The paragraph is an introduction to the Eversource Energy Q3 2024 Earnings Call. The operator, Alyssa, welcomes attendees, explains the call format, and introduces Rima Hyder, VP of Investor Relations, who discusses the use of slides and forward-looking statements. Rima notes that actual results may vary due to risks and uncertainties, and references additional information in their news release and recent 10-Q. Key speakers include Joe Nolan, Chairman, President, and CEO, and John Moreira, Executive VP, CFO, and Treasurer. Joe Nolan begins the discussion by highlighting the company's progress, including a significant milestone achieved with the sale of Revolution Wind and South Fork Wind to global infrastructure partners.

The company has exited the offshore wind development business to focus on being a regulated utility that specializes in pipes and wires. Despite exiting, they acknowledge the importance of offshore wind for the region and plan to leverage their transmission expertise to support clean energy projects onshore. They have a $24 billion capital plan through 2028 focused on regulated electric, natural gas, and water infrastructure, including significant investments in transmission and electric distribution. The company aims to improve its financial stability by enhancing its balance sheet, improving its credit position, and increasing cash flow through the sale of assets, cost management, and strategic investments in clean energy.

Eversource is confident in achieving a 5% to 7% EPS growth through 2028, supported by its robust capital and financing plans. As a leading utility in New England, the company is advancing clean energy initiatives, including securing $90 million in federal funding for an offshore wind hub in Connecticut and $20 million for a battery storage project in Massachusetts. Their partnership with Massachusetts focuses on decarbonization goals and investment needs, with the state's approval of the Electric Sector Modernization Plan (ESMP), which earmarks $600 million for distribution investments and significant transmission upgrades, forming a potential national model for clean energy infrastructure.

The paragraph discusses significant investments in Massachusetts to boost electrification capacity by over 180%, establishing the state as a leader in clean energy. It highlights the progress of the Massachusetts AMI program, including the installation of smart meters and the successful implementation of a new customer billing system. In Connecticut, while a draft decision from PURA marks progress toward AMI deployment, certain challenges remain. The paragraph also introduces an innovative project in Cambridge, Massachusetts: a $1.5 to $1.6 billion underground substation, approved by the Energy Facilities Siting Board, set to be the largest in the U.S., with construction starting in early 2025.

The paragraph discusses Eversource's achievements and ongoing efforts in utility infrastructure investment, highlighting a collaborative approach with stakeholders. Eversource is recognized by Time magazine as a leading utility and top employer. The company aims for sustainable growth and will attend the upcoming EI conference. The call transitions to John Moreira, who reports on third-quarter financial results, noting a $524 million net loss from the sale of an offshore wind investment, with obligations linked to its completion in 2026.

The paragraph provides a detailed financial overview of quarterly earnings for different business segments. The overall GAAP results showed a loss of $0.33 per share, heavily impacted by an after-tax loss related to the offshore wind divestiture. Excluding the wind divestiture, recurring earnings were $1.13 per share, up from $0.97 the previous year. Segment-wise, electric transmission and distribution experienced earnings increases due to infrastructure investments and rate increases. The natural gas distribution showed reduced losses due to higher infrastructure revenues, while the water distribution segment increased earnings thanks to lower depreciation expenses and a recent acquisition. The parent company and other operations, excluding the offshore wind loss, also increased their earnings compared to last year.

The paragraph discusses the company's third-quarter results, highlighting a lower effective tax rate but increased interest expenses, leading to an updated full-year 2024 EPS guidance of $4.52 to $4.60. The company reaffirms its long-term EPS growth rate of 5% to 7%. In regulatory updates for Massachusetts, the company received approval for its Electric Sector Modernization Plan, allowing $600 million in distribution investments for clean energy and increasing its five-year capital investment forecast to $23.7 billion. Additionally, the company received approval for a rate-based reset following the acquisition of EGMA, leading to a $77 million revenue increase this year and $62 million in 2025, with another reset expected in 2027.

