Eversource Energy Aktie

Good day, and thank you for standing by. Welcome to the Eversource Energy First Quarter 2026 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Rima Hyder, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today on our First 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 1, 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, Chief Financial Officer and Treasurer. Also 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, and good morning, everyone, and thank you for joining us today for our first quarter 2026 earnings call. Beginning on Slide 4, we are starting the year on a strong operational footing and with a clear plan for disciplined execution of our key strategic objectives of safety and reliability, strengthening the balance sheet and derisking our business profile.

As you can see on Slide 5, our team delivered excellent operational performance, especially during the powerful blizzard we experienced in February. With over 40 inches of snow and wind gust over 70 miles per hour, this Nor'easter was one of the most severe blizzards to impact the Northeast, particularly Massachusetts in recent years. We executed our large coordinated restoration effort, mobilizing thousands of line crews, leveraging mutual aid and using remote switching and pre-staged materials to restore service quickly while keeping safety and critical facilities top of mind.

Our team worked in tight coordination with local and state agencies to prioritize life safety, accelerate restorations and support impacted communities. In total, we responded to over 2,000 fire, police and safety events and restored power to more than 500,000 customers. These efforts in our successful restoration reflect the benefits of ongoing infrastructure investments for our electric grid and emergency preparedness.

We are very grateful for the support and positive feedback from numerous state and local policymakers, first responders and our customers. A majority of the customers surveyed after the blizzard said they greatly appreciated how quickly service was restored.

Moving on to Slide 6. As we look to the current year, we recognize that there are some remaining items that we need to resolve to further strengthen our balance sheet and derisk our business profile. First, on the sale of Aquarion, we received final approval from PURA in March. Last week, PURA denied an appeal from certain parties. We are now waiting for an additional appeal period to end in mid-June before we can close the transaction.

Second, on Revolution Wind, as Orsted recently reported, the project is about 95% complete. The commercial operation date is still expected to be in the second half of this year, and we look forward to this much needed source of generation for the New England region. Given the latest construction update and cost estimates, we believe that the current contingent liability balance due to GIP remains appropriate.

Finally, the recent decisions from FERC on the New England transmission owners base ROE that was an attempt to address a 15-year long complaint is flawed. We believe this decision by FERC departs from the statutory limitations imposed by the Federal Power Act, and long-standing judicial precedent requiring FERC to set just in reasonable rates of return sufficient to attract the capital needed for essential utility investment.

As priorities have changed over multiple administrations and commissioners at FERC, one thing has remained constant, New England's need for new energy supply resources to address affordability, ensure reliability and support economic development. Achieving these goals requires a modern, more resilient transmission system regardless of the energy source powering it. 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 making the grid more resilient.

Funding these investments requires a stable predictable regulatory environment to attract long-term capital at the lowest possible cost. For more than a decade, uncertainty stemming from FERC's lack of action after U.S. Court of Appeals vacated FERC's prior order in the case in 2017 has challenged investor confidence. Unfortunately, this FERC decision further undermines utilities' ability to secure the capital needed to support state and federal policies and mandates to build and upgrade grid infrastructure and maintain safe operations and top-tier reliability for customers.

As you have seen from some of our recent actions, we have appealed this decision and filed a motion for stay in the courts. We have also submitted a Section 205 filing following the exact FERC methodology used in their March 19th order but with updated data. The data FERC used to derive the 9.57% ROE is over a decade old. By updating the data for current market conditions, the ROE comes to 11.39%. A key procedure of this filing is the potential for settlement. We are hopeful that all parties in this proceeding can come together to reach an outcome that benefits customers while also providing reasonable financial support for New England transmission owners to continue to upgrade and build the much needed transmission system for future load growth.

On the back of the FERC ROE decision, which lowered our transmission base ROE to 9.57%, we did adjust our guidance for 2026, which John will reiterate in a few minutes. We are reaffirming our long-term earnings growth rate of 5% to 7% off the midpoint of our revised 2026 guidance.

Let me now highlight a few key states policy developments across our territory. On Slide 7, in Massachusetts, in March, Governor Healey signed an executive order to secure Massachusetts' energy future, establishing a comprehensive strategy to strengthen the Commonwealth's energy reliability, affordability and independence. This order responds to extremely adverse shifts in federal policy, rising electricity demand, volatile fossil fuel prices and global energy supply disruptions by directing state agencies to rapidly expand energy resources and modernize the distribution and transmission systems.

The executive order recognizes that Massachusetts energy supply needs are growing. It cites ISO New England projections that electricity consumption could rise by nearly 15% by 2035 and by nearly 50% by 2045, and with peak demand increasing even faster. The order also emphasizes the need for immediate action to maximize federal tax credits for clean energy projects before they expire under accelerated time lines established by recent federal law.

We appreciate Governor Healey's recognition that addressing regional supply constraints through when all of the above approach is essential to achieving energy affordability. As an energy delivery company, we remain focused on maintaining and upgrading infrastructure to integrate new energy resources, enhance reliability and control costs for customers. We look forward to continued collaboration with the administration, the legislature and other stakeholders to advance solutions that deliver lasting reliability and affordability benefits.

In Connecticut, as we mentioned last quarter, we are going to begin our first rate review for CL&P in about 8 years. We see that as an incredible opportunity to show how we vastly improved reliability and that those investments are valuable to customers. We expect to file a letter of intent with PURA for the CL&P rate case later this month. We recognize that this will be a big ask, and as we do in other jurisdictions, we will collaborate with PURA and other key stakeholders to submit a rate case filing that is constructive, responsible and designed to protect the interests of customers. Our filing will address customers' need for reliable electric service, affordability and stable, predictable rates.

Another key item for us is the recovery of storm costs. We expect to receive a final decision from PURA on our Connecticut storm cost prudency review in July, which would allow us to begin the legislative backed securitization process. Importantly, securitization enables timely cash collection, improving our FFO to debt metrics while addressing affordability concerns for our customers.

In New Hampshire, Governor Ayotte signed House Bill 1539, a bill allowing for the securitization of storm costs, which provides an affordable path for recovery of our outstanding storm costs, which are currently under review at the PUC. We are grateful for the support of the governor and the general assembly for passing this important legislation.

As we have stated before, 2026 will be a truly transformational year for us as we operate within a changing regulatory landscape and navigate affordability concerns. We will maintain transparent communication with all our stakeholders and take decisive actions to mitigate potential risk.

I will now turn the call over to John to discuss our financial results. Thank you.

Thank you, Joe, and good morning, everyone. This morning, I will review our first quarter 2026 earnings results, provide a regulatory update, including the recent FERC ROE decision, and also discuss our balance sheet, progress and financing plan.

I'll start with our first quarter results on Slide 9. Our GAAP earnings per share for the first quarter was $1.61 compared with GAAP earnings of $1.50 per share in the first quarter of 2025. GAAP results for the quarter include an after-tax charge of $43.9 million or $0.12 per share related to the FERC ROE decision representing the refund for the first 15-month complaint period. Excluding that charge, our non-GAAP earnings were $1.73 per share for the quarter as compared to GAAP as well as non-GAAP earnings of $1.50 per share in the first quarter of 2025. The $0.23 per share improvement over the prior year is primarily in the Gas segment with an $0.18 per share improvement driven by rate-based increases in Massachusetts and implementation of the Yankee Gas rate case in Connecticut.

Electric transmission improved $0.06 per share primarily driven by continued investment in the system. Electric and water distributions are both up as well due primarily to rate increases and cost control. Offsetting these positive drivers were higher losses of $0.05 per share at parent and other, primarily due to higher effective tax rate and higher interest costs. Overall, the first quarter was in line with our expectations.

Moving to Slide 10. The FERC decision that was issued on March 19 arbitrarily reduce the base transmission ROE from 10.57% to 9.57%. As you can see on this slide, this case has been ongoing for nearly 15 years, since the first complaint was filed on October 1, 2011. The 10.57% rate was established on October 16, 2014, and Eversource and the other New England transmission owners have continued billing at this rate, even though the U.S. Court of Appeals for the D.C. Circuit vacated FERC's order in April of 2017, which would have otherwise allowed us to bill customers using the original 11.14% rate.

Since 2011, FERC has gone through 22 separate commissioners and 13 different chairs, each nominated by 1 of 5 separate presidential administrations before issuing this arbitrary and capricious decision on March 19. The decision was based on a record of evidence over a decade old for a refund period far beyond what is allowed in the Federal Power Act. Since the decision was issued, Eversource and the other transmission owners have taken several actions to protect the right to a fair rate of return on invested capital.

On April 2, we filed a motion for stay at FERC, seeking to pause the order refund obligations and ensure time for an appropriate legal review. This was followed by a similar filing at the U.S. Court of Appeals for the D.C. Circuit on April 14. We Also, on April 2, we filed a motion for an extension of the refund deadline. Without this extension, FERC's order would have required that we issue refunds within 30 days, ignoring the necessary process of working with ISO New England and load-serving entities throughout the region. This extension was granted by FERC extending the deadline to May of 2027.

On April 20, we filed a request for rehearing at FERC, seeking to resolve the decision's multiple legal deficiencies. And lastly, on April 30, we made a Section 205 filing with FERC to establish a new base ROE using current market data, not market data that's over a decade old. Using FERC's own methodology from its recent decision and current market data, we arrive at a just and reasonable base ROE for transmission of 11.39%. We expect that this updated rate will be implemented towards the end of this year, subject to refund. This filing also includes a change to the ROE cap on transmission investments, raising the cap to 12.89%.

We are disappointed with FERC's actions in this proceeding. And while we will continue to protect our right to a fair rate of return on invested capital, we did make 2 disclosures during the quarter to reflect FERC's March 19 decision. The first was an adjustment to our 2026 non-GAAP EPS guidance as disclosed in our 8-K filed on March 31. The change in the base ROE is expected to lower Eversource's future after-tax earnings in the aggregate by approximately $70 million for 2026. And we also adjusted for the potential Aquarion sale as a result of PURA's approval. These items together resulted in revised 2026 non-GAAP earnings guidance in the range of $4.57 to $4.72 per share. The second disclosure was the after-tax charge of $43.9 million or $0.12 per share related to the FERC decision that I discussed earlier.

Moving on to some state regulatory updates. I won't cover everything that Joe discussed, but I do want to touch on a few items. First, on Aquarion. Should the transaction not close, we would proceed with the pending rate case as filed with PURA, seeking a distribution rate increase of $88 million. The rate case is expected to be completed towards the end of the year, and it would support Aquarion's ability to continue investing in its infrastructure and to provide reliable service for customers. We are pleased with PURA's decision approving the sale. However, should the transaction not close, we are prepared to replace the sale proceeds with other alternative financing solutions, if necessary.

Also in Connecticut, I would like to acknowledge the RAM decision that was issued on April 22. The decision addresses 2 very important things. For us, PURA authorized the funding of $100 million reserve for storm restoration costs. The second is that the decision uses forecast data to set rates associated with PPAs. The use of forecast data is a change that we have long advocated. It also allows for rates to be adjusted on a more timely basis, avoiding large over or under recoveries. Both of these changes result in more stable rates for customers and more stable and predictable operating cash flows for Eversource. On top of that, PURA's decision makes these changes while lowering rates for customers. We thank PURA for their thoughtful and constructive decision.

Lastly, in New Hampshire, Joe mentioned the new storm cost securitization law. This means that now in Connecticut and New Hampshire together, Eversource should recover approximately $2 billion in deferred storm costs and carrying charges through these securitization transactions within the next 12 to 18 months.

Moving to Slide 11 for a financing update. We executed on one of the latest steps in our plan to continue building balance sheet stability when we issued our first junior subordinated notes in February. We were very pleased that the offering was more than 5x oversubscribed and continues to trade at or above par. This gives us confidence that should we decide to issue something similar in the future, the market supports our strategy. I will underscore that our financing strategy is unchanged since the update we provided during our fourth quarter earnings call. We continue to expect that our equity needs over the next 5-year forecast period are in the range of $800 million to $1.1 billion. As communicated previously, this financing plan includes flexibility related to the Aquarion transaction outcome.

