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DATE
Friday, August 1, 2025 at 1:00 p.m. ET
CALL PARTICIPANTS
Chairman, President, and Chief Executive Officer — Joseph R. Nolan Jr.
Executive Vice President and Chief Financial Officer — John P. Marreira
Vice President, Investor Relations — Rima Q. Hyder
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RISKS
Moody's downgraded Connecticut Light and Power to Baa1 from A3, citing the Connecticut regulatory environment as the reason for the downgrade.
TAKEAWAYS
Quarterly Earnings— GAAP and recurring earnings were $0.96 per share, up from $0.95 per share in the prior year, with growth in transmission, distribution, natural gas, and water segments, partially offset by higher parent interest expense.
Load Growth— Electric demand growth exceeded 2% through 2025, nearly double the rate observed in the same period last year, driven by electrification and decarbonization trends.
Capital Plan— Five-year capital investment plan increased 10% to $24.2 billion, with $2.2 billion executed through June 2025 and $1.5-$2 billion in additional potential opportunities identified.
FFO to Debt— Moody's FFO to debt ratio reached 11.5% as of Q1 2025, an improvement of over 200 basis points from year-end 2024, with expectations of reaching 13%-14% post-Aquarion sale.
Connecticut SB4— Senate Bill 4 enacted, enabling securitization of storm costs from 2018-2025 and shifting some public benefit program costs from customer bills to state bond funding, expected to modestly reduce customer bill impacts.
Storm Cost Recovery— Deferred storm costs submitted for prudency review in Connecticut totaled $980 million as of December 2023; approximately 85% of $2.0 billion in total deferred storm costs across all states are either recovered or under review.
Regulatory Outcomes— New Hampshire PUC approved a $100 million permanent rate increase for Public Service Company of New Hampshire, effective July 25, 2025, based on a 9.5% ROE and a 50/50 capital structure, and authorized a new four-year performance-based rate mechanism with annual inflation adjustments and a 142 basis point adder.
Equity Issuance— Issued approximately $200 million of equity under the ATM program in June 2025 to provide liquidity; future issuances will be monitored based on Aquarion sale timing and short-term debt needs.
Infrastructure Investment— Advanced metering infrastructure rollout in Massachusetts is underway, with the AMI communication network substantially complete in Western Massachusetts and meter installation started in Weston.
Earnings Guidance— Recurring EPS guidance for 2025 reaffirmed at $4.67-$4.82 per share, with a long-term EPS growth target of 5%-7% off the 2024 base year.
SUMMARY
Eversource Energy(ES 1.34%) management emphasized execution of strategic priorities, including regulated utility infrastructure investment and grid modernization to address rising regional demand. The Connecticut Supreme Court clarified that prudency for cost recovery must be assessed at the time of management's investment decision, prohibiting regulatory hindsight in future rate cases. The onshore substation for the Revolution Wind project, managed by Eversource, is expected to reach substantial completion this month and enter the testing and commissioning phase, reducing critical path risk for the company. Equity needs for the five-year forecast period remain at $1.2 billion, with the majority anticipated in the latter half of the plan and potential reductions pending Aquarion transaction closure and storm cost securitization timing. Management reported an over $1 billion year-over-year improvement in operating cash flows for the first half of 2025, driven by cash flow initiatives and regulatory recoveries. The company maintains top decile reliability performance, supporting service continuity for over 4 million customers across three states.
The Connecticut Supreme Court ruling clarified that "prudency needs to be set at the time management makes the investment decision," and that regulators cannot apply hindsight in cost recovery reviews.
Onshore substation construction for the Revolution Wind project, managed by Eversource, is expected to reach substantial completion this month and enter the testing and commissioning phase, reducing critical path risk for the company.
Management stated that equity needs for the five-year forecast period remain at $1.2 billion, with the majority anticipated in the latter half of the plan, and potential reductions pending Aquarion transaction closure and storm cost securitization timing.
Management highlighted an over $1 billion year-over-year improvement in operating cash flows for the first half of 2025, driven by successful implementation of cash flow initiatives and regulatory recoveries.
The company maintains top decile reliability performance, supporting service continuity for over 4 million customers across three states.
INDUSTRY GLOSSARY
FFO to Debt: Ratio of funds from operations to total debt, used by credit rating agencies to assess financial leverage and cash flow adequacy.
AMI: Advanced Metering Infrastructure; integrated systems of smart meters and communication networks that enable real-time monitoring and management of energy usage.
PURA: Public Utilities Regulatory Authority; regulatory body for utilities in Connecticut.
ATM Program: At-the-market equity offering program, allowing the company to issue shares incrementally into the market to raise capital as needed.
Performance-Based Rate Mechanism (PBR): Regulatory framework tying utility revenues to agreed performance outcomes, often allowing for periodic adjustments based on inflation or other metrics.