The paragraph discusses the company's activities in New Hampshire and Connecticut regarding storm cost recovery and rate cases. In New Hampshire, they are reviewing $232 million in storm costs, with a final decision expected next year, and have proposed a four-year performance-based rate-making plan with a capital support mechanism. Interim rates with a $61 million increase were implemented on August 1st. In Connecticut, they filed exceptions to PURA's draft decision on AMI cost recovery and plan to submit a rate case for Yankee Gas, citing a $210 million revenue deficiency due to investments. The paragraph concludes by mentioning efforts to improve balance sheet metrics.

The paragraph discusses several financial and strategic developments of a company. They have implemented a rate adjustment in Connecticut effective July 1, are increasing distribution rates, and are closing offshore wind sales in the third quarter. These actions, along with regulatory rate recoveries and tax benefits, aim to improve cash flow and achieve a FFO-to-debt target by 2025. They are also progressing on the sale of their Aquarion water business, aiming to close by the end of 2025. The company has raised approximately $1 billion through an ATM program and issued 15.7 million common shares by October 2024, including 1.1 million Treasury shares. They showcase a proven track record of earnings and dividend growth and express confidence in their five-year capital forecast of $23.7 billion and financing plan, projecting a 5% to 7% EPS growth rate through 2028 from a 2023 EPS of $4.34. Lastly, the call prepares to take questions, with Shahriar Pourreza from Guggenheim Partners asking about discussions on Millstone and state involvement in pricing.

The paragraph discusses the strong collaboration between Rhode Island, Connecticut, and Massachusetts in securing clean energy for their region. All parties, including Governor Lamont, are working together, with particular projects and assets like Clean Energy Connect and Seabrook being highlighted. Despite not being aware of specific pricing strategies, the speaker is confident in the mature relationship among the governors and their ability to find a solution beneficial to New England customers. The conversation then shifts to Ørsted's recent financial impairment related to Revolution and questions about obligations under the GIP agreement, which John Moreira is expected to address.

In this discussion, the company acknowledges a substantial $900 million loss, excluding gains from Sunrise, due to a highlighted issue with pile settlements mentioned by Ørsted. They intend to closely monitor progress with partners like GIP and Ørsted to address this. Shahriar Pourreza verifies that the loss is accounted for without further increments for now. The conversation then shifts to Joe Nolan and Carly Davenport discussing the company's financing strategy. Carly highlights that approximately $1 billion in equity has been raised this year, with plans to potentially reach $1.3 billion in the coming years. Joe emphasizes their focus on improving the balance sheet and assures that by the fourth quarter call, they will provide updated plans, revise capital forecasts, align financing strategies, and detail equity requirements.

In this exchange, Carly Davenport asks Joe Nolan about the 3% to 4% improvement in Funds from Operations (FFO) to debt, focusing on the contributions from known cash flow enhancements and the Aquarion sale. Joe Nolan responds by explaining that most major drivers of this improvement are known and measurable, including rate adjustments and offshore wind transactions, with only the Aquarion sale still pending. He highlights a recent $77 million rate adjustment approved by the Massachusetts DPU. Afterward, Nicholas Campanella from Barclays asks about cost-sharing changes for an offshore wind project, and Joe Nolan clarifies that they have reached a cost cap in their arrangement.

In the conversation, Nicholas Campanella and Joe Nolan discuss financial strategies related to Eversource and Ørsted, emphasizing a 50% exposure sharing between the two companies. Nicholas seeks clarification on rebasing plans based on prior year actuals and whether the 5% to 7% guidance includes proceeds from Aquarion. Joe Nolan confirms that the Aquarion proceeds are part of the financing plan and that rebasing will continue as usual. Durgesh Chopra from Evercore asks about the inclusion of the Cambridge underground station investment in the five-year plan, which Joe Nolan confirms. The discussion then turns to the funding of an additional $600 million CapEx, with further updates promised in a future call.

