NSTAR ELECTRIC CO
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
ES$69.84-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0000072741-24-000010
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000072741-24-000018
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 168 previous paragraphs and 165 current paragraphs.
80 unchanged; 64 reworded; 19 added; 20 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our results without including these items. This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods. We believe the impacts of the impairment charge for the offshore wind investments, the loss on the disposition of land associated with an abandoned project, and transaction and transition costs are not indicative of our ongoing costs and performance. We view these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. Due to the nature and significance of the effect of these items on Net Income Attributable to Common Shareholders and EPS, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business. These non-GAAP financial measures should not be considered as alternatives to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as indicators of operating performance.
Current report
•We earned $335.3 million, or $0.95 per share, in the second quarter of 2024, compared with $15.4 million, or $0.04 per share, in the second quarter of 2023. We earned $857.2 million, or $2.43 per share, in the first half of 2024, compared with $506.6 million, or $1.45 per share, in the first half of 2023. Our results for the second quarter and first half of 2023 include an after-tax impairment charge of $331.0 million, or $0.95 per share, recorded within Eversource Parent and Other Companies to reflect our estimate of the fair value of the offshore wind projects. Our 2023 results also include after-tax land abandonment and other charges recorded within Eversource Parent and Other Companies of $6.2 million, or $0.01 per share, in the second quarter of 2023 and $6.7 million, or $0.01 per share, in the first half of 2023. Excluding the offshore wind impairment and these other charges, our 2023 non-GAAP earnings were $352.6 million, or $1.00 per share, in the second quarter of 2023 and $844.3 million, or $2.41 per share, in the first half of 2023.
Current report
•On April 18, 2024, Eversource and Ørsted executed the equity and asset purchase agreement to sell Eversource’s 50 percent interest in Sunrise Wind to Ørsted for a gross purchase price of $230 million. The purchase price was subject to reduction for actual capital spending less than forecasted spending between signing the agreement in January and closing of the transaction. On July 9, 2024, Eversource completed the sale of its 50 percent ownership share of Sunrise Wind to Ørsted. In accordance with the equity and asset purchase agreement and after adjustment for the reduction in capital spending compared to forecasted, Ørsted paid Eversource $118 million at the closing of the sale transaction, and the remaining proceeds of $34 million will be paid after onshore construction is completed and certain other construction milestones are achieved.
Current report
(1)In the second quarter of 2023, we recorded an impairment charge resulting from the expected sales of our offshore wind investments and to reflect the estimate of the fair value of the offshore wind projects at that time. For further information, see "Business Development and Capital Expenditures – Offshore Wind Business" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.
Current report
(2)The 2023 charges primarily include a loss on the disposition of land. The land was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned.
Current report
Our water distribution segment earnings decreased $1.3 million in the second quarter of 2024, as compared to the second quarter of 2023, due primarily to higher operations and maintenance expense, higher interest expense, and higher depreciation expense.
Current report
Eversource Parent and Other Companies: Eversource parent and other companies’ losses improved by $293.6 million and $275.8 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to the absence of the impairment of Eversource parent’s offshore wind investments in the second quarter of 2023, which resulted in an after-tax charge of $331.0 million, or $0.95 per share and the absence of a loss on the disposition of land in the second quarter of 2023 that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned. These earnings improvements were partially offset by higher interest expense in both periods. Additionally, earnings in the second quarter were negatively impacted by a higher effective tax rate.
Current report
On April 18, 2024, Eversource and Ørsted executed the equity and asset purchase agreement to sell Eversource’s 50 percent interest in Sunrise Wind to Ørsted for a gross purchase price of $230 million. The purchase price was subject to reduction for actual capital spending less than forecasted spending between signing the agreement in January and closing of the transaction. On July 9, 2024, Eversource completed the sale of its 50 percent ownership share of Sunrise Wind to Ørsted. In accordance with the equity and asset purchase agreement and after adjustment for the reduction in capital spending compared to forecasted, Ørsted paid Eversource $118 million at the closing of the sale transaction, and the remaining proceeds of $34 million will be paid after onshore construction is completed and certain other construction milestones are achieved.
Current report
With the completion of the sale, Eversource has divested all of its ownership interest in Sunrise Wind and will not have any ongoing ownership interest in the project, nor any ongoing financial obligations associated with project costs. Eversource’s existing credit support obligations were either terminated or indemnified by Ørsted as a result of the sale. Eversource has entered into a separate amended and restated construction management agreement to manage Sunrise Wind’s onshore construction through completion. In this role, Eversource will solely be a service provider to Sunrise Wind.
Current report
Upon close of the sale transactions in the third quarter of 2024, the total proceeds will be compared to the current carrying value of the investments, and the difference will be reflected in the statement of income. At that time, Eversource will also record an estimate of future obligations under the terms of the GIP transaction, which primarily could include the potential cost overrun sharing obligation and potential obligation to maintain GIP’s internal rate of return for the Revolution Wind project. Eversource is currently evaluating the combined impact of the Sunrise Wind sale and the expected sale of Revolution Wind and South Fork Wind, and at this time, does not expect a material financial impact on our 2024 results. Proceeds from the transactions will be used to pay off parent company debt.
Current report
In the second quarter of 2023, in connection with the process to divest its offshore wind business, Eversource identified indicators for impairment. In the impairment assessment, Eversource evaluated its investments and determined that the carrying value of the equity method offshore wind investments exceeded the fair value of the investments and that the decline in fair value was other-than-temporary. The completion of the strategic review in the second quarter of 2023 resulted in Eversource recording a pre-tax other-than-temporary impairment charge of $401 million ($331 million after-tax) to reflect the investment at estimated fair value based on the expected purchase price at that time. In the fourth quarter of 2023, Eversource recognized an additional pre-tax other-than-temporary impairment charge of $1.77 billion ($1.62 billion after-tax) in its offshore wind investments and established a new cost basis in the investments as of December 31, 2023. The impairment charges were non-cash charges and did not impact Eversource’s cash position.
Current report
Installation of South Fork Wind’s twelve 11-megawatt wind turbines was completed in February 2024 and the project is in-service. For Revolution Wind, major construction began in the fourth quarter of 2023 and onshore and offshore construction is underway. For Sunrise Wind, onshore construction is in progress.
Current report
EGMA Distribution Rates: On May 29, 2024, EGMA filed for its first rate base reset for rates to be effective November 1, 2024, in accordance with an October 7, 2020 EGMA Rate Settlement Agreement approved by the DPU. The rate base reset occurring on November 1, 2024 adjusts distribution rates to account for capital additions (including the roll-in of GSEP capital additions), depreciation expense, property taxes, and return on rate base for capital additions placed into service through December 31, 2023. The total revenue requirement calculated for the first rate base reset is an increase to base distribution rates of $155.0 million, of which $34.1 million is associated with GSEP investments through December 31, 2023. Under the terms of the Rate Settlement Agreement, EGMA applied a cap on the revenue change to be effective November 1, 2024, and the amount in excess of the cap will be deferred for recovery through the Local Distribution Adjustment Clause (LDAC) on November 1, 2025, including carrying charges. After adjusting for the cap, the increase to base distribution rates is $87.5 million to be effective November 1, 2024 (of which $8.8 million is offset by a reduction in the GSEP revenue requirement and GSEP rate also taking effect on November 1, 2024), and an increase of $67.5 million to base distribution rates to be effective November 1, 2025.