Deferred Storm Cost: Utility expenses related to storm restoration that are tracked separately and eligible for later recovery from customers, subject to regulatory approval.
Full Conference Call Transcript
Joe Nolan: Thank you, Rima, and good morning, everyone. Thank you for being with us today. Starting on Slide four, we have made great progress halfway through the year, executing our key strategic priorities while maintaining our commitment to being a pure-play pipes and wires regulated utility. As anticipated, electric demand continues to rise both in the near term and throughout our ten-year forecast horizon. We recognize this growth trajectory early on and work closely with key stakeholders to position ourselves to effectively meet the challenge. In several regions, demand is expected to outpace existing infrastructure capacity, underscoring the critical need for strategic upgrades and new development.
The accelerating electrification of transportation and heating sectors driven by decarbonization efforts is further fueling this upward trend. Notably, load growth through 2025 has exceeded 2%, nearly double the rate observed during the same period last year, reinforcing our expectations and validating the investments we've made to capitalize on this momentum. A clear indication of this is the 10% increase in our five-year infrastructure investment plan that we announced in February.
Our balance sheet is strengthening, and our FFO to debt ratio continues to improve as a result of constructive regulatory outcomes, as well as our execution on cash flow enhancements that we laid out last year, such as exiting the offshore wind business and the planned divestiture of our water business. Turning to our quarterly accomplishments on Slide five, once again, this quarter, we saw solid earnings growth from our transmission and distribution businesses versus last year's results. Earnings for the second quarter were $0.96 a share, in line with our expectations.
We are reaffirming our 2025 EPS guidance range of $4.67 per share to $4.82 per share, as well as our long-term EPS growth projection of 5% to 7% through 2029. In addition to our solid financial results, we had other significant accomplishments across the company. During this hot summer, we continue to maintain our top decile reliability performance, even during record-breaking heat waves. I'd like to briefly acknowledge the severe weather event that impacted parts of Connecticut, Southeastern Massachusetts, and Cape Cod during the July 4 holiday weekend. This storm had damaging winds well above 70 miles per hour. These dangerous conditions posed significant operational challenges, but our team responded swiftly to ensure safety and service continuity.
I would like to thank all our employees, including crews, operations, and customer services teams who worked around the clock to restore power to our customers. This is also a testament to our continued investment in grid modernization, which has significantly enhanced system resilience, enabling faster and more efficient storm restoration efforts that minimize customer outages and support long-term reliability. We issued our annual sustainability report, which is available on our website. The report highlights some of our most innovative sustainability and governance achievements, including our network geothermal pilot project, our Cape Cod Solutions Transmission project, and our efforts to develop the future energy workforce. Shifting focus to the regulatory front, let me begin with an update on Connecticut.
The Connecticut legislative session ended in early June, and the general assembly passed Senate Bill 4, SB4, on a bipartisan basis. SB4 is a comprehensive energy reform bill with the stated intention of making electric bills more affordable and the utility regulation process more transparent. The bill was signed into law by Governor Ned Lamont. SB4 allows for securitization of storm costs incurred by Eversource from 2018 to 2025, which is important for customer bill predictability as well as strengthening our balance sheet. The new law also clarifies the requirements of the public utility regulatory authority, including requiring that all five commissioners sit on all rate request proceedings moving forward.
Additionally, the law allows the state to use bonds to cover the cost of some public benefit programs, which are also currently recovered through a separate charge on our customers' bills. This is expected to modestly reduce their overall bill impact. We appreciate that leaders on both sides of the aisle and the general assembly are committed to ensuring a transparent and constructive process for utilities in Connecticut to deliver safe and reliable service. Staying with Connecticut, the Aquarian divestiture process continues to progress well. We are well into the regulatory approval proceedings in all three states, and we expect to close the deal by the end of the year.
We also received a decision from the Connecticut Supreme Court on Aquarian's appeal from its 2023 rate case results. We are encouraged by the court's findings on the applicability of the legal standards for rate making, including the application of prudency standards as well as utility companies being entitled to carrying charges on deferred costs. This court ruling was an important development for future investments and cost recovery. Our focus in this legal challenge has always been to get clarity from the court on the applicability of prudent standards in order to support and defend capital investments in the future.
Having the rules of the road clarified by the court is critical in this regard and is of greater value than the evidentiary disputes on Aquarian's 2023 rate case. Moving north, we received a constructive decision on the rate case for Public Service Company of New Hampshire. We are pleased with the commission's collaborative approach on this rate case proceeding. This decision, which was in line with our expectations, largely supports our investments in grid modernization, system reliability, and necessary energy infrastructure needed to continue delivering safe, affordable, and sustainable electricity to our New Hampshire customers. John will cover the details of this recent decision.
