Eversource(US:ES)2024-05-02 16:02Financial Data and Key Metrics Changes - The company's GAAP and recurring earnings for Q1 2024 were $1.49 per share, up from $1.41 per share in the previous year [31] - Electric distribution earnings increased to $0.48 per share from $0.47 per share in 2023, driven by higher revenues from a base distribution rate increase [11] - Water distribution segment earnings were flat at $0.01 per share compared to the previous year [12] - The company reported a loss of $0.04 per share for Eversource parent and other company earnings, compared to breakeven results in 2023, primarily due to higher interest expenses [12] Business Line Data and Key Metrics Changes - Electric transmission earnings rose to $0.50 per share from $0.45 per share, attributed to investments in the transmission system [31] - Natural gas distribution earnings increased to $0.54 per share from $0.49 per share, due to higher revenues from capital cost recovery mechanisms and lower operating expenses [32] - The water distribution business is undergoing a review, with potential sale proceeds assumed in the long-term financing plan [38] Market Data and Key Metrics Changes - The company anticipates a significant increase in electrification capacity in Massachusetts, projecting a 180% increase to support the adoption of 2.5 million electric vehicles and 5.8 gigawatts of solar generation [7] - In Connecticut, regulatory policies are currently misaligned with state policy, discouraging investment and utility innovation [8] Company Strategy and Development Direction - Eversource is focusing on becoming a pure play regulated utility, emphasizing the delivery of clean energy safely and reliably [5] - The company is committed to a five-year capital expenditure forecast of $23.1 billion, with substantial infrastructure needs providing opportunities for capital deployment [16] - The company is reducing capital expenditures in Connecticut by nearly $100 million in 2024 due to regulatory misalignment [16] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the regulatory environment in Connecticut, stating that without a secure cost recovery path, further capital investments cannot be justified [21] - The company remains optimistic about achieving its EPS growth rate of 5% to 7% through 2028, based on its capital investment forecast [18] - Management highlighted the importance of collaboration with state leaders to align regulatory policies with clean energy goals [30] Other Important Information - The company is on track to close the sale of its offshore wind business, with expected cash proceeds of approximately $1.1 billion from the sale of South Fork and Revolution Wind assets [37] - The company is also expecting to utilize tax equity investments from South Fork Wind, which could bring around $500 million in cash over the next 24 months [37] Q&A Session Summary Question: What CapEx are you cutting in Connecticut? - The company is cutting capital expenditures in Connecticut due to a negative regulatory environment, but will maintain safety spending [21] Question: What is the timeline for the Aquarion water sale? - The appeal process for the Aquarion rate case is expected to take 9 to 12 months after filing with the Connecticut Supreme Court [89] Question: What would it take to get more comfortable with the regulatory setup in Connecticut? - The company is looking for preapproval and a clear recovery roadmap for investments made on behalf of customers [96] Question: How does the under recovery of deferred costs impact FFO to debt? - The under recovery of approximately $600 million in 2023 is expected to improve the FFO to debt ratio significantly, with cash recovery starting in July [66] Question: What are the next milestones for the Massachusetts CL&P process? - The DPU is expected to render a decision on the electric sector modernization plan by August [44]