Next, on Slide 12. I would like to share the latest affirmation of our strategy, which is that our FFO to debt metrics remain strong. Our latest metrics are 14.2% and 14.5% for S&P and Moody's, respectively. Consistent with our guidance, these are each over 100 basis points above the downgrade thresholds. In addition, on April 10, following the FERC ROE decision, S&P reaffirmed its ratings and stable outlook for Eversource and our subsidiaries. These objective measures reflect the successful execution of our previously communicated strategy.

Next, let me reaffirm our 5-year capital plan of $26.5 billion, as shown on Slide 13. This reflects our 5-year utility infrastructure investments by segment through 2030, and we are off to a good start with CapEx of nearly $800 million through March as compared to our 2026 forecast of $5.1 billion. As you can see on this slide, Connecticut AMI is not included in our plan. We look forward to the next steps on this opportunity following the recent constructive hearings held by PURA earlier this year. As we stated in the briefs we filed in March, our goal is to deliver the highest benefit for customers at the lowest possible cost.

Turning to Slide 14. We continue to look towards a meaningful inflection in our earnings growth driven by improved regulatory outcomes. That includes the recovery of storm costs through securitization in both Connecticut and in New Hampshire. It includes the completion of alternative financing opportunities and distribution rate adjustments, including the results of our CL&P rate request in 2027.

Lastly, on Slide 15, we remain confident in our ability to deliver earnings growth towards the upper half of our long-term target of 5% to 7% by 2028. And just to be clear, this would be off of the midpoint of our revised 2026 non-GAAP earnings EPS range.

With that, I will turn the call back to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Carly Davenport of Goldman Sachs.

Maybe just to start on Aquarion. I guess, as you mentioned, we're still about 5 weeks or so out from the new appeal window sort of closing. So maybe could you just provide kind of your latest thoughts on the potential for further appeals to be filed in that process and I guess your temperature on this progressing to close?

Yes. We, obviously, we were pleased with the PURA decision. I think it was very clear, and I think that they spoke to the issues that the appeal, what's running the appeal, and I felt very good about the decision. We continue to be watchful down there as you know. They are not just the parties that appeal, there are others involved. So we are vigilant. But as we've said in the past that we don't have a gun to our head anymore if we do intend to close the transaction, but if it wasn't to close, it's not going to be the end of the world.

Got it. Okay. Great. That's helpful. And then just on the FERC ROE decision on -- you're obviously attacking this from a few different angles. But just on the 205 filing, you did mention potential to reach settlement there. So just maybe could you talk a little bit about what that timing could look like in the case that settlement is on the table versus if it has to go sort of at full length?

Sure, sure. As we -- as I said in my formal remarks, we feel that a new rate will be implemented towards the end of the year. I would say to your exact question, Carly, the first process or procedure out of the gate once we hit back from FERC within 60 days of the date of our filing is a point of a settlement judge to the case to bring the parties to the table. So hopefully, we can settle on the rate prospectively as well as address the legal deficiencies in the FERC order as part of that settlement conference. So that should happen later this year.

Our next question comes from the line of Shar Pourreza of Wells Fargo.

This is actually [ Marcela ] on for Shar. Also kind of talking about the FERC decision, what's your level of confidence on the 15-month refund period? And what milestones should investors be watching for, for clarity on whether that interpretation prevails in court? Maybe for example, should we be paying attention to the MISO proceeding as something that might read through? And how should we be thinking about timing on that case?

Sure. From a data point, if we go the full process and not be able to settle with the parties, yes, I would agree, the MISO decision is going to be a significant data point for us. But I think the process that we put forth, and to your question specifically on the 15-month window, we do recognize that we are subject to a 15-month refund period. And therefore, we accrued for that in the first quarter, as I mentioned. So the 15-month refund period is law, and we recognize that. But arbitrarily, picking a retroactive date for the refund is where we think PURA -- I'm sorry, FERC did not follow the letter of the law.

That's really helpful. And then maybe shifting gears to New Hampshire storm cost securitization. Just how should we be thinking about how much you'll pursue, if there's any carrying costs included in that? And then timing on when we might expect to see that filing?

Sure. So we're hoping the timing is soon that we can get to the table and work with the PUC and the Department of Energy in New Hampshire. I think the dollar amount is probably in the $4 to $4.70 range, and that would include the carrying charges that has already been -- that continues to accrue. So it's really to the customer's benefit, the sooner we complete the securitization, the better off our customers would be in lowering the ultimate cost that would, in fact, be securitized. So we hope then we could complete that transaction, I would say, in a reasonable time frame, late 2027.

Our next question comes from the line of Steve Fleishman of Wolfe Research.

So great. On the FERC, just a follow up on the FERC questions. When we think about the other parties that you might settle with, like who are the parties in this case at FERC? Is it your state advocates? Is it transmission customers? Or yes.

It's a broad range of stakeholders that would be involved. Obviously, as you very well know, this is a New England tariff. So all 6 New England state transmission owners are impacted. So you can expect that every consumer advocate from those states, the AG's office from 6 New England states will have a seat at the table. And we are prepared to have those discussions with everyone involved.

Okay. And is there like a man -- it sounds like, as you said, you can implement subject to refund by a certain date. Is there a deadline though, where they actually have to rule by?

Sure. Yes. Good question. Our understanding is that FERC has 60 days from the data filing to let us know when the rate can be implemented. And there's a -- FERC can take up to 5 -- suspend the rate up to 5 months. So I think we can all expect that, if you take the 60 days plus to 5 months, so within 7 months from the filing date is where we would expect the rate to be implemented, as I've mentioned on the subject to refund basis.

Okay. And then just on the Aquarion and I mean, what are we actually waiting for at this point to decide whether to close or not just for the -- I mean, they rejected the reconsideration. So what is actually left from here?

Yes. We're waiting for the appeal period to be exhausted. And so this is the second of the appeal period, they exhaust on June 14.

And that's at the commission or at the court?

At the commission.

Our next question comes from the line of Sophie Karp of KBCM.

So my question is, in light of all of the uncertainties you guys are facing with the FERC process and the [indiscernible] Aquarion situation as you wait out the appeal window, how are you thinking about the timing of equity capital here? Does that make sense to just like issue the amount that you need and rip the Band-Aid off? Or would you wait and see these pieces kind of fall into place before you rightsize the offering? Like what's your thinking process here?

Sure. Sophie, this is John. So let me just reiterate our guidance is between now and 2030 to issue between -- in the range of $800 million to $1.1 billion. Clearly, that's a very nominal number over the next 5-year period.

Also, as another reminder, in February, we did do our first [ JSN ] offering, which I was very excited about. That brought in $1.5 billion of cash. So right now, we're seeing how this thing plays out. And also, as I highlighted in my formal comments, within the next 12 to 15 months, we would expect up to around $2 billion of incremental cash coming in through the Connecticut and New Hampshire storm securitization proceeds. So we will be very thoughtful and mindful of all of these significant interactions -- transactions that could have an impact on our equity needs.

So we really have no urgency to go to market right now. So it's -- we'll pay a close eye as to how these transactions ultimately materializes.

And then my other question clearly not normal, something that impacts your Eversource's economics. But when we think about energy supply situation in New England and Millstone upcoming recontracting potential rate and forward prices in New England given the situation in global oil and gas markets. Clearly, that impacts affordability. And so what are you seeing in terms of a policy response maybe across these territories to this intended impact from higher energy pricing in your territory specifically?

Yes, I've been very encouraged. I mean we're injecting 2,600 megawatts of new power into the region. So that is really going to help moderate the clearing price at ISO New England. I think that if you look at the volatility in ISO New England, it's really not -- it's not a very volatile market compared to [ PJM. ] So I feel good about it. When I look at Clean Energy Connect injecting 1,100 megawatts into our system, I look at Revolution Wind at 704 megawatts, and I look at Vineyard Wind in at over 800 megawatts, that's having a significant impact on pricing in the region, so I feel very encouraged.

Couple that with the fact that we are resisting data centers. I'm really not interested in the data center coming here. It's of no value to our residential customers, actually any customer. It's only going to drive up the price of energy. And so those are some of the things. And then you take a state like Massachusetts, where they had an executive order that's looking at all things that we can possibly do. I mean they have approved a natural gas pipeline enhancement with Enbridge that we're going to partner with to bring in additional gas capacity into the region. As you know, we did purchase a 26-acre site from Joe Dominguez at Constellation, that's going to allow us to inject upwards of 2,400 megawatts of power into the region.

So I feel we're very well positioned to help our customers manage any cost, energy cost and try to drive. We want to drive that clearing price down and make sure that we provide a stable, reliable network for it to operate on. I mean I continue to be encouraged by the number of requests that we're getting to inject into our system. This clean energy resources, whether it's the hydro or the offshore wind, and offshore wind is at a 50% capacity. In fact, it's very, very good. And it's at a time when we really need it. Those winter months, that's when it's really peaking.

So I'm not really that concerned. Obviously, I love more generation. I wish we had a dozen more combined cycle plants built here. But the fact of the matter is, I think we're still very well positioned and we're not going to see the volatility that some of these other exchanges are seeing.

Our next question comes from the line of Andrew Weisel of Scotiabank.

Another one on the transmission ROEs. I understand what you're saying about the 205 process and how you can implement subject to refund. My question is, what would you be booking on a prospective basis in terms of earnings, say, 2027 and beyond? Will you assume the 11.39% up and until the FERC or a court indicates that you shouldn't? Will future guidance be based on the 11.39? Or the 9.57% as a base ROE?

Well, first and foremost, the current guidance that we just reiterated and updated back when we issued the 8-K, which was March 31, assumed the current rate, which is 9.57%, okay? So we'll wait to see how this 205 ultimately shakes out later this year. We'll have -- we'll know that definitively. And we'll revise our guidance to reflect whatever rate we can bill to customers. But that will be done on the fourth quarter call in February once we've solidified this issue.

Right. Okay. So your assumption is that you'll get resolution before the fourth quarter call when you gave guidance?

Yes. Under the current procedure on the Federal Power Act, we expect a decision from FERC to determine when we can implement this new proposed rate. And as I've said, on a subject to refund basis. So we will be billing customers, provided that we don't mutually reach a settlement agreement with the stakeholders. We will -- this rate will go live and it will -- and the process to review and decide the ultimate rate that's just unreasonable. FERC will have plenty of time to do that.

Right. Okay. Let's hope they stick to the schedule. They don't always stay on time, but let's hope they do.

Then the second question, if I can, on the refunds of $880 million or so. I know the refund period was extended through mid-2027. From an accounting perspective, have you taken any sort of reserves? Or will you have to? Or is that just sort of looming while the challenging appeals play out?

We'll see how things progress, but our position based on the legal merits of our case that we have filed with FERC counsel and our own internal counsel, we feel we have a strong legal position that supports us not booking anything until we have further determination and clarity on the retroactive piece going back to 2014. So I want to be clear.

But we do know that we have exposure and we are subject to the 15-month refund period as FERC just validated. We were also pleased and we feel it was the right thing for FERC to do -- to dismiss complaint 2, 3 and 4. So we have that validated. But we do agree that we are subject on the Federal Power Act to the 15-month refund period. And that's why we booked that this quarter.

Our next question comes from the line of Travis Miller of Morningstar Inc.

Just one quick follow-up for me on FERC. I appreciate all the details here in the script. But on that FERC high level, given the uncertainty there, depending on what happens over the next year, what's the flexibility you have on your transmission investments in your CapEx? Is that an area where you could potentially move around some CapEx if there's a decision that goes against you? Or is there even a need to move around CapEx?

