EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT MAY 2, 2024
CUSTOMER | COMMUNITY | EMPLOYEE |
FINANCIAL | CLEAN ENERGY | RELIABILITY |
EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Safe Harbor Statement
All per-share amounts in this presentation are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings discussion includes financial measures that are not recognized under generally accepted accounting principles (non-GAAP) referencing earnings and EPS excluding the 2023 impairment charges for the offshore wind investments and certain transaction, transition and other charges. 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 Energy 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 Eversource Energy's assets and liabilities as a whole. Eversource Energy uses these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain results without including these items. This information is among the primary indicators management uses as a basis for evaluating performance and planning and forecasting of future periods. Management believes the impacts of the impairment charges for the offshore wind investments and transaction; transition and other charges are not indicative of Eversource Energy's ongoing costs and performance. Management views 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, management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy's financial performance and provides additional and useful information to readers in analyzing historical and future performance of the business. These non-GAAP financial measures should not be considered as alternatives to Eversource Energy's reported net income attributable to common shareholders or EPS determined in accordance with GAAP as indicators of Eversource Energy's operating performance. This document includes statements concerning Eversource Energy's expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, readers can identify these forward-looking statements through the use of words or phrases such as "estimate," "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could" and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that may cause our actual results or outcomes to differ materially from those contained in our forward-looking statements, including, but not limited to: cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers; our ability to complete the offshore wind investments sales process on the timelines, terms and pricing we expect; if we and the potential purchasers are unable to reach the definitive agreements necessary to consummate the purchase and sale transactions; 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; and if the projects do not commence operation as scheduled or within budget or are not completed, disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; ability or inability to commence and complete our major strategic development projects and opportunities; acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems; actions or inaction of local, state and federal regulatory, public policy and taxing bodies; substandard performance of third-party suppliers and service providers; fluctuations in weather patterns, including extreme weather due to climate change; changes in business conditions, which could include disruptive technology or development of alternative energy sources related to our current or future business model; contamination of, or disruption in, our water supplies; changes in levels or timing of capital expenditures; changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations; changes in accounting standards and financial reporting regulations; actions of rating agencies; and other presently unknown or unforeseen factors.
Other risk factors are detailed in Eversource Energy's reports filed with the Securities and Exchange Commission (SEC). They are updated as necessary and available on Eversource Energy's website at www.eversource.comand on the SEC's website at www.sec.gov. All such factors are difficult to predict and contain uncertainties that may materially affect Eversource Energy's 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, Eversource Energy undertakes 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.
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Agenda
EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Business Update
- Offshore Wind Update
- Operational Excellence
- Progress on Meeting Aggressive Climate Goals
Joe Nolan
Chairman, President & CEO
Financial Update
- Q1 2024 Financial Results
- Regulatory Update
- Drivers for Cash Flow Enhancement
John Moreira
EVP, CFO & Treasurer
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Offshore Wind Update: On Track to Close Later This Year
- South Fork Wind and Revolution Wind
- Sale to GIP for $1.1 billion
- Regulatory approvals filed with the NYPSC and FERC
- Sunrise Wind
