Eversource Energy’s capital program remains on track for the year, with the company continuing to project capital investment of about $3bn in 2020, Phil Lembo, Eversource’s executive vice president and CFO, said during the company’s May 7 1Q20 earnings call.
“In large part because of the very mild winter weather, we had a very strong start for the year, with reliability enhancements and system improvements totaling $600m in the first quarter of 2020, compared with about $550m in the same period of 2019,” he said.
Lembo also discussed the COVID-19 pandemic, noting that due to the critical nature of Eversource’s infrastructure and regulated investments, the company has “continued to work safely and effectively throughout the stay-at-home requirements in place over our three states,” that is, Connecticut, Massachusetts, and New Hampshire.
“Regulators recognize that some long-term initiatives will need to move forward to ensure that we have a grid capable of serving our customers’ increasingly sophisticated needs,” he said. “A new three-year grid modernization work plan for 2021 through 2023 will be filed in Massachusetts this summer.”
Lembo also noted that the Connecticut Public Utilities Regulatory Authority (PURA) on May 6 issued an order requesting proposals for program designs by the end of July for initiatives related to grid modernization, involving such topics as advanced metering infrastructure, energy storage, and zero-emission vehicles.
Further discussing COVID-19, Lembo said that the company is closely following the guidance provided by the Centers for Disease Control and Prevention, as well as local health authorities in Eversource’s daily work activities. While the company is actively accomplishing all of its essential work, it has suspended certain less time-sensitive work, such as upgrades to its work centers and offices, he said.
The company took early and aggressive actions in accordance with its pandemic action plan, with nearly all of its employees who normally work in an office setting working remotely since early March, Lembo said. About 4,500 employees continue to work in the field to support the reliability and safety of Eversource’s energy and water delivery systems, he added, noting that significant changes have been made to ensure safety, including maintaining social distancing at the work site.
He also noted that the PURA recently issued an interim decision that calls for utilities to offer certain “programs during the COVID-19 crisis that are available to any customer requesting financial assistance, requiring no initial down payment, and have a duration of 24 months.”
The PURA directed utilities to maintain a detailed record of those costs incurred and revenues lost as a result of implementing its order, and said that it will allow utilities to establish a regulatory asset to track incurred costs, he said.
Eversource’s regulatory dockets have been impacted due to COVID-19, Lembo said, noting that the company’s electric rate case in New Hampshire has been delayed. Eversource was originally scheduled to receive a final order in May and implement permanent rates on July 1, but the New Hampshire Public Utilities Commission now has until November to issue a final decision on the matter, he said.
Eversource’s Public Service of New Hampshire implemented a $28m rate increase effective July 1, 2019, Lembo said, noting that that increase will remain in effect until permanent rates are set at the end of the rate case, with any difference between the temporary and permanent rates to be reconciled back to the July 2019 time frame.
Another topic that Lembo addressed was offshore wind energy, noting that Eversource in March filed its construction and operations plan (COP) with the Bureau of Ocean Energy Management (BOEM) regarding the 704-MW Revolution Wind offshore project. The BOEM’s review of that project has begun, and Eversource expects to have a full schedule for that review later this year, he said.
As noted on Ørsted’s website, Revolution Wind is a 50/50 joint venture with Eversource, and the project — to be located more than 15 miles south of the Rhode Island coast and 32 miles southeast of the Connecticut coast — will have a capacity of 400 MW to Rhode Island and 304 MW to Connecticut. The project’s timeline calls for it to be fully operational by 2023, according to the site.
Lembo noted that Eversource has not yet received a new BOEM schedule on the bureau’s review of the 130-MW South Fork offshore project. The COP for that project was filed “in 2018, but the process was paused last year so that we could update the project for our new one nautical mile by one nautical mile configuration,” Lembo said. “We expect the new schedule to be posted by mid year.”
As noted on that project’s website, the South Fork Wind project is a 50/50 partnership between Ørsted and Eversource, and is to be located 35 miles east of Montauk Point, with the underground transmission system delivering power to the local grid in East Hampton, N.Y.
Lembo noted that due to travel and meeting restrictions stemming from the COVID-19 pandemic, the administrative law judge overseeing the New York State Public Service Commission review of the South Fork Wind project has extended the near-term schedule, resulting in intervenor testimony to be due in early August, and hearings set to begin at the end of September.
Lembo noted that Ørsted said recently that those delays make it unlikely that the South Fork project will enter commercial operation by the end of 2020.
He also said that Eversource continues to have a target filing date on its COP for the Sunrise Wind offshore project with the BOEM in the second half of this year. That timetable may be affected by New York’s current restrictions on onshore and offshore survey work, he said, adding that Eversource expects to have more insight into the timing of that project’s COP filing and schedule by late this summer.
According to the Sunrise Wind project website, the project is a 50/50 partnership between Ørsted and Eversource, with support from Con Edison and the New York Power Authority. The 880-MW offshore wind farm, to be located at least 30 miles east of Montauk Point, is expected to be fully operational by 2024, according to the site.
Lembo said that Eversource remains “strongly convinced that the opportunities in offshore wind off the northeast coast are excellent, with 15,000 MW likely to be built over the coming years to supply significant clean energy needs of New England and New York.”
Earnings report
Eversource on May 6 reported 1Q20 earnings of $334.8m, or $1.01 per share, compared with earnings of$308.7m, or 97 cents per share, in 1Q19. Results for 2020 include an after-tax charge of $3.5m, or 1 cent per share, associated with Eversource’s pending acquisition of the assets of Columbia Gas of Massachusetts, the company said, adding that absent that charge, Eversource earned $338.3m, or $1.02 per share, in 1Q20.
