Eversource Energy’s Strong Financial Performance in the First Half of 2024

Eversource Energy, a leading energy company in the Northeast, has reported impressive financial results for the first half of 2024. The company’s diversified business segments, including electric distribution, electric transmission, natural gas distribution, and water distribution, have all contributed to its overall success.

Earnings Overview

In the first six months of 2024, Eversource earned $857.2 million, or $2.43 per share, compared to $506.6 million, or $1.45 per share, in the same period of 2023. This represents a significant increase of 69% in net income attributable to common shareholders.

The company’s regulated businesses, which include the electric distribution, electric transmission, natural gas distribution, and water distribution segments, were the primary drivers of this strong performance. These regulated segments earned $914.6 million, or $2.59 per share, in the first half of 2024, compared to $839.8 million, or $2.40 per share, in the same period of 2023.

The electric distribution segment, which includes the operations of CL&P, NSTAR Electric, and PSNH, saw its earnings decrease slightly due to higher operating and maintenance expenses, such as storm restoration costs and depreciation. However, this was offset by increased revenues from base distribution rate increases and capital tracking mechanisms.

The electric transmission segment experienced a significant increase in earnings, driven by a higher transmission rate base as a result of Eversource’s continued investment in its transmission infrastructure, as well as the impact of the annual billing and cost reconciliation filing with the Federal Energy Regulatory Commission (FERC).

The natural gas distribution segment also reported strong earnings growth, benefiting from higher revenues from capital tracking mechanisms and a base distribution rate increase at NSTAR Gas, as well as lower operating and maintenance expenses.

The water distribution segment saw a modest increase in earnings, primarily due to a one-time regulatory adjustment related to a rate case decision in Connecticut.

Liquidity and Capital Expenditures

Eversource’s cash flows from operating activities totaled $962.0 million in the first half of 2024, compared to $647.3 million in the same period of 2023. This increase was driven by the timing of cash payments, a decrease in cost of removal expenditures, and a higher income tax refund.

The company’s capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense, totaled $2.26 billion in the first half of 2024, compared to $1.98 billion in the same period of 2023. These investments were primarily focused on enhancing the reliability and resilience of the company’s electric, natural gas, and water distribution systems, as well as upgrading its transmission infrastructure.

Eversource has maintained a strong liquidity position, with $33.4 million in cash as of June 30, 2024, and $1.21 billion in available borrowing capacity under its commercial paper programs. The company has also been active in the debt markets, issuing $3.85 billion of new long-term debt in the first half of 2024 to fund its capital expenditures and repay short-term debt.

Business Development and Capital Expenditures

Eversource’s electric transmission business continued to be a significant area of investment, with capital expenditures increasing by $135.6 million in the first half of 2024 compared to the same period in 2023. These investments are designed to improve the reliability of the electric grid, meet customer demand for power, and strengthen the grid’s resilience against extreme weather and other safety and security threats.

In the distribution business, Eversource invested $1.41 billion in the first half of 2024, with a focus on aging infrastructure, load growth, and other system improvements. These investments are aimed at enhancing the reliability and efficiency of the company’s electric, natural gas, and water distribution systems.

Eversource’s offshore wind business, which includes 50% ownership interests in the Revolution Wind, South Fork Wind, and Sunrise Wind projects, has been a strategic focus for the company. In the first half of 2024, Eversource’s total equity investment balance in its offshore wind business was $806.1 million, up from $515.5 million at the end of 2023.

During the second quarter of 2024, Eversource completed the sale of its 50% interest in the Sunrise Wind project to Ørsted for $118 million, with an additional $34 million to be paid upon the completion of certain construction milestones. The company also executed an agreement to sell its existing 50% interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP) for $1.1 billion, subject to various adjustments.

Regulatory Developments and Rate Matters

Eversource’s regulated subsidiaries continue to navigate the regulatory landscape, with several notable developments in the first half of 2024:

• In Connecticut, the Aquarion Water Company of Connecticut (AWC-CT) received a final rate case decision from the Public Utilities Regulatory Authority (PURA), which resulted in a decrease to the company’s authorized revenues. AWC-CT has appealed the decision, and a ruling is pending.

• In Massachusetts, NSTAR Electric and NSTAR Gas received approval for base distribution rate increases, while EGMA filed for its first rate base reset, which will result in a significant increase to its base distribution rates.

• In New Hampshire, PSNH filed for a temporary and permanent base distribution rate increase, which includes the recovery of $247 million in unrecovered storm costs over a five-year period. The New Hampshire Public Utilities Commission is expected to issue a final decision on the permanent rates by August 2025.

Outlook and Conclusion

Eversource has reaffirmed its 2024 non-GAAP earnings guidance range of $4.50 to $4.67 per share, which excludes the impact of the sales of its offshore wind investments. The company also reiterated its long-term EPS growth rate target of 5% to 7% through 2028.

The strong financial performance in the first half of 2024, coupled with the company’s strategic investments in its core utility businesses and the ongoing optimization of its offshore wind portfolio, position Eversource for continued success. The company’s diversified business model, prudent financial management, and commitment to operational excellence have enabled it to navigate the evolving energy landscape and deliver value to its shareholders and customers.