Current report
NSTAR Electric CIP Filing: On December 30, 2022, the DPU approved a provisional system planning tariff for the recovery of costs associated with a capital investment project (CIP) proposal submitted by NSTAR Electric for one of six geographic study areas in its service territory in accordance with DPU’s directives. The DPU established a new, provisional framework for planning and funding upgrades to the electric power system to foster development and interconnection of distributed energy facilities. Under the DPU program, NSTAR Electric has filed infrastructure upgrade proposals to be built within a four-year construction timeframe that allocate the costs of interconnection upgrades between the interconnecting distributed generation facility and distribution customers based on a technical analysis of capacity benefits. Payments made by the distributed generation facility will be applied against the total capital investment made by NSTAR Electric and NSTAR Electric will earn a return on the net investment. The amount allocated to distribution customers will be recovered through a reconciling mechanism, the Provisional System Planning Tariff. The DPU approved the first of these provisional system planning projects, the Marion-Fairhaven group study area, which will enable 141 MW of distributed energy resources (DER) to be interconnected at a total estimated cost of $120 million. Of the total $120 million, $66 million will be allocated to distribution customers, once the enabled distributed energy facilities capacity is fully subscribed by distributed energy facilities interconnecting customers. Additionally, NSTAR Electric will proceed with construction of approximately $54 million of transmission upgrades necessary to improve local reliability and integrate distribution energy resources in the Marion-Fairhaven area and recover the amount through local transmission rates.
Current report
On June 4, 2024, the DPU approved four of the remaining five CIPs that were originally submitted by NSTAR Electric. These included the Plainfield-Blandford CIP, which will enable 40 MW of DER to be interconnected at a total estimated distribution investment of $37 million, the Dartmouth-Westport CIP which enables 60 MW of DER for a total distribution investment of $58 million, the Plymouth CIP which enables 380 MW of DER for a total distribution investment of $152 million and the Cape Cod CIP which enables 296 MW of DER for a total distribution investment of $170 million. Of the total $417 million for these four recently approved CIPs, $183 million will be allocated to distribution customers, once the enabled distributed energy facilities capacity is fully subscribed by distributed energy facilities interconnecting customers. Additionally, NSTAR Electric will proceed with construction of approximately $64 million of transmission upgrades necessary to improve local reliability and integrate distribution energy resources in the four CIP areas and recover the amount through local transmission rates. The sixth and final originally filed CIP, Freetown, is still pending approval with the DPU.
Current report
New Hampshire:
Current report
PSNH Distribution Rate Case: On June 11, 2024, PSNH filed an application with the NHPUC for approval of a temporary annual base distribution rate increase, proposed to take effect August 1, 2024. On July 31, 2024, the NHPUC approved a settlement agreement that was reached by PSNH, New Hampshire Department of Energy, and the Office of the Consumer Advocate to implement a temporary annual base distribution rate increase of $61.2 million to take effect August 1, 2024.
Current report
Also on June 11, 2024, PSNH filed an application with the NHPUC to request an increase in permanent base distribution rates of $181.9 million, which is inclusive of the temporary rate increase, and proposed to take effect August 1, 2025. The temporary rates are subject to reconciliation based on the outcome of the permanent rate case back to the date when temporary rates took effect. The permanent rate increase request includes $247 million in unrecovered storm costs to be recovered over a five-year period. As part of the rate case, PSNH proposed to implement a performance-based rate making plan that would adjust rates annually over a four-year term with a corresponding stay out provision. The plan includes a revenue-cap formula adjusted for inflation, a supplemental capital adjustment formula to support PSNH’s planned capital infrastructure improvements, an exogenous events recovery mechanism, performance metrics and an earnings sharing mechanism, among others. The NHPUC is permitted up to twelve months in all to investigate the proposed rates and issue a final order. A decision by the NHPUC on permanent rates is expected by August 1, 2025.
Current report
Impairment of Offshore Wind Investment relates to an impairment charge in 2023 associated with Eversource’s equity method investment in its offshore wind business resulting from the completion of the strategic reviewto reflect the estimate of the fair value of the offshore wind projects. See "Business Development and Capital Expenditures – Offshore Wind Business" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.
Removed paragraphs (20)
Previous report
•We earned $521.8 million, or $1.49 per share, in the first quarter of 2024, compared with $491.2 million, or $1.41 per share, in the first quarter of 2023.
Previous report
On April 18, 2024, Eversource and Ørsted executed the equity and asset purchase agreement to sell Eversource’s 50 percent interest in Sunrise Wind to Ørsted, and upon closing, Ørsted will become the sole owner of Sunrise Wind. Eversource will remain contracted to manage Sunrise Wind’s onshore construction through completion. In accordance with the equity and asset purchase agreement, Ørsted will pay Eversource 50 percent of the negotiated purchase price upon closing the sale transaction, with the remaining 50 percent paid after onshore construction is completed and certain other milestones are achieved. Upon the closing of the transaction, Eversource will not have any ongoing ownership interest in the project, nor any ongoing financial or credit support obligations associated with project costs. The impact of the purchase price from the sale of Sunrise Wind to Ørsted, as compared to the current carrying value of the investment which had assumed an abandonment of the project, will be reflected when the sale of Sunrise Wind is completed. Eversource expects the sale of Sunrise Wind to Ørsted will be completed later this year.
Previous report
•As of January 1, 2024, four of South Fork Wind’s twelve turbines were placed into service and met the project commercial operation date requirements under the power purchase agreement with LIPA. Installation of the project’s twelve 11-megawatt wind turbines was completed in February 2024 and all are now producing power. Final commissioning, including warranty testing and construction contract close-out, is underway.
Previous report
Eversource Parent and Other Companies: Eversource parent and other companies’ losses increased $17.8 million in the first quarter of 2024, as compared to the first quarter of 2023, due primarily to higher interest expense and the absence of a benefit in the first quarter of 2023 from the liquidation of Eversource parent’s equity method investment in a renewable energy fund, partially offset by the absence of a charitable contribution made with a portion of the proceeds from the liquidation in the first quarter of 2023. Parent and other companies also benefited from a lower effective tax rate.
Previous report
In March 2024, NSTAR Gas closed on two First Mortgage Bonds, Series W and Series X for $160.0 million and $40.0 million, respectively, and these bonds will be issued in June 2024.
Previous report
On April 18, 2024, Eversource and Ørsted executed the equity and asset purchase agreement to sell Eversource’s 50 percent interest in Sunrise Wind to Ørsted, and upon closing, Ørsted will become the sole owner of Sunrise Wind. Eversource will remain contracted to manage Sunrise Wind’s onshore construction through completion. In accordance with the equity and asset purchase agreement, Ørsted will pay Eversource 50 percent of the negotiated purchase price upon closing the sale transaction, with the remaining 50 percent paid after onshore construction is completed and certain other milestones are achieved. Upon the closing of the transaction, Eversource will not have any ongoing ownership interest in the project, nor any ongoing financial or credit support obligations associated with project costs. The impact of the purchase price from the sale of Sunrise Wind to Ørsted, as compared to the current carrying value of the investment which had assumed an abandonment of the project, will be reflected when the sale of Sunrise Wind is completed. In accordance with accounting guidance, the impairment loss recognized on the Sunrise Wind investment cannot subsequently be reversed for increases in estimated fair value, and therefore the impact will be recognized when the sale occurs. Eversource expects the sale of Sunrise Wind to Ørsted will be completed later this year.