We certainly will look at that. I don't want to get ahead of our skis here, but that's something that we can look at. But right now, where we have -- and we said that in our formal remarks that we were a bit taken back by this harsh decision that was just issued by FERC because as Joe mentioned, we need more supply, right? And utilities and transmission owners should be incentivized to explore investment opportunities that would reduce the overall cost for customers. If you recall back a decade ago, where New England was under tremendous amount of congestion pressure, and we unlocked that congestion and saving customers billions of dollars eliminating that price differential. So those investments have resulted in tremendous cost savings for our customers throughout New England.

[Operator Instructions] Our last question comes from the line of Paul Patterson of Glenrock Associates.

So lots of questions answered. I just -- on the Connecticut PBR, is that -- I don't know. Are we going to wait 10 years for something on that? Or is that -- I'm just joking around, I apologize. But I mean what do you think is, I guess, what's the status of that?

Paul, as you know, we've been untangling a lot of things down there. It's a very, very positive turnaround. I think in PURA, we're getting very, very good decisions. We're getting fair decisions. In the [indiscernible], PBR would be great to have. But at this point, we're just trying to sort through and get an orderly regulatory environment to operate in. So I'm not going to go poke the bear and start to talk about PBR right now. Let's get some other things or some other priorities that I have on my plate before I'm going to poke the bear on PBR.

Okay. So just wait and see kind of thing, I guess, right?

Yes.

Okay. And then I guess one of my questions is, do you know what triggered FERC after all this time to sort of come out with this sort of out nowhere?

Yes. I mean we can suspect that it was a tough decision having to sort of linger out there for many, many years. I think the message that they've sent to New England transmission owners is we're going to let the courts make the decision on this proceeding. And that's why we're taking the legal action that we've discussed on this call today.

I am showing no further questions at this time. So I would like to turn it back to Joe Nolan for closing remarks.

Thank you again for joining us today. You still have time to get on David Campbell's Evergy call. We gave you 15 minutes. But our teams have weathered a lot of storms this past year, and we delivered top-tier reliability for our customers. We are carrying tremendous momentum into 2026 with a clear focus on derisking our business profile, resolving key open items ahead of us and positioning the company for sustainable long-term growth. Thanks very much.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Eversource Energy Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rima Hyder, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today on the full year and fourth quarter 2025 earnings call. During this call, we'll be referencing slides that we posted on our website. As you can see on Slide 1, 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 are 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. Also joining us today is Jay Buth, our Vice President and Controller.

I will now turn the call over to Joe.

Thank you, Rima, and good morning, everyone, and thank you for joining us today for our year-end earnings call. I'm pleased to report that 2025 was another year of strong execution across the organization. Our team delivered excellent operational performance, continue to advance critical infrastructure needs for our customers, leveraging technology solutions to lower O&M costs, and remain focused on providing safe, reliable and affordable service to customers and communities we are proud to serve.

We also made meaningful progress working collaboratively with state policymakers, regulators and stakeholders to address critical priorities like affordability, while remaining focused on reliability. This remains a top priority for Eversource.

Our goal is to ensure state leaders have the tools they need to support customers and that we have the regulatory clarity to make the investments essential to balancing affordability and reliability. These challenges can only be solved through true partnerships, working together face-to-face with shared goals.

Moving to Slide 4. Let me take you through some of our 2025 accomplishments. Starting with our financial performance. I am proud to report that we delivered on our commitment of non-GAAP earnings with full year earnings per share of $4.76. We also paid dividends of $3.01 per share to our shareholders, representing a 5.2% increase.

Moving on to Slide 5. In 2025, our employees once again demonstrated their commitment to operational excellence. Throughout the year, we delivered high levels of service reliability, responded effectively to several significant weather events, and continued making progress on projects that strengthen the resiliency and sustainability of our electric, natural gas and water systems.

As a result, we had top decile performance for both the MBI and the SAIDI metrics that demonstrates our investments vastly improved reliability for customers. With this high level of performance, our electric customers, on average, experienced an outage only once in nearly 2 years.

We successfully deployed over $4 billion in capital investments in 2025. Our team has advanced grid modernization initiatives, expanded customer energy efficiency programs, and continued supporting the region's long-term decarbonization goals. These efforts reinforce our role as a trusted partner for New England's clean energy future and demonstrates our ability to execute consistently across a broad set of priorities.

Our advanced metering infrastructure or AMI program has officially reached over 100,000 smart meter installations in Massachusetts, a significant milestone in this multiyear effort to upgrade more than 1.5 million meters statewide and deliver more modern tools with greater functionality that will benefit customers. On the regulatory front, we obtained several constructive decisions that will support ongoing infrastructure needs, including rate outcomes and cost recovery mechanisms that align with our infrastructure investment needs.

We advanced key grid modernization initiatives, progressed on storm cost proceedings with 98% of our $2 billion in deferred storm cost in current rates are pending cost prudence reviews, and we continue to engage with policymakers on the affordability and reliability implications of the region's energy transition and address low growth.

Our commitment to building strong regulatory relationships is enabling productive dialogue in all 3 state jurisdictions. The outcomes we obtained last year reflect a shared recognition of the importance of modernizing the distribution system while keeping customer affordability at the forefront.

Last month, in Massachusetts, we worked with Governor Healey's administration to implement a rate relief plan for electric and gas customers, which is a constructive step in support of affordability for Massachusetts customers. The plan provides customer discounts in February and March during peak winter usage. The discounts are partly funded by the state, and we will gradually recover our portion of the discounts over the lower usage period this year. This approach aligns with our efforts to smooth bill impacts for our customers.

Strengthening our balance sheet was a top priority for us in 2025. And over the last 12 months, ending September 30, we have delivered an improvement of more than 400 basis points in our FFO-to-debt ratio at Moody's. As a result of the cash flow enhancements previously outlined. Maintaining this improvement will be a continued key focus area for us in 2026. In January 2025, we broke ground on the Cambridge underground substation, a $1.8 billion investment, which is the largest underground substation in the nation and critical investment in strengthening the electric system that serves one of the fastest-growing and most energy-intensive areas of our region. Construction on this project continues to progress very well.

We completed the construction of the onshore substation for the Revolution Wind project late last year. And as Orsted recently announced, the project is expected to achieve first power within the coming weeks. Orsted has also stated that construction of Revolution Wind has resumed since the preliminary injunction on the recent stop work order was granted, and the project is 87% complete.

Currently, given the latest construction updates and cost estimates, we do not need to change the contingent liability that we recorded in the third quarter of 2025. Another one of our proud accomplishments for the seventh year in a row was that Newsweek recognized Eversource as one of America's most responsible companies. This recognition highlights our excellence in environmental, social and corporate governance areas. This recognition is a reflection on the hard work and dedication of nearly 11,000 Eversource employees who do the right thing every day, and I want to sincerely thank them for that.

Moving to Slide 6. As we look at 2026, our priorities remain clear, and well aligned with the needs of the region. First, we will continue to deliver top-tier operational performance for our customers, maintaining high reliability enhancing customer experience, and ensuring the safety of our workforce, and the public are our core commitments. Second, we will advance our infrastructure investment program, including grid modernization, resiliency projects, and targeted upgrades that support reliability today while enabling the clean energy transition of tomorrow. The service we provide is critical, and replacing the aging infrastructure and addressing capacity requirements to meet demand growth is extremely important for our customers.

John will discuss in greater detail our new 5-year capital investment plan of $26.5 billion. This new plan increases our necessary infrastructure investment over the next 5 years by $2.3 billion. The majority of this increase is aimed at electric and natural gas distribution investments to address aging infrastructure needs under a multiyear project, such as the electric sector modernization plan, and the underground cable modernization program as well as complying with applicable state safety regulations.

Third, we will continue to actively pursue our constructive engagement with regulators and stakeholders. In each of our states, new leadership in government brings fresh perspectives, new conversations and new opportunities to partner in shaping the future of energy in our region.

In Massachusetts, our smart meter initiative is a cornerstone of that future, offering customers more insight, more control and more connection to the way they use energy.

Last year in Connecticut, we reached an agreement to sell Aquarion Water Company. This decision followed a thoughtful and disciplined review of our investment portfolio. While we were disappointed with PURA's initial decision, we will continue to work with them on the judge's remand. The commission recently announced that we can expect to revise draft and final decision in March.

Aquarion is a well-run business with a strong local team, and this transaction positions the water system for continued investments under a dedicated water operator while also delivering value to our customers and shareholders. In addition, as this business is still part of Eversource, we have provided PURA with notice of intent to file a rate case for Aquarion, consistent with our responsibility, to seek appropriate recovery for ongoing investments that ensure safe, reliable and sustainable water service for customers.

We will also begin our first rate review in Connecticut for CL&P in about 8 years. We see that as an incredible opportunity to show how we've provided best in the industry reliability and that those investments are valuable to customers. Another key item for us is our recovery of storm costs. We expect to receive a decision from PURA on our Connecticut storm cost prudency review in July, which would allow us to begin the legislative-backed securitization process.

Importantly, securitization enables timely cash collection, improving our FFO to debt metrics while reducing near-term bill impacts for customers. This year, we're also looking at how we thoughtfully and responsibly use artificial intelligence, which is helping us reimagine how we work, from safety to line inspections, to system planning to customer service, and even leveraging AI in how we prepare and respond to regulatory proceedings.

Using AI to optimize our system operations can reduce costs for our customers. And finally, we will continue to execute with financial discipline. We remain committed to a strong balance sheet, prudent capital deployment and delivering stable, predictable long-term value for our stakeholders. I want to thank our employees across the organization for their commitment, professionalism and exceptional work throughout 2025. Their dedication is the foundation of everything we do, and it positions us well for another productive year ahead, and continued long-term success with a keen eye on enhancing our earnings and derisking our business profile. 2026 will be a truly transformational year for us as we operate within a changing regulatory landscape and navigate affordability concerns. We are driving forward on several major fronts.

We're executing relentlessly on completing our offshore wind commitments, enhancing storm cost securitization and managing the potential sale of Aquarion. At the same time, we remain laser-focused on delivering top decile operational performance across our systems to continue to deliver on our customers' expectations. This combination of strategic execution and operational excellence positions us to achieve earnings growth towards the upper half of our 5% to 7% long-term EPS range by 2028.

I will now turn the call over to John to discuss this long-term growth trajectory as well as our results. Thank you.

Thank you, Joe, and good morning, everyone. This morning, I will review 2025 full year earnings results, provide a regulatory update, share our updated 5-year capital investment plan and provide our 2026 EPS guidance, our 5-year financing strategy and our long-term earnings growth expectation.

Let me start on Slide 8 with a review of our 2025 earnings results. Our GAAP results for 2025 were earnings of $4.56 per share compared with GAAP earnings of $2.27 per share in 2024. GAAP results for 2025 include a net loss of $75 million or $0.20 per share, related to an increase in our liability for expected future obligations to global infrastructure partners. As part of the September 30, 2024, sale of South Fork Wind and Revolution Wind projects, net of tax effects associated with the sale of these projects.

For the quarter, our GAAP as well as our non-GAAP earnings results were $1.12 per share compared with GAAP earnings of $0.20 per share for the fourth quarter of 2024, and non-GAAP earnings results of $1.01 per share for the fourth quarter of 2024.

As a reminder, GAAP results for the full year 2024 included a net loss of $2.30 per share related to the divestiture of our offshore wind investment recognized in the third quarter of last year. As well as a loss on a potential sale of Aquarion Water, which we recognized in the fourth quarter of 2024. Excluding those after-tax losses, our non-GAAP earnings were $4.76 per share for the full year 2025 as compared to $4.57 per share in 2024. As you may recall, our revised non-GAAP earnings guidance for 2025 was in the range of $4.72 to $4.80. Breaking down the 2025 full year earnings by segment, Electric Transmission earned $2.09 per share in 2025, as compared with earnings of $2.03 per share in 2024. The improved results were driven by continued investments in our electric transmission system to address service reliability and demand growth.

