Eversource Energy (NYSE:ES), New England’s largest utility, spent a good deal of its second-quarter earnings presentation with analysts Friday talking about one state in the region: Connecticut.
Whether it was lingering issues from the response to Tropical Storm Isaias last year, current storm preparedness levels, offshore wind or electric vehicles, Connecticut was front and center for CEO Joe Nolan. He said improving Eversource’s relationship with Connecticut policymakers and ratepayers is his “top priority.”
To prepare for Tropical Storm Elsa — which last month produced heavy rain and wind but not the widespread power outages and restoration problems in Connecticut that accompanied Isaias last August — the utility brought in 500 extra line crews and tree-trimming teams and prepositioned them with its 700 line crews and 250 tree teams. There was also an online portal for cities and towns to prioritize repair sites for Eversource’s teams. Nolan said it was “a good exercise” for Eversource to show that “a lot of things have changed for our business.”
Eversource was forced to make these changes through legislation and regulatory mandates in the wake of Isaias. First, the Connecticut General Assembly passed the Take Back Our Grid Act, which directed the Public Utilities Regulatory Authority (PURA) to develop and implement performance-based regulations, including financial penalties such as fines and reductions of return on equity.
PURA finalized a $28.6 million civil penalty and annual profit reductions of about $31 million against Eversource last month after releasing an April assessment of the utility’s storm performance. Eversource appealed the ROE reduction in state court. The “pancaking” of penalties, according to Eversource CFO Phil Lembo, forms the basis of the appeal, which the company believes violates state law in effect at the time of the storm.
Update on OSW, EVs
Eversource’s joint offshore wind ventures with Ørsted continued to make significant progress during the quarter, Nolan said. He first cited the agreement with Dominion Energy to charter its U.S.-built, Jones Act-compliant wind turbine installation vessel, currently under construction in Texas. Upon completion, he said, the vessel will sail to New London, Conn., where Eversource will use it to install wind turbines for the Revolution and Sunrise Wind projects. Work has also recently begun at State Pier in New London to convert it into a central staging area for OSW, Nolan added.
PURA approved a comprehensive EV charger program to support the state’s push for having at least 125,000 zero-emission vehicles on the road by the end of 2025. Nolan said Eversource appreciates several PURA changes made to the draft decision “to enhance the program’s expected success,” and the utility will submit an implementation plan by Oct. 15.
Outside of Connecticut, Eversource will have invested $55 million in its Massachusetts EV program by the end of the year, helping to connect about 4,000 charging ports. It also has proposed spending more than $190 million on EV support from 2022 to 2025, including $68 million in capital investments to add charger infrastructure in environmental justice communities.
Earnings
Eversource reported earnings of $264.5 million ($0.77/share), up about $12 million from the same period in 2020 ($252.2 million, $0.75/share) driven by its transmission and distribution segments. Transmission earned $137.6 million during the quarter, up from $129.5 million, and distribution was up $121.6 million from $115 million.
Transcript courtesy of Seeking Alpha.