The Eversource Energy Q1 2024 Earnings Call is being moderated by Alyssa and hosted by Matthew Fallon, the Director for Investor Relations. The call will discuss forward-looking statements and the potential risk and uncertainty associated with them. Joseph Nolan, the Chairman, President, and CEO, and John Moreira, the Executive Vice President and CFO, will be speaking, along with Vice President and Controller Jay Buth. Nolan provides an update on the sale of the offshore wind business, which is on track to close in the coming months. All necessary regulatory approvals have been filed for the sale of South Fork Wind and Revolution Wind to global infrastructure partners.

Eversource has recently completed the purchase and sale agreement for Sunrise Wind with Ørsted and has filed for regulatory approvals for the project. Construction is underway for the Revolution Wind Project, and the company is excited about its future as a regulated utility business. The company's investments in technology have allowed for a quick response to a recent storm, restoring power to 85,000 customers in just five minutes. The company takes pride in its emergency response organization and ability to quickly restore power during emergencies.

Eversource's resiliency investments help minimize customer outage impacts and their emergency response plan allows for efficient restoration. The company is also focused on achieving aggressive greenhouse gas reduction goals in the states they serve and have developed an Electric Sector Modernization Plan to address this. The plan incorporates projected demand growth from electric vehicles and heating and analyzes electric growth down to the circuit level to identify necessary grid investments.

The state governments of Massachusetts, New Hampshire, and Connecticut are all working towards a clean energy transition. In Massachusetts, infrastructure investments will increase electrification capacity and allow for the adoption of electric vehicles, heat pumps, and solar generation. In New Hampshire, regulatory reforms are being considered to streamline the process for clean energy initiatives. In Connecticut, state policy leaders have a vision for solar expansion, electric vehicle adoption, and renewable purchase power agreements. However, there is a lack of alignment between state policy and regulatory decisions, which is hindering utility innovation and investment in clean energy initiatives.

The paragraph discusses the first quarter financial results of Eversource, a utility company. It mentions that the upfront program funding by the utilities does not work due to delayed cost recovery. The company is encouraged by a recent decision by PURA to provide timely reimbursement. The company remains committed to a clean energy future and thanks its team for their dedication. A financial update and drivers for cash flow enhancement are also mentioned. The company's GAAP and recurring earnings for the quarter were $1.49 per share, with electric transmission earning $0.50 per share.

Eversource's improved results in the first quarter of 2024 were driven by investments in their transmission system and increased revenues from their electric and natural gas distribution businesses. They also expect to see continued growth in their earnings and are reiterating their EPS guidance for the year. In terms of regulatory updates, they have filed a plan for electric sector modernization in Massachusetts and are expecting a decision in August, and are also busy with regulatory matters in New Hampshire.

The company submitted documentation for a prudency review of $232 million in storm costs and expects a decision later this year. They also plan to file a rate review in New Hampshire and received a final decision on their annual rate adjustment mechanism in Connecticut. The increase in rates is due to required costs, but will be offset by lower energy supply costs. The company also resubmitted a request for a prudency review of $635 million in storm costs in Connecticut and is currently in the discovery phase. These costs will be recovered in the next general distribution rate proceeding.

The company filed for a review of the Aquarion rate decision by the Appellate court and requested for the case to be transferred directly to the Connecticut Supreme Court. They believe that the legal issues raised in the case will have a negative impact on utility investment and customers in the long term. The company is committed to educating key leaders and communities on the importance of stable regulatory policies and supporting state policies for clean energy. However, the existing gap between the state's vision and regulatory framework is hindering progress and the company has had to make cuts to their capital expenditures in Connecticut as a result.

The company expects to reduce capital investment in Connecticut by $500 million over the next five years due to regulatory decisions not aligning with state policy. However, they confirm their five-year capital expenditure forecast of $23.1 billion and anticipate other drivers to enhance their FFO to debt ratio, such as the sale of assets, tax equity investments, rate increases, and potential sale of their water business. They aim to reach a targeted FFO to debt ratio of 14 to 15 by 2025.

The company has raised $75 million through equity issuances and plans to raise up to $1.3 billion in the future. They are also reviewing their water distribution business and preparing for a potential sale. Their 5-year capital forecast and financing plan drive a 5% to 7% EPS growth rate through 2028. In Connecticut, they have cut back on capital expenditures due to regulatory decisions and are looking to redeploy resources in more profitable areas.

The investment objectives in Connecticut focus on safety and reliability, with potential reductions in reliability areas due to negative regulatory environment. The company has a strong track record in reliability and a resiliency program in place. Up to $1.3 billion in equity is still planned, with a preference for utilizing the ATM program for flexibility. $75 million has already been executed through the program.