Our electric distribution earnings were $1.80 per share in 2025, as compared with earnings of $1.77 per share in 2024. The higher results were due primarily to increased revenues from base distribution rate increases for Eversource's Massachusetts and New Hampshire businesses, partially offset by higher O&M, interest costs, depreciation and property taxes.

The natural gas distribution segment earned $0.97 per share in 2025 as compared with $0.81 per share in 2024. The improved earnings results were due to base distribution rate increases at Eversource's natural gas businesses, and continued investment in our gas system to replace aging infrastructure with a focus on safety.

These higher revenues were partially offset by higher O&M, which included a $12.2 million charge as part of NSTAR Gas' settlement agreement with the Attorney General's Office in December of 2025 as well as higher depreciation, interest and property tax expense.

Eversource parent and other reflected a GAAP loss of $0.42 per share in 2025, as compared with a GAAP loss of $2.46 per share in 2024. These results include the impact from our offshore wind divestiture and the potential Aquarion sale that I discussed earlier. On a non-GAAP basis, Eversource parent and other loss was $0.22 per share in '25 as compared with a non-GAAP loss of $0.16 per share in 2024. This higher loss was primarily driven by increased interest costs offset by the benefit from a settlement with the Massachusetts Attorney General for the recovery of previously incurred EGMA integration costs as approved by the DPU and to a lower effective tax rate.

That wraps up 2025 a solid financial year despite the challenges we faced. We are proud to have delivered another year of recurring non-GAAP earnings and dividend growth.

Turning to our updated 5-year capital plan for 2026 through 2030, as shown on Slide 9, which reflects our utility infrastructure investments by segment. As a reminder, this plan includes only those projects that we have a clear line of sight on from a regulatory approval perspective. Over this 5-year period from '26 through 2030, we expect to invest approximately $26.5 billion in our regulated electric and natural gas businesses, representing a $2.3 billion increase as compared to our prior 5-year plan and a $1.5 billion increase from 2026 through 2029, the overlapping period.

The $26.5 billion does not include Aquarion Water, which would amount to an additional $1.3 billion over this 5-year period. This infrastructure investment plan will allow us to continue to provide customers with safe and reliable service support low growth and address our state's clean energy objectives.

Looking at the $1.5 billion increase from a segment standpoint, as shown on Slide 10, electric distribution is the largest driver of the increase at $696 million. Our updated capital forecast now includes over $11 billion of electric distribution investments, with a continued focus on system resiliency and top-tier electric reliability for our customers. This level of investment is primarily driven by the Massachusetts electric sector modernization plan as well as over $300 million remaining for the AMI program in Massachusetts. The next driver of the increase in our capital investment plan is natural gas distribution at $523 million. The updated capital forecast plan includes nearly $7 billion of natural gas distribution investments, centered around reliability and safety. Contributing to this increase are a variety of mandatory safety regulations that recently became effective, which represents approximately 25% of the growth in this gas distribution plan. Our transmission plan increased by $233 million for the overlapping period.

The revised plan includes over $7 billion of infrastructure investments over the next 5 years. These investments include replacement of aging infrastructure, to harden the system and increase resiliency during extreme weather events as well as innovative substation and other infrastructure projects undertaken for reliability and load growth.

Rounding out our capital plan, are investments in technology and facilities, which increased by $75 million and now is forecasted at $1.2 billion, including cybersecurity investments, AI tools to enable our employees to work more efficiently and tools to protect customer information. As shown on Slide 11, the transmission capital plan includes future ESMP substations towards the end of the 5-year forecast period. For this reason and to address load growth for the New England region, the plan includes sizable transmission investments for NSTAR Electric, which will have the largest transmission rate base in our service territory, projected at nearly $8 billion by 2030.

The resulting impact to rate base from the updated capital investment plan is shown on Slide 12. The customer-focused core business investments included in the capital plan results in an 8.3% growth in rate base from 2024 through 2030. On the regulatory front, we had another busy year with encouraging results.

Our key 2025 regulatory proceedings are highlighted on Slide 13. Highlighting some recent outcomes starting with Massachusetts, we received approval of our PBR rate adjustments with a $55 million increase for NSTAR Electric implemented on January 1 of this year, and a $10 million increase for NSTAR Gas effective November 1, 2025.

Also in Massachusetts, we received approval to implement a settlement agreement that included the recovery of EGMA, acquisition and integration costs, and to solve some long-standing regulatory matters related to pension and other deferred cost recovery items. EGMA integration costs of $82 million will be recovered over a 10-year period and will be implemented as part of our next EGMA rate case.

The pension and other cost settlement will result in a onetime bill credit for NSTAR Electric customers in 2026 of approximately $20 million. This impact was recognized in the fourth quarter of 2025.

Lastly, in Massachusetts, we successfully worked with the Attorney General's office on a settlement, which was approved by the DPU for the NSTAR Gas rate base roll-in, which resulted in a $45 million base rate increase and a onetime customer credit of $12.2 million, which will be effective in 2026. This impact was also recognized in the fourth quarter of 2025.

In Connecticut, we continue to pursue the sale of Aquarion Water with PURA. In January, the Superior core overturn PURA denial of the Aquarion sale and sent the transaction back to PURA on remand to address some items. The court agreed with our argument that the first decision was legally incorrect, finding that PURA lacked the authority to reject the legislatively mandated governance structure of the newly created Aquarion Water Authority.

On February 4, PURA issued a new procedural schedule that includes briefs, a proposed decision with an opportunity for written exceptions, and a final decision to be issued on March 25. We will continue to engage with PURA and all stakeholders as the process moves ahead. We recognize the uncertainty surrounding the Aquarion sale, and our priority is to ensure that Aquarion continues to make necessary system investments to maintain reliable service for customers.

As a result, we have submitted a notice of intent to PURA disclosing our plan to file a rate case for Aquarion, seeking a preliminary rate request of $88 million in additional revenues. This rate request is necessary so that we can support the system long term in the event that PURA does not approved our application for the sale of Aquarion.

Let me now talk about our financing needs over the next 5 years. Without the Aquarion proceeds, we anticipate incremental financing needs, and we are reviewing a number of alternatives to ensure we continue to fund the business efficiently.

Looking at Slide 14, you can see our financing activities. Overall, we need to fund $27.8 billion of infrastructure investments, which includes Aquarion and dividends in the range of $6.7 billion to $7.2 billion for a total cash need of $34.5 billion to $35 billion.

Over the next 5 years, we expect cash flows from operations to be in the range of $24.2 billion to $24.7 billion, which would fund nearly 70% of our cash needs. We are looking at approximately $8.5 billion to $9 billion to come from incremental debt and other financing solutions. Within this range, we are looking at various alternatives for these solutions, such as junior subordinated notes, minority interest sale or minority, like capital structured financing transactions. These alternative financing solutions would qualify for equity content in the range of $1.3 billion to $2.5 billion. We expect a decision from PURA regarding storm prudency that would allow us to move forward with securitization and anticipate proceeds of up to $1.5 billion, providing roughly 3% of the cash -- of cash inflows.

Should an Aquarion sale occur, we would use the proceeds to lower the need for these alternative financing solutions. If we don't close on Aquarion, we would look towards these alternative financing solutions to meet our financing needs. The remaining cash needs would come from equity issuances of roughly $800 million to $1.1 billion.

It's important to note that this equity need is not impacted by the Aquarion sales. As Joe stated, we continue to be laser-focused on improving our balance sheet. As you can see on Slide 15, we have followed through on our commitment to cash flow and balance sheet improvements with over 400 basis points of enhancement on the FFO to debt metrics at Moody's, and 300 basis point improvement at S&P for 2025.

Assuming no Aquarion sale, our financing plan for the 5-year forecast is built to maintain at least 100-basis-point cushion over the S&P and Moody's downgrade threshold each year.

Next, I will turn to our 2026 earnings guidance on Slide 16. Our guidance this year does not assume that the Aquarion sale will occur. And therefore, we have included water segment earnings as part of our full year guidance. With that said, we are projecting earnings per share in the range of $4.80 to $4.95 for 2026.

For 2026, we expect earnings growth to be more moderate due primarily to the timing of key regulatory outcomes. Importantly, we view the 2026 headwinds as transitory and not reflective of the underlying strength of the business or our long-term growth outlook. These outcomes include the potential sale of Aquarion, the recovery of storm costs in Connecticut as well as in New Hampshire.

The positive drivers impacting our guidance this year include transmission investments to improve system resiliency and to address increased electric demand. Distribution rate increases, thanks to our PBR mechanisms in Massachusetts and now in New Hampshire, and our strong focus on managing O&M expense. These positive drivers are expected to be partially offset by higher depreciation and property taxes from increased investments, higher interest costs, the impact of share dilution and a higher effective tax rate.

Turning to Slide 17. As we move into 2027 and 2028, we expect a meaningful inflection in earnings growth, driven by improved regulatory outcomes, recovery of storm costs completion of alternative financing opportunities and distribution rate adjustments, including the result of CL&P rates request in 2027.

As a result, while 2026 reflects a year of transformation, we see clear upside starting in 2027 and continuing throughout the forecast period. We are projecting the 5-year long-term earnings per share growth rate to be in the range of 5% to 7%, based off of our 2025 non-GAAP recurring EPS of $4.76 per share.

We remain confident in our ability to deliver earnings growth towards the upper half of our long-term target of 5% to 7% by 2028. Just to be clear, this expectation would be off of the expected 2027 earnings results.

In closing, our long-term fundamentals remain firmly intact. We have line of sight to improving our earnings as we move beyond 2026, supported by constructive regulatory progress, capital investments moving into rate base in a timely manner and continued focus on disciplined execution.

Importantly, from an earnings growth perspective, these drivers provide increase in visibility into 2027 and beyond. Adding to this is a resilient regulated portfolio of investments, a steadily improving balance sheet and a clear strategy for long-term value creation. We are confident in our ability to deliver sustainable growth and enhance shareholder value over time.

I will now turn the call back to Rima for Q&A.

Daniel, we're ready for our Q&A now. Thank you.

[Operator Instructions] Our first question comes from Shar Pourreza with Wells Fargo.

So just really quickly, the first one is, obviously, Joe, your growth trajectory is predicated on the balance sheet and funding, and you say, like, obviously, financing is somewhat flexible. If you sort of get the Aquarion sale approval on March 25 and storm cost recoveries, that will obviously eliminate the hybrids, but could that also take out some of the straight equity? And could that situation, so post-sale and storm cost, recoveries be accretive to the 5% to 7%, since you're already at the upper half under a base assumption and a lot of your funding needs will be eliminated.

Yes, I'm going to let John touch on that.

Shar, so to start off with Hawaii. To start off with the approach we're taking, just to your point, given the uncertainty around the Aquarion deal is we've given you all kind of range of potential alternatives, as I said in my prepared remarks, that level of $0.8 billion to $1.1 billion of common equity issuances does not -- it's not impacted by whether or not the Aquarion transaction is completed, where we have the flexibility is in the debt -- in the alternative financing to your point. I do expect us -- as you know, we have not issued any junior subordinated debt. So the expectation is with or without Aquarion, we do expect to go to market to -- with that instrument.

And that's despite storm cost recoveries.

Yes, storm cost recoveries will come in, in 2027. And given the procedural schedule that PURA just issued with a final decision, by July, we probably won't be able to complete the securitization and get the cash in the door until Q3 time frame of 2027. So that's why we feel that even with an Aquarion sale moving forward, we still need to go to market with these junior subs. As you know, it is accretive to issuing straight equity. And yes, yes, let me just leave it at that.

And you're 5% to 7%. So obviously, in that situation, you would need less funding. And your base assumption is already at the higher end of 5%.

Correct.

Yes, exactly, Shar.

Correct. So where we have the lever to push and pull, if Aquarion happens, then the alternative financing solutions will be pulled back. So I would view it this way. Within Aquarion deal closing in a timely fashion, it moves our growth rate for the outer years to a much better start.