We're pleased to announce that during the second quarter, we finalized contracts that maintain positive constructive relationships with several of our key unions representing electric and natural gas employees in Massachusetts. It's important to Eversource that we maintain these relationships with our union partners. Turning to slide six, as we invest in modernizing our infrastructure and supporting the energy transition of the future, we are equally focused on keeping costs manageable for the families and businesses we serve. Affordability is not just a goal; it's a cornerstone principle in every investment we make. Through innovative solutions and strategic grid enhancements, we're enabling the integration of renewable energy resources and preparing for the increase in electric demand expected in our region.
Our advanced metering infrastructure rollout in Massachusetts is progressing very well, and we reached a major milestone in July. The AMI Communication Network, which started deployment earlier this year in Western Massachusetts, is substantially complete. This was a critical foundational step prior to the meter installation. We have also started the construction of the communication network in Eastern Massachusetts. I am pleased to report that following a successful system launch last week, we have begun the installation of the first AMI meters in Weston, Massachusetts. The transition to AMI meters for all Eversource Massachusetts Electric customers is expected to take approximately three years to complete. We are very excited to bring AMI to Massachusetts.
This initiative aims to bring transparency, efficiency, and reliability to energy distribution while empowering customers to make informed decisions about their energy consumption. Even more exciting is our key project, the Cambridge Underground Substation, the first of its kind in the United States. Construction is moving ahead well since breaking ground earlier this year. Boston Properties, our partner on this project, is now advancing toward the final depth of approximately 105 feet. We are pleased that we can meet the growing needs and enable clean energy resources for Cambridge, a global center of innovation. The Eversource team behind our innovative Outer Cape battery energy storage was recognized for their work on the project by the Energy Systems Integration Group.
This group is an independent not-for-profit organization that galvanizes the expertise of the technical community to support grid transformation in energy systems integration. Our system was recognized for its state-of-the-art nature and the seamless implementation of the first-of-its-kind systems to improve reliability for customers. Since full commissioning in December 2022, this system has been dispatched on several occasions, avoiding sustained outages for thousands of customers during storms and other unexpected events. Turning to a brief update on Revolution Wind on slide seven, you may recall that in early May, Orsted announced that the project was approximately 75% complete. We expect Orsted to update the overall project status soon. The onshore substation construction, which Eversource oversees, is progressing well.
We expect the onshore substation construction to be substantially complete this month. The testing and commissioning process is underway, which will allow the substation to provide back feed power to the offshore facilities in early 2026. This construction progress significantly reduces the critical path risk for Eversource. Before we conclude today's call, I want to thank all of you, our employees, partners, and investors, for your continued trust and support. This quarter's results reflect our team's unwavering commitment to operational excellence, customer service, and long-term value creation. This quarter wasn't just about performance; it was about our over 10,000 employees working together every day to keep the lights on and provide superior customer service.
From our line workers restoring power in the dark, to our engineers designing the grid of tomorrow, to customers and shareholders who trust us every day, we're proud to serve over 4,000,000 customers across three states. As we look ahead, we remain focused on delivering safe, reliable, and sustainable energy while navigating an evolving regulatory and economic landscape. I will now turn the call over to John Marreira to discuss our financial results.
John Marreira: Thank you, Joe, and good morning, everyone. This morning, I will review second quarter earnings results, provide a regulatory update, and discuss our balance sheet and credit metrics progress. I'll start with our second quarter results on Slide nine. GAAP and recurring earnings results for the second quarter were $0.96 per share compared with GAAP and recurring earnings of $0.95 per share last year. Higher utility earnings were largely offset by a decrease in parent and other earnings. Looking at the quarter results, starting with Transmission, higher electric transmission earnings of $0.02 per share were due to increased revenues from continued investments in the transmission system and lower interest expense, partially offset by the impact of share dilution.
Next, we have higher electric distribution earnings of $0.02 per share that benefited from distribution rate increases in New Hampshire and Massachusetts, providing cost recovery of infrastructure investments in our distribution system. These higher revenues were partially offset by higher property taxes, interest, depreciation, and the impact from share dilution. The improved results of $0.02 per share at Eversource's Natural Gas segment were due primarily to base distribution rate increases at both Massachusetts utilities, to also provide timely recovery of investment in our natural gas segment. These revenue increases were partially offset by higher O&M interest, depreciation, property tax expenses, and the impact from share dilution.
Water distribution earnings improved $0.02 per share year over year, as a result of higher revenues and lower interest expense. Eversource parent losses increased $0.07 per share for the quarter, higher interest expense. Lower results were as expected, primarily due to resulting from the absence of capitalized interest after the sale of our offshore wind business. Overall, our second quarter earnings were in line with our expectations, and we are pleased with the solid performance. Moving to our key regulatory items, beginning with New Hampshire on slide 10. On July 25, we received the order on the PSNH rate proceeding.
