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Eversource(ES) - 2023 Q1 - Earnings Call Transcript
ESEversource(ES)2023-05-04 18:04
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Financial Data and Key Metrics Changes - The company reported GAAP earnings of 1.41pershareforQ12023,anincreasefrom1.41 per share for Q1 2023, an increase from 1.28 per share in Q1 2022, reflecting improved operational performance [30][11] - The full-year guidance for earnings per share is maintained at 4.25to4.25 to 4.43, with a reaffirmation of a long-term EPS growth rate in the upper half of the 5% to 7% range [12][30] Business Line Data and Key Metrics Changes - Electric distribution earnings were 0.47pershareinQ12023,comparedto0.47 per share in Q1 2023, compared to 0.45 in Q1 2022, driven by increased distribution revenues [31] - The electric transmission segment earned 0.45pershareinQ12023,upfrom0.45 per share in Q1 2023, up from 0.43 in Q1 2022, attributed to higher investment levels [31] - Natural gas distribution earnings increased to 0.49pershareinQ12023from0.49 per share in Q1 2023 from 0.47 in Q1 2022, primarily due to higher base distribution revenues [31] - Water distribution segment earnings decreased by 0.01pershareduetohigheroperationsandmaintenancecosts[31]MarketDataandKeyMetricsChanges−Thecompanynotedasignificantdeclineinnaturalgasprices,whichisexpectedtoreflectpositivelyincustomerbills[9]−ElectricsupplyratesinNewEnglandareanticipatedtodeclinesignificantlyinJulyforcustomersonbasicordefaultserviceinConnecticutandMassachusetts[9]CompanyStrategyandDevelopmentDirection−ThecompanyisadvancingitsoffshorewindprojectsinpartnershipwithØrsted,withsignificantinvestmentsandjobcreationinRhodeIslandandNewYork[8]−Astrategicreviewofoffshorewindinvestmentsisongoing,withexpectationsforupdateslaterinthequarter[28]−ThecompanyisfocusedonfacilitatingsolardevelopmentinMassachusetts,aimingtoaddupto1,000megawattsofnewsolarenergycapacity[28]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheongoingstrategicreviewofoffshorewindinvestmentsandthepotentialforapositiveoutcomeforshareholders[39]−Thecompanyisactivelyengagingwithstateregulatorsandthegovernorregardingperformance−basedrate−making,emphasizingtheimportanceofcollaboration[41]−Concernswereraisedaboutfuelsupplyforgeneratorsandtheneedtominimizeriskstocustomers,especiallyinlightofpastsupplyissues[59]OtherImportantInformation−Thecompanyhasissued0.01 per share due to higher operations and maintenance costs [31] Market Data and Key Metrics Changes - The company noted a significant decline in natural gas prices, which is expected to reflect positively in customer bills [9] - Electric supply rates in New England are anticipated to decline significantly in July for customers on basic or default service in Connecticut and Massachusetts [9] Company Strategy and Development Direction - The company is advancing its offshore wind projects in partnership with Ørsted, with significant investments and job creation in Rhode Island and New York [8] - A strategic review of offshore wind investments is ongoing, with expectations for updates later in the quarter [28] - The company is focused on facilitating solar development in Massachusetts, aiming to add up to 1,000 megawatts of new solar energy capacity [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strategic review of offshore wind investments and the potential for a positive outcome for shareholders [39] - The company is actively engaging with state regulators and the governor regarding performance-based rate-making, emphasizing the importance of collaboration [41] - Concerns were raised about fuel supply for generators and the need to minimize risks to customers, especially in light of past supply issues [59] Other Important Information - The company has issued 750 million of parent company debt and retired 450millionofparentdebtrecently[14]−Thetimingofsomeoffshorewindconstructioncostshasbeenadjusted,loweringthe2023capitalprojectionby450 million of parent debt recently [14] - The timing of some offshore wind construction costs has been adjusted, lowering the 2023 capital projection by 500 million while extending costs into future periods [32] Q&A Session Summary Question: Can you provide more details on the sale process and pricing expectations? - Management indicated that the sale process is advanced, involving two parties, and expressed confidence in achieving good value for the projects [17][39] Question: How do you see the regulatory environment evolving in Connecticut? - Management confirmed they have a seat at the table in legislative discussions and are optimistic about reaching a workable resolution [41] Question: Will the offshore wind projects be sold as separate transactions? - Management confirmed that there will be two announcements for the leases and contracts, expected in the second quarter [51] Question: What are the expectations for the Aquarion hearing on May 15? - Management expressed hope for a favorable outcome, emphasizing their strong track record and relationships with state officials [71] Question: How does the company view future investment opportunities in offshore wind? - Management sees significant opportunities for investment in offshore wind transmission and is focused on regulated assets [57]