All right. That's perfect. Okay. And then just lastly, another obviously, uncertain here is Revolution Wind. I guess, where do we stand on potential post-close liabilities to Orsted. And at what point does that liability end? So like, at EEI, you guys mentioned First Power was the cutoff point. So does that mean that if the project reaches First Power, even if the BOEM lawsuits are still ongoing, you are off the hook?

Yes. Thank you. I'll tell you, we have not had this level of clarity around some of the uncertainty, certainly in my tenure as CEO. We expect first power in the next couple of weeks. That is not the trigger though. The trigger is COD, we deliver just as we did with South Fork. We feel very comfortable with the number that we're carrying now. I'm watching weather as we speak, and we expect that 60th turbine to head out to the lease area, and we will have first power in a few weeks. So it's going very, very well. All the land construction that we were responsible for was done. So you take Revolution Wind and the clarity around that and the end being very near, you take the Aquarion decision coming in March, whether it's approved or not, at least it's bringing clarity.

You've got storm costs recovery. You've got a decision coming in July. We already have the securitization vehicle in place. So all of these things, coupled with the rate base rolling that we've got in Massachusetts, we feel very, very comfortable about our future.

Shar, one more. Just to be clear, we don't have any liability to Orsted. Our obligation is to GIP just for...

Our next question comes from Carly Davenport with Goldman Sachs.

Maybe just a follow-up on the sources and uses of cash. Maybe could you just dive in a little bit more on what could potentially make sense from a minority interest sale standpoint and how you might consider structuring that in the context of regulatory approval needs?

Yes. Sure, Carly. This is John. So that's -- we're looking at -- as I said in my formal remarks, we're looking at many alternatives. I would say from a minority interest sale, we wouldn't -- we're looking at kind of a traditional equity interest or a kind of think of it as a minority interest capital structure deal. So it's a little bit different than a true minority interest in the equity position at a line of business or at one of our utilities.

So I think it's a little premature for us to start talking about the level of details, because that would be -- we're not looking to do that immediately. It's just something that we have on the table or as I like to refer, it's a tool that we have in our toolkit.

Great. Okay. That's helpful. And then you're still highlighting $1 billion of upside to the new capital plan tied to Connecticut AMI. Obviously, a lot going on in Connecticut at the moment. So just kind of any sense of when you think from a timing standpoint, you could get some resolution on that and potentially see that start to roll into the plan?

Yes, sure. So we expect that we'll be meeting in Connecticut on AMI. All we want really is to get a woeful application of the prudent standard. And then we'll have to update the implementation schedule, and that meeting is going to be next week. So we're optimistic that we can, at least, get additional clarity around, number one, the desire and the rules of the road down there to make it fair for us to make that investment. But we're not going to make the investment until we feel comfortable with the recovery mechanism. As you know, we've got a lot of money on the line down there right now, and we want to get our storm costs back. We've got a CL&P rate case, and if AMI is important to them, we certainly are ready to implement. I'm thrilled to tell you that 100,000 meters have been put in, in Massachusetts. It's going very, very well.

And I think it's to be a great opportunity for the customs of Connecticut to be able to enjoy the benefits of AMI. And I think that we're in a good position to be able to deliver on that.

And Carly, I would just add that $1 billion that we have on the slide, you need to, at this point in time, view that as a placeholder that number from a cost perspective is kind of stale. So the team is looking at updating that. As Joe mentioned, we do have some discussions happening next week, and we will file a revised cost estimate for that program.

Our next question comes from Bill Appicelli with UBS.

Just going back one step to something you guys said earlier, and I think to make sure I understand it. When you guys say that the upper half -- towards the upper half, I guess, one, just to be clear, that means into the upper half in '28, and then -- and when you say -- you mean rebasing that essentially off of the '27, right? So you're not -- there's no risk of rebasing off of '26, which is obviously a lower number, right? When you say you're sort of off of '27, you're referring to more normalized earnings power in '27 and then growing into the upper half into '28. That's the intention there?

That you are spot on, and that's why in my formal remarks, I made it perfectly clear as to what the base year was. So we -- the expectation is we're going to be at the upper half, which implies over 6% off of the earnings that we delivered for 2027.

All right. Understood. And then -- as far as the tax benefits from South Fork and how much of that is reflected in earnings for '26? And what's the runway there?

From an ITC standpoint associated with our tax equity ownership, zero. Okay? We have not dipped into that bucket yet. So we still have roughly $500 million that we will be utilizing in the coming years. And quite honestly, that it will allow us to be for all intents and purposes, a noncash taxpayer, certainly at the federal level for the next several years and hopefully, towards even the tail end of our forecast period. .

Okay. And then -- so you're utilizing other credits that are available to you this year because there...

I mean, yes, we always have puts and takes from a credit standpoint, a tax standpoint. As I continue, as I've highlighted throughout 2025, in 2025, we were able to harvest a bit more than what we were planning on. And I've also guided you all that don't expect it to be at the same level for 2026. So -- and then Bill, I just want to clarify that the ITC credits that we are yet to utilize, those do not generate a P&L impact, just to be clear. So that is strictly a cash.

Right. Okay. Understood. And then, I guess, the last question, just any other color you can give on drivers into '27 because of sort of the importance of that. Obviously, the CL&P case, but anything else you can sort of frame out when we think about how earnings will shape up in '27 over this '26 number you gave today?

Sure, Bill, and thank you for raising that question. To address that topic, we did introduce a brand-new slide that I hope you find everyone finds useful. It highlights those major drivers, and the timing of when we would expect things to start materializing. So if you look at that slide, it's Slide 17 in the deck that we disseminated, we have the Aquarion transaction. We have the storm case. We have the Aquarion rate case, we have the securitization, and we have revolution get behind us. All key overhangs that we've had for a long time will not be solidified in 2026. The 2027 enhancements will be, obviously, if Aquarion closes, the CL&P rate case as we continue to forecast, we will likely file that case midyear of '26 with a rate adjustment kicking in midyear of 2027. And the storm cost prudency, securitization transaction will happen around the Q3 of 2027. So those are the major drivers that will give us the momentum from a growth standpoint into '27 and beyond.

Our next question comes from Sophie Karp with KBCM.

So I guess I'm wondering, can you give us some sense when is the COD on the Revolution Wind going to occur after you have first power, which you will have in a few weeks? Like what's the time line there? And that just will you press release that? Will we know that? Or are you going to wait until the next time you report?

Yes. We're targeting the second half of 2026. We are very, very pleased with the progress. As you know, we've pulled that schedule in significantly. It continues to improve. I see nothing standing in the way of that schedule only getting better. And again, the only situation that we worry about is weather and something that none of us can control. But -- so second half of 2026 at this point, yes, and as we get more clarity as we get first power in another week or 2, I think that Orsted, who was actually has the lead, we're not really the one that's able to disclose that. We'll give updates to the market.

[Operator Instructions] Our next question comes from Paul Patterson with Glenrock Associates.

So just to sort of -- and I apologize for being a little slow on this. With the Aquarion sale, what is the difference if you get it or you don't in terms of the incremental amount of equity or equity hybrids that were that we're talking about? Could you just fill that out for me? I just -- I'm not completely clear. I apologize.

Sure. So once again, Paul, this is John. No change to what we just rolled out as our equity needs, $800 million to $1.1 billion from a pure-play equity raise, where we have the flexibility is in the other alternative financing. We were assuming that in the current transaction to get $1.6 billion of the equity portion of the sale of Aquarion. So that's what you should think about as being the impact.

And also, we'll put them on notice if we do not transact we will file for a rate case to improve those earnings down there as well. I mean it is a phenomenal asset, but we made the decision to exit that business to improve our balance sheet. And that was a decision that we made. But if, in fact, we don't exit it, it still is a very, very good business.

Yes, I see that. Also on the Eversource Gas benefit in the fourth quarter that -- if I read the press release correctly, it was in the parent. I was just wondering, could you -- how much was that? And why is it in the parent and not in the gas business? Or what am I missing?

Okay. Very, very good question, Paul. So those are costs that we had incurred several years ago when we were integrating EGMA. It's not in-stock gas, it's EGMA. And per the settlement agreement that we executed back when we acquired the company back in 2020, it did provide similar to what we have been granted in previous M&A transactions in all 3 jurisdictions, quite honestly, okay? Those costs -- those integration-related costs were incurred by the parent company as the source of fund. So those costs are at the parent company. We recorded the benefit at the parent company to reimburse the parent. The recovery, the recovery, the dollars will come in from EGMA customers, because the EGMA is the -- are the customers that are reaping the benefits of that.

I'm showing no further questions at this time. I would now like to turn it back to Joe Nolan for closing remarks.

Thank you all for joining us today. 2025 was a solid execution of our business plan. Our team delivered top-tier reliability for our customers we advanced major strategic priorities. We enhanced our financial condition, and we strengthened the foundation of the business.

As we move into 2026, we're carrying that momentum forward, with a clear focus on derisking our business profile, resolving the key open items ahead of us, and positioning the company for sustainable long-term growth. We are firing on all cylinders to finish this work, and I'm confident that the disciplined execution you've seen for us this year will continue as we deliver on the commitments we've made to our customers, communities and shareholders. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Eversource Energy Q3 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Rima Hyder, Vice President of Investor Relations.

Good morning, and thank you for joining us today on the third quarter 2025 earnings call. During this call, we'll be referencing slides that we posted this morning on our website. You can see on Slide 1 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 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, Chief Financial Officer and Treasurer. Also joining us today is Jay Buth, our Vice President and Controller.

I will now turn the call over to Joe.

Good morning, and thank you for joining us today.

Starting on Slide 4. Over the past 10 months, our team's relentless focus on executing on our key strategic initiatives has driven strong results and consistent performance. We are well on our way to delivering against these initiatives and ending the year on a strong note. Our strong results have also greatly improved our standing among our peers. On a year-to-date basis, our share price has been a top performer among the EEI peer group. Today, I'll walk you through how we're capitalizing on our unique market position fueling sustainable growth and strengthening the balance sheet to power our future outlook.

Moving to Slide 5. In the last few months, we have gained more clarity on the Connecticut regulatory environment and the impact for our ongoing and future regulatory proceedings at PURA. Additionally, each day of construction that passes yields progress on the derisking of Revolution Wind. We're seeing a constructive shift in Connecticut's regulatory landscape. Last month, Governor Lamont appointed 4 new commissioners at PURA, filling out the 5-member requirement under Connecticut law. With this new commission on the way, there is now a genuine opportunity to collaborate with all parties on regulatory initiatives and to achieve more balanced regulatory outcomes. This will enable us to better serve the needs of our customers in this state and to do so with a strong focus on safety, reliability and affordability. Critical needs exist for state and regional infrastructure investments to maintain a strong, reliable and resilient grid that can accommodate new sources of generation to meet the increasing levels of projected electric demand, a transparent and predictable regulatory process is going to benefit all stakeholders, including our customers, and we are looking forward to getting back to work on Connecticut's energy goals.

For our ongoing Yankee rate case, we submitted a motion to adopt an alternative resolution with PURA. This was in response to PURA's request for parties to reach a consensus based resolution to reestablish trust in balance in the regulatory process and avoid further legal appeals. Our proposal includes important customer affordability provisions that we believe are supportive of all stakeholders affordability goals. We expect to see a final decision from PURA today. We remain on schedule to receive a final decision for the sale of Aquarion Water on November 19 and we continue to expect to close the transaction by the end of this year. As you may be aware, we filed a comprehensive offer of compromise to address concerns raised by the Connecticut Office of Consumer Counsel. The commitments that were outlined in the offer of compromise provide additional assurances that the transaction will serve the interest of Connecticut and the customers served by Aquarion Water.