Previous report
Federal Siting and Permitting Process: The federal siting and permitting process for each of our offshore wind projects commences with the filing of a Construction and Operations Plan (COP) application with BOEM. BOEM provides a review schedule for the project’s COP approval and conducts environmental and technical reviews of the COP. BOEM issues an Environmental Impact Statement (EIS) that assesses the environmental, social, and economic impacts of constructing the project and recommends measures to minimize impacts. The Final EIS will inform BOEM in deciding whether to approve the project or to approve with modifications and BOEM will then issue its Record of Decision. BOEM issues its final approval of the COP following the Record of Decision. South Fork Wind and Revolution Wind have received final approval from BOEM.
Previous report
Sunrise Wind filed its COP application with BOEM in September 2020. For the Sunrise Wind project, BOEM released its Draft EIS on December 16, 2022 and its Final EIS on December 15, 2023. The Record of Decision was received on March 26, 2024 and final approval of Sunrise Wind is expected in the second quarter of 2024.
Previous report
Construction Process: South Fork Wind entered the construction phase in early 2022 and construction activities have been completed. As of January 1, 2024, four of South Fork Wind’s twelve turbines were placed into service and met the project commercial operation date requirements under the power purchase agreement with LIPA. Installation of the project’s twelve 11-megawatt wind turbines was completed in February 2024 and all are now producing power. Final commissioning, including warranty testing and construction contract close-out, is underway. South Fork Wind faces several challenges and appeals of New York State and federal agency approvals, however we believe it is probable we will be able to overcome these challenges.
Previous report
For Revolution Wind, on October 31, 2023, the joint venture made its final investment decision to advance to full onshore and offshore construction and installation, and major construction began in the fourth quarter of 2023 upon receipt of all necessary federal, state and local approvals. Construction of the project’s onshore substation, onshore interconnection facility, and duct bank for the onshore underground transmission cable is underway. Offshore construction activities have also begun, with boulder clearance underway to prepare for offshore transmission cable installation. Other marine construction activities, including installation of the wind turbine foundations, 11-megawatt wind turbines, transmission cable, and offshore substations, are expected to occur in 2024 and 2025. We expect the Revolution Wind project to be in-service in late 2025.
Previous report
For Sunrise Wind, on March 26, 2024, the joint venture made its final investment decision to proceed with the project. Construction of the direct current to alternating current onshore converter station and 18-mile onshore duct bank for the onshore underground transmission cable is now underway. In addition, expansion of the onshore substation where Sunrise Wind will interconnect into the New York power grid has begun. Marine construction activities for Sunrise Wind are expected to begin later this year. For Sunrise Wind, based on the current expected timing of BOEM’s final approval and the start of offshore construction, we currently expect an in-service date in 2026.
Previous report
CL&P Performance-Based Rate Making: On May 26, 2021, in accordance with an October 2020 Connecticut law, PURA opened a proceeding to begin to evaluate and eventually implement performance-based regulation (PBR) for electric distribution companies. PURA is conducting the proceeding in two phases. On January 25, 2023, PURA staff issued a proposal outlining a suggested portfolio of PBR elements for further exploration and potential implementation in the second phase of the proceeding. On April 26, 2023, PURA issued a final decision on the first phase and identified various objectives to guide PBR development and evaluate adoption of a PBR framework. The decision commenced Phase 2 by initiating three reopener dockets focused on revenue adjustment mechanisms, performance metrics and integrated distribution system planning with final decisions expected in 2025.
Previous report
On November 16, 2023, PURA issued a straw proposal in the first reopener that focused on revenue adjustment mechanisms. The proposal outlines potential additions and reforms to the current revenue adjustment mechanisms, such as multi-year rate plans, earnings sharing mechanisms and the revenue decoupling mechanism. On March 14, 2024, PURA issued a straw proposal in the second reopener docket which concentrates on performance mechanisms in a PBR framework. The proposal suggests the development of performance incentive mechanisms, reported metrics and scorecards. These straw proposals are not authoritative and additional technical sessions, hearings and testimony will continue prior to a final decision, which will not be applied until the time of CL&P’s next distribution rate case.
Previous report
We continue to monitor developments in this proceeding, and at this time, we cannot predict the ultimate outcome of this proceeding and the resulting impact to CL&P.
Previous report
CL&P Storm Filing: On December 22, 2023, CL&P initiated a docket seeking a prudency review of approximately $634 million of catastrophic storm costs for twenty-four weather events from January 1, 2018 to December 31, 2021. In the filing, CL&P requested PURA establish a rate to collect $50 million annually from customers from the date of the final decision in this proceeding. On March 1, 2024, PURA declined this request stating that a rate amendment should be conducted as part of a rate case. CL&P re-filed this request but removed the rate aspect and is seeking just the prudency review of the storm costs. On March 28, 2024, PURA established a proceeding for the purpose of receiving and reviewing evidence of the costs reported by CL&P in response to catastrophic storms and pre-staging events occurring between 2018 and 2021. PURA established a partial procedural schedule with hearings scheduled in the third quarter of 2025. Although we cannot predict the ultimate outcome of this matter, we continue to believe these deferred storm restoration costs were prudently incurred and are probable of recovery. As a result, management does not expect the storm cost review by PURA to have a material impact on the financial position or results of operations of CL&P.
Previous report
CL&P Advanced Metering Infrastructure Filing: On July 31, 2020, CL&P submitted to PURA its proposed $512 million Advanced Metering Infrastructure (AMI) investment and implementation plan. On August 17, 2021, PURA issued a Notice of Request for an Amended EDC Advanced Metering Infrastructure Proposal. On November 8, 2021, CL&P submitted an Amended Proposal in response to this request with an updated schedule for the years 2022 through 2028, which included additional information as required by PURA. As required, the plan includes a full deployment of advanced metering functionality and a composite business case in support of the Advanced Metering Infrastructure plan. On January 3, 2024, PURA issued a final decision regarding CL&P’s Advanced Metering Infrastructure investment and implementation plan, which CL&P most recently estimated at $766.4 million for capital costs and operating expenses. In CL&P’s view, the final decision does not provide a reasonable path for cost recovery and delays implementation by at least a year during the pendency of the cost recovery proceeding. In addition, the final decision modifies the prudence standard for recovery of costs expended on the project, improperly linking recovery to outcomes not known at the outset of the project. On January 18, 2024, CL&P submitted a motion for reconsideration to PURA asking that the agency modify these aspects of the decision, which PURA subsequently denied on February 14, 2024. On March 6, 2024, CL&P filed written comments citing four major problems associated with PURA’s guidelines for recovery of the costs of AMI implementation, which if not addressed, represent obstacles to AMI implementation in Connecticut. On April 16, 2024, PURA issued a procedural order directing Eversource and inviting all parties and intervenors to submit pre-filed testimony pertaining to AMI by May 14, 2024, and rebuttal testimony by May 29, 2024. A final decision is expected in the fourth quarter of 2024.
