Eversource(US:ES)2023-08-01 17:34Financial Data and Key Metrics Changes - The second quarter 2023 Electric Distribution earnings were $0.47 per share compared to $0.37 in the same quarter last year, primarily due to higher revenues from base distribution rate increases and lower O&M costs [53] - GAAP earnings were $0.04 per share in Q2 2023, down from $0.84 in Q2 2022, impacted by a $331 million after-tax impairment charge related to offshore wind investments [89][68] - Recurring earnings were $1 per share in Q2 2023 compared to $0.86 in Q2 2022, excluding the impairment charge [66] Business Line Data and Key Metrics Changes - The Electric Transmission segment earned $0.46 per share in Q2 2023, up from $0.44 per share in Q2 2022, driven by continued investments in the electric transmission system [79] - The Natural Gas Distribution segment earned $0.03 per share in Q2 2023, compared to $0.02 in the same quarter last year, due to higher revenues from capital tracking mechanisms [90] - The Water Distribution segment maintained earnings at $0.03 per share in Q2 2023, consistent with the previous year [67] Market Data and Key Metrics Changes - Supply rates for residential customers in Connecticut and Massachusetts decreased approximately 40% per kilowatt hour from January to July 2023, with New Hampshire customers seeing a similar decline effective August 1 [101] - The company expects an improvement in cash flows in 2023 compared to 2022, driven by the absence of one-time cash outflows and net proceeds from the sale of offshore wind investments [93] Company Strategy and Development Direction - The company is committed to a $21.5 billion five-year regulated capital program, reaffirming its long-term EPS growth rate in the upper half of the 5% to 7% range [69] - Eversource is focused on clean energy initiatives, having invested nearly $800 million in clean energy in 2022, including offshore wind and battery storage [48] - The company is advancing the sale of its offshore wind assets, with a focus on ensuring all agreements are in place before finalizing the transaction [92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in completing the offshore wind transaction soon, emphasizing the importance of wind energy in transitioning to a clean energy environment [75][99] - The company remains focused on engaging with policymakers to discuss long-term solutions for energy supply challenges, particularly in light of natural gas supply constraints [46][60] - Management highlighted the need for continued investments in clean energy technologies and infrastructure to support electrification and reduce reliance on natural gas [49][61] Other Important Information - The company has $1 billion remaining under its ATM program for equity issuance, which it plans to utilize opportunistically [94] - The impairment charge recognized in Q2 2023 was based on the sale price of uncommitted lease areas and expectations regarding tax credit qualifications [68] Q&A Session Summary Question: What are the next steps regarding the Sunrise Wind repricing? - Management indicated that the repricing process is underway and that they are confident in the outcome, with an estimated investment level of around $400 million related to this [15][32] Question: Can you elaborate on the deferred storm costs recovery in Connecticut? - Management explained that recovery of storm costs will occur during a general rate proceeding, with the earliest recovery expected by the end of 2025 [16][18] Question: What is the expected impact of the offshore wind sale on FFO to debt? - Management did not disclose specific figures but indicated that the transaction would improve the FFO to debt ratio significantly, with discussions planned with rating agencies [157][158] Question: How does the recent draft decision impact investment in Connecticut? - Management expressed concern over the draft decision's potential to discourage investment but remains committed to working with stakeholders to achieve a favorable outcome [139]