Moving on to an update on offshore wind. We have substantially completed construction of the onshore substation for Revolution Wind project. We expect to provide back feed [indiscernible] to the offshore facilities by the end of November, which will support testing and commissioning of those facilities. In parallel, we will complete the final testing and commissioning of the remaining onshore equipment. Overall, as Orsted has stated, Revolution Wind is substantially complete and work has continued since the [ stop ] [indiscernible] lifted in September. We recognized an increase to our liability to GIP in the third quarter, which was largely offset by tax benefits. We continue to support the project's owners in their completion of this important generation resource for New England.

As I said at the start of the call, our execution has delivered positive results and we have made great headway on our many key strategic initiatives this year. We have continued to deliver on our operational metrics with top decile reliability performance among our peers. We have significantly improved our FFO to debt ratio through constructive regulatory outcomes and managed our balance sheet to support solid credit ratings. And we know we are not done yet. We have continued to invest in transmission and distribution infrastructure across our service territories. We are on track to invest nearly $5 billion this year. We have installed over 40,000 AMI meters in Massachusetts and completed the communication network deployment in the Western portion of our service territory. These achievements are just a few that underscore the strength of our execution engine and the depth of our operational rigor.

As you can see on Slide 6, we have many growth opportunities ahead of us. Our service area is truly the crown jewel of the country. This area is home to cutting-edge biotech and research in the best universities and health care in the world. As these industries expand, they turn to us for a reliable, resilient grid, making us an indispensable partner in their success. We're seeing robust load growth, driven primarily by electrification of transportation and heating, decarbonization initiatives from both the public and private sectors and economic expansion across manufacturing and commercial sectors. These factors help to ensure that our growth is broad-based, durable and aligned with state sustainability goals. Year-to-date, we have seen weather-normalized load growth of 2%. In this summer, we experienced a peak of [ over ] 12 gigawatts, the highest record since 2013 as load growth in our service territory has started outpacing the impacts of distributed generation such as rooftop solar.

The evolving electric demand landscape presents a need for numerous transmission projects such as upgrades linking onshore and offshore wind to load centers into connections, improving regional reliability and addressing congestion as the generation mix for our region evolves. Some of the projects we are pursuing to get ahead of this continued load growth include the Cambridge underground substation, which will be the largest in the nation in 1 of 14 substations currently on the drafting table that we expect to build in Massachusetts alone to support future growth. Being opportunistic about land acquisitions in our service territory to support this growth, such as the Mystic Land acquisition we did last year with more in the pipeline, responding to requests for proposals from ISO New England to address longer-term transmission solutions, such as the most recent 1 to bring power from Northern Maine to Southern New England. These opportunities, some being outside of our 5-year forecast period could add billions of dollars to our future investment plans. Each project that we are considering not only supports our growth trajectory, but also deepens our value proposition as a great innovator.

We also recognize that as demand increases, affordability must remain top of mind. We are working closely with our regulators to offer our customers various options to address affordability as shown on Slide 7. We collaborate with large and small customers to design rate structures that incent efficiency. For example, earlier this year, we worked constructively with our regulators in Massachusetts to offer a 10% discount to our gas customers during the winter peak months and recover that in the summer months to smooth the impact of high bills. Similarly, starting this month, we are offering a seasonal heat pump rate in Massachusetts. Eversource electric customers who use a heat pump to heat their homes can take advantage of a seasonal heat pump rate, which is a reduced rate during the winter months. We are expanding energy efficiency programs to provide incentives for residential and low income customers who choose to adopt energy-efficient technologies. These programs, coupled with AMI give customers greater transparency and control over their energy pocketbook. Our nation-leading energy efficiency programs have already generated $1.4 billion in savings for our customers.

We have also implemented low-income discount rates for our most vulnerable customers, and we are recognized for our leadership in advocacy for state utility partnerships in [indiscernible] programs. We are excited about new energy supply coming into our region, which should alleviate supply cost pressure on customer bills. Over the next 12 months, Eversource is directly supporting new generation coming into the region totaling over 2,500 megawatts. We aim to deliver reliable, sustainable energy while keeping costs manageable and partnering with customers to ensure affordability through cost-effective investments, efficient operations and equitable rate design.

Before I hand the call over to John, I want to thank our 10,000-plus employees for their dedication, our regulators for their collaborative spirit, and our shareholders for their trust. We're executing against a clear strategy serving extraordinary customer base and working to build the grid for tomorrow, responsibly and sustainably. I look forward to your questions in sharing more details on our path forward.

With that, I'll turn the call over to John Moreira.

Thank you, Joe, and good morning, everyone. This morning, I will review third quarter earnings results, provide a regulatory update and discuss our recent financings and progress on credit metrics.

I'll start with our third quarter results on Slide 9. As announced last month, during the third quarter, we recognized a net after-tax nonrecurring charge of $75 million or $0.20 per share related to our offshore wind liability. This charge increased our estimated liability for future payments to GIP by approximately $285 million, which was offset by $210 million of tax benefits. These tax benefits were the result of a change to previously estimated tax attributes primarily associated with Revolution Wind.

Our GAAP earnings for the third quarter of this year were $0.99 per share, including the impact of this recent offshore wind net charge. GAAP EPS for the third quarter of last year was a loss of $0.33 per share, reflecting the impact of the sale transaction of South Fork and Revolution. Excluding the after-tax losses from offshore wind in both years, non-GAAP recurring earnings for the third quarter of 2025 were $1.19 per share compared with $1.13 of non-GAAP recurring earnings per share last year.

Now looking at the quarter results by segment, starting with transmission. Higher electric transmission earnings of $0.01 per share were due to increased revenues from continued investment in the transmission system. Next, we have higher electric distribution earnings of $0.03 per share that reflect distribution rate increases in New Hampshire and Massachusetts provided for cost recovery for infrastructure investments in our distribution system. These higher revenues were partially offset by higher interest, depreciation, property taxes and O&M. The improved results of $0.04 per share at Eversource's Natural Gas segment were due primarily to base distribution rate increases in both Massachusetts utilities and from capital tracking mechanisms to provide timely cost recovery of investments in our Natural Gas businesses. These revenue increases were partially offset by higher interest, depreciation and property tax expenses. Water distribution earnings were lower by $0.02 per share for the quarter as compared with prior year, primarily due to higher O&M and depreciation expense.

Eversource parent earnings results were flat for the quarter, excluding the net impact from offshore wind that I mentioned earlier. As a reminder, all of these segment results reflect the impact of share dilution. Overall, we are very pleased with the solid performance for the third quarter and our recurring earnings are in line with our expectations.

Moving to some key regulatory items as shown on Slide 10. As Joe mentioned, we recently filed an alternative resolution proposal in the Yankee rate case. If adopted by PURA without modifications, the alternative resolution would waive our statutory right to appeal the final decision resulting in a fair and balanced outcome. The alternative resolution is an improvement over the draft decision, increasing revenues by approximately $104 million as compared with the PURA's draft decision of $55 million. The alternative resolution would also provide customer relief this winter to a greater extent than the draft decision by accelerating the refund of an existing regulatory liability.

Also, as Joe mentioned, on the Aquarion [ on sale ], PURA has maintained its final decision date of November 19 and pending that decision, we continue to expect to close the transaction by year-end. In Massachusetts, we received the approval of our NSTAR Gas PBR adjustment, and we also filed a motion for reconsideration on the NSTAR Gas rate base reset.

Next, let me reaffirm our 5-year capital plan of $24.2 billion, as shown on Slide 11, which reflects our 5-year utility infrastructure investments by segment through 2029. As a reminder, this plan only includes projects for which we have a clear line of sight from a regulatory perspective. Through September, we have executed on $3.3 billion of our $4.7 billion infrastructure investment plan. We are very pleased with this progress, and we are on track to meet our planned target for the year. We continue to see additional capital investment opportunities in the range of $1.5 billion to $2 billion within the 5-year forecast period. We plan to update our next 5-year capital plan in our fourth quarter earnings call.

Turning to Slide 12. We remain highly focused on improving our cash flow position and strengthening our balance sheet condition. As I have stated before, we expect our FFO to debt ratio for 2025 to be approximately 100 basis points above the rating agency thresholds by year-end. In fact, our Moody's FFO to debt ratio was 12.7% as of the second quarter of this year and reflects an improvement of over 300 basis points from December of 2024. We expect this ratio to be over 13% as of the third quarter.

As we have shared with you last quarter and as shown on Slide 13, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet. As a result, our operating cash flows have continued to improve, increasing over $1.7 billion year-over-year through the third quarter.

Moving on to our financing activity on Slide 14. While earlier this year we did not anticipate issuing long-term debt at the parent company during 2025, however, we did see the need to capitalize on favorable credit spreads, proactively prefunding an early 2026 maturity and strengthening our liquidity position. Given where our short-term debt balances were forecasted to be and in order to maintain an appropriate level of liquidity, we issued $600 million of parent company debt. On the equity side, to date, we have issued $465 million of equity under the ATM program. We expect that this level will take care of our equity needs for the near term. We also continue to pursue recovery of our deferred storm costs. As of the third quarter, 98% of our deferred storm costs are either under review or already in rates. And as a reminder, our previous cash flow improvement forecast did not assume securitization as the cost recovery mechanism for the Connecticut deferred storm costs.

Next, I will turn to 2025 earnings guidance as shown on Slide 15. As announced in October, we are now in 2025 recurring earnings per share guidance to the range of $4.72 to $4.80 per share to a higher midpoint and reaffirming our longer-term EPS growth rate of 5% to 7% off of the 2024 non-GAAP EPS base. We remain confident in our EPS growth trajectory driven by disciplined execution of our strategic plan, targeted customer-focused investments in transmission and distribution are backed by constructive regulatory frameworks that enable timely cost recovery for our operations. Continued progress on storm cost recovery combined with strict O&M discipline strengthens our financial foundation and positions Eversource to deliver consistent long-term value to customers and shareholders.

I'll now turn the call back to the operator to begin our Q&A session.

Thank you. At this time, we will conduct the Q&A session. [Operator Instructions] Our first question today comes from Shar Pourreza from Wells Fargo.

So just on Yankee Gas, obviously, everyone is watching this one. You've got this motion to adopt the alternative resolution out there. There's some stuff coming out now on it, I think. Is there anything you want to flag? And just remind us, what's kind of embedded in the plan around the outcome? Is it fair to assume that you're kind of conservative around what you're embedding there? [indiscernible] sort of updates, I think we're starting to see some things come across. I appreciate it.

Sure. As you know, [indiscernible] started at 9:00 and the commission went in and the order is out. We need to go through it. As you know, the [ devils are in the detail ]. So we'll continue to take a good look at that, and I think we'll have some answers for folks on this call later today, I can promise you. John can talk to you a little bit about what's embedded in the plan.

Yes. No, Shar, I would say it's in line with our plan, and it appears that the decision is a little bit better than the draft decision, which is very encouraging for us. But as Joe mentioned, we have to go through it. It's -- the ink is not dry at this point. So -- but we will have much more information when we meet with you all at EEI.

Perfect. I'm just glad we're getting through this process. That's good. And then just on the NSTAR Gas PBR, right? I mean, you have a [indiscernible] for recovery of roughly [ 160 ]. Just walking through what you did and didn't get. Why did the Massachusetts, [indiscernible] deny that? Is there kind of an opportunity to get it later? And does this mean you're following a rate case? Obviously, the governor has been kind of warning around rates being too high, then guiding the DPU to scrutinize everything. So I just want to get a sense there. I appreciate it.

Good question, Shar. So the [ 160 ] component, the piece is 3 major items. One is a roll-in of GSEP, which is about $107 million. That really has no impact to customers. It's just going from the right hand to the left hand, the normal PBR adjustment, which was -- which did get approve of about $10 million.

