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    ES
    Earnings call· Jun 2026(Q2 FY26)

    EVERSOURCE ENERGY Q2 FY26 earnings call ES

    Jul 31, 2026 Source

    Executive summary

    Eversource Energy Q2 FY26 — Strategic Focus and Balance Sheet Strengthening

    Eversource Energy delivered Q2 FY26 recurring EPS in line with expectations, driven by strategic portfolio optimization including the Aquarion sale and a focus on core regulated utility operations. The company reaffirmed its long-term EPS growth guidance and received a positive outlook change from Moody's, reflecting balance sheet strengthening efforts. Key initiatives include advancing significant transmission projects and navigating regulatory rate cases, while managing an increased contingent liability for the Revolution Wind project.

    Highlights

    5

    • Delivered Q2 recurring EPS of $0.87, in line with expectations, and reaffirmed long-term EPS growth guidance of 5% to 7%.

    • Completed the sale of Aquarion, generating $1.7 billion in net proceeds to strengthen the balance sheet and focus on core operations.

    • Moody's upgraded outlook from negative to stable, reflecting strong financial execution and commitment to balance sheet sustainability.

    • ISO New England preliminarily selected Eversource and Avangrid's joint proposal for a $2.2 billion transmission project, with Eversource's share at $700 million.

    • Received final storm cost decision from PURA, approving $870 million for recovery, with $670 million expected to be securitized.

    Concerns

    5

    • Recognized an after-tax charge of $164 million ($0.43/share) related to increased estimated offshore wind contingent liability for Revolution Wind.

    • GAAP earnings impacted by a noncash after-tax charge of $111.4 million ($0.30/share) related to the carrying value of Aquarion.

    • Lower recurring earnings YoY primarily due to lower earnings in electric transmission (FERC ROE reduction) and gas distribution segments.

    • PURA denied recovery of carrying charges for storm costs, which Eversource is evaluating options for.

    • CL&P rate case filing proposes an 11% impact on total customer bills, a potentially challenging ask in an election year.

    Guidance & targets

    11
    CategoryTargetConfidence
    Long-term EPS growth rate
    5% to 7%
    high materiality
    High
    2026 Non-GAAP EPS
    $4.57 to $4.72 per share
    high materiality
    High
    Long-term EPS growth trajectory
    Upper half of 5% to 7%
    high materiality
    High
    Equity needs
    $800 million to $1.1 billion
    high materiality
    High
    Equity issuance
    No equity issuance
    medium materiality
    High
    5-year capital plan
    $26.5 billion
    high materiality
    High
    ISO-NE transmission project capital expenditure
    ~50% of $700 million
    medium materiality
    Medium
    AMI capital investment (Connecticut)
    Nearly $1 billion
    medium materiality
    Medium
    AMI O&M expense (Connecticut)
    $300 million
    medium materiality
    Medium
    Storm cost securitization cash receipt
    Approximately 1 year from now
    medium materiality
    High
    FERC prospective ROE rate implementation
    New ROE rate expected
    high materiality
    High

    Operational metrics

    23
    Recurring EPS
    $0.87down from $0.96
    Q2 FY26

    Second quarter recurring earnings per share, in line with expectations, but lower than prior year due to transmission and gas distribution segments.

    Aquarion sale net proceeds
    $1.7 billion
    Q2 FY26

    Net proceeds from the completed sale of Aquarion, used to displace parent company debt.

    Offshore wind contingent liability charge
    $164 million
    Q2 FY26

    After-tax charge related to an increase in the estimated offshore wind contingent liability for Revolution Wind, due to revised cost projections including stop work orders.

    Aquarion carrying value charge
    $111.4 million
    Q2 FY26

    Noncash after-tax charge related to the carrying value of Aquarion Water Company upon closing the sale.

    CL&P rate review revenue deficiency
    $451 million
    Current filing

    Calculated revenue deficiency in the CL&P rate review filing, the first since 2017.

    CL&P revenue deficiency from capital investments
    90%
    Current filing

    Portion of the CL&P revenue deficiency related to capital investments, future storm resiliency investments, storm restoration costs, depreciation, and taxes.

    CL&P revenue deficiency from O&M
    11%
    Current filing

    Portion of the CL&P revenue deficiency for increased O&M, demonstrating cost control efforts.

    CL&P investments in electric distribution infrastructure
    Over $4 billion
    Last 10 years

    Investments made to improve and upgrade electric distribution infrastructure serving 1.3 million customers in Connecticut.

    CL&P average customer outage frequency
    1 outage every 2 years15% improvement since 2017
    Current

    Improved reliability metric for Connecticut customers.

