Eversource(US:ES)2023-11-06 19:34Financial Data and Key Metrics Changes - The company reported GAAP and recurring earnings of $1 per share for Q3 2023, compared to $0.97 per share in Q3 2022, reflecting a slight increase [38] - The recurring earnings projection for 2023 has been narrowed to a range of $4.30 to $4.43 per share, up from the previous range of $4.25 to $4.43 per share [39] - The company reaffirmed its long-term EPS growth rate expectation in the upper half of the 5% to 7% range [39] Business Segment Data and Key Metrics Changes - The Electric Transmission segment earned $0.46 per share in Q3 2023, up from $0.44 per share in Q3 2022, driven by continued investments [16] - Electric Distribution earnings decreased to $0.50 per share in Q3 2023 from $0.65 per share in Q3 2022, primarily due to timing of rate design changes and increased storm-related costs [16] - The Natural Gas Distribution segment reported a loss of $0.10 per share in Q3 2023, compared to a loss of $0.07 per share in Q3 2022, attributed to higher regulatory and operating expenses [17] Market Data and Key Metrics Changes - The company noted that Connecticut residential customers receiving standard service dropped from over 90% last winter to 70% heading into this winter, indicating a shift towards competitive suppliers [33] - New England electric demand growth is expected to more than double by 2050, contrasting with relatively flat demand over the past decade [13] Company Strategy and Development Direction - The company is focused on enhancing service for customers and has invested significantly in electric and gas systems to ensure reliability and resilience [11] - Eversource is actively planning for a clean-energy future, having filed its Electric Sector Modernization Plan to support Massachusetts' clean energy climate plan [13] - The company is encouraged by recent support from regional governors for offshore wind investment, viewing it as essential for a clean energy future [14] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the New York Public Service Commission's denial of pricing adjustments for renewable projects but remains optimistic about future opportunities [6] - The company anticipates significant cash flow improvements from the sale of offshore wind projects and regulatory rate adjustments in Massachusetts [22][44] - Management emphasized the importance of maintaining strong credit ratings and expects to enhance the FFO to debt ratio significantly in 2024 and beyond [44] Other Important Information - The company completed the sale of its 50% interest in an offshore wind lease area to Orsted for $625 million, marking a significant milestone in exiting the offshore wind business [18] - The company expects to recover $400 million to $500 million in deferred storm cost recovery rolling into rates during 2024 [22] Q&A Session Summary Question: Can you provide clarity on the RFP process and the denial of the repricing petition? - Management explained that the New York PSC denied the repricing petition due to a preference for competitive procurement over administrative adjustments, but an accelerated RFP process was initiated shortly after [26] Question: What is the expected timeline for the sale of offshore wind projects? - Management indicated that while the buyer is familiar with Orsted and negotiations are progressing, they cannot provide a specific timeline for the completion of the sale [106] Question: How does the company plan to manage interest rate exposure moving forward? - Management stated that they have factored interest rate expectations into their long-term growth prospects and are implementing cost-cutting measures to mitigate impacts [91] Question: What are the implications of the recent Moody's credit rating action? - Management expressed disappointment but noted that short-term ratings were unaffected, and they expect to enhance cash flows significantly in 2024, which should improve credit metrics [44] Question: Can you elaborate on the strategy for deferred storm balances? - Management confirmed plans to file for recovery of deferred storm costs and emphasized that this process is in good shape and imminent [98]