We have proposed an increase of $103,000,000, which was amended from the original proposal of $182,000,000, primarily to exclude deferred storm costs, which will be considered by the commission in another docket. The audit approved a permanent rate increase of $100,000,000 based on an ROE of 9.5% and a 50/50% capital structure. This increase includes the previously approved temporary rate increase of $61,000,000. The PUC also approved a new performance-based rate mechanism with a four-year term that includes annual inflation adjustments and a 142 basis point adder. This rate order is effective as of today, and we will continue to evaluate all of the components of the rate order to determine next steps.
While not all components of our rate proposal were adopted, we are encouraged by this constructive rate outcome that was in line with our expectations. Moving to Slide 11. In Massachusetts, on November 1, new rates are expected to go into effect for NSTAR Gas. Under the annual PBR adjustment, which and a potential rate base rolling are elements of our approved ten-year PBR plan for NSTAR Gas. In addition, EGMA will have a rate increase of approximately $62,000,000 also effective on November 1, reflecting the second phase of the 2024 rate base rolling. Moving to Connecticut.
We have completed the discovery phase of the hearings of our Yankee Gas rate proceeding and have provided strong support for our system infrastructure investments and cost structure. We expect a final decision in this rate proceeding in October for rates to be effective November 1. As a reminder, this filing seeks to recover an adjusted revenue deficiency of approximately $190,000,000, reflecting the recovery of critical investments and cost increases since the previous rate review back in 2018. We also received a draft decision in the Connecticut PVR docket in July.
While we appreciate PURA's work on advancing this important regulatory construct, we continue to have concerns with certain core components of this framework and are working with PURA and other stakeholders to ensure that we have alignment with the PBR structure that we can support. Next, let me reaffirm our five-year capital plan of $24,200,000,000 as shown on Slide 12, which reflects our five-year utility infrastructure investments by segment. This plan reflects a 10% increase over the last five-year plan, and as we've discussed previously, it only includes projects for which we have a clear line of sight from a regulatory perspective. Through June 2025, we have executed on $2,200,000,000 of our $4,700,000,000 infrastructure investment plan.
We are very pleased with this progress, and we are on track to meet our plan target for the year. We continue to see additional capital investment opportunities in the range of $1.5 to $2,000,000,000 within this five-year forecast period. Turning to Slide 13. We remain highly focused on improving our cash flow position and strengthening our balance sheet condition. Our plan to enhance our cash flows is balanced by our equity needs of $1,200,000,000, the majority of which is expected to be issued towards the back half of our five-year forecast period. As I have stated before, we expect our FFO to debt ratios for 2025 to be approximately 100 basis points above the rating agency thresholds.
In fact, our Moody's FFO to debt ratio as of the first quarter of this year of 11.5% reflects an improvement of over 200 basis points from 12/31/2024. In early September, we met with all three rating agencies and received positive feedback on our execution of cash flow enhancements. Moody's recently reaffirmed its ratings for both Eversource Energy and NSTAR Electric, which we were very pleased to see. Unfortunately, Moody's also announced a downgrade for Connecticut Light and Power to Baa1 from A3. Moody's cited the Connecticut regulatory environment as their reason for the downgrade.
As we shared with you last quarter, and as shown on Slide 14, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet condition. As a result, our operating cash flows have continued to improve, increasing over $1,000,000,000 year over year through the first half of this year. We also see further opportunity for customer bill stabilization and balance sheet enhancement through Senate Bill 4 in Connecticut by establishing a legal foundation for securitization of storm costs. This would certainly benefit our cash flow position and our balance sheet improvement efforts. As a reminder, our forecast did not assume securitization as the cost recovery for the Connecticut deferred storm costs.
Staying with Connecticut, we recently supplemented our storm cost recovery filing with an additional $171,000,000 of storm costs for the period of February 2023 through December 2023. This brings the total balance of deferred storm cost currently with PURA for prudency review to $980,000,000. We continue to believe that all of the storm restoration costs we filed were prudently incurred and should be recovered from customers. It's important to note that we now have approximately 85% of the $2,000,000,000 of deferred storm cost balance being recovered in rates or in the prudency review process across all three states.
Moving to slide 15, I would like to share a progress update on debt maturities at the parent level and also cover our at-the-market equity issuance program. Our plan to retire $600,000,000 of maturing parent debt during 2025 is progressing as planned, and we are prepared to manage the final maturity this month with existing resources as shown on the slide. We anticipate no new long-term debt issuances this year at the parent company. During the second quarter, we issued approximately $200,000,000 of equity under the ATM program. We will closely manage further issuances in the second half of the year as we monitor the status of the Aquarion transaction and our short-term debt commercial paper balances.
