Eversource Energy’s second-quarter income plunged to $53.7 million from $352.7 million in the year-ago quarter, largely due to several one-time charges, the electric and gas utility company said Friday.
The charges included $111.4 million on Eversource’s Aquarion sale, $62 million for a pending transmission return on equity refund and $164 million for increased liability from Eversource’s investment in the offshore Revolution Wind project.
Eversource’s second-quarter earnings per share fell to 14 cents from 96 cents in the same period last year. The company reaffirmed its expectations that it will earn $4.57/share to $4.72/share in ongoing income this year. The Springfield, Massachusetts-based company also said it continues to expect its earnings per share will grow by 5% to 7% a year through 2030, based on its adjusted 2026 non-GAAP earnings guidance midpoint of $4.65/year.
The 704-MW Revolution Wind offshore wind project is 97% complete and is slated to come online by the end of the year, according to Joseph Nolan, Eversource chairman, president and CEO.
However, because of two stop-work orders issued by the Trump administration, the project was delayed, increasing Eversource’s potential costs related to the project, Nolan said during the company’s second-quarter earnings conference call on Friday.
Nolan said he is confident the project, which is being built by Ørsted, will be finished this year, noting it is already delivering 300 MW to ISO-NE.
“The remaining pieces of the installation are very straightforward,” Nolan said. “There's no uncertainty around it.”
ISO-NE on July 22 tentatively selected a proposal by Avangrid and Eversource to build $2.2 billion in transmission that could deliver 1.2 GW of wind from Maine into Massachusetts with a 2032 in-service date, Nolan noted during the conference call.
After reviewing stakeholder comments, ISO-NE is expected to make a decision on the project in September, according to Nolan.
“If this project is ultimately successful, it will greatly help address the affordability challenge facing New England by enabling increased supply and easing congestion costs,” Nolan said.
Also, the company’s Connecticut Power and Light subsidiary in mid-July proposed a $1 billion, six-year advanced metering infrastructure initiative for the utility’s 1.4 million customers.
Neither of those projects is in Eversource’s current $26.5 billion capital expenditure plan. With a 0.66 benefit to cost ratio, the CP&L proposal would cost ratepayers about $350 million above its estimated benefits, making it unlikely it will be approved by state regulators, according to equity analysts with Jefferies.
“We continue to expect that [the advanced metering infrastructure initiative] is securitized or not pursued, leading to no earnings benefit for shareholders,” the analysts said in a Friday note. “It is unsettling to see an application with such negative [net present value].”
Nolan linked electricity affordability to grid reliability.
“An electric system that's allowed to degrade becomes less reliable and, over time, more expensive to maintain and fix,” Nolan said. “This balance between affordability and reliability can be accomplished through efficient operations, rigorous cost control and strategically investing to maximize long-term customer value at the lowest reasonable cost.”
Eversource’s plans to invest in transmission come amid a major debate over how much return on equity transmission owners should be allowed to earn on their assets, in part triggered by the Federal Energy Regulatory Commission’s mid-March decision that the ROEs in New England were too high.
Eversource and other utilities have challenged FERC’s decision and asked the agency to reset their allowed returns. Under the decision, Eversource faces up to $968.4 million in refunds, according to its quarterly report filed with the U.S. Securities and Exchange Commission.
