Eversource Energy (ES) (Q2 2026) Earnings Call Highlights: Strategic Shift to Pure-Play Utility ...

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Recurring EPS: $0.87 per share for Q2 2026, in line with expectations. GAAP EPS: $0.14 per share for Q2 2026, compared to $0.96 per share in Q2 2025. Non-GAAP EPS: $0.87 per share for Q2 2026, compared to $0.96 per share in Q2 2025. Offshore Wind Contingent Liability Charge: After-tax charge of $164 million ($0.43 per share) in Q2 2026. Aquarion Sale Charge: Non-cash after-tax charge of $111.4 million ($0.30 per share) related to the carrying value of Aquarion Water Company. Aquarion Sale Proceeds: Net proceeds of $1.7 billion from the sale of Aquarion, closed on June 30. Electric Distribution Segment: Increased earnings driven by higher electric distribution revenues. Electric Transmission Segment: Lower earnings primarily due to the base ROE rate reduction ordered by FERC. Gas Distribution Segment: Lower earnings impacted by a prior year benefit for recoverable expenses. CLMP Rate Case: Revenue deficiency of $451 million, reflecting a proposed ROE rate of 10.25%, with an 11% impact on total customer bill. New Hampshire Base Rate Adjustment: Approved increase of approximately $24 million, effective August 1, 2026. Storm Cost Decision: PURA approved approximately $870 million of the $975 million requested; approximately $670 million expected to be securitized. FFO to Debt Ratios: 14.3% for S&P and 15.7% for Moody's as of March 31, 2026. 2026 Non-GAAP EPS Guidance: Reaffirmed range of $4.57 to $4.72 per share. Long-Term EPS Growth Guidance: Reaffirmed 5% to 7% growth target. Five-Year Capital Plan: Reaffirmed at $26.5 billion through 2030.

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Release Date: July 31, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Eversource Energy (NYSE:ES) completed the sale of Aquarion, generating $1.7 billion in net proceeds, strengthening its balance sheet and positioning as a pure-play regulated utility. The company reaffirmed its long-term EPS growth guidance of 5% to 7%, with confidence in achieving the upper half of this range by 2028. Moody's upgraded Eversource Energy (NYSE:ES)'s outlook from negative to stable, reflecting improved financial strength and execution. Eversource Energy (NYSE:ES) was preliminarily selected by ISO New England for a $2.2 billion transmission project, with its share at $700 million, enhancing growth opportunities. The company received a final storm cost decision in Connecticut, allowing securitization of approximately $670 million, with no equity issuance expected for the remainder of 2026.

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Negative Points

Eversource Energy (NYSE:ES) recognized an additional $164 million after-tax charge related to the Revolution Wind contingent liability due to cost increases from stop work orders. The FERC ROE decision reduced the base transmission ROE to 9.57%, negatively impacting earnings and requiring ongoing legal challenges. PURA denied recovery of carrying charges on storm costs in Connecticut, which Eversource Energy (NYSE:ES) is evaluating for appeal. The CLMP rate case filing requests a $451 million revenue deficiency, which would result in an 11% increase in customer bills, potentially facing regulatory and political hurdles. The AMI proposal in Connecticut has a negative NPV on a net benefit basis, raising concerns about its cost-effectiveness and approval prospects.

Q & A Highlights

Q: Can you break down the key assumptions that comprise the $1.8 billion estimate for storm proceeds in your plan, beyond the $700 million Connecticut figure?A: John Moreira (CFO): The $1.8 billion is composed of the $700 million from the Connecticut storm decision we received this week, approximately $450 million of New Hampshire storm costs awaiting final approval, and the difference is the carrying charges related to the Connecticut storms. We are reviewing the decision and looking at our options for recovery of the carrying charges, which we feel has a path forward within our five-year period.