    CL&P avoided customer outages
    1.5 million
    2025

    Estimated customer outages avoided across Connecticut due to automated technology installed on the system.

    New Hampshire annual base rate adjustment
    $24 million
    Annual

    Approved increase as part of the New Hampshire rate case and multiyear PBR plan.

    Storm cost approved for recovery (PURA)
    $870 millionout of $975 million requested
    Current decision

    Amount of storm costs approved by PURA for recovery, allowing securitization financing to proceed.

    Storm cost deferred (PURA)
    $60 million
    Current decision

    Storm costs deferred by PURA pending completion of a third-party audit review.

    Storm cost excluded (PURA)
    $40 million
    Current decision

    Storm costs excluded by PURA from recovery.

    Storm cost already recovered
    $200 million
    Prior to decision

    Portion of approved storm costs that have already been recovered in rates.

    Storm cost to be securitized
    $670 million
    Current plan

    Amount of storm costs expected to be securitized following PURA's final decision.

    New generation supported in New England
    2,500 MW
    Since last year

    Eversource has directly supported this amount of new generation coming into the region, with most already online.

    Revolution Wind project completion
    >97%
    Current

    Percentage completion of the Revolution Wind project, nearing commercial operation.

    Revolution Wind capacity delivered to grid
    >300 MW
    Current

    Capacity currently being delivered to the ISO New England grid from Revolution Wind, ramping up to full capacity.

    Rate base growth
    Slightly over 8%CAGR
    Historical

    Historical compound annual growth rate for rate base.

    Potential FERC refund
    $880 million
    Incremental

    Incremental amount that would need to be refunded if the FERC decision is upheld, beyond the 15-month refund already accounted for.

    New Hampshire storm costs
    $450 million
    Outstanding

    Amount of New Hampshire storm costs awaiting final tranche approval for securitization.

    Total storm proceeds
    $1.8 billion
    Total

    Total expected storm proceeds, including Connecticut securitization, New Hampshire storm costs, and potential Connecticut storm carrying charges.

    Industry KPIs

    3
    MetricValueDetails
    Ffo to debt14.3% (S&P), 15.7% (Moody's)%
    Regulatory rate base growthSlightly over 8%%
    Rto market structure reviewISO New England's 2025 longer-term transmission planning RFP

    Deals & partnerships

    2
    Aquarion Water CompanySale of water utility business$1.7 billion net proceeds

    Completed the sale of Aquarion, furthering strategic position as a pure-play regulated pipes and wires utility.

    AvangridJoint proposal for a transmission project$2.2 billion total project cost

    Joint proposal selected by ISO New England as the preferred solution for a transmission project to increase capacity between Maine and New Hampshire.

    Capital programs

    3
    5-year utility infrastructure investmentsunderway$26.5 billion

    Reaffirmed 5-year capital plan for utility infrastructure investments by segment through 2030.

    ISO New England Transmission Project (Maine-New Hampshire)preliminarily selected$2.2 billion

    Benefit: Increase transmission capacity between Maine and New Hampshire, strengthen interface between Northern and Southern New England.

    Joint proposal with Avangrid preliminarily selected by ISO New England. Eversource's share is approximately $700 million. Approximately 50% of Eversource's CapEx share expected within current 5-year forecast.

    Advanced Metering Infrastructure (AMI) for ConnecticutproposedNearly $1 billion
    Start: Next year (if approved this fall)

    Benefit: Deliver customer benefits in excess of estimated cost, provide tools to manage energy consumption.

    Included in CL&P rate case filing. Also seeking expedited decision to leverage contractual pricing. Involves $300 million of O&M expense over the same period.

    Risks & headwinds

    6
    Increased offshore wind contingent liabilityQ2 FY26

    $164 million after-tax charge ($0.43 per share)

    Mitigation: Management believes the project is over 97% complete and the charge captures remaining costs; project on track for commercial operation later this year.

    FERC base transmission ROE reduction and refund orderOngoing, refund period >10 years

    Reduced base ROE rate; potential incremental refund of $880 million

    Mitigation: Appealing to FERC and D.C. Circuit Court of Appeals, challenging FERC's authority and due process. Filed Section 205 for prospective ROE.

    Denial of storm cost carrying charges by PURA

    Impacts total expected storm proceeds of $1.8 billion

    Mitigation: Evaluating options and next steps for seeking recovery of carrying charges.

    Sizable CL&P rate case ask and election year scrutinyOngoing regulatory process

    Proposed 11% impact on total customer bill from $451 million revenue deficiency

    Mitigation: Emphasizing prudent capital investments (90% of deficiency), strong reliability metrics, and rigorous cost control (11% O&M increase). Confident in fair hearing based on recent PURA engagement.

