Eversource Energy (ES) Q4 FY25 earnings call: guidance and Q&A

Could the Aquarion sale and storm cost recoveries eliminate some straight equity needs and potentially make the 5-7% EPS growth target accretive, given the base assumption is already at the higher end?

John Moreira clarified that the $0.8B-$1.1B common equity issuance is not impacted by the Aquarion sale. The flexibility lies in debt and alternative financing. Storm cost recoveries are expected in Q3 2027, so junior subordinated notes are still planned. An Aquarion sale would reduce the need for alternative financing solutions and improve the growth rate for outer years.

“Where we have the lever to push and pull, if Aquarion happens, then the alternative financing solutions will be pulled back. So I would view it this way. With an Aquarion deal closing in a timely fashion, it moves our growth rate for the outer years to a much better start.”

asked by Shar Pourreza · answered by John Moreira

What is the status of potential post-close liabilities to Orsted for Revolution Wind, and when does this liability end (e.g., at first power or COD)?

Joe Nolan stated that Eversource has no liability to Orsted, only to GIP. The trigger for liability ending is Commercial Operation Date (COD), not first power. First power is expected in weeks, and COD is targeted for H2 2026. The company feels comfortable with the current contingent liability.

“We expect first power in the next couple of weeks. That is not the trigger though. The trigger is COD, we deliver just as we did with South Fork. We feel very comfortable with the number that we're carrying now.”

asked by Shar Pourreza · answered by Joseph Nolan

Could you elaborate on the potential structure of a minority interest sale and its regulatory approval needs?

John Moreira explained that they are looking at a 'minority interest capital structure deal' rather than a traditional equity interest in a line of business. He noted it's a tool in their toolkit and not an immediate plan, so details are premature.

“we're looking at kind of a traditional equity interest or a kind of think of it as a minority interest capital structure deal. So it's a little bit different than a true minority interest in the equity position at a line of business or at one of our utilities.”

asked by Carly Davenport · answered by John Moreira

What is the timing for resolution on the $1 billion Connecticut AMI upside to the capital plan, and when might it roll into the plan?

Joe Nolan expects meetings next week to gain clarity on a lawful application of the prudent standard for AMI in Connecticut. John Moreira added that the $1 billion is a placeholder and the cost estimate is stale, with a revised estimate to be filed after discussions.

“All we want really is to get a lawful application of the prudent standard. And then we'll have to update the implementation schedule, and that meeting is going to be next week.”

asked by Carly Davenport · answered by Joseph Nolan

Confirm that the 'upper half of 5-7% by 2028' growth target is re-based off of 2027 normalized earnings, not the lower 2026 number.

John Moreira confirmed this understanding, stating the expectation is to be at the upper half (over 6%) off of the earnings delivered for 2027.

“That you are spot on, and that's why in my formal remarks, I made it perfectly clear as to what the base year was. So we -- the expectation is we're going to be at the upper half, which implies over 6% off of the earnings that we delivered for 2027.”

asked by William Appicelli · answered by John Moreira

How much of the tax benefits from South Fork are reflected in 2026 earnings, and what is the remaining runway?

John Moreira stated that 0% of the ITC from their tax equity ownership has been utilized yet. They still have roughly $500 million in ITC to utilize in coming years, which will make them a non-cash taxpayer at the federal level for several years, potentially through the forecast period. He clarified that ITC credits do not generate a P&L impact, only a cash benefit.

“From an ITC standpoint associated with our tax equity ownership, 0. Okay? We have not dipped into that bucket yet. So we still have roughly $500 million that we will be utilizing in the coming years.”

asked by William Appicelli · answered by John Moreira

What are the key drivers for the expected meaningful inflection in earnings growth in 2027?

John Moreira pointed to Slide 17, highlighting the Aquarion transaction (if closed), storm cost recovery (securitization in Q3 2027), and the CL&P rate case (filing mid-2026, rate adjustment mid-2027) as major drivers.

“The 2027 enhancements will be, obviously, if Aquarion closes, the CL&P rate case as we continue to forecast, we will likely file that case midyear of '26 with a rate adjustment kicking in midyear of 2027. And the storm cost prudency, securitization transaction will happen around the Q3 of 2027.”

asked by William Appicelli · answered by John Moreira

Clarify the difference in incremental equity or equity hybrids needed if the Aquarion sale occurs versus not.

John Moreira reiterated no change to the $0.8B-$1.1B pure-play equity raise. The flexibility is in alternative financing. The Aquarion sale was assumed to provide $1.6 billion of equity portion, which would reduce the need for alternative financing solutions. Joe Nolan added that if the sale doesn't happen, they would file a rate case for Aquarion to improve its earnings.

“No change to what we just rolled out as our equity needs, $800 million to $1.1 billion from a pure-play equity raise. Where we have the flexibility is in the other alternative financing. We were assuming that in the current transaction to get $1.6 billion of the equity portion of the sale of Aquarion. So that's what you should think about as being the impact.”

asked by Paul Patterson · answered by John Moreira