Next, I will turn to 2025 earnings guidance as shown on Slide 16. With the first half of the year in the record books, we are reaffirming our 2025 recurring earnings per share in the range of $4.67 to $4.82 and our longer-term EPS growth rate of 5% to 7% off of 2024 EPS base. We remain confident in our EPS growth outlook underpinned by the disciplined execution of our strategic plan, our customer-focused investments in electric transmission and distribution that are supported by constructive regulatory mechanisms, ensuring timely cost recovery for the majority of our businesses.
At the same time, ongoing progress on storm cost recovery and O&M cost discipline are expected to provide a solid foundation positioning Eversource to provide consistent long-term value to our shareholders. I'll now turn the call back to Rima to begin our Q&A.
Rima Hyder: Michelle, we're ready to begin our Q&A session.
Operator: Thank you. Our first question is going to come from the line of Carly Davenport with Goldman Sachs. Your line is open. Please go ahead.
Joe Nolan: Good morning, Carly.
Carly Davenport: Hey, Joe. Hey, thanks for taking the questions. Maybe just to start, on the balance sheet, appreciate the updates there. So the 11% FFO to debt at the end of Q1, just can you walk us through kind of the confidence levels in hitting that 14% level by the end of the year and some of those drivers in addition to the asset sale, if I recall, was expected to add about 100 basis points to that ratio?
John Marreira: Very highly confident. The biggest driver to enhance our FFO to debt is in rates, and that is the recovery of the deferrals. Albeit, I don't expect to see the significant sizable improvement in the second half of the year because we have already recovered the $900,000,000 that went into rates July 1. So we're on track. It's not just the public benefits. We also have cost recovery of deferrals, as I mentioned, storms in my formal remarks, and other regulatory assets that we have coming into rates in the other jurisdictions. In my formal remarks, I mentioned that we will monitor the progress that we're making on the regulatory approval for Aquarion.
Highly confident that we'll reach the 13 handle with the Aquarion closing towards the end of the year, that'll contribute approximately 100 basis points to get us to that nice cushion.
Carly Davenport: Got it. Great. Thank you. And then just on Connecticut, you know, you mentioned obviously the securitization of the storm cost was not in your base plan. So could you talk a little bit about how that potentially could impact the longer-term FFO to debt levels? And then just from a logistics perspective, how should we think about the timing to filing for that and when that could ultimately have an impact on the balance sheet?
John Marreira: Sure, sure. Let's start with your first question. First question is, how that impacts. Right now, we're not moving from the $1,200,000,000 need. Clearly, everything else being equal, and that would certainly have an impact on our financing needs. You know, the fact of the matter is within six months, we're gonna do a clean refresh in February, we'll give you an update of what our revised equity needs. And when we roll out our equity needs at that point in time, we'll certainly take into consideration the securitization aspects of those costs.
Your second question as to how it would work, where we stand right now, we just two weeks ago filed another wave of storm costs, about $171,000,000 into PURA. So that puts the total cost, storm cost under the prudency review close to a billion dollars. So that is a very sizable amount for the authority to review and go through it. In light of that filing, that latest filing, PURA did update their schedule, their procedural schedule, to take us out through March with hearings and briefs being filed. So right now, we don't have an approval date for that review.
But once we get the review, which is the most critical aspect of that, we already have the legislation, we will be off to the running with the securitization process. We expect it would take in and of itself about twelve to eighteen months to get complete. So likely now, we're hoping that we would be able to get that cash in the door by '26. So with this push out in the schedule, it's looking more like 2027.
Carly Davenport: Great. That's super helpful. Thank you for the time.
John Marreira: Thank you, Carly.
Operator: Thank you. And one moment as we move on to our next question. Our next question is going to come from the line of Jeremy Tonet with JPMorgan Securities. Your line is open. Please go ahead.
Joe Nolan: Morning, Jeremy.
Jeremy Tonet: Hey, Jeremy. Hi. Good morning. Just want to kind of follow-up with some of the points on that we discussed there. I think the slides highlight the fur ending first quarter FFO to debt. I was just wondering if you could share updated metrics for the second quarter for Moody's and S&P, how you stand against those thresholds at this point?
John Marreira: Well, for Moody's and S&P, we're already in a strong position there. So let me speak to Moody's. So we have line of sight. I would tell you that every quarter, we'll continue to make progress. As I've said, you know, this quarter on a twelve-month basis, rolling basis, we improved over 200 basis points, which is very, very sizable just in one quarter. I expect that momentum to continue. And I would say in the coming quarters, we'll be at that 13%.
Jeremy Tonet: Got it. Thank you for that. And was just wondering if you could turn to New Hampshire a little bit here. If there's any other, you know, I guess, process takeaways that you have from the outcome there and views, I guess, on settlements versus the full litigation and you know, how you think things progress there?