Q: On the storm cost decision, the carrying costs were denied in full. How does that compare against what you had embedded in the financing plan, and what are the components of the $1.8 billion from storm cost securitization?A: John Moreira (CFO): We are pleased to finally have a decision and a number to move forward with securitization, getting nearly $700 million in the door a year from now. We are disappointed with a couple of items, like the $63 million deferred and the carrying charge. Importantly, we have not recognized $1 of these retroactive carrying charges in our forecast because we didn't have a high degree of conviction. We continue to believe we are entitled to them and will assess our next steps.

Q: On the New England transmission opportunity, what are the next milestones to de-risk that potential investment to the point you'd consider rolling it into the baseline?A: Jay Buth (Chief Accounting Officer): We expect stakeholder comments on August 14 on the preliminary recommendations, with ISO New England reviewing and responding in August and September. We anticipate a final recommendation in September, so we should be in a good position to give updates on the third quarter call. John Moreira (CFO) added that roughly 50% of the $700 million CapEx will incur during the current five-year forecast period through 2030.

Q: Can you expand on the drivers of the incremental Revolution Wind charge this quarter and any risks around cost slipping incrementally?A: Jay Buth (Chief Accounting Officer): The two stop work orders led to losing a vessel that needed to be remobilized to finish the job. The project is over 97% complete, and we have every component needed to install it. The remaining installation pieces are straightforward with no uncertainty. We're delivering over 300 megawatts to the ISO New England grid and ramping toward the 704 number. We feel very good about the number captured to date and don't see other risks that would keep me up at night.

Q: Regarding the FERC ROEs, you previously mentioned wanting an ALJ appointed for a global resolution. Has that view changed, and what do you expect from the parallel processes?A: John Moreira (CFO): The process is in line with expectations, except no administrative judge was appointed. Settlement is always on the table in any proceeding. FERC wants to accelerate the paper hearing to have a reasonable rate in effect by November 30th. Once we see that rate, it could potentially get parties to reengage and hopefully look at a global settlement.

Q: Now that overhangs are in the rearview, have you considered revising long-term growth targets or providing more precision like a rate-based growth target?A: John Moreira (CFO): We provide enough information with annual CapEx to calculate a rough number. Our rate-based growth is growing slightly over an 8% CAGR, and we do have a slide every year showing expected rate base by 2030 based on our CapEx. We felt a separate disclosure wasn't really needed since we give enough color for someone to arrive at the annual rate-based growth.

Q: Can you talk about the timeline for the AMI rollout in Connecticut and how it will reflect in rate base?A: John Moreira (CFO): We're nearing the end of a five-year journey in Massachusetts. For Connecticut, we've included the proposal in the rate case and also requested an expedited decision to move forward this fall to take advantage of contractual pricing locked down for vendors used in Massachusetts. If we get the green light this fall, we'd mobilize next year, and everything would be wrapped up five years later. Some of that billion dollars will fall beyond our forecast period.

Q: Did the recent MISO FERC decision strengthen or complicate your appeal arguments?A: John Moreira (CFO): No impact. Our facts and circumstances from a legal standpoint are quite different than the MISO decision. The MISO impact on the rate was a couple of basis points, while in New England it's much greater. Our legal position is different, and we feel good about it. We've done everything possible with the motion for a stay and are waiting for the court to rule, hoping before we commence any refunds, which we have not initiated.

Q: Do you have a targeted or minimum credit cushion, and if the FERC refund was upheld, would you use balance sheet capacity or other levers to maintain it?A: John Moreira (CFO): We stand with our guidance to be 100 basis points above downgrade thresholds, and we've been successful as shown on the slide. That's our priority, and I feel good about achieving that steady state. If we had to refund the incremental $880 million, we would do that in a balanced manner.

Q: Regarding the AMI filing in Connecticut, the benefit-cost analysis turns negative on an NPV basis. Can you provide details on the proposal and prospects given the negative NPV?A: John Moreira (CFO): The primary driver is that this docket has been open for many years. If we had approvals earlier, the cost-benefit analysis would have been much stronger. Because we haven't had assurance of recovery, we haven't moved forward, and costs have gone significantly higher while benefits haven't changed. Over time, we think it's the right thing to do and will give customers tools to manage energy consumption, which brings a lot of value.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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