- Executed Purchase and Sale Agreement with Ørsted
- Regulatory approvals filed with the NYPSC and FERC
- Proceeds to be disclosed upon closing
Construction Update
- All South Fork Wind turbines producing power
- Construction underway for Revolution Wind and Sunrise Wind
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Serving Our Customers' Needs Today, Tomorrow, and for Years to Come
Delivering Clean, Reliable Energy and Water | Enabling the Clean Energy Future | ||||||||||
Delivering for Customers Today… | …Preparing for Customers Needs Tomorrow | ||||||||||
Electric Reliability | Gas Pipeline Safety | Renewable Energy | Electric Transmission | ||||||||
Storm Response
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
To Achieve Our Clean Energy Future, We Need to Start Now
New England State GHG Reduction Goals
Massachusetts | New Hampshire | Connecticut | |
Statutory | Recommendations | Statutory | |
Requirements | Requirements | ||
Base Year | 1990 | 1990 | 2001 |
Near-Term | 50% by 2030 | 50% by 2025 | 45% by 2030 |
Target | |||
Long-Term | 85% by 2050 | 80% by 2050 | 80% by 2050 |
Target | |||
Additional | Net zero | Zero-carbon | |
targets | emissions by | electric supply | |
2050 | by 2040 | ||
New England Carbon Emissions by
Source
6% Industrial
13% Power
Generation
33%
Commercial
and
Residential
48%
Transportation
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Electric Sector Modernization Plan
A Comprehensive Roadmap to Achieve Massachusetts' Clean Energy Goals
S Y S T E M P L A N N I N G P R O C E S S | |||||||
Incorporated MA's | Analyzed expected | Identified areas | Leveraged formal | ||||
anticipated demand | growth by region, | where system | stakeholder engagement | ||||
growth assumptions | community and | upgrades are needed, | process to seek | ||||
for EV adoption and | circuit | focusing first on | communities' | ||||
electric heating | lowest-cost options | perspectives before | |||||
and non-wires | projects proceed to siting | ||||||
alternatives | |||||||
P L A N T O E N H A N C E T H E G R I D & E N A B L E C L E A N E N E R G Y | |||||||
IDENTIFIES NEEDED | |||||||
INVESTMENTS OVER | |||||||
THE NEXT 10 YEARS | |||||||
to support clean | Increases | Allows for the adoption of | Enables 5.8 GW | ||||
energy resources and | electrification | 2.5 million electric | of solar, exceeding | ||||
drive improvements in | hosting capacity by | vehicles statewide and | the state's 2040 | ||||
grid reliability and | 180% over the next | 1 million heat pumps, | goals, and reaching | ||||
resiliency | decade | meeting over 80% of the | over 63% of its 2050 | ||||
state's 2050 goals | |||||||
goals |
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Q1 2024 vs. Q1 2023 Financial Results
Electric Transmission
Electric Distribution
Natural Gas Distribution
Water Distribution
Parent & Other
Reported Recurring EPS
(GAAP)
1Q 2024 | 1Q 2023 | 1Q Change | |
$0.50 | $0.45 | $0.05 | |
0.48 | 0.47 | 0.01 | |
0.54 | 0.49 | 0.05 | |
0.01 | 0.00 | 0.01 | |
(0.04) | 0.00 | (0.04) | |
$1.49 | $1.41 | $0.08 | |
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EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
Regulatory Update
Massachusetts
- 5-YearElectric Sector Modernization Plan
- Final Decision expected August 2024
New Hampshire
- Prudence Review of August 2022-Mar 2023 storm costs ($232M)
- Final Decision expected in 2024
- Expect to file a request for rate review in mid-2024
Connecticut
- Annual Rate Adjustment Mechanism in CT approved April 17, 2024
- New rates starting July 1, 2024
- Prudence Review of 2018-2021 Storm Costs in Connecticut ($634M)
- Discovery phase in progress
- Appealed of Aquarion Rate Case Decision
- Filed with Connecticut Appellate Court on April 8, 2024
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FFO/Debt Enhancement 2023 to 2025
FFO/DEBT ENHANCEMENTS
+ 3% to 4% | |||
($1.8 Billion | 14% to 15% | ||
+ Other Drivers) | |||
+ ~2% | |||
(~$600 Million) | |||
9% | |||
2023 FFO/Debt | 2023 Under | Other | 2025 Target (S&P) |
(Estimated S&P) | Recoveries | Enhancements | |
and Drivers |
EVERSOURCE ENERGY Q1 2024 EARNINGS REPORT
MAJOR DRIVERS
2023 Under Recoveries | ($/Millions) |
2023 Under Recovery of CT Annual Rate | $400 |
Adjustment Mechanism | |
2023 Other Under Recoveries | $200 |
Total 2023 Under Recoveries | ~$600 |
Other Enhancements through 2025 | |
GIP Sale Proceeds | $1,100 |
South Fork Wind Tax Equity Investment | $500 |
Incremental Storm Cost Recovery | $200 |
(2024 and 2025) | |
Total Other Enhancements | $1, 800 |
Total Known Cash Flow Enhancements | ~$2,400 |
Other Drivers:
Planned Rate Increases, Sunrise Wind Sale, Equity Issuance, and Potential Sale of Water Business
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Eversource Energy published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 11:52:05 UTC.