and reliable for our customers. So we did an excellent job taking into account, some of the issues that pure had raised and other rate proceedings. Uh, so we put a very, very strong case in front of them when you we had to and we did and I'm very very pleased uh with that uh how that progressed, how that process.
Sophie Karp: The last one on aquarium, given the pushback. I understand that the plan is to sell the assets, but if this route does not work, are we going to restart the sale process, or is it just that if the commission does not approve the current transaction, you are just going to keep the asset and just address the funding needs with more equity?
Has progressed.
And then the last one on aquarium, uh, you know, given the pushback.
So I, I understand that the the plan is to sell the assets but are we? I mean, if if this this routes doesn't work, how we? I mean are we going to re are you going to restart the the sale process or is it just that um you know if uh if the commission doesn't approve the current transaction you just going to keep the asset and
Joe Nolan: Yeah, you know, I mean, I think that case is going very, very well. The hearing finished last week, and I don't see any challenges around that. I think it's highly unlikely that we don't see that approved. You know, I think the team did a phenomenal job. You know, keep in mind, you got to keep in mind that the legislature and the governor enacted a law to allow this entity to buy that asset. For that to shift or something to happen there, the likelihood is highly unlikely. You know, if it does, obviously, you know, we'll cross that bridge when it comes to it. But I'm very optimistic that that transaction will close this year, and we'll be, you know, we'll be in great shape.
And just address the, uh, the funding needs with more equity.
Yeah, you know I mean I think that case is going very, very well, the hearing's finished uh last week and I don't see any challenges around that. Uh I think it's highly unlikely that that we don't see that approved. Um, you know, I think the team did a phenomenal job and, you know, keep in mind you got to keep in mind the the legislature in the governor enacted, a law to allow this entity to buy that asset. So for for, for that to shift or something to happen, there is is the likelihood is highly unlikely. You know, if it does obviously, you know, we'll cross that bridge when it comes to it. But I'm very optimistic that that transaction will close this year, uh, and we'll be uh, you know, we'll be in great shape.
Sophie Karp: Very good. Thank you.
Joe Nolan: Thank you.
Very good. Thank you.
John Moreira: Thank you, Andrew.
Michelle: Thank you. As a reminder, to ask a question, please press star one-one on your telephone. Our next question is going to come from the line of Ryan Levine with City. Your line is open. Please go ahead.
Thank you, Andy.
Thank you. And as a reminder to ask a question. Please press star, 1, 1 on your telephone.
Rima Hyder: Morning, Ryan.
Our next question is going to come from the line of Ryan LaVine with City. Your line is open, please go ahead.
John Moreira: Morning, Ryan.
Rima Hyder: Good morning. Congratulations on 40 years.
Morning Ryan.
John Moreira: Thank you.
Good morning and congratulations on 40 years.
Rima Hyder: Just one clarifying question. In terms of the Connecticut court's clarification around prudency standard, can you maybe unpack that a little bit more in detail around the implications for your business and how that could impact, whether it is an Advanced Metering Infrastructure decision or other decisions that would be coming before in the future?
Thank you. Just one clarifying question in terms of the Connecticut courts' clarification around Prudy standards. Can you maybe unpack it a little bit more in detail around the implications for your business and how that could impact, you know, whether it's an AMI decision or other decisions that would be coming before.
Uh, in the future.
John Moreira: Sure, sure. We were very pleased with the court. The court's decision kind of reiterated the prudency standard as it exists today in law. But the clarifying provision that we were very appreciative of is the fact that the commissioner cannot apply hindsight in the rate recovery process. So prudency needs to be set at the time management makes that investment decision. When you go in for the prudency review, which could be numerous years later, you cannot introduce new facts and circumstances that existed after that period. So that was very, very encouraging for us.
Commission that cannot, um, apply hindsight.
In in the rate recovery process. So crudi needs to be set at the time management makes the investment decision.
And when you go in for the prudence review, which could be numerous years later, you can't introduce new facts and circumstances that existed after that period. So that was very, very encouraging for us.
Rima Hyder: Great. Does that have any implications for any Advanced Metering Infrastructure decision or any of the other upcoming decisions that would impact you?
Joe Nolan: I think it will have a lot of effect on that because at the end of the day, we are making decisions based on the facts that are on the table today. If we pull the trigger and we decide to make the investment, it is not going to be something that two or three years from now that somebody is going to say, "Well, I think the rules have changed now and circumstances are different." I think it has changed, and I think it is improved. It has certainly improved my feeling around making that investment that we would not have to be concerned that the rules could change down the road. I think very much so. I think it helps.
Great. And and does that have any implications for any Ami decision or any of the other upcoming decisions that would impact you?
Rima Hyder: Okay. Thanks for taking my question.
Well, I think it will have uh it will have a lot of uh effect on that because at the end of the day, you know, we're we're making decisions based on the facts that are on the table today. And so if we we if we pull the trigger and we decide to make the investment, uh it's not going to be something that 2 or 3 years from now. That somebody's going to say well I think the uh the rules have changed now and circumstances are different. So I think it has changed and I think it's improved uh um certainly it's certainly improved my feeling around making that investment that we wouldn't have to be concerned that, you know, the rules could change down the road. So I think it very much so I think it helps
Joe Nolan: Thank you, Ryan.