Previous report
Future of Gas Docket: In October 2020, the DPU opened Docket “DPU 20-80 The Future of Gas” to examine the role of Massachusetts natural gas local distribution companies (LDCs) in helping to meet the state’s 2050 climate goals. In December 2023, the DPU issued an order for this docket. The DPU will consider and, in some cases, require new processes and analysis for traditional natural gas investments, which may require significant changes to the LDC planning process and business models. The DPU intends to put policies and structures in place that would protect customers as Massachusetts works to decarbonize the building sector, which may involve subsequent dockets and regulatory proceedings and potentially recasting the role of LDCs in Massachusetts. The DPU preserved customer choice for energy needs and encouraged further development of decarbonized alternatives, such as the networked geothermal systems that NSTAR Gas is piloting in Framingham, Massachusetts. On December 29, 2023, Eversource and other LDCs sought formal clarity from the DPU to fully understand the resulting impact to their natural gas businesses and the associated timing of any impacts. On April 2, 2024, the DPU issued an order responding to the request for clarification indicating that the LDCs shall implement the inclusion of a Non-Gas Pipeline Alternatives (NPA) analysis on all project authorizations effective immediately. Existing NPA analysis processes will be used until such time a formal stakeholder-based NPA analysis framework is established and approved by the DPU. The DPU also indicated that NSTAR Gas and EGMA are not required to provide climate compliance performance metrics in the next PBR filing, however would be expected to propose metrics at the latest in the next base distribution rate proceeding. Greenhouse gas emissions reporting was not changed from the order. Eversource does not believe there is any indication of an inability to recover costs or risk of impairment of NSTAR Gas’ and EGMA’s natural gas assets at this time.
Previous report
Legislative and Policy Matters:
Previous report
Federal: On April 10, 2024, the U.S. Environmental Protection Agency announced the final regulation setting drinking water standards for six per- and polyfluoroalkyl substances (PFAS) compounds. The regulation requires compliance under a phased approach in which systems will need to complete the initial monitoring requirements for each PFAS within three years, and when warranted, take steps to assure compliance within five years. Beginning in 2027, systems will need to report results of initial monitoring and regular monitoring and issue public notifications for any monitoring and reporting violations. Starting in 2029, systems must comply with all maximum contaminant levels (MCL) and provide public notification for MCL violations. Eversource is currently evaluating the impacts to comply with the regulation for its water business.
Previous report
The decrease in electric distribution wholesale market sales revenue for the three month period was due primarily to lower average electricity market prices received for wholesale sales at CL&P, NSTAR Electric and PSNH. ISO-NE average market prices received for CL&P’s wholesale sales decreased to an average price of $39.65 per MWh for the three months ended March 31, 2024, as compared to $48.95 per MWh for the same period in 2023, driven primarily by lower natural gas prices in New England. Volumes sold into the market were primarily from the sale of output generated by the Millstone PPA and Seabrook PPA that CL&P entered into in 2019, as required by regulation. CL&P sells the energy purchased from Millstone and Seabrook into the wholesale market and uses the proceeds from the energy sales to offset the contract costs. The net sales or net cost amount is refunded to, or recovered from, customers in the non-bypassable component of the CL&P FMCC rate.
Reworded paragraphs (64)
Previous wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, as well as the Eversource 2023 combined Annual Report on Form 10-K. References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries. All per-share amounts are reported on a diluted basis. The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."
Current wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, the combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as well as the Eversource 2023 combined Annual Report on Form 10-K. References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries. All per-share amounts are reported on a diluted basis. The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."
Previous wording
The only common equity securities that are publicly traded are common shares of Eversource. Our earnings discussion includes a financial measure that is not recognized under GAAP (non-GAAP), EPS by business, which is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities of such business, but rather represent a direct interest in our assets and liabilities as a whole. We use this non-GAAP financial measure to evaluate and provide details of earnings results by business. This non-GAAP financial measure should not be considered as an alternative to EPS determined in accordance with GAAP as an indicator of operating performance.
Current wording
The only common equity securities that are publicly traded are common shares of Eversource. Our earnings discussion includes financial measures that are not recognized under GAAP (non-GAAP) referencing our earnings and EPS excluding the impairment charge for the offshore wind investments, a loss on the disposition of land that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned, and certain transaction and transition costs. EPS by business is also a non-GAAP financial measure and is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities of such business, but rather represent a direct interest in our assets and liabilities as a whole.
Previous wording
•our ability to complete the offshore wind investments sales process on the timelines, terms and pricing we expect; if we and the counterparties are unable to satisfy all closing conditions and consummate the purchase and sale transactions with respect to our offshore wind assets; if we are unable to qualify for investment tax credits related to these projects; if we experience variability in the projected construction costs of the offshore wind projects, if there is a deterioration of market conditions in the offshore wind industry; andif the projects do not commence operation as scheduled or within budget or are not completed,
Current wording
•our ability to complete the sale of our offshore wind investments in the South Fork Wind and Revolution Wind projects on the timeline, terms and pricing we expect; if we and the counterparty are unable to satisfy all closing conditions and consummate the purchase and sale transaction with respect to these offshore wind assets; if we are unable to qualify for investment tax credits related to these projects; if we experience variability in the projected construction costs of these offshore wind projects, if there is a deterioration of market conditions in the offshore wind industry; andif the projects do not commence operation as scheduled or within budget or are not completed,
Previous wording
All such factors are difficult to predict and contain uncertainties that may materially affect our actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A, Risk Factors, included in this combined Quarterly Report on Form 10-Q and in
Current wording
All such factors are difficult to predict and contain uncertainties that may materially affect our actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For more information, see Item 1A, Risk Factors, included in this combined Quarterly Report on Form 10-Q and in Eversource's 2023 combined Annual Report on Form 10-K. This combined Quarterly Report on Form 10-Q and Eversource's 2023 combined Annual Report on Form 10-K also describe material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Financial Statements. We encourage you to review these items.
Previous wording
•We reaffirmed our projection to earn within a 2024 non-GAAP earnings guidance range of between $4.50 per share and $4.67 per share, which excludes the impact of the expected sales of our 50 percent interests in three jointly-owned offshore wind projects and related transaction costs. We also reaffirmed our projection of our long-term EPS growth rate through 2028 within a 5 to 7 percent range.
Current wording
•We reaffirmed our projection to earn within a 2024 non-GAAP earnings guidance range of between $4.50 per share and $4.67 per share, which excludes the impact of the sales of our 50 percent interests in the three jointly-owned offshore wind projects and related transaction costs. We also reaffirmed our projection of our long-term EPS growth rate through 2028 within a 5 to 7 percent range.
Previous wording
•Cash flows provided by operating activities totaled $291.3 million in the first quarter of 2024, compared with $69.2 million in the first quarter of 2023. Investments in property, plant and equipment totaled $1.15 billion in the first quarter of 2024, compared with $977.1 million in the first quarter of 2023.
Current wording
•Cash flows provided by operating activities totaled $962.0 million in the first half of 2024, compared with $647.3 million in the first half of 2023. Investments in property, plant and equipment totaled $2.22 billion in the first half of 2024, compared with $2.04 billion in the first half of 2023.
Previous wording
•Cash totaled $259.2 million as of March 31, 2024, compared with $53.9 million as of December 31, 2023. Our available borrowing capacity under our commercial paper programs totaled $296.1 million as of March 31, 2024.
Current wording
•Cash totaled $33.4 million as of June 30, 2024, compared with $53.9 million as of December 31, 2023. Our available borrowing capacity under our commercial paper programs totaled $1.21 billion as of June 30, 2024.
Previous wording
•In the first quarter of 2024, we issued $1.35 billion of new long-term debt.
Current wording
•In the first half of 2024, we issued $3.85 billion of new long-term debt and we repaid $900 million of long-term debt.
