Eversource Executives Aren’t Ready to Bring Back Connecticut Capex

The top executives at Eversource Energy Inc. have lauded work by Connecticut legislators to reform parts of the state’s electricity market but are stopping well short of bringing back growth investments they pulled last year after regulators there pushed for performance-based elements in their framework.

Lawmakers in June passed Senate Bill 4, a package of measures that they said will shrink utility bills for customers in the Constitution State. The legislation also includes some changes to the state’s regulatory processes, including letting utilities securitize storm costs and filling vacancies on the state’s Public Utilities Regulatory Authority.

PURA’s actions to bring more performance measures into its revenue mechanisms last year led Eversource Chairman, President and CEO Joe Nolan and his team to pull $500 million of capital spending over five years from Connecticut, saying that the agency’s actions had made recovering investment costs insecure and unpredictable.

On Aug. 1, Noland and CFO John Moreira said SB4 contains some encouraging measures for Eversource and other utilities and added that they “appreciate that leaders on both sides of the aisle in the general assembly are committed to ensuring a transparent and constructive process” for utilities in the state. But when asked about relaunching a growth capex push in Connecticut, Moreira’s response was concise and clear.

“We would like to see some more constructive data points coming out of the commission before we reassess our capital redeployment,” Moreira said on a conference call with analysts and investors to discuss Eversource’s second-quarter results.

Moreira said Eversource leaders are concerned with “certain core components” of the Connecticut performance-based regulations framework, a draft decision of which was released last month. The company’s representatives, he added, are working with PURA officials and others “to ensure that we have alignment with the PBR structure that we can support.”

Eversource’s capex plan through 2029 totals $24.2 billion, an increase from $23.1 billion for the 2024-2028 window executives outlined last year. When Nolan and Moreira pulled back from Connecticut, they didn’t cut Eversource’s total spending plans but instead added to plans in Massachusetts and New Hampshire.

In the three months that ended June 30, Eversource produced a net profit of nearly $355 million on operating revenues of more than $2.8 billion. Those numbers were up from $335 million and $2.5 billion, respectively, in the same period of last year. Earnings from its electric transmission and distribution divisions rose 9% year over year to almost $370 million.

Shares of Eversource (Ticker: ES) were changing hands at $65.26 in midday trading Aug. 11. Over the past six months, they have risen about 6%, growing the company’s market capitalization to about $24.2 billion.