The 704-MW Revolution Wind wind farm off the coast of southern New England is fully operational, delivering needed power supplies to the region and “significantly” reducing Eversource Energy’s risk of additional financial obligations for the project, Joseph Nolan, Eversource chairman, president and CEO, said Thursday during a third-quarter earnings conference call.
“This significant milestone comes at a critical time for our region, where extreme temperatures have underscored how important it is to bring every potential energy source online for customers,” Nolan said.
Two stop-work orders issued by the Trump administration delayed the project, which is being built by Ørsted.
Eversource in 2024 sold its 50% stakes in three offshore wind farm projects, including its share of the Revolution Wind project. As of June, the utility company had set aside about $409 million for potential obligations related to the two wind farms sold to Global Infrastructure Partners, according to a U.S. Securities and Exchange Commission filing.
Eversource expects to close out any contractual obligations with GIP next year, a process that will “take some time to fully reconcile,” Nolan said. “Our current assessment is that we have an adequate reserve on our books to cover this potential obligation.”
Eversource’s Connecticut Light & Power is working with state regulators to review its proposed $451 million rate hike proposal, Nolan noted during the call.
“We believe the constructive engagement we've had with regulators and stakeholders has created a path forward that balances affordability with the investments needed to deliver safe, reliable and resilient service,” he said.
CP&L is proposing a multi-year, performance-based rate framework that includes gradual, annual inflation index rate changes to avoid significant rate hikes, according to John Moreira, Eversource CFO. Eversource expects the Connecticut Public Utilities Regulatory Authority will issue a decision on the rate case in June, he said.
Under the rate proposal, CL&P would spend $1 billion installing advanced meters in Connecticut, Nolan noted.
Also, ISO New England has selected a $2.2 billion joint transmission proposal from Eversource and Avangrid to bolster the grid in the Boston area, Nolan said. Eversource has a $700 million share of the project.
The metering installations and the transmission project aren’t included in Eversource’s current capital expenditure plan, Nolan noted.
Meanwhile, Moreira said Eversource expects that a federal appeals court could issue a decision by the early fall next year on a challenge seeking to reverse the Federal Energy Regulatory Commission’s decision to cut the return on equity earned by New England’s transmission owners.
In March, FERC ruled that the base ROE for New England’s transmission owners had been set too high and retroactively lowered it, triggering refunds to customers going back as far as 2011. Eversource and Avangrid have said their utilities owe about $880 million and $203 million in potential refunds.
New England’s transmission owners are working with ISO-NE and load serving entities to prepare the refund, according to Moreira.
“This is an incredibly complex labor-intensive process to recalculate 10-plus years' worth of load settlement and billing data,” he said. “Given these complexities and the significance of this refund process, we know it will be challenging to process these refunds by FERC's deadline of May of next year.”