Previous wording
•On May 1, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, payable on June 28, 2024 to shareholders of record as of May 16, 2024. On January 31, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on March 29, 2024 to shareholders of record as of March 5, 2024.
Current wording
•On May 1, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on June 28, 2024 to shareholders of record as of May 16, 2024.
Previous wording
Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measure of EPS by business to the most directly comparable GAAP measure of diluted EPS.
Current wording
Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net Income Attributable to Common Shareholders and diluted EPS.
Previous wording
Our electric distribution segment earnings increased $2.6 million in the first quarter of 2024, as compared to the first quarter of 2023, due primarily to higher revenues from a base distribution rate increase effective January 1, 2024 at NSTAR Electric and from CL&P's capital tracking mechanism due to increased electric system improvements, and an increase in interest income primarily on regulatory deferrals. Those earnings increases were partially offset by higher interest expense, higher depreciation expense, higher operations and maintenance expense, and higher property and other tax expense.
Current wording
Our electric distribution segment earnings decreased $15.8 million and $13.1 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to higher operations and maintenance expense driven by higher storm restoration costs, the absence of a prior year benefit at PSNH related to the establishment of a new regulatory tracking mechanism that allowed for the recovery of previously incurred operating expenses associated with poles acquired on May 1, 2023, higher interest expense, higher depreciation expense, and higher property tax expense. Those earnings decreases were partially offset by higher revenues from a base distribution rate increase at NSTAR Electric effective January 1, 2024 and from CL&P's capital tracking mechanism due to increased electric system improvements, and an increase in interest income primarily on regulatory deferrals.
Previous wording
Our electric transmission segment earnings increased $21.6 million in the first quarter of 2024, as compared to the first quarter of 2023, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure and higher AFUDC equity income.
Current wording
Our electric transmission segment earnings increased $28.0 million and $49.6 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure, the impact of the annual billing and cost reconciliation filing with FERC, and higher AFUDC equity income.
Previous wording
Our natural gas distribution segment earnings increased $20.3 million in the first quarter of 2024, as compared to the first quarter of 2023, due primarily to higher revenues from capital tracking mechanisms due to continued investments in natural gas infrastructure and from a base distribution rate increase effective November 1, 2023 at NSTAR Gas, lower operations and maintenance expense, and lower property tax expense. Those earnings increases were partially offset by higher depreciation expense and higher interest expense.
Current wording
Our natural gas distribution segment earnings increased $15.4 million and $35.7 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to higher revenues from capital tracking mechanisms due to continued investments in natural gas infrastructure and a base distribution rate increase effective November 1, 2023 at NSTAR Gas, and lower operations and maintenance expense. Those earnings increases were partially offset by higher depreciation expense and higher interest expense.
Previous wording
Our water distribution segment earnings increased $3.9 million in the first quarter of 2024, as compared to the first quarter of 2023. Higher first quarter earnings were due primarily to an after-tax benefit of $5.2 million recorded to recognize the impacts of the Aquarion Water Company of Connecticut’s rate case decision from PURA from the effective date of the order on March 15, 2023 through March 31, 2024. The adjustment was recorded as a result of the State of Connecticut Superior Court’s decision on the rate case appeal on March 25, 2024. The impacts primarily include a reserve recorded for revenues subject to refund as a result of the lower authorized revenues not yet reflected in current rates, offset by a reduction to depreciation expense to reflect lower depreciation rates ordered by PURA in its final decision. Earnings were also unfavorably impacted by higher interest expense and higher operations and maintenance expense.
Current wording
Our water distribution segment earnings increased $2.6 million in the first half of 2024, as compared to the first half of 2023, due primarily to an after-tax benefit of $6.3 million recorded to recognize the impacts of the Aquarion Water Company of Connecticut’s rate case decision from PURA from the effective date of the order on March 15, 2023 through June 30, 2024. The adjustment was recorded as a result of the State of Connecticut Superior Court’s decision on the rate case appeal on March 25, 2024. The impacts primarily include a reduction to depreciation expense to reflect lower depreciation rates ordered by PURA in its final decision, partially offset by a reserve recorded for revenues subject to refund as a result of the lower authorized revenues not yet reflected in current rates. The earnings increase was partially offset by higher interest expense, higher depreciation expense, and higher operations and maintenance expense.
Previous wording
Cash totaled $259.2 million as of March 31, 2024, compared with $53.9 million as of December 31, 2023.
Current wording
Cash totaled $33.4 million as of June 30, 2024, compared with $53.9 million as of December 31, 2023.
Previous wording
CL&P and PSNH have uncommitted line of credit agreements totaling $375 million and $250 million, respectively, which will expire in 2024. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of March 31, 2024.
Current wording
CL&P and PSNH have uncommitted line of credit agreements totaling $375 million and $250 million, respectively, all of which will expire in either October 2024, May 2025 or September 2025. There are no borrowings outstanding on either the CL&P or PSNH uncommitted line of credit agreements as of June 30, 2024.
Previous wording
Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of December 31, 2023. As a result of the PSNH long-term debt issuance in April 2024, $251.0 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of March 31, 2024.
Current wording
Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of December 31, 2023. As a result of the Yankee Gas long-term debt issuances in July 2024, $37.9 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of June 30, 2024.
Previous wording
Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of March 31, 2024, there were intercompany loans from Eversource parent to CL&P of $426.1 million and to PSNH of $251.0 million. As of December 31, 2023, there were intercompany loans from Eversource parent to CL&P of $457.0 million and to PSNH of $233.0 million. Eversource parent charges interest on these intercompany loans at the same weighted-average interest rate as its commercial paper program. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets, as these intercompany borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of CL&P’s intercompany borrowings were reclassified to Long-Term Debt on CL&P’s balance sheet as of December 31, 2023. As a result of the PSNH long-term debt issuance in April 2024, $251.0 million of PSNH’s intercompany borrowings were reclassified to Long-Term Debt on PSNH’s balance sheet as of March 31, 2024.
Current wording
Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of June 30, 2024, there were intercompany loans from Eversource parent to CL&P of $407.8 million and to PSNH of $132.0 million. As of December 31, 2023, there were intercompany loans from Eversource parent to CL&P of $457.0 million and to PSNH of $233.0 million. Eversource parent charges interest on these intercompany loans at the same weighted-average interest rate as its commercial paper program. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets, as these intercompany borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of CL&P’s intercompany borrowings were reclassified to Long-Term Debt on CL&P’s balance sheet as of December 31, 2023.
Previous wording
Long-Term Debt Issuance Authorizations: On February 8, 2024, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt through December 31, 2024. On May 1, 2024, the DPU approved NSTAR Electric’s request for authorization to issue up to $2.4 billion in long-term debt through December 31, 2026.
Current wording
Long-Term Debt Issuance Authorizations: On February 8, 2024, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt through December 31, 2024. On May 1, 2024, the DPU approved NSTAR Electric’s request for authorization to issue up to $2.4 billion in long-term debt through December 31, 2026. On July 24, 2024, PURA approved CL&P’s request for authorization to issue up to $1.0 billion in long-term debt through December 31, 2025.
Previous wording
As a result of the Eversource parent long-term debt issuances in April 2024, $1.39 billion of current portion of long-term debt was reclassified to Long-Term Debt on Eversource parent’s balance sheet as of March 31, 2024.
Current wording
As a result of the Yankee Gas long-term debt issuances in July 2024, $100.0 million of current portion of long-term debt was reclassified to Long-Term Debt on Eversource parent’s balance sheet as of June 30, 2024.