    Negative NPV for Connecticut AMI projectOver 5-year rollout

    Cost-benefit analysis shows negative NPV

    Mitigation: Seeking expedited decision to lock in favorable contractual pricing; emphasizing long-term customer benefits and tools for energy management.

    Regional energy supply constraints and affordability challengesOngoing

    null

    Mitigation: Supporting 2,500 MW of new generation (80% online); advocating for additional generation and gas capacity expansion to meet growing demand (e.g., data centers).

    What to watch in Q3 FY26

    5

    ISO-NE Transmission Project Final Recommendation

    September
    CurrentPreliminarily selected joint proposal with Avangrid for $2.2B project (Eversource share $700M)
    TargetPublication of final recommendation

    Why it matters

    Confirmation of this project will allow Eversource to roll its $700 million share into the capital plan, driving future rate base growth.

    We currently anticipate a publication of a final recommendation in September. So we should be in a good position for the third quarter call to give you more updates and that will allow us to roll that into the plan.

    Q&A highlights

    7

    How does the denial of carrying costs impact the financing plan, what are the offsets, and what are the components of the $1.8 billion storm cost securitization?

    John Moreira stated that while disappointed with the denial of carrying charges and deferred amounts, the overall decision is constructive as it provides a firm number for securitization ($670 million). He clarified that the financing plan did not assume retroactive carrying charges due to lack of conviction, but they will assess options for recovery. The $1.8 billion total includes $700 million from CT securitization, $450 million from NH storm costs, and the remainder from CT storm carrying charges.

    “we have not recognized $1 of these retroactive carrying charges. So in -- one would conclude that in our financing plan because we don't have a high level of degree of conviction that we have not assumed that we would get the retroactive piece.”

    asked by Shar Pourreza · answered by John Moreira

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Repositioning and Aquarion Sale

    Eversource completed the sale of Aquarion for $1.7 billion in net proceeds, solidifying its focus as a pure-play regulated pipes and wires utility. This move aims to optimize the portfolio, efficiently reinvest capital, and strengthen the balance sheet, as evidenced by Moody's upgrading the company's outlook to stable. The proceeds will be used to displace parent company debt.

    02

    Revolution Wind Project Update

    The Revolution Wind project is nearing completion, currently over 97% complete and on track for commercial operation later this year. Despite two stop-work orders and associated cost increases, which led to a $164 million after-tax charge this quarter, management expressed confidence in the project's remaining installation and its ability to deliver over 300 MW to the grid, ramping towards 704 MW.

    03

    FERC ROE Decision and Appeal

    The company is actively challenging FERC's March decision to reduce the base transmission ROE rate and order a refund. Appeals have been filed with FERC and the D.C. Circuit Court, arguing FERC exceeded its authority and denied due process. A new prospective ROE rate, calculated at 11.39%, is expected to take effect on November 30, following a Section 205 filing.

    04

    New England Transmission Opportunities

    ISO New England has preliminarily selected a joint proposal by Eversource and Avangrid for a $2.2 billion transmission project to increase capacity between Maine and New Hampshire. Eversource's share is approximately $700 million, with an anticipated in-service date of 2032. This project, if finalized, would address affordability challenges and congestion costs, with about half of Eversource's capital expenditure expected within the current 5-year forecast.

    05

    Connecticut Regulatory Filings

    Eversource filed its first CL&P rate review since 2017, proposing a $451 million revenue deficiency and a 10.25% ROE. The filing emphasizes investments in reliability and resiliency, with 90% of the deficiency related to capital investments. The company also received a final storm cost decision from PURA, approving $870 million for recovery, with $670 million expected to be securitized, though carrying charges were denied.

    06

    Advanced Metering Infrastructure (AMI) Proposal

    As part of the CL&P rate case, Eversource proposed a plan for AMI implementation in Connecticut, involving nearly $1 billion in capital investment and $300 million in O&M expense over five years. The company is seeking an expedited decision to leverage existing contractual pricing from its Massachusetts AMI rollout, aiming to start the project next year.

    07

    Cost Control and Affordability

    Management highlighted its commitment to cost control, noting that only 11% of the CL&P rate case revenue deficiency is for increased O&M, representing $45 million in avoided expenses compared to inflation. The company also emphasized the importance of increasing energy supply, including new generation and gas capacity expansion, to moderate costs and support growing demand from large loads like data centers.

    AI-generated summary of the company’s earnings call. Not investment advice.