Carly Davenport from Goldman Sachs asks about the FFO to Debt walk and the impact of the 2023 under recoveries on the cash flow statement. John Moreira explains that the under recovery was approximately $600 million and would drive up FFO to debt by 200 basis points. He also mentions a favorable order received for a rate adjustment mechanism and plans for offshore wind projects to increase FFO to debt by 2025. Davenport then asks about the next milestones for the Massachusetts CL&P process and opportunities for other states to adopt similar frameworks. Moreira explains that the next milestones for Massachusetts are uncertain and discusses the potential for other states to adopt similar frameworks.

The hearings for the clean energy docket have concluded and now the DPU will review the briefs and reply briefs. The legislation passed a couple of years ago requires the DPU to make a decision by August. If approved, $600 million will be invested in the forecast period, with additional investments needed beyond that. Massachusetts is proactive in achieving its goals. In Connecticut, collaboration and cooperation with utilities and the authority is necessary to support their clean energy strategy. In New Hampshire, discussions are ongoing for utility-owned solar investments, with a rate review planned for this summer. This investment would be regulated, similar to the model in Massachusetts.

The speaker is asked about the impact of their recent rate order on their plans to monetize their asset in Connecticut. They confirm that the appeal process will take at least a year and they will continue to move forward with the process. The speaker also mentions the tax equity investment in South Forks and believes it will continue to benefit them for the next few years. They also mention other tax benefits and a deferred storm balance that will help maintain their FFO to debt ratio in the long term.

During the earnings call, the speaker was asked about Sunrise and the negative book value reported last quarter. The speaker explained that the accounting rules require them to wait until the transaction closes before making any adjustments, which is expected to occur in the third quarter of this year. The next question was about the drivers of the walk from 14% to 15% on Slide 10, and the speaker clarified that it is a mixed bag of FFO and debt reduction. The focus then shifted to the Aquarion process, with the speaker emphasizing that they are prioritizing value over speed in order to obtain the greatest possible value.

The company has filed a request to appeal to the Supreme Court regarding the Aquarion sale and expects a 9-12 month process. They will not hold off the sale process to wait for the decision. In the meantime, they are implementing the original rate change and expecting to file for their WICA program, which will provide cost recovery for their annual capital program. The company is pleased with the decisions being made in the Connecticut regulatory environment.

The governor has the ability to appoint five commissioners, but it is unclear if he will do so. The speaker expresses concerns about the current regulatory environment in Connecticut and the need for collaboration between the state and utility companies. He believes that Connecticut has the potential to be a leader in clean energy.

The speaker discusses the challenges they have faced in their business and assures investors that they are taking it seriously and working hard to make positive changes. They also mention a potential solar opportunity in New Hampshire and express confidence in the availability of land and the proximity to their infrastructure. They are still in the early stages of this project and will provide updates in future calls. The speaker emphasizes the importance of finding a fair model for utility owned solar in New Hampshire. A question is then asked about their operations in Connecticut.

Joseph Nolan, a representative from a utility company, agrees that state policies and regulatory environment are not aligned, making it difficult for them to invest capital. He is looking for preapproval and a regulatory recovery roadmap for their investments in AMI and EVs, similar to what they have in Massachusetts. He assures that they will not spend any money until they have a constructive regulatory environment in place. He believes this can be achieved through collaboration with the governor, other agencies, and even the Attorney General.

The speaker is asking a question about the impact of under recoveries on FFO to debt, and the speaker also congratulates the company on recent sports victories. The company responds that the impact on FFO to debt is not a one-to-one ratio and that they have already issued debt to cover upcoming maturities.

In this paragraph, the speaker discusses the potential impact of not moving forward with the sale of Aquarion water. They mention that if the sale does not happen, the equity could potentially be higher than $1.3 billion, but if the sale does go through, that number would decrease.

John Moreira discusses the current state of the company's equity needs and their plans for the potential sale of Aquarion. He clarifies that the FFO to debt ratio of 14-15% by 2025 will be achieved with other drivers, including cash inflows, and not just the sale of Aquarion. Joseph Nolan provides an update on the construction progress of the Revolution and Sunrise projects, noting that they are utilizing successful practices from the South Fork project. The call ends with a question from Travis Miller regarding CL&P.

The speaker discusses how much of the additional CapEx is covered under an existing rider or tracker, with a focus on the $300 million system hardening that has helped Connecticut improve reliability. They also mention that the clean energy policy in Connecticut will likely continue to be a political issue in the future. The speaker thanks everyone for their time and encourages follow-up questions to be directed to IR. The conference call concludes.

This summary was generated with AI and may contain some inaccuracies.