John Marreira: Yeah. No. Jeremy, I think it was fantastic. You know, we had been in the rate arena since 2018. Every single case that we had, had been settled prior to that. You know, I talked to a lot of the folks. We don't have any recollection of any time we've had to litigate a case. But, you know, I think it was a very, very good case, that allowed us to flush a lot of the issues out. And I think that the regulatory climate there is very favorable. Obviously, you know, in a situation like that, you don't get everything you want. But the fact of the matter was constructive. It was fair. It was transparent.
You know, we asked for, you know, after we netted out storms, we asked for $103,000,000. We ended up getting, you know, we got $100,000,000. You know, we got an ROE of nine and a half percent. But what I like about it is it's very constructive, not only with the commission, but with all of the parties that were involved. So, you know, going forward, I think it's an example, you know, this is a really a nice way to kind of handle a rate case in that professional manner. So we're pleased. Obviously, we're looking at the order and there's some puts and takes and some things that, you know, we might like to have tweaked.
But at the end of the day, it's a good order for not only the customers, but it's a good order for the company as well. And I mean, I would just add, let's not lose sight that we did get the PBR structure, which was important to us, and we hope that prevailed. And very, very pleased that ultimately the, you know, the revenue level was that we that the rate case provided for us is very supportive as that is kind of the cast-off basis, if you will, for future rate increases as we move into this RO PBR environment.
Jeremy Tonet: Got it. Thank you for that. I'll leave it there.
John Marreira: Alright. Thanks, Jeremy.
Operator: Thank you. One moment as we move on to the next question. Our next question is going to come from the line of Andrew Weisel with Scotiabank. Your line is open. Please go ahead.
Joe Nolan: Morning, Andrew.
Andrew Weisel: Hi. Good morning, everyone. Hey, one more on the balance sheet. So the ATM issuances of about $220,000,000 during the quarter after or it was off during the first quarter. I know the commentary still shows the majority of equity toward the back half of the forecast period. So how should we think about that? What made you turn it on during the last quarter? And I know last year, you had that similar run rate of $1,000,000,000 over the year, about $250,000,000 per quarter on average. So what should we expect going forward? And at a minimum, were you active in July?
John Marreira: Well, you'll see that when we hit when we're in the third quarter, half is cherubby. So obviously in my former remarks, said, look, our equity needs for this year will be dictated by how the Aquarion approval progresses and what our short-term debt balances are. So we saw a window of opportunity in June, and we did that raise all in the month of June as a way to provide liquidity for us, which is very important to us. So, I've said that, you know, time and time again, what we need for this year is gonna be based on, you know, the timing of Aquarion and our short-term balances.
So once again, I think the guidance that I reiterated still holds. Once we close Aquarion, I don't see the need to raise any equity for, you know, for some time.
Andrew Weisel: Okay. Thank you. That's helpful. Then longer term, question on Connecticut. Between the updates and the Connecticut court ruling, do you think your position to redeploy some of the capital back into the state? In the past, you diverted some money away from Connecticut into other states given the uncertainty. Do you think you're ready to reallocate, or would you wanna see some more constructive data points from the commission itself first?
John Marreira: We would like to see some more constructive data points coming out of the commission before we reassess our capital redeployment.
Andrew Weisel: Okay. Do you think there's opportunity between now and the year-end update when you formally refresh the capital forecast, or do you think it'll take a little more time than that?
John Marreira: It's that's that's tough that's difficult to predict, but one of the events that we're watching very closely is what the outcome of the Yankee gas case proceeding. And we also have a reconsideration in on AMI if we get some clarity around that. And some rules of the road that are fair to us, then that's also an opportunity as well.
Andrew Weisel: Great. That's really helpful. Thank you so much.
Operator: Thank you. And one moment as we move on to the next question. Our next question will come from the line of Anthony Crowdell with Mizuho. Your line is open. Please go ahead.
Joe Nolan: Good morning, Anthony.
Anthony Crowdell: Good morning. Hey, Joe. I don't wanna, you know, start off on a bad foot, but the last earnings call, I made a call that Knicks would beat the Celtics.
Joe Nolan: Yeah. I know. K. You're good. You're good. I thought you were gonna tell me fortieth anniversary. Jay's my fortieth anniversary at the company. I stopped my forty first year, Anthony. I mean, I thought you'd have something nice like that.
Anthony Crowdell: Wow. Congratulations.
Joe Nolan: Yeah. Thank you.
Anthony Crowdell: How many I worked at a utility, and people were very fortunate. Like, there's a lot of, like, you do a lot of different job. Like, you your career really moves to different things. How many different jobs do you think you had over the forty years?
Joe Nolan: Oh, it's heartbroken. I had a stat in customer service. I thought I terrible. I wanna be in communications, and look at look what happened. It was probably the best job I ever had starting in customer service. I ended up going back and running it, and I've done everything. There's not really a job that I haven't done. So it's been a great, great run.
Anthony Crowdell: Well, congratulations. Forty years next is very impressive.