Okay, thanks for taking my questions. Thank you, Ryan.
Michelle: Thank you. One moment for our next question. Our last question is going to come from the line of Julien Dumoulin Smith with Jefferies. Your line is open. Please go ahead.
Thank you. And 1 moment for our next question.
Joe Nolan: Good morning, Paul.
Our last question is going to come from the line of Julian. Dolan Smith with Jefferies, your line is open. Please go ahead. Good morning, Paul.
John Moreira: Hey.
Joe Nolan: Oh, Julie.
John Moreira: Good morning.
Joe Nolan: No, it is Paul, and happy anniversary.
John Moreira: Oh, thank you, Paul. You're so thoughtful.
Hey, good morning. Know it is Paul and happy anniversary. Oh thank you Paul. You're so thoughtful.
Joe Nolan: Yeah, no, I hadn't. 40 years. That is a high milestone. I hope I can make it that long. I had two quick follow-ups just to make sure I heard it right. Is the plan no additional equity needs in 2025 after you did the plan for June?
Yeah. No, I am 4 40 years. That is that is a high Milestone. I hope I can make it that long. Um, I have 2 quick follow-ups just to to make sure I I heard it. Right. So is the plan. No additional Equity needs in 2025. After you, you did that you, you plan for June.
John Moreira: It's not what I said. What I said was we did the $200 million raise, and we will monitor our CP balances and also the progress that we're making on the aquarium to maintain an appropriate level of liquidity. I don't see any that amount being significant this year. Obviously, having the proceeds from the aquarium happen later this year, I'm not anticipating a big amount of equity, if any, issued in 2026.
No, it's not what I said. What I said was we did we did.
The 200, uh, million dollar raise and we, we will monitor our, um, CP balances. And also, the progress that we're making on the aquarium on, um, to maintain an appropriate level of liquidity. So, um, but I don't see any any that amount being significant this year and obviously, having the, um, proceeds from the aquarium on happen, later this year, I I'm not anticipating, um, you know, uh, uh, a big amount of equity, if any issued in in 2026,
Joe Nolan: Okay, great. Thank you for clarifying on that. Then the last one I had.
John Moreira: No problem.
Joe Nolan: Thank you. With respect to the quarterly and cadence of earnings, could you just describe some of the building blocks for the second half of the year? I noticed that the corporate was negative $0.34, I think it was, in the first half, and you had a positive driver at corporate in Q3. So overall, if you could help on some of the building blocks on the second half.
Okay, great now. Thank you for clarifying on that. And then the last one I had.
John Moreira: Sure, Paul. As I've, for the last couple of quarters, I've highlighted the fact that interest costs are going to be a headwind. I've also said that in the first half of 2025, it'll be a far greater headwind because we close on the sale of the transaction a portion in July, and then we close on the GIP sale on September 30th. That's why the parent impact is a bit higher than it otherwise would have been. The second half of the year, I'm not anticipating it being, at least the interest component, as being as significant as it was for the first half. That's one item. Then typically, the tax truance that we typically do always happens in the third quarter. That could have an impact on the parent. On your point on the utility side, I think it's kind of steady state.
You know, thank you and just with respect to the the quarterly and, uh, Cadence of earnings. Could you just describe some of the, the building blocks for the second half of the year? Uh, just a notice. The, the corporate was -34 cents. I think it was in the, the first half and you had a a positive driver at corporate and third quarter, so just overall, if you could help on some of the building blocks on the second. Sure, Paul. So, as I, um, you know, for the last couple of quarters I've I've highlighted the fact that
Interest costs are going to be a a headwind. And I've also said that in the first half of 2025, it'll be a far greater, uh headwind because we closed on the, on the, the sale of the transaction, a portion in July, and then we close on the Gip sale in um, on September 30th. So um that's why it's uh the parent impact is a bit higher than it. Otherwise would have been. So the second half of the year, I'm not anticipating it being at least the interest component as being a significant as it was for the first half. So that's 1 item. And then typically
John Moreira: I've given you guidance as to what the rate adjustments are going to be on November 1st for the gas companies. That's pretty much locked in.
Uh, you know, the tax, um, the troops that we typically do is, is always happens in the, uh, the third quarter. So that could, that could have, uh, an impact on the parent, but on your point on the Utility side. Um, I think it's kind of steady state. I've given you guidance as to what the rate adjustments are going to be on November 1st, uh, for uh, for the gas companies, so, that's pretty, um, pretty much locked in,
Joe Nolan: Okay, great. No, thank you very much. Have a nice anniversary weekend.
John Moreira: Hey, thank you.
Joe Nolan: Thank you.
Okay, great. No, thank you very much. Have a nice day and weekend. Hey, thank you.
Michelle: Thank you. This will be concluding our question and answer session. I would now like to hand the conference back over to Joe Nolan for closing remarks.
To Joe Nolan for closing remarks.
John Moreira: Thank you very much. Thanks, everybody, for joining us today on the call. We are very excited about the future, and we want to thank you for taking the time this morning and enjoy the rest of the summer.
Well, thank you very much. Thanks, everybody, for joining us today on the call. We're very excited about the future, and we want to thank you for taking the time this morning. Enjoy the rest of the summer.
Michelle: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.
This concludes today's conference call. Thank you for participating and you may now disconnect everyone have a great day.