Eversource Energy’s Earnings Call Highlights Strong Performance and Strategic Advances

Eversource Energy ((ES)) has held its Q3 earnings call. Read on for the main highlights of the call.

Eversource Energy’s recent earnings call conveyed a generally positive sentiment, underscored by strong financial performance and strategic regulatory advancements. The company highlighted significant infrastructure investments, although it also addressed challenges related to offshore wind liabilities and regulatory hurdles in Connecticut and Massachusetts.

Strong Share Price Performance

Eversource Energy’s share price has been a standout performer among its EEI peer group year-to-date. This reflects the company’s robust operational execution and strategic initiatives, which have resonated well with investors.

Regulatory Progress in Connecticut

The company reported positive developments in Connecticut’s regulatory environment, including the appointment of new commissioners at the Public Utilities Regulatory Authority (PURA). These changes are expected to lead to more balanced regulatory outcomes, benefiting Eversource’s operations in the state.

Offshore Wind Project Advancements

Eversource Energy is making significant progress with its offshore wind projects, notably the Revolution Wind project. The onshore substation is substantially complete, with back-feed energization anticipated by the end of November, marking a critical milestone.

Significant Infrastructure Investment

Eversource is on track to invest nearly $5 billion in transmission and distribution infrastructure this year. This substantial investment underscores the company’s commitment to enhancing its infrastructure and service reliability.

Improved Credit Metrics

The company expects its Funds From Operations (FFO) to debt ratio to exceed 13% by the third quarter, an improvement of over 300 basis points from December 2024. This reflects Eversource’s strengthened financial position and prudent fiscal management.

Cash Flow Improvement

Operating cash flows have increased by over $1.7 billion year-over-year through the third quarter. This improvement highlights the company’s strong cash generation capabilities and financial health.

Offshore Wind Liability Increase

Eversource recognized a net after-tax nonrecurring charge of $75 million related to offshore wind liability. This includes a $285 million increase in liability, partially offset by $210 million in tax benefits, reflecting the complexities of managing large-scale renewable projects.

Challenges with Yankee Gas Rate Case

The company is awaiting a final decision on the Yankee Gas rate case, facing ongoing regulatory challenges in Connecticut. These challenges highlight the complexities of navigating regulatory environments while striving for favorable outcomes.

NSTAR Gas Rate Base Reset Denied

In Massachusetts, the Department of Public Utilities (DPU) denied a $45 million rate base roll-in for NSTAR Gas. Eversource has filed a motion for reconsideration and intends to file a rate case, demonstrating its proactive approach to regulatory setbacks.

Forward-Looking Guidance

Eversource Energy provided optimistic guidance for the remainder of the year and beyond. The company aims to close the sale of Aquarion Water by year-end, bringing in net cash of $1.6 billion. The guidance for 2025 recurring EPS has been raised to a range of $4.72 to $4.80, with a reaffirmed long-term EPS growth rate of 5% to 7%. Eversource is committed to advancing decarbonization and electrification initiatives while ensuring customer affordability.

In summary, Eversource Energy’s earnings call reflected a strong financial performance and strategic advancements, despite facing certain regulatory and project-related challenges. The company’s forward-looking guidance remains optimistic, with a focus on infrastructure investment and sustainable growth.