Eversource Energy Q4 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Shahriar Pourreza - Guggenheim Partners - Analyst : Joe, let me just start off with Connecticut, if it's okay. There's obviously a lot of back and forth to kick off the legislative session, seems to be some bipartisan support at this point for an expansion of PURA. Do you support three or five commissioners? And what do you see as the pathway forward from here for the broader set of reforms like making PURA independent a deep tweaking the public benefits, et cetera?

Question: Shahriar Pourreza - Guggenheim Partners - Analyst : Got it. Hopefully, we get some positive changes there. John, just I know just a quick one for you. I know we're getting this credit question this morning. It's putting a little bit of pressure on the shares. But I guess what's the FFO to debt target for '25 to '29, sounds like there's a change versus the previous 14% to 50% target. What are you embedding in that $1.2 billion of equity for CT storm recovery, all of it, none of it.

Question: Carly Davenport - Goldman Sachs Group Inc - Analyst : Maybe just to stick on the sort of balance sheet and financing point. I appreciate the comments on the equity financing. Just as you think about the timing and methodology, I know you said back half of the plan, but would you expect that to be -- put a new ATM program in place as you kind of work through the initial $1.3 billion or do you see potential to execute more from a block sale perspective as you reach the latter parts of the plan? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 12, 2025 / 2:00PM, ES.N - Q4 2024 Eversource Energy Earnings Call

Question: Carly Davenport - Goldman Sachs Group Inc - Analyst : Got it. Great. That's helpful. And then maybe just as you think about the potential for that $1.5 billion to $2 billion of incremental investments on top of the new five-year plan. How should we think about the potential timing of some of those buckets coming into play here?

Question: Steven Fleishman - Wolfe Research - Analyst : I don't know. My phone might have gone out just briefly there. Just on -- did you actually give an FFO to debt number target in the answer to the question before went out -- my phone went out for like 10 seconds.

Question: Steven Fleishman - Wolfe Research - Analyst : Okay. And where did it end up for end of '24?

Question: Steven Fleishman - Wolfe Research - Analyst : And then -- low double, yes. Okay. And then on -- could you -- you didn't really talk at all about revolution, and there was like nuance on Orsted's call where they had said it was -- previously said it would be on by 2026 and then they said second half of 2026. Did anything really change there? Or is it still on the same timeline that it was?

Question: Steven Fleishman - Wolfe Research - Analyst : And you don't see anything like in your K or anything where you'd have to take another write-off there or anything like that?

Question: Steven Fleishman - Wolfe Research - Analyst : Okay. Great. And then I know you filed the lawsuit recently in Connecticut about the actions of PURA. Just -- is there like a timeline on that lawsuit to be decided or.

Question: William Appicelli - UBS Group AG - Analyst : Just a follow-up question there on the -- some of the cash flow items. So you mentioned the minimal cash tax payments through 2028. Can you just maybe expand upon that and what's driving that?

Question: William Appicelli - UBS Group AG - Analyst : Okay. And I guess the other credits that you've utilized ahead of the South Fork is what is are they?

Question: William Appicelli - UBS Group AG - Analyst : Okay. And then when we think about the 5.7% growth rate, obviously, the guidance for this year is somewhat below that. But can you just sort of outline the drivers of some of the acceleration to get you back into that 5% to 7% as we think of into '26 and '27 and '28.

Question: Durgesh Chopra - Evercore ISI Institutional Equities - Analyst : I have two. Just as I think about 2025, John, right? This is year-over-year is 4% growth below the target. And I do the math on your equity issuance, it's about $0.10 the amount of equity issued in 2024. Is that really the driver? I guess what I'm asking you is if you -- because you front-run that equity, you're below that 5% to 7%. Absent that, you would have been in that 5% to 7% rate. Is that the right way to think about it? Or there were other issues like.

Question: Durgesh Chopra - Evercore ISI Institutional Equities - Analyst : Got it. Okay. And then just on the interest expense topic, just as you think about your long-term growth rate, what are you modeling for interest rates? Are you modeling the current rate levels? Or do you see interest rates going up? Maybe just help us with your thought process there?

Question: Durgesh Chopra - Evercore ISI Institutional Equities - Analyst : Well, let's hope they do.

Question: Ross Fowler - Bank of America Merrill Lynch - Analyst : So just a couple of questions on a couple of things at the state level that are happening. In Massachusetts, we've seen the DPU has put out this proposal to end most gas line extensions. Does that shift your capital plan sort of under the surface away from gas and more towards electric? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 12, 2025 / 2:00PM, ES.N - Q4 2024 Eversource Energy Earnings Call Or are you kind of already doing that in anticipation of things like this coming as you go through the full electrification runway in that state? And then the follow-on to that is how do you think about customer bill impacts as we switch from less gas surface going forward? Should this proposal be accepted towards more electric heating service in the future.

Question: Ross Fowler - Bank of America Merrill Lynch - Analyst : Okay. Fair enough, Joe. And then I guess there's some legislative efforts in Connecticut to talk through or at least think about the statutory changes that were made around the Aquarion sale. How do you like contextualize the risks related to that? Or have they actually moved forward with legislation there?

Question: Ross Fowler - Bank of America Merrill Lynch - Analyst : Okay. Joe, Fair enough. And then, John, maybe if I can squeeze in one for you, taking out some earlier questions and just trying to fine-tune the detail on slide 17 on the cash flow. So if I think about that green box to the right of beyond 2025, would it be fair to say equity, we know kind of what you've given us, that's the $1.2 billion towards the end of the plan plus the DRIP and employee programs. And then I can kind of get my head into an assumption of what deferred storm cost recovery looks look like and what distribution investment incremental looks like. So if I take sort of your 13% FFO to debt, I can sort of back into what you're assuming for rate increases, would that be fair?

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Just wanted to dive into 2025 EPS a little bit more, if I could, and just headwinds and tailwinds there. What you see four headwinds? And how do you think about, I guess, filling the $0.12 of Aquarion earnings and kind of growth within the plan?

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Okay. Got it. I didn't know if those move into disc ops, but I guess.

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Got it. Okay. And I guess in the subsequent year, thinking about offsetting that headwind, just everything as you wait in the plan, anything else explicitly. Just trying to get a feeling for the shape of the earnings trajectory as Aquarion rolls off?

Question: Andrew Weisel - Scotiabank Global Banking and Markets - Analyst : First one on Mystic. It seems it's a great opportunity with a lot of flexibility, a lot of optionality, I guess my question is, what do you think about where -- what that might become? And what are the odds that might turn into a sizable investment opportunity, something that might be in the $1 billion-plus range. And is that included in your CapEx plan?

Question: Andrew Weisel - Scotiabank Global Banking and Markets - Analyst : Okay. Would you be comfortable making a $1 billion-plus investment there?

Question: Andrew Weisel - Scotiabank Global Banking and Markets - Analyst : Okay. Great. And then just to clarify one other financing one. The dividend reinvestment and employee compensation programs. I see 1.3 million shares in 2024. Can you just give round numbers what we should expect for 2025 and beyond, whether in shares, dollars, or both?

Question: Angie Storozynski - Seaport Global Holdings LLC - Analyst : So I -- just one question about Aquarion. So clearly, a very strong outcome of the sale process. Just wondering given that this transaction needs to be approved by PURA if you are anticipating any roadblocks there especially as far as the customer benefit is concerned. When I think about it for a municipal utility, it's hard to see any meaningful cost efficiencies or there's obviously the issue of taxes as well, which I understand can be replaced by the payments in law of taxes. But I'm just, again, wondering the regulatory standard for approvals of deals like that.