Previous wording
Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $21.6 million of RRB principal payments and $7.6 million of interest payments in the first quarter of 2024, and paid $21.6 million of RRB principal payments and $8.3 million of interest payments in the first quarter of 2023.
Current wording
Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $21.6 million of RRB principal payments and $7.6 million of interest payments in the first half of 2024, and paid $21.6 million of RRB principal payments and $8.3 million of interest payments in the first half of 2023.
Previous wording
Common Share Issuances and Equity Distribution Agreement: On May 11, 2022, Eversource entered into an equity distribution agreement pursuant to which it may offer and sell up to $1.2 billion of its common shares from time to time through an “at-the-market” (ATM) equity offering program. In the first quarter of 2024, Eversource issued 1,292,892 common shares, which resulted in proceeds of $75.4 million, net of issuance costs. Eversource used the net proceeds received for general corporate purposes.
Current wording
Common Share Issuances and Equity Distribution Agreement: On May 11, 2022, Eversource entered into an equity distribution agreement pursuant to which it may offer and sell up to $1.2 billion of its common shares from time to time through an “at-the-market” (ATM) equity offering program. In the first six months of 2024, Eversource issued 4,206,649 common shares, which resulted in proceeds of $248.2 million, net of issuance costs. Eversource used the net proceeds received for general corporate purposes.
Previous wording
Cash Flows: Cash flows from operating activities primarily result from the transmission and distribution of electricity, and the distribution of natural gas and water. Cash flows provided by operating activities totaled $291.3 million in the first quarter of 2024, compared with $69.2 million in the first quarter of 2023. Operating cash flows were favorably impacted by the timing of cash payments made on our accounts payable, a $66.6 million increase in operating cash flows due to income tax refunds received in 2024 compared to income tax payments made in 2023, a decrease in regulatory under-recoveries driven primarily by the timing of collections for regul atory tracking mechanisms, the timing of cash collections on our accounts receivable, and a $13.2 million decrease in cost of removal expenditures. The CL&P non-bypassable FMCC retail rate increased in the first quarter of 2024, as compared to the first quarter of 2023, which lowered the regulatory under-recovery deferral adjustment and resulted in an improvement to operating cash flows of $53.1 million. The impacts of regulatory collections are included in both Regulatory Recoveries and Amortization on the statements of cash flows. These favorable impacts were partially offset by the timing of other working capital items and a $42.6 million increase in cash payments to vendors for storm costs.
Current wording
Cash Flows: Cash flows from operating activities primarily result from the transmission and distribution of electricity, and the distribution of natural gas and water. Cash flows provided by operating activities totaled $962.0 million in the first half of 2024, compared with $647.3 million in the first half of 2023. Operating cash flows were favorably impacted by the timing of cash payments made on our accounts payable, the timing of other working capital items, a decrease in cost of removal expenditures, a $48.8 million increase in income tax refunds received in 2024 compared to 2023, and a $42.6 million decrease in cash payments to vendors for storm costs. These favorable impacts were partially offset by the timing of cash collections on our accounts receivable and an increase in regulatory under-recoveries driven primarily by the timing of collections for energy and natural gas supply costs and other regulatory tracking mechanisms. The impacts of regulatory collections are included in both Regulatory Recoveries and Amortization on the statements of cash flows.
Previous wording
On April 17, 2024, PURA issued an interim decision in CL&P’s Rate Adjustment Mechanisms (RAM) filing and approved rates for the six RAM components, with rates effective July 1, 2024 through April 30, 2025. The rate approvals include the recovery of NBFMCC and SBC net under-recoveries as of December 31, 2023 of $264.9 million and $86.2 million, respectively, and the recovery of expected net costs of $388.5 million for the NBFMCC and $254.4 million for the SBC for the period July 1, 2024 through April 30, 2025. The NBFMCC rate adjustment is primarily driven by long-term nuclear power purchase agreements required by state policy and the SBC rate adjustment is primarily driven by costs associated with accounts receivable hardship customer protection.
Current wording
On April 17, 2024, PURA issued an interim decision in CL&P’s Rate Adjustment Mechanisms (RAM) filing and approved rates for six RAM components, with rates effective July 1, 2024 through April 30, 2025. The rate approvals include the recovery of NBFMCC and SBC net underrecoveries as of December 31, 2023 of $264.9 million and $86.2 million, respectively, and the recovery of expected net costs of $388.5 million for the NBFMCC and $254.4 million for the SBC for the period July 1, 2024 through April 30, 2025. The NBFMCC rate adjustment is primarily driven by long-term nuclear power purchase agreements required by state policy and the SBC rate adjustment is primarily driven by costs associated with accounts receivable hardship customer protection and the new low-income discount rate effective December 2023. On July 23, 2024, PURA issued a draft final decision that approved a further adjustment to the NBFMCC rate to include the recovery of incurred and deferred electric vehicle program costs from 2021 through May 31, 2024 of $44.4 million and expected electric vehicle program costs from June 1, 2024 through December 31, 2024 of $24.3 million. In total, $49.8 million, including $5.4 million in carrying costs, will be recovered over a 20-month period of September 1, 2024 through April 30, 2026, and $24.3 million will be recovered over an eight-month period of September 1, 2024 through April 30, 2025. In addition, PURA approved $3.5 million of 2024 Innovative Energy Solutions program costs and $2.5 million of Connecticut Green Bank program costs, over an eight-month period of September 1, 2024 through April 30, 2025. A final PURA decision in CL&P’s RAM filing is expected on August 14, 2024.
Previous wording
On May 1, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, payable on June 28, 2024 to shareholders of record as of May 16, 2024. On January 31, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on March 29, 2024 to shareholders of record as of March 5, 2024. In the first quarter of 2024, we paid cash dividends of $244.8 million and issued non-cash dividends of $6.0 million in the form of treasury shares, totaling dividends of $250.8 million. In the first quarter of 2023, we paid cash dividends of $229.4 million and issued non-cash dividends of $6.0 million in the form of treasury shares, totaling dividends of $235.4 million.
Current wording
On May 1, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on June 28, 2024 to shareholders of record as of May 16, 2024. In the first half of 2024, we paid cash dividends of $490.9 million and issued non-cash dividends of $12.0 million in the form of treasury shares, totaling dividends of $502.9 million. In the first half of 2023, we paid cash dividends of $459.0 million and issued non-cash dividends of $11.8 million in the form of treasury shares, totaling dividends of $470.8 million.
Previous wording
In the first quarter of 2024, CL&P and NSTAR Electric paid $82.5 million and $96.7 million, respectively, in common stock dividends to Eversource parent.
Current wording
In the first half of 2024, CL&P, NSTAR Electric and PSNH paid $82.5 million, $393.9 million and $62.0 million respectively, in common stock dividends to Eversource parent.
Previous wording
Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP income/expense. In the first quarter of 2024, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $1.15 billion, $285.9 million, $394.9 million, and $148.9 million, respectively. Capital expenditures were primarily for continuing projects to maintain and improve infrastructure and operations, including enhancing reliability to the transmission and distribution systems.
Current wording
Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP income/expense. In the first half of 2024, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $2.22 billion, $532.2 million, $729.8 million, and $289.7 million, respectively. Capital expenditures were primarily for continuing projects to maintain and improve infrastructure and operations, including enhancing reliability to the transmission and distribution systems.
