Eversource Energy 2026 Q2 Earnings Call

Please proceed. Good morning, and thank you for joining us today on our second quarter 2026 earnings call.

During this call, we'll be referencing slides that are available on our website at investors.eversource.com. As you can see on slide one, some of the statements made during this investor call may be forward-looking. These statements are based on management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts and projections. We undertake no obligation to update or revise any of these statements. Additional information about the various factors that may cause actual results to differ, and our explanation of non-GAAP measures and how they reconcile to GAAP results, is contained within our news release, the slides we posted last night, and in our most recent 10-Q and 10-K.

Speaking today will be Joe Nolan, our Chairman, President and Chief Executive Officer, and John Moreira, our Executive Vice President, CFO and Treasurer. Joining us today is Jay Buth, our Vice President, Controller, and Chief Accounting Officer. I will now turn the call over to Joe.

Thank you, Rima. Good morning everyone, and thank you for joining us. Starting on slide four, as we complete the midpoint of the year, we're pleased with the terrific progress we have made this quarter. Our team is focused on executing the priorities we've established over the past year, including completing the sale of Aquarion, delivering strong operational performance, and strengthening the balance sheet. At the same time, we are continuing to advance the investments needed to support safe, reliable, and more resilient electric and natural gas systems for our customers. As you can see on slide five, we have several recent accomplishments. From an earnings perspective, we delivered second quarter recurring earnings per share of $0.87, in line with our expectations, and we are reaffirming our long-term EPS growth guidance of 5%-7%.

We have also delivered on maintaining a strong financial foundation, which is a major focus for us. Our disciplined approach to capital allocation and balance sheet management continues to position us well to fund critical infrastructure investments while preserving the financial flexibility needed to support long-term growth. The recent Moody's change to our outlook from negative to stable is a testament to our consistent execution and commitment to strengthening our balance sheet and the sustainability of our financial strategy to support our long-term growth. We continue to make progress on key initiatives that will deliver higher growth for our business and further de-risk our business profile. First, we completed the sale of Aquarion, which resulted in net proceeds of $1.7 billion. This sale is a significant milestone in furthering our strategic position as a pure play regulated pipes and wires utility.

It allows us to optimize our portfolio by focusing on our core electric and natural gas operations across New England, while efficiently reinvesting capital for the benefit of our customers. Second, the Revolution Wind project continues to progress through advanced stages of construction and commissioning. As we do each quarter, we continue to evaluate our contingent liability associated with the sale of Revolution Wind. Based on revised cost projections of total construction costs, which included cost increases stemming from two stop work orders, we recognized an after-tax charge of $164 million in the second quarter to increase this liability. As Ørsted has previously stated, the project is on track to reach its commercial operation date later this year. Lastly, on the FERC ROE decision, we have taken multiple actions to address this decision, appealing to FERC as well as the D.C. Court of Appeals. We expect that FERC will make a decision on the prospective ROE by November 30th.

John will cover the process and the timeline for the court appeal. One thing is certain now, more than ever, the New England region needs more transmission investment and utilities need a predictable regulatory environment to attract long-term capital to fund these investments for the benefit of customers. Our investments in transmission have delivered billions of dollars in savings for customers over the years by eliminating significant congestion costs for the region, while also making the grid more resilient. We see ample need and opportunities for transmission infrastructure investment to further alleviate overall costs for customers.

In fact, as you can see on slide six, Following a comprehensive evaluation of six bids submitted in response to ISO New England's 2025 longer-term transmission planning RFP, ISO New England has preliminarily selected the joint proposal submitted by Eversource and Avangrid as the preferred solution. This transmission project is designed to increase transmission capacity between Maine and New Hampshire while strengthening the transmission interface between Northern and Southern New England. Eversource's share of the $2.2 billion project is approximately $700 million, with an anticipated in-service date of 2032. There are still significant steps ahead before a final solution is reached in the coming months. If this project is ultimately successful, it will greatly help address the affordability challenge facing New England by enabling increased supply and easing congestion costs. This would mark the second competitive transmission bid awarded to Eversource following the Boston 2028 Solutions Study Project in 2020.

That project was successfully completed by Eversource ahead of schedule and under budget. As we have stated previously, incumbent utilities are uniquely positioned to deliver reliable, cost-effective transmission solutions for the region, leveraging their operational expertise, existing infrastructure, and established relationships with stakeholders and communities. This is another example of our keen focus as a pure-play pipes and wires utility to deliver cost-effective solutions that provide benefits to customers. Moving on to Connecticut regulatory front on slide seven. We received our final storm cost decision this week and are pleased that we can now proceed with securitization financing to enable the recovery of these storm costs, something we intend to execute on as soon as possible. We also filed our CL&P rate review early this month, the first in almost a decade.

Our proposal creates a sustainable path forward that balances affordability with the investments needed to maintain and strengthen the electric system that Connecticut depends on. A safe, reliable, and resilient electric grid is the cornerstone of the state's economy and enables the achievement of many important goals, including carbon reduction and electrification. The decision from this rate review will shape the state's electric infrastructure for the next decade and prepare the state for future economic growth. Over the last 10 years, our customers in Connecticut have enjoyed increased reliability as a direct result of our strategic investments in the electric system. Continued investment is needed to maintain the level of affordable reliability and resiliency that customers have come to expect.

This includes addressing aging infrastructure that is nearing the end of its useful life, responding to more frequent and unpredictable severe weather events, and making the necessary upgrades to support the growing electric demand in the state. Since our last rate case in 2017, we've invested over $4 billion to improve and upgrade our electric distribution infrastructure, serving our 1.3 million customers across 157 cities and towns in Connecticut. In our rate filing, we have clearly demonstrated how our Connecticut customers have directly benefited from the investments we have made. Nearly half of all power interruptions experienced by customers in 2025 were restored remotely in a matter of minutes. The average customer experiences one outage nearly every two years, which is a 15% improvement since 2017. Additionally, we estimate that more than 1.5 million customer outages were avoided across Connecticut last year, thanks to automated technology installed on the system.

Lastly, through targeted initiatives such as system upgrades and enhanced system operating training, we've further improved our accuracy in determining and communicating estimated times of restoration during outages by 14% since 2017, resulting in clearer, more consistent information available to customers. At the same time, we recognize that importance of keeping energy bills as manageable as possible, and we're committed to working with our regulators and other stakeholders across our service territories to strike the right balance between investing in the future of energy system and delivering value for our customers in the communities we serve. Affordability and reliability are connected. An electric system that's allowed to degrade becomes less reliable and, over time, more expensive to maintain and fix. This balance between affordability and reliability can be accomplished through efficient operations, rigorous cost control, and strategically investing to maximize long-term customer value at the lowest reasonable cost.

Our approach has been to make proactive, strategic investments that address aging infrastructure in a cost-effective manner long before they fail. From a regional perspective, another area of focus for us is energy supply, which remains the greatest challenge to affordability for customers. While we do not control or earn any profit from energy supply, we want to be an integral part of the conversation to lower costs for our customers. Bringing additional generation to the region is key to reducing energy supply costs for electric customers. Since last year, Eversource has directly supported 2,500 megawatts of new generation coming into the region. Currently, 80% of this new generation is online. While this is a great step forward for the region, we know that we need more to support the growing electric demand across New England.