Joe Nolan: You're the most thoughtful analyst. Most thoughtful analyst to call and really wish me happy anniversary. I appreciate that, Anthony.
Anthony Crowdell: I hope I hope I make thirty years of work. So forty I know. Just I just had some housekeeping questions in New Hampshire. What's the percentage breakout in rate base in New Hampshire? I think you guys have a decent amount of FERC rate base there. Just a percentage between, I guess, what's regulated by the New Hampshire regulators and what's regulated by FERC. And then just a follow-up, the equity layer in the at the FERC at FERC assets in, New Hampshire. Are they based on an actual equity ratio or you know, what's set in rates, like a hypothetical structure?
John Marreira: Anthony, on the FERC side, the FERC side is based on the tavern for all of New England. And it's based on, you know, the actual.
Anthony Crowdell: Great. And then in New Hampshire, how much of you know, if I think of PSNH, how much of that rate base is state regulated versus FERC regulated?
John Marreira: State regulated is about $2,100,000,000 on the distribution side. And on the FERC side, subject to check, I think it's $1.7, $1.8. If my memory serves me correct. But I can double check that?
Anthony Crowdell: Nope. That's great. Just sorry, guys. No. I was just gonna say we can, follow-up with you and confirm that for you.
Anthony Crowdell: No problem. Joe, how I mean, John, how many years do you have with Eversource or the even the predecessor companies?
John Marreira: Twenty five going on, like, twenty sixth a year. And I've had numerous jobs, Anthony. Not as exciting as Joe. So
Anthony Crowdell: You're like a rookie compared to its forties.
John Marreira: But I've been in the industry almost four o think, many years as Joe has.
Anthony Crowdell: Thanks so much for taking my question, guys. Appreciate it. Thanks so much.
Operator: Thank you. One moment as we move on to the next question. Our next question is going to come from the line of Angie Storozynski with Seaport. Your line is open. Please go ahead.
Joe Nolan: Good morning, Angie.
Angie Storozynski: Good morning, guys. Good morning. Happy Friday. See everybody's, you know, happy we made it. Okay. So, so just one question about the equity needs vis a vis the storm cost recovery in Connecticut. Obviously, we're waiting to see the outcome of the Aquarion sale. But I'm just again, I'm trying not to get too excited here that we will have lower equity needs I mean, because you are mentioning also additional CapEx. Right? So assuming that you know, at least a portion of that $1.5 to $2,000,000,000 comes in, that would carry additional equity needs. Right?
So it's not likely even with the sale of Aquarion and with securitization that there is a, you know, a reduction in total equity amount, just that the equity is not gonna rise meaningfully along with higher CapEx. Is this how I should think about it?
John Marreira: I think you're thinking about it correctly. As I said, And then the last question, you know, within in February, we'll we're gonna do a refresh. As you know, there's a lot of puts and takes. And in February, we will know exactly where the Aquarion transaction and hope I'm hoping that it closes. Our guidance still to close that transaction by the end of the year. So we'll have that. And that's obviously assumed in our plan already. And then securitization, we'll see. We'll have better clarity on the timing. And the amount. By that point in time. And we'll also do a refresh of our five-year capital plan added another year.
So and we'll know where the $1.5 to $2,000,000,000 potential adds. As Joe mentioned, a good portion of that is the AMI in Connecticut. So we'll see how that progresses. So we'll have much more clarity certainly by the end of this year.
Angie Storozynski: Okay. And then on the Yankee Gas rate case, vis a vis SB4, So hope I mean, wherever you see saw the comments from the attorney general in Connecticut. You've been out of you know, for quite what is it? Seven years? Right, since the last rate case? 2018. Yeah. And so, I mean, again, is the so are we so this SB4 is gonna apply here, so all of the commissioners need to opine on the rate case. So this is more like a test case how future rate cases in the state are likely to go.
John Marreira: Yeah. I think I think it's highly unlikely they'll see two more in the time that this decision will be coming out. You know, keep in mind, the attorney general is an elected official. You know, he's know, a lot of it is, know, we're gonna continue to work hard on that case to get a
Joe Nolan: Yeah. And, Angie, as I said in my formal remarks, I you know, the team did a phenomenal job in presenting the justification for the investments that we've made. To maintain that system very safe reliable for our customers. So we did an excellent job taking into account some of the issues that PURA had raised in other rate proceedings. So we put a very, very strong case front of them. We knew we had to, and we did. And I'm very, very pleased, with that how that progress how that process has progressed.
Angie Storozynski: And then the last one on Aquarion. You know, given the pushback, So I understand that the plan is to sell the asset, but are we I mean, if this route doesn't work. Are we I mean, are we gonna re are you gonna restart the sale process, or is it just that you know, if the commission doesn't approve the current transaction, you're just gonna keep the asset and just address the funding needs with more equity.