Previous wording
Credit Ratings: On March 5, 2024, S&P revised the outlook from watch negative to negative for Eversource parent, CL&P, NSTAR Electric, and PSNH.
Current wording
Credit Ratings: On June 18, 2024, Moody’s revised the outlook from stable to negative for CL&P.
Previous wording
Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense (all of which are non-cash factors), totaled $1.09 billion in the first quarter of 2024, compared to $789.2 million in the first quarter of 2023. These amounts included$75.6 million and $42.9 million in the first quarter of 2024 and 2023, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.
Current wording
Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense (all of which are non-cash factors), totaled $2.26 billion in the first half of 2024, compared to $1.98 billion in the first half of 2023. These amounts included$152.7 million and $119.1 million in the first half of 2024 and 2023, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.
Previous wording
Electric Transmission Business: Our consolidated electric transmission business capital expenditures increased by $116.0 million in the first quarter of 2024, as compared to the first quarter of 2023. A summary of electric transmission capital expenditures by company is as follows:
Current wording
Electric Transmission Business: Our consolidated electric transmission business capital expenditures increased by $135.6 million in the first half of 2024, as compared to the first half of 2023. A summary of electric transmission capital expenditures by company is as follows:
Previous wording
Offshore Wind Business: Eversource’s offshore wind business includes 50 percent ownership interests in wind partnerships, which collectively hold the Revolution Wind, South Fork Wind and Sunrise Wind projects, and a tax equity investment in South Fork Wind. The offshore wind projects are being developed and constructed through joint and equal partnerships with Ørsted.
Current wording
Offshore Wind Business: As of June 30, 2024, Eversource’s offshore wind business includes 50 percent ownership interests in wind partnerships, which collectively hold the Revolution Wind, South Fork Wind and Sunrise Wind projects, and a tax equity investment in South Fork Wind. The offshore wind projects are being developed and constructed through joint and equal partnerships with Ørsted.
Previous wording
As of March 31, 2024 and December 31, 2023, Eversource's total equity investment balance in its offshore wind business was $596.4 million and $515.5 million, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, Eversource's total equity investment balance in its offshore wind business was $806.1 million and $515.5 million, respectively.
Previous wording
In September of 2023, Eversource made a contribution of $528 million using the proceeds from the lease area sale to invest in a tax equity interest for South Fork Wind. South Fork Wind was restructured as a tax equity investment, with Eversource purchasing 100 percent ownership of a new Class A tax equity membership interest. As a result of this investment, Eversource expects to receive approximately $400 million of investment tax credits (ITC) after the turbines are placed in service for South Fork Wind and meet the requirements to qualify for the ITC, in addition to other expected future cash flow benefits that aggregate to approximately $100 million. These investment tax credits will be utilized to reduce Eversource’s federal tax liability or generate tax refunds in future periods through 2026. As of March 31, 2024, six South Fork Wind turbines met the requirements to qualify for the investment tax credits. As a result, $193 million of expected investment tax credits were reclassified from the South Fork Wind tax equity investment balance reported in Investments in Unconsolidated Affiliates as a reduction in current taxes payable of $54 million and an increase in deferred tax assets of $139 million on the Eversource balance sheet as of March 31, 2024. An additional $37 million deferred tax asset was established through a reduction of the tax equity investment balance due to a temporary difference on the related depreciable property as of March 31, 2024. These balance sheet reclassifications represent non-cash transactions.
Current wording
In September of 2023, Eversource made a contribution of $528 million using the proceeds from the lease area sale to invest in a tax equity interest for South Fork Wind. South Fork Wind was restructured as a tax equity investment, with Eversource purchasing 100 percent ownership of a new Class A tax equity membership interest. This investment will result in Eversource receiving cash flow benefits from investment tax credits (ITC) and other future cash flow benefits as well. As of June 30 2024, all twelve South Fork Wind turbines met the requirements to qualify for the investment tax credits. As a result, $385 million of expected investment tax credits were reclassified from the South Fork Wind tax equity investment balance reported in Investments in Unconsolidated Affiliates as a reduction in current taxes payable of $54 million and an increase in deferred tax assets of $331 million on the Eversource balance sheet as of June 30, 2024.
Previous wording
As a result of expected tax credits generated from our wind investments, Eversource expects lower federal income tax payments, which will improve operating cash flows between 2024 through 2026.
Current wording
As a result of these investment tax credits generated from our wind investments, Eversource expects lower federal income tax payments between 2024 through 2026.
Previous wording
Expected Sales of Offshore Wind Investments: On January 24, 2024, Ørsted signed an agreement with Eversource to acquire Eversource’s 50 percent share of Sunrise Wind, subject to the successful selection of Sunrise Wind in the New York fourth solicitation for offshore wind capacity, signing of an OREC contract with NYSERDA, finalization of agreements including the equity and asset purchase agreement, receipt of the final approval by BOEM of the Sunrise Wind COP, and relevant regulatory approvals. On January 25, 2024, Sunrise Wind submitted a proposal in the New York fourth offshore wind solicitation and was selected by NYSERDA on February 29, 2024 for contract negotiation. Sunrise Wind is currently negotiating an OREC contract with NYSERDA that will include the price proposed by Sunrise Wind in the solicitation. We expect the OREC contract to be finalized in the second quarter of 2024.
Current wording
Sales of Offshore Wind Investments: On January 24, 2024, Ørsted signed an agreement with Eversource to acquire Eversource’s 50 percent share of Sunrise Wind, subject to the successful selection of Sunrise Wind in the New York fourth solicitation for offshore wind capacity, signing of an OREC contract with NYSERDA, finalization of agreements including the equity and asset purchase agreement, receipt of the final approval by BOEM of the Sunrise Wind Construction and Operations Plan (COP), and relevant regulatory approvals. On February 29, 2024, Sunrise Wind was selected for contract negotiation in the offshore wind solicitation by NYSERDA, and was subsequently awarded a contract, which was finalized and completed on May 31, 2024. In June 2024, Sunrise Wind received final approval by BOEM of its COP and all remaining regulatory approvals.
Previous wording
•On February 13, 2024, Eversource announced that it executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP). As part of this transaction, Eversource expects to receive approximately $1.1 billion of cash proceeds upon closing, which includes the sales value related to the 10 percent energy community ITC adder of approximately $170 million related to Revolution Wind, and to exit these projects while retaining certain cost sharing obligations for the construction of Revolution Wind. The purchase price is subject to future post-closing adjustment payments based on, among other things, the progress, timing and expense of construction of each project. The cost sharing obligations provide that Eversource would share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for the Revolution Wind project, after which obligations for any additional capital expenditure overruns would be shared equally by Eversource and Ørsted. Additionally, Eversource’s financial exposure will be adjusted by certain purchase price adjustments to be made following commercial operation of the Revolution Wind project and closing of South Fork as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. South Fork Wind construction has been completed and Eversource does not expect any material cost sharing or other purchase price adjustment payments for South Fork Wind. Closing of the transaction is currently expected to occur later this year.