What we had proposed at the mitigation plan for the DPU was to allow us to roll in rate base similar to what we saw last year that the DPU approved for EGMA. That number is about $45 million. And we were very specific when we made that mitigation filing that if we did not receive the rate base role and then our alternative would be to file a general rate case. So as of yesterday, we filed a motion for reconsideration and we also filed our intent to file a rate case. There's been a lot of change, not only in the Connecticut PURA, but also in Massachusetts. These [indiscernible] 2 new commissioners really have not been there that long. So we're hopeful that the efforts that we will work very closely with the DPU will move in the right direction.

Okay. Perfect. Big congrats, Joe, on sort of the traction. It seems like you guys are getting to a pretty good inflection point here. So congrats.

Thank you. Well, I'm very, very proud of the team. We've worked very, very hard at that, getting our message out there. We've been all over actually all the states talking about the issues and engaging key decision makers. So we're really, really proud of the team. It took a [indiscernible], but thank you, and I will see you at EEI. I'm looking forward to seeing you.

Our next question comes from Carly Davenport with Goldman Sachs.

Maybe just to go back to Connecticut, I guess just as you think about the recent changes from a regulatory standpoint, are there any updates you can share from conversations with credit agencies in terms of their views, just given the focus on the regulatory environment and some of the credit rating changes that they've made recently?

Sure, sure. I would say, and I have -- I always have discussions with the credit rating agencies, but I'm sure you can appreciate. Right now, they're in a wait-and-see mode. They want to see some constructive regulatory outcomes to make the determination similar to what we expect and would like to see come out of PURA. But working collaboratively, we think that this new commission is focused on working collaboratively with all the utilities. So -- but I would say we're all there in a wait-and-see mode right now.

Got it. Okay. That makes a lot of sense. And then just 1 other one, I guess, on Connecticut as well. I know you guys have talked previously about kind of timing to file another rate case at CL&P. Just kind of curious how the recent shifts kind of impact your views on timing there?

Yes, sure. We had never really had any attention to filing prior to 2026. So we are looking at that, as you know, a filing of that nature is comprehensive. So we would need to get [ test year ] and that type of stuff. This would not be something that would happen until at least second, third quarter, if we were to file. Obviously, we're going through that now, and that's what we're looking at, at this point, Carly.

Our next question is from Jeremy Tonet with JPMorgan Securities.

This is actually [indiscernible] on for Jeremy.

You're breaking up. [indiscernible]

Can you guys hear me now?

Yes, it's better now. Yes.

[Technical Difficulty]

Jeremy, we're losing you again. Can you call in and we'll come back to you? We'll put you back in the queue?

Sounds good.

Our next question is from Andrew Weisel with Scotiabank.

Good morning, everybody. First question, Joe, you talked about the land acquisition strategy. I know Mystic was a big 1 last year. Can you talk a little more how you're thinking about this? Is this kind of like a land grab where you're trying to get as much acreage as possible in strategic locations for your own stand-alone development? Or is it working with potential customers or partners like large load customers or data centers? And would it be right to assume that dollars are small, it's more about optionality?

Well, yes, a couple of things. This would be for our own use, for our own regulated business. It's in locations that are strategic in nature to allow the injection of energy, whatever energy that is. We are not in the data center business. We're not attracting data centers. As you know, we have a final amount of generation in the region. What we're working on kind of the single and double strategy that I talked about is to be able to unlock captive generation that might be in the New England market to allow it to fall freely also to allow anyone else to interconnect into our territory. So we did purchase the Mystic, and we'll have some news on another very strategic site that we're excited about that will position this company for decades to come.

Interesting. Looking forward to that. Okay, great. Then on equity, just a couple of fine-tuning questions maybe for John here. It looks like the 2025 outlook went up by about $200 million and you removed the comment that the majority of the outlook will be issued in the back half of the forecast period. But John, I think I also heard you say that you're satisfied for the near term after the recent activity. I might have asked a similar question last quarter, but just wondering about the outlook. Maybe you can detail some of these changes, does that relate to kind of CapEx or the long term thinking of how to get to your targeted credit metrics?

Yes, yes. So I mean, as I said in my formal remarks, for the near term, I believe we're done, right? Although we took that off the slide, it was an indication that we're going to continue to issue equity. Still the majority is we may have issued like 37%, 38% thus far. So I still stick to my position that the majority of that will be issued once the latter half of next year.

With the approval of Aquarion, once we get that decision, that's going to bring in net cash at [ $1.6 billion. ] And then with the securitization of Connecticut storm costs likely coming in the door in '27, I think we're primarily covered for those years. So my position still stands. So as I said in my formal remarks, the near term, we're good for now. I have the appropriate level of liquidity. I'm very happy with that given the financings that we did in the last 2 months.

Okay. That's very clear, and it sounds like you're in a good position. Thank you so much.

Our next question is from Anthony Crowdell of Mizuho.

I guess JPMorgan did an update [indiscernible] system in a new building there. Just, I guess, quickly on Revolution. I think it was reported from Orsted this morning, it's 85% complete, Revolution. Just if you could talk about what are maybe the critical parts left bringing the project to completion to end and is it second half '26 when you believe it's all finished?

Yes, Anthony. Yes, Revolution is going very, very well. And right now, we're -- Orsted announced this morning that 52 of the 65 turbines are installed, I will tell you that the work that we're doing in Rhode Island is pretty close to being finished. We've got great job at that onshore substation, we're going to begin to see some power there at the substation very, very soon. So right now, I know that Orsted is talking about a second half of 2026. But I will tell you that we've made significant progress. We've brought the dates in by 4 to 5 months. So we're hoping that we can see that improve. But I will tell you that I feel very, very good about the project and the work that's been done down there. So I think we'll see that project schedule improve.

When is the first megawatt, first power expected to come online from the project?

Yes. That's an issue that Orsted to discuss. We are basically a partner that's building the onshore piece. They are the conductor of this particular train. So let them -- they can tell you what's going on.

Got it. And then just flipping to the storm cost securitization in Connecticut. I know it's with PURA. Any -- and I know the recent change there and it only recently has it changed. But any update on maybe the timing of getting resolution on the storm cost securitization?

Yes. So a couple of things. I mean, our focus has been on the Yankee case. It has been on the Aquarion sale. So when we start to sequence these items, those are the things that were top of the list for us. We now shift our focus onto storms. I think the team has done an extraordinary job of documenting everything. We've had tremendous success in both Massachusetts [indiscernible]. And I don't think it will be any different in Connecticut. We have been asked that we pulled that ahead right now. It's a second quarter event, second, third quarter that we'll see a decision. But we think given that the decks have been clear that PURA we're hoping that, that can improve, we can get a decision that will allow us to go forward with securitization and get that money in the door for us. So yes, and the other issue is the interest cost, which -- that will provide us a great opportunity there to stop the interest cost.

Our next question is from Julien Dumoulin-Smith from Jefferies.

Look forward to see you guys next week. Look, I wanted to just follow up on the Massachusetts backdrop. I know Shar asked it, but just how would you frame expectations here from gas on to the electric PBR? Just with respect to the backdrop here, anything to read -- again, I get that the gas PBR had very specific metrics but anything that you'd read into the backdrop here on the electric or EGMA?

Well, the -- similar to what we have on the electric side, we have the same composition on the gas side. We have to perform. And on the gas side, this was the first touch point being under the PBR structure for [ Yankee NSTAR Gas ]. So there's several performance metrics, there's really 3 criteria that you have to meet. One of them is you have to meet the performance measures that have been approved by [indiscernible] We -- there were 18 actually. We performed very well in 15. So 3, we did not perform. And those 3 are very, let's call it, very subjective opinion surveys like J.D. Powers and surveys that we do, which are very driven by how the customers perceive us.

The history of the precedent in front of the DPU as it relates to these performance measures is always viewed as while the company didn't have control, [indiscernible] the company couldn't have done anything. And obviously, in a high-cost environment, it's very challenging. So that was the reason that the DPU took the action and did not allow us to roll the [ $45 million ] into rate base. And as I mentioned earlier, yesterday, we did file for a motion for reconsideration. So we will continue to work with the DPU Obviously, as I mentioned, it's -- we have some new players sitting at the table, and we look forward to working with them very closely as we progress on this motion.

Right. But the PBR metrics on the electric side kind of have that same composition, though?

And we performed well. We have performed well. It's not an annual assessment with NSTAR Electric, it's a 10-year deal, you have a 5-year. The fifth year happens in 2028.

Excellent. No, indeed. And then just if I can -- I mean, obviously, you guys roll forward typically 4Q. But any early indications, especially as it pertains to transmission and long lead time investments where you perhaps had some visibility here already? And any indications from [indiscernible] New England's planning process this year?

Well, as you've seen in the last 5-year plan that we rolled out, the latter years are no longer a dip, and I expect that trend to continue where the outer periods will be more increasing versus what we've seen historically. So that's the reason -- that is the primary driver of that is because we have the clarity, and we have the projects that are in the queue to allow us to roll that into our plan.

Got it. All right. Excellent. We look forward to [indiscernible] nicely done. I appreciate the disclosures on the credit side, and we'll talk to you soon.

Operator, I would like to correct a statement that I made earlier to Andrew Weisel's question. I think I may have spoken I just want to get that on the record. The equity, I said that our equity needs in the near term are taken care of. And I stay with my statement that I had made previously that the majority of the equity needs will be towards the tail end of our forecast period. I think in my answering Andrew's question, I may have said next year. That is not the case.

Thank you for that clarification. Our next question is from Paul Patterson from Glenrock Associates.

So just on -- I'm having a little trouble with this. How should we think about your tax rate on an adjusted basis for the quarter and how you see it going forward?

Paul, this is John. So as I've said previously, over the past several years, we have taken advantage of some very attractive tax benefits last year, and I may have said this previously, we were in the high teens. The expectation is this year it's probably be in the low 20%, 20%. But I think next year in 2026, we probably would get to more of a normal sustainable level. But we've taken full advantage of some nice tax benefits for the past several years and we will continue to have any and all tax benefits that we can actually achieve.

Okay. Because when I look at the after-tax benefit or the -- excuse me, the hit on the offshore wind that was offset by the tax benefits, should we -- are all of those tax benefits reflected in the non-adjusted number? In other words, they seem to be allocated. When you talk about the write-off, it seems like that's being allocated to the write-off. And that isn't leaking into the -- correct?

That is not the case. So let me -- the percentages that I just mentioned only relates to our normal recurring results. The $210 million that we harvested to offset the tax liabilities directly related to offshore wind. And it's primarily the final change in estimate from where we were at the end of the year of 2024. And the characterization of that benefit is really we were able to deem the loss on wind as more ordinary versus capital. So we changed the percentage that we had used in '24 versus that tax split of capital at [indiscernible] increased in this year when we file our tax return in the third quarter. So we were able to allocate more as ordinary versus capital and ordinary, we can carry forward for 15-plus years. So that's really what changed in our tax position as it relates to offshore wind.

Okay. And there's -- and so okay, that answers the question, that's kind of what I thought. So okay, I appreciate the clarity.

Our next question is from Sophie Karp with KBCM.

I don't know if you guys know this on top of your head, but I'm curious what legally constitutes kind of the end of the Revolution project as far as your agreement with Orsted, like at what point are you no longer on the hook for anything there? Like is that first power? Is that something of other milestones? Any color would be helpful here.

Sure. So it's similar to the protocol we're using on the South Fork project. It would be COD. At COD, we will hand that over and that is when we are off the hook.

And what is COD specifically?

Full operation, turning over of all of the documents, anything associated with the work that we have done and the PPA is in full force.

Got it. Thank you so much.

I'm showing no other questions at this time. So I would now like to turn it back to Joe Nolan for closing remarks.

Thank you once again for taking the time to join us today. We know many of you who have been patient investors over a long time, and we will continue to execute our key strategic initiatives that create value for our customers and shareholders. We look forward to seeing many of you at EEI next week, safe travels. Operator, this ends our call today.

Thank you. This does conclude the program, and you may disconnect.