John Marreira: Yeah. You know, I mean, I think that case is going very, very well hearings finished last week, and I don't see any challenges around that. I think it's highly unlikely that we don't see that approved. You know, I think the team did a phenomenal job in keep in mind you gotta keep in mind that the legislature and the governor enacted a law to allow this entity to buy that asset. So for that to shift or something to happen there, it is the likelihood is highly unlikely. You know? If it does, obviously, you know, we'll cross that bridge when it comes to it. But I'm very optimistic that transaction will close this year.
And we'll be you know, we'll be in great shape.
Angie Storozynski: Very good. Thank you.
John Marreira: Thank you, Angie.
Operator: Thank you. And as a reminder, to ask a question, please press 11 on your telephone. Our next question is going to come from the line of Ryan Levine with Citi. Your line is open. Please go ahead.
Joe Nolan: Morning, Ryan.
Ryan Levine: Good morning, and congratulations on forty years.
Joe Nolan: Thank you.
Ryan Levine: Just one clarifying question. In terms of the Connecticut courts, clarification around prudency standard, you maybe unpack that a little bit more in detail around the implications for your business and how that could impact you know, you know, whether it's an AMI decision or other decisions that would be coming before in the future.
John Marreira: Sure. Sure. We were very pleased with the court. The court's decision kind of reiterating the prudency standard as it exists today in law. The clarifying provision that we were very appreciative of is the fact that the commissioner cannot apply hindsight in the rate recovery process. So prudency needs to be set at the time management makes the investment decision. And when you go in for the prudency review, which could be numerous years later, you can't introduce new facts circumstances that existed after that period. That was very, very encouraging for us.
Ryan Levine: Great. And does that have any implications for any my decision or any of the other upcoming decisions that would impact you?
John Marreira: Well, I think it will have a it will have a lot of effect on that because at the end of the day, you know, we're we're making decisions based on the facts that are on the table today. And so if we, we pull the trigger and we decide to make the investment, I think the, the rules have changed now and circumstances are different. So I think it has changed, and I think it's improved, Certainly, it's certainly improved my feeling around making that investment that we wouldn't have to be concerned that you know, the rules could change down the road. So I think it very much so. I think it helps.
Ryan Levine: Okay. Thanks for taking my questions.
John Marreira: Thank you, Ryan.
Operator: Thank you. And one moment for our next question. Our last question is gonna come from the line of Julian Dumoulin-Smith with Jefferies. Your line is open. Please go ahead.
Joe Nolan: Good morning, Paul.
Paul Patterson: Hey. Oh, Julian. Good morning.
Joe Nolan: No. It is Paul, and a happy anniversary.
Paul Patterson: Give me Oh, thank you, Paul. You're so thoughtful.
Joe Nolan: Yeah. No. I am. Four forty years. That is that is a high milestone. I hope I can make it that long. I have two quick follow-ups just to make sure I heard it right. Is the plan no additional equity needs in 2025 after you did what you
John Marreira: What I said was we did we did the $200,000,000 raise, and we will monitor the progress that we're making on the Aquarion to maintain an appropriate level liquidity. So but I don't see any amount being significant this year. And, obviously, having the proceeds from the Aquarion happen later this year, I not anticipating you know, a big amount of equity, if any, issued in 2026.
Paul Patterson: Okay. Great. No. Thank you for clarifying on that. And then the last one I had you know, thank you. And just with respect to the quarterly and cadence of earnings, could you just describe some of the building blocks for the second half of the year? Just I noticed that the corporate was negative 34¢, I think it was, and the first half, and you had a positive drag with corporate and third quarter. So just overall, if you could help on some of the building blocks on the second half.
John Marreira: Sure, Paul. So as I've you know, for the last couple of quarters, I've I've highlighted the fact that interest costs are going to be a headwind. And I've also said that in the first half, of 2025, it'll be a far greater, headwind. Because we closed on it on the sale of the transaction a portion in July, and then we closed on the GIP sale in, on September 30. So, that's why it's the parent impact is a bit higher than it otherwise would have been. So the second half of the year, I'm not anticipating it being at least the interest component as being as significant as it was for the first half. So that's one item.
And then typically, you know, the tax the true-ups that we typically do is always happens in the third quarter. So that could have an impact on the parent. But on your point on the utility side, I think it's kind of steady state. I've given you guidance as to what the rate adjustments are gonna be on November 1. For the gas companies. That's pretty much locked in.
Paul Patterson: Okay. Great. No. Thank you very much. Have a nice anniversary to you, Ken.
Joe Nolan: Hey. Thank you. Thank you.
Operator: Thank you. This will be concluding our question and answer session, and I would now like to hand the conference back over to Joe Nolan for closing remarks.
Joe Nolan: Well, you very much. Thanks everybody for joining us today on the call. We're very excited about the future and we wanna thanks for taking the time this morning, and enjoy the rest of the summer.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.