Current wording
On February 13, 2024, Eversource executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP) for $1.1 billion of cash proceeds to be received upon closing, subject to adjustment. The purchase price is inclusive of the sales value related to a 40 percent level of federal investment tax credits, 10 percent of which is the energy community ITC adder of approximately $170 million related to Revolution Wind. The purchase price is subject to adjustments based on, among other things, the progress, timing and the construction cost of Revolution Wind, including changes in actual versus forecasted capital spending between signing the agreement and closing of the transaction. Factors that could result in Eversource’s total net proceeds from the transaction to be lower, resulting in post-closing adjustment payments owed to GIP, include the ultimate cost of construction and extent of cost overruns for Revolution Wind, delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment, and Revolution Wind’s eligibility for federal investment tax credits at less than the value included in the purchase price. Total net proceeds could also be adjusted for a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation date of the Revolution Wind project.
Previous wording
On February 13, 2024, Eversource announced that it executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP). As part of this transaction, Eversource expects to receive approximately $1.1 billion of cash proceeds upon closing, which includes the sales value related to the 10 percent energy community ITC adder of approximately $170 million related to Revolution Wind, and to exit these projects while retaining certain cost sharing obligations for the construction of Revolution Wind. The purchase price is subject to future post-closing adjustment payments based on, among other things, the progress, timing and expense of construction of each project. The cost sharing obligations provide that Eversource would share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for the Revolution Wind project, after which obligations for any additional capital expenditure overruns would be shared equally by Eversource and Ørsted. Additionally, Eversource’s financial exposure will be adjusted by certain purchase price adjustments to be made following commercial operation of the Revolution Wind project and closing of South Fork as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. South Fork Wind construction has been completed and Eversource does not expect any material cost sharing or other purchase price adjustment payments for South Fork Wind.
Current wording
The post-closing purchase price adjustment payments include cost sharing obligations that provide Eversource will share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for Revolution Wind, after which obligations for any additional capital expenditure overruns would be shared equally by Eversource and Ørsted. The purchase price is also subject to post-closing adjustments as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. Post-closing purchase price adjustment payments will be made following the sale closing date for South Fork and following the commercial operation of Revolution Wind. South Fork Wind construction has been completed, and Eversource does not expect any material cost sharing or other purchase price adjustment payments for South Fork Wind.
Previous wording
Closing the transaction with GIP is subject to customary conditions, including certain regulatory approvals by the New York Public Service Commission, the FERC, and a review under the Hart Scott Rodino Act, as well as other conditions, among which is the completion and execution of the partnership agreements between GIP and Ørsted that will govern GIP’s new ownership interest in those projects following Eversource’s divestiture. The review period under the Hart Scott Rodino Act has expired. Closing of this transaction is currently expected to occur later this year. If closing of the sale is delayed, additional capital contributions made by Eversource would be recovered in the sales price. Under this agreement with GIP, Eversource’s existing credit support obligations are expected to roll off for each project around the time that each project completes its expected capital spend.
Current wording
Closing the transaction with GIP is subject to customary conditions, including certain regulatory approvals, as well as other conditions, among which is the completion and execution of the partnership agreements between GIP and Ørsted that will govern GIP’s new ownership interest in those projects following Eversource’s divestiture. All regulatory approvals have been received and the review period under the Hart Scott Rodino Act has expired. Closing of this transaction is currently expected to occur in the third quarter of 2024.
Previous wording
Eversource will continue to make future cash expenditures for required cash contributions to its offshore wind investments up to the time of disposition of each of the offshore wind projects. Capital contributions are expected until the sales are completed and changes in the timing and amounts of these contributions would be adjusted in the sales prices and therefore not result in an additional impairment charge. Proceeds from the transactions will be used to pay off parent company debt.
Current wording
Under the agreement with GIP, Eversource’s existing credit support obligations are expected to roll off for each project around the time that each project completes its expected capital spend. Eversource will continue to make future cash expenditures for required cash contributions up to the time of disposition of the Revolution Wind and South Fork Wind projects and changes in the timing and amounts of these contributions would be adjusted in the purchase price.
Previous wording
Impairment: Equity method investments are assessed for impairment when conditions exist as of the balance sheet date that indicate that the fair value of the investment may be less than book value. Eversource continually monitors and evaluates its equity method investments to determine if there are indicators of an other-than-temporary impairment. If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. Subsequent declines or recoveries after the reporting date are not considered in the impairment recognized. Investments that are other-than-temporarily impaired and written down to their estimated fair value cannot subsequently be written back up for increases in estimated fair value. Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist at the equity method investment level, selecting discount rates used to determine fair values, and developing an estimate of discounted future cash flows expected from investment operations or the sale of the investment. In the first quarter of 2024, there were no indicators of an other-than-temporary impairment in Eversource’s equity method investment balance.
Current wording
Impairment: Equity method investments are assessed for impairment when conditions exist as of the balance sheet date that indicate that the fair value of the investment may be less than book value. Eversource continually monitors and evaluates its equity method investments to determine if there are indicators of an other-than-temporary impairment. If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. Subsequent declines or recoveries after the reporting date are not considered in the impairment recognized. Investments that are other-than-temporarily impaired and written down to their estimated fair value cannot subsequently be written back up for increases in estimated fair value. Impairment evaluations involve a significant degree of judgment and estimation, including identifying circumstances that indicate an impairment may exist at the equity method investment level, selecting discount rates used to determine fair values, and developing an estimate of discounted future cash flows expected from investment operations or the sale of the investment. In the second quarter of 2024, there were no indicators of an other-than-temporary impairment in Eversource’s equity method investment balance.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The decrease in energy supply procurement within both electric distribution and natural gas distribution for the three and six month periods was driven by lower average prices and lower average supply-related sales volumes.
Current report — wording carried from elsewhere
Income Tax Expense increasedfor thethree month period due primarily to higher pre-tax earnings ($83.8 million), higher state taxes ($25.8 million), a decrease in amortization of EDIT ($5.4 million), and an increase in items that impact our tax rate as a result of regulatory treatment (flow-through items) and permanent differences ($7.3 million), partially offset by a decrease in reserves ($42.9 million) primarily related to the 2023 impairment of Eversource’s offshore wind investment.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Eversource's 2023 combined Annual Report on Form 10-K. This combined Quarterly Report on Form 10-Q and Eversource's 2023 combined Annual Report on Form 10-K also describe material contingencies and critical accounting policies in the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations and Combined Notes to Financial Statements. We encourage you to review these items.
Previous report — wording carried elsewhere
•On January 24, 2024, Ørsted signed an agreement with Eversource to acquire Eversource’s 50 percent share of Sunrise Wind, subject to the successful selection of Sunrise Wind in the New York fourth solicitation for offshore wind capacity, signing of an OREC contract with NYSERDA, finalization of agreements including the equity and asset purchase agreement, receipt of the final approval by BOEM of the Sunrise Wind COP, and relevant regulatory approvals. On January 25, 2024, Sunrise Wind submitted a proposal in the New York fourth offshore wind solicitation and was selected by NYSERDA on February 29, 2024 for contract negotiation. Sunrise Wind is currently negotiating an OREC contract with NYSERDA that will include the price proposed by Sunrise Wind in the solicitation. We expect the OREC contract to be finalized in the second quarter of 2024.
Previous report — wording carried elsewhere
Factors that could result in Eversource’s total net proceeds from the transaction to be lower or higher include Revolution Wind’s eligibility for federal investment tax credits at other than the anticipated 40 percent level; the ultimate cost of construction and extent of cost overruns for Revolution Wind; delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment; and a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation date of the Revolution Wind project.
Previous report — wording carried elsewhere
State and Local Siting and Permitting Process: All state and local approvals have been received for South Fork and Revolution Wind. For Sunrise Wind, all state and local approvals required to start construction have been received.