Good day, and thank you for standing by. Welcome to the Eversource Energy Q2 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Rima Hyder, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today on the second quarter 2025 earnings call for Eversource. During this call, we'll be referencing slides that we posted this morning on our website. As you can see on Slide 1, 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 and President and Chief Executive Officer; and John Moreira, our Executive Vice President, Chief Financial Officer and Treasurer. Also joining us today is Jay Buth, our Vice President and Controller. I will now turn the call over to Joe.

Thank you, Rima, and good morning, everyone. Thank you for being with us today. Starting on Slide 4. We have made great progress halfway through the year, executing our key strategic priorities while maintaining our commitment to being a pure-play pipes and wires, a regulated utility. As anticipated, electric demand continues to rise, both in the near term and throughout our 10-year forecast horizon. We recognize this growth trajectory early on and worked closely with key stakeholders to position ourselves to effectively meet the challenge.

In several regions, demand is expected to outpace existing infrastructure capacity, underscoring the critical need for strategic upgrades and new development. The accelerating electrification of transportation and heating sectors, driven by decarbonization efforts is further fueling this upward trend. Notably, low growth through the first half of 2025 has exceeded 2%, nearly double the rate observed during the same period last year, reinforcing our expectations in validating the investments we've made to capitalize on this momentum. A clear indication of this is the 10% increase in our 5-year infrastructure investment plan that we announced in February.

Our balance sheet is strengthening and our FFO to debt ratio continues to improve as a result of constructive regulatory outcomes as well as our execution on cash flow enhancements that we laid out last year, such as exiting the offshore wind business and the planned divestiture of our water business.

Turning to our quarterly accomplishments on Slide 5. Once again, this quarter, we saw solid earnings growth from our transmission and distribution businesses versus last year's results. Earnings for the second quarter were $0.96 a share, in line with our expectations. We are reaffirming our 2025 EPS guidance range of $4.67 per share to $4.82 per share as well as our long-term EPS growth projection of 5% to 7% through 2029.

In addition to our solid financial results, we had other significant accomplishments across the company. During this hot summer, we continue to maintain our top decile reliability performance even during record-breaking heat waves. I'd like to briefly acknowledge the severe weather event that impacted parts of Connecticut, Southeastern Massachusetts and Cape Cod during the July 4th holiday weekend. This storm had damaging winds well above 70 miles per hour.

These dangerous conditions post significant operational challenges, but our team responded swiftly to ensure safety and service continuity. I would like to thank all our employees, including crews, operations and customer services teams who worked around the clock to restore power to our customers.

This is also a testament to our continued investment in grid modernization, which has significantly enhanced system resilience, enabling faster and more efficient storm restoration efforts that minimize customer outages and support long-term reliability. We issued our annual sustainability report, which is available on our website. The report highlights some of our most innovative sustainability in governance achievements, including our network geothermal pilot project, our Cape Cod Card Solutions transmission project and our efforts to develop the future energy workforce.

Shifting focus to the regulatory front. Let me begin with an update on Connecticut. The Connecticut legislative session ended in early June. The general assembly passed Senate Bill 4, SB4, on a bipartisan basis. SB4 is a comprehensive energy reform bill with the stated intention of making electric bills more affordable and the utility regulation process more transparent. The bill was signed into law by Governor at the end of the month. SB4 allows for securitization of storm costs incurred by Eversource from 2018 to 2025, which is important for customer bill predictability as well as strengthening our balance sheet. The new law also clarifies the requirements of the public utility regulatory authority, including requiring that all 5 commissioners sit on all rate request proceedings moving forward.

Additionally, the law allows the state to use bonds to cover the cost of some public benefit programs, which are also currently recovered through a separate charge on our customers' bills. This is expected to modestly reduce their overall bill impact. We 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 Connecticut to deliver safe and reliable service.

Staying with Connecticut, the Aquarion divestiture process continues to progress well. We are well into the regulatory approval proceedings in all three states, and we expect to close the seal by the end of the year. We also received a decision from the Connecticut Supreme Court on Aquarion's appeal from its 2023 rate case results. We are encouraged by the court's findings on the applicability of the legal standards for rate making, including the application of prudency standards as well as utility companies being entitled to carrying charges on deferred costs. This court ruling was an important development for future investments and cost recovery. Our focus in this legal challenge has always been to get clarity from the court on the applicability of prudent standards in order to support and defend capital investments in the future. Having the rules of the road clarified by the court is critical in this regard. It is of greater value than the evidentiary disputes on Aquarion's 2023 rate case.

Moving on, we received a constructive decision on the rate case for a public service company of New Hampshire. We are pleased with the commission's collaborative approach on this rate case proceeding. This decision which was in line with our expectations, largely supports our investments in grid monetization, system reliability and necessary energy infrastructure needed to continue delivering safe, affordable and sustainable electricity to our New Hampshire customers. John will cover the details of this recent decision.

We're pleased to announce that during the second quarter, we finalized contracts that maintain positive constructive relationships with several of our key unions, representing electric and natural gas employees in Massachusetts. It's important to Eversource that we maintain these relationships with our union partners.

Turning to Slide 6. As we invest in modernizing our infrastructure and supporting the energy transition of the future, we are equally focused on keeping costs manageable for the families and businesses we serve. Affordability is not just a goal, it's a cornerstone principle in every investment we make.

Through innovative solutions and strategic grid enhancements, we're enabling the integration of renewable energy resources and preparing for the increase in electric demand expected in our region. Our advanced metering infrastructure rollout in Massachusetts, is progressing very well, and we reached a major milestone in July. The AMI communication network, which started deployment earlier this year in Western Massachusetts is substantially complete. This was a critical foundational step prior to the meter installation. We have also started the construction of the communication network in Eastern Massachusetts.

I am pleased to report that following a successful system launch last week, we have begun the installation of the first AMI meters in Western Massachusetts. The transition to AMI meters, for all Eversource, Massachusetts electric customers is expected to take approximately 3 years to complete. We are very excited to bring AMI to Massachusetts. This initiative aims to bring transparency, efficiency and reliability to energy distribution, while empowering customers to make informed decisions about their energy consumption. Even more exciting, is our key project, the Cambridge Underground substation, the first of its kind in the United States. Construction is moving ahead well since breaking ground earlier this year. Boston Properties, our partner on this project, is now advancing toward the final depth of approximately 105 feet. We are pleased that we can meet the growing needs that enable clean energy resources for Cambridge, a global center of innovation.

The Eversource team behind our innovative Outer Cape battery energy storage was recognized for their work on the project by the Energy Systems Integration Group. This group is an independent not-for-profit organization that galvanizes the expertise of the technical community to support grid transformation in energy systems integration. Our system was recognized for its state of the eye nature and the seamless implementation of the first of its kind systems to improve reliability for customers. Since full commissioning in December of 2022, this system has been dispatched on several occasions, avoiding sustained outages for thousands of customers during storms and other unexpected events.

Turning to a brief update on Revolution Wind on Slide 7. You may recall that in early May, Orsted announced that the project was approximately 75% complete. We expect Orsted to update the overall project status soon. The onshore substation construction, which Eversource overseas is progressing well. We expect the onshore substation construction to be substantially complete this month. The testing and commissioning process is underway, which will allow the substation to provide back feed power to the offshore facilities in early 2026. This construction progress significantly reduces the critical path risk for Eversource.

Before we conclude today's call, I want to thank all of you, our employees, partners and investors for your continued trust and support. This quarter's results reflect our team's unwavering commitment to operational excellence, customer service and long-term value creation. This quarter wasn't just about performance, it was about our over 10,000 employees working together every day to keep the lights on and provide superior customer service. For line workers restoring power in the dock to our engineers design the grid of tomorrow, to customers and shareholders who trust us every day, we're proud to serve over 4 million customers across three states.

As we look ahead, we remain focused on delivering safe, reliable and sustainable energy while navigating an evolving regulatory and economic landscape. I will now turn the call over to John Moreira to discuss our financial results.

Thank you, Joe, and good morning, everyone. This morning, I will review second quarter earnings results, provide a regulatory update and discuss our balance sheet and credit metrics progress.

I'll start with our second quarter results on Slide 9. GAAP and recurring earnings results for the second quarter were $0.96 per share compared with GAAP and recurring earnings of $0.95 per share last year. Higher utility earnings were largely offset by a decrease in impairment and other earnings.

Looking at the quarter results, starting with transmission, higher electric transmission earnings of $0.02 per share were due to increased revenues from continued investments in the transmission system and lower interest expense, partially offset by the impact of share dilution. Next, we have higher electric distribution earnings of $0.02 per share that benefited from distribution rate increases in New Hampshire and Massachusetts providing cost recovery of infrastructure investments in our distribution system. These higher revenues were partially offset by higher property taxes, interest, depreciation and the impact from share dilution.

The improved results of $0.02 per share at Eversource's Natural Gas segment were due primarily to base distribution rate increases at both Massachusetts utilities, to also provide timely recovery of investment in our natural gas segment. These revenue increases were partially offset by higher O&M, interest, depreciation, property tax expenses and the impact from share dilution. Water distribution earnings improved $0.02 per share year-over-year as a result of higher revenues and lower interest expense.

Eversource parent losses increased $0.07 per share for the quarter. Lower results were as expected, primarily due to higher interest expense resulting from the absence of capitalized interest after the sale of our offshore wind business. Overall, our second quarter earnings were in line with our expectations, and we are pleased with this solid performance.

Moving to our key regulatory items beginning with New Hampshire on Slide 10. On July 25, we received the order on the PSNH rate proceeding. We have proposed an increase of $103 million, which was amended from the original proposal of $182 million, primarily to exclude deferred storm costs, which will be considered by the commission in another docket. The audit approved a permanent rate increase of $100 million based on an ROE of 9.5% and a 50-50% capital structure. This increase includes the previously approved temporary rate increase of $61 million.

The PUC also approved a new performance-based rate mechanism with a 4-year term that includes annual inflation adjustments and 142 basis points This rate order is effective as of today. We will continue to evaluate all of the components of the rate order to determine next steps. While not all components of our rate proposal were adopted, we are encouraged by this constructive rate outcome that was in line with our expectations.

Moving to Slide 11. In Massachusetts, on November 1, new rates are expected to go into effect for NSTAR Gas under the annual PBR adjustment and a potential rate base rolling which are elements of our approved 10-year PBR plan for NSTAR Gas. In addition, EGMA will have a rate increase of approximately $62 million, also effective on November 1, reflecting the second phase of the 2024 rate base rolling.

Moving to Connecticut, we have completed the discovery phase of the hearings of our Yankee Gas rate proceeding and have provided strong support for our system infrastructure investments and cost structure. We expect a final decision in this rate proceeding in October for rates to be effective November 1. As a reminder, this filing seeks to recover an adjusted revenue efficiency of approximately $190 million, reflecting the recovery of critical investments and cost increase since the previous rate review back in 2018.

We also received a draft decision in the Connecticut PBR docket in July. While we appreciate PURA's work on advancing this important regulatory construct, we continue to have concerns with certain core components of this framework and are working with PURA and other stakeholders to ensure that we have alignment with the PBR structure that we can support.

Next, let me reaffirm our 5-year capital plan of $24.2 billion, as shown on Slide 12, which reflects our 5-year utility infrastructure investments by segment. This plan reflects a 10% increase over the last 5-year plan. And as we've discussed previously, it only includes projects for which we have a clear line of sight from a regulatory perspective.

Through June of 2025, we have executed on $2.2 billion of our $4.7 billion infrastructure investment plan. We are very pleased with this progress and we are on track to meet our planned target for the year. We continue to see additional capital investment opportunities in the range of $1.5 billion to $2 billion within this 5-year forecast period.

Turning to Slide 13. We remain highly focused on improving our cash flow position and strengthening our balance sheet condition. Our plan to enhance our cash flows is balanced by our equity needs of $1.2 billion, the majority of which is expected to be issued towards the back half of our 5-