Eversource Energy will reduce its investments in Connecticut by about $500 million over the next five years because of the “negative regulatory environment” at the Public Utilities Regulatory Authority (PURA), executives told investors during the company’s first-quarter earnings call May 2. 

“As it stands, regulatory policies in Connecticut discourage investment and utility innovation, as well as our participation in a wide range of clean energy initiatives that rely on our balance sheet,” Eversource CEO Joe Nolan said. 

The PURA has deferred and delayed cost recovery on Eversource’s investments, Nolan continued. The company is also pursuing a legal challenge of a rate cut imposed on its water utility subsidiary. 

“Without recognition that our funding sources rely on a secure and predictable cost-recovery path, we cannot move forward to put additional capital resources on the table,” Nolan said.  

CFO John Moreira added that the company is unwilling “to put capital at risk in relation to advanced metering infrastructure and electric vehicle programs” and is planning to cut spending in the state by nearly $100 million in 2024. But he emphasized that Eversource’s overall forecasted expenditures across its entire system has not changed. 

“Emerging infrastructure needs across our system provide ample opportunity for capital deployment in lieu of using those valuable resources in Connecticut,” Moreira said. 

Following Eversource’s announcement, Connecticut Gov. Ned Lamont (D) bluntly told The Connecticut Mirror he would reappoint PURA Chair Marissa Gillett, whose term ended March 1. 

During Gillett’s time at the PURA, the agency has frequently drawn the ire of Eversource and Avangrid. Lamont has indicated that the companies have pushed for her ouster. 

Gillett has been a proponent of performance-based regulation, and the PURA imposed significant fines on Eversource for poor performance in 2020 during Tropical Storm Isaias and for declining to disclose if it used ratepayer funds to promote new natural gas hookups. 

In an interview with David Roberts on his podcast “Volts” in January, Gillett expressed her intent to make utility profits more dependent on their performance in helping to meet the state’s reliability, affordability and climate priorities. 

“What the fight is in our dockets right now is whether the [performance-based regulation] incentive mechanisms are layered on top of an authorized [return on equity] or whether they’re a component of the ROE,” Gillett said. 

A PURA spokesperson did not respond to RTO Insider’s requests for comment in time for publication, but a spokesperson for Lamont said “Eversource has a legal obligation to maintain grid reliability, and we are confident they will uphold that commitment.” 

Offshore Wind, NH Solar

Eversource also provided an update on its exit from the offshore wind sector, saying it is nearing the completion of the sale of its stake in South Fork Wind and Revolution Wind to Global Infrastructure Partners, and Sunrise Wind to Ørsted. 

“We are on track to close the sale of the three projects over the coming months,” Nolan said. “We are progressing well on the approvals necessary to close these transactions.” 

Eversource anticipates that the cash proceeds from the sale to GIP will total $1.1 billion, Moreira said. 

Nolan noted that onshore and offshore construction has begun on the Revolution Wind project but declined to specify further details on the progress. 

“Now that our offshore wind risk is largely behind us, we are very excited about the future of Eversource, delivering safe and reliable electric, natural gas and water service to our 4.4 million customers,” Nolan said. 

Eversource is also discussing the potential for new investments in solar in New Hampshire, he said. 

“We will likely be proposing an investment opportunity in the months to come,” he added, while highlighting ongoing efforts by the New Hampshire legislature to revamp the state’s Site Evaluation Committee and accelerate permitting and siting processes. 

Nolan said he is encouraged by the state’s interest in utility-owned solar and that the significant amount of land available close to Eversource’s power infrastructure creates a “great opportunity” for investment. 

Eversource reported net income of $521.8 million ($1.49/share) for the first quarter, up 6.2% over the same period last year.