In the paragraph, Joe Nolan discusses the strategy for the Yankee Gas rate case in Connecticut, including the introduction of a Performance-Based Regulation (PBR) model, which has been successful in other states like Massachusetts and New Hampshire. He emphasizes the importance of cash flow to support necessary investments for maintaining safe and reliable gas services. He describes Yankee Gas as well-run but notes it has been under-earning. Nolan expresses hope for constructive outcomes in the rate case. Later, Bill Appicelli from UBS inquires about the Connecticut draft decision regarding the AMI docket and any desired modifications to make the decision more favorable. Joe Nolan is then prompted to expand on these comments.

The paragraph discusses the considerations and decision-making process for investing in the AMI program in Connecticut. It highlights the need for clear regulatory and legal assurances for cost recovery before proceeding with the investment. Joe Nolan mentions the success of a recent billing system implementation in Massachusetts as a positive example and notes that investing in AMI requires a comprehensive approach rather than piecemeal implementation.

The paragraph involves a discussion on Advanced Metering Infrastructure (AMI) as a crucial investment for enabling the grid and transitioning to a clean energy future, allowing customers to manage their energy usage and integrate distributed generation like solar panels. The speakers also address higher interest expenses, attributed to a combination of higher rates and increased debt due to delays in offshore wind projects. Joe Nolan then responds to Jeremy Tonet from J.P. Morgan, explaining that there is significant interest in the Aquarion asset, with the initial stage of the sales process completed and expressing confidence in the progress and interest generated.

In the paragraph, the speakers discuss their expectations for an announcement regarding a transaction winner by the first quarter, with confidence in closing the transaction by 2025 due to a six-month statutory process in Connecticut. Jeremy Tonet seeks clarification on equity issuances, and John Moreira confirms they were not forward sales, indicating the cash is already received. Ross Fowler from Bank of America asks about regulating Yankee through Performance-Based Ratemaking (PBR). John Moreira explains that PBR offers rate stability with annual inflation adjustments and performance incentives, reducing volatility compared to general rate proceedings. He emphasizes their confidence in achieving reasonable and practical performance targets.

In the paragraph, Ross Fowler and John Moreira discuss the regulatory framework for electrification in Massachusetts. Fowler mentions potential bill pressures and capital opportunities from the transition. Moreira expresses support for Massachusetts' model, emphasizing stakeholder collaboration and the ESMP mechanism, which balances investment needs for electrification. He praises the straightforward regulatory process and highlights the importance of planning beyond the initial phase, viewing the approach as collaborative and supportive. The discussion is followed by an operator announcing the next question from Steve Fleishman of Wolfe Research.

The paragraph features a conversation between Steve Fleishman, Joe Nolan, and Travis Miller concerning financial projections and clean energy advancements. Steve Fleishman asks for clarification about higher vessel costs related to Ørsted's impairment and their effect on sales. Joe Nolan responds that the vessel issue has been resolved and emphasizes monitoring project development. Steve also inquires about a slight midpoint decrease in the year's guidance range, to which Joe attributes interest assumptions and delayed Fed actions rather than equity issuance timing. Travis Miller then shifts the topic to the ESMP (Energy System Modernization Program), asking about its contribution to clean energy goals. John Moreira acknowledges understanding the inquiry, implying an ongoing effort towards clean energy electrification.

The paragraph discusses ongoing and future investment programs related to clean energy in Massachusetts and Connecticut. Initially, a program referred to as the CIP, involving interconnection of solar energy across six clusters in Massachusetts, was approved by the DPU, costing about a billion dollars. The ESMP is the next phase, with more investments expected. In Connecticut, investment is contingent on improved regulatory conditions, with the AMI project being a priority. The focus is on ensuring timely cash flow to fund investments, emphasizing the importance of aligning recovery mechanisms with investment timelines.

The paragraph is a segment of a conference call where different participants are discussing financial aspects of a company. Julien Dumoulin-Smith from Jefferies asks about the company's financial performance, focusing on improvements in the FFO to debt ratio and elevated interest expenses. John Moreira indicates that the FFO to debt ratio has improved since 2023 but does not provide specific details. Julien also inquires about the company's elevated interest expenses moving forward into 2025, seeking clarification on the gross run rate against the parent company. The conversation reflects ongoing financial management and assessment efforts.

