Eversource Energy (ES) Q1 FY26 earnings call: guidance and Q&A

On March 19, FERC reduced the New England transmission owners' base ROE from 10.57% to 9.57%, resolving a complaint pending since October 1, 2011 — a proceeding spanning 22 commissioners, 13 chairs, and five administrations. Management called the decision arbitrary, capricious, and based on evidence over a decade old, noting the D.C.

Circuit had vacated FERC's prior order in April 2017 (which would otherwise have restored the original 11.14% rate). Eversource booked a $43.9M ($0.12/share) after-tax charge for the 15-month refund period it concedes it is subject to, and the cut is expected to lower 2026 after-tax earnings ~$70M.

Responses include an April 2 motion for stay and refund-deadline extension (granted, to May 2027), an April 14 stay motion at the D.C. Circuit, an April 20 rehearing request, and an April 30 Section 205 filing using FERC's own methodology with current data yielding a proposed 11.39% base ROE and a 12.89% cap.

The MISO decision is flagged as a significant read-through data point.

GAAP EPS was $1.61 vs $1.50 a year earlier; excluding the $0.12 FERC charge, non-GAAP EPS was $1.73, up $0.23 YoY. The Gas segment contributed the largest gain at +$0.18/share on Massachusetts rate-base increases and implementation of the Yankee Gas rate case in Connecticut.

Electric transmission added $0.06/share on continued system investment, and electric and water distribution both rose on rate increases and cost control. Partially offsetting was a $0.05/share higher loss at Parent and Other, driven by a higher effective tax rate and higher interest costs.

Management characterized the quarter as in line with expectations.

Eversource issued its first junior subordinated notes in February, an offering more than 5x oversubscribed that raised ~$1.5B and trades at or above par. FFO/debt stood at 14.2% (S&P) and 14.5% (Moody's), each more than 100 bps above downgrade thresholds, and S&P reaffirmed ratings and a stable outlook on April 10 following the FERC order.

The 5-year equity need is unchanged at $800M–$1.1B, and management stressed no urgency to access the equity market given the JSN proceeds and ~$2B of expected securitization cash inflows over 12–18 months.

Combined, Eversource expects to recover ~$2B of deferred storm costs and carrying charges via securitization across Connecticut and New Hampshire within 12–18 months, improving FFO/debt while addressing affordability. Connecticut's storm-cost prudency review decision is expected from PURA in July, enabling the legislative-backed securitization process.

In New Hampshire, Governor Ayotte signed House Bill 1539 authorizing storm-cost securitization; management estimated the New Hampshire piece in a '$4 to $4.70' range including carrying charges (unit stated ambiguously), targeting completion around late 2027. Separately, the April 22 Connecticut RAM decision authorized a $100M storm restoration reserve and moved PPA rate-setting to forecast data, supporting more stable rates and cash flows.

Eversource received final PURA approval for the Aquarion sale in March, and PURA denied an appeal the prior week. The company is awaiting the end of a second appeal period (at the commission) on June 14 before closing. Management said it intends to close but no longer feels pressured — 'we don't have a gun to our head anymore' — and would replace sale proceeds with alternative financing if the deal falls through.

In that contingency, Eversource would pursue Aquarion's pending $88M distribution rate case, expected to conclude toward year-end.

Eversource plans to file a letter of intent this month for CL&P's first base rate review in about eight years, framed as an opportunity to demonstrate reliability improvements; results are expected in 2027. The April 22 RAM decision was constructive — funding a $100M storm reserve and adopting forecast-based PPA rate-setting while lowering customer rates.

Connecticut AMI remains outside the $26.5B capital plan pending next steps after constructive PURA hearings earlier this year. On performance-based ratemaking (PBR), management declined to 'poke the bear,' prioritizing an orderly regulatory environment first.

Management is encouraged by ~2,600 MW of new generation entering the region, citing Clean Energy Connect (1,100 MW), Revolution Wind (704 MW), and Vineyard Wind (over 800 MW), with offshore wind running near a 50% capacity factor that peaks in critical winter months.

Eversource purchased a 26-acre site from Constellation enabling injection of up to 2,400 MW and is partnering with Enbridge on a natural gas pipeline enhancement to bring additional gas capacity to the region. Notably, Nolan said Eversource is 'resisting data centers,' arguing they add no value for residential customers and would raise energy prices; he expects less price volatility than PJM.

A February Nor'easter delivered over 40 inches of snow and 70+ mph gusts, one of the most severe blizzards to hit the Northeast — particularly Massachusetts — in recent years. Eversource mobilized thousands of line crews, used mutual aid, remote switching, and pre-staged materials, responded to over 2,000 fire, police, and safety events, and restored power to more than 500,000 customers.

A majority of surveyed customers appreciated the restoration speed, which management tied to ongoing grid investment and emergency preparedness.