In the paragraph, Julien Dumoulin-Smith and John Moreira discuss financial aspects related to equity issuance and its impact on debt for a company. Moreira explains that while issuing equity in the first half of the year created a drag because cash and wind proceeds were received mostly in the third quarter, the billion dollars received helped offset debt and improve interest rates. Julien then shifts to asking Joe Nolan about cost provisions and recovery mechanisms for a new substation project in Massachusetts, which Nolan assures will have no recovery lag due to clear estimates and FERC regulation. Andrew Weisel from Scotiabank then poses a question about a $500 tax equity investment related to South Fork.

In the dialogue, Andrew Weisel questions John Moreira about the expected financial benefits from tax credits, initially projected by the end of 2025 but potentially extending into 2026 or later. Moreira explains that the $500 million in tax credits will indeed be deferred beyond 2026 but emphasizes that other tax credits will be leveraged, maintaining overall financial balance. He confirms that the credits will still be used, just in later years. Weisel then inquires about overall progress on financial targets, noting an increase in the bottom line from $2.6 billion to $3.75 billion. Moreira clarifies that despite the increase and adjustments for known factors, they remain within the target range of 14% to 15% growth. Finally, Weisel seeks a high-level overview related to Connecticut.

The paragraph is a discussion about Eversource's capital investment strategy, particularly focusing on the challenges of investing in Connecticut compared to other states. Joe Nolan mentions that the company had previously redirected $500 million of capital away from Connecticut due to issues with timely cost recovery. However, there are plenty of investment opportunities in New Hampshire and Massachusetts, where legal standards are more favorable. Nolan remains optimistic about potential changes in Connecticut that might enable investment there. John Moreira adds that timely cost recovery is crucial for maintaining the balance sheet and serving customers. The discussion then shifts to the next question from another participant.

In the conversation, Angie Storozynski questions John Moreira about the earnings benefits related to the NECEC transmission line, particularly if these benefits are influenced by the project's capital costs. Moreira clarifies that the benefit comes from the execution of the Power Purchase Agreement (PPA), which provides remuneration based on the annual billing of the project, at a rate of approximately 2.25%. He further explains that this percentage is linked to the value billed to customers, which helps maintain the earnings recognized from the project.

The paragraph is a conversation between Joe Nolan, a representative of a regulated utility company, and Angie Storozynski during an investor call. Joe Nolan clarifies that the company plans to remain a pure-play regulated utility focused on smaller, more predictable projects, rather than pursuing large merchant projects like a transmission line from Canada. Angie thanks Joe and ends the conversation. Then, Paul Patterson asks Joe about concerns related to AMI (Advanced Metering Infrastructure), specifically about the company's ability to implement rate increases rather than any disputes over incremental Operations and Maintenance (O&M) costs.

In the paragraph, John Moreira addresses Paul Patterson's inquiry about the impact of offshore wind costs on Connecticut and the potential swap of the Millstone nuclear facility with offshore wind. Moreira highlights the involvement of regional governors in promoting clean energy, likening it to a "potluck supper" where different states contribute varied energy resources. Connecticut is interested in integrating nuclear energy, Massachusetts favors Canadian hydro power, and New Hampshire has its own nuclear plant. Connecticut's governor hopes for financial contributions from other states for the Millstone assets, despite these initiatives not being directly related to their business.

The paragraph discusses the collaboration among New England governors to address energy challenges, emphasizing a strong working relationship and optimism for solutions benefiting all customers. It highlights the importance of timely infrastructure development for a clean energy future, with a focus on environmental justice and inclusive decision-making. The successful siting process in Cambridge is attributed to the involvement and consideration of all stakeholders. The conversation then transitions to closing remarks for a call.

The conference call has ended, and participants are thanked for their involvement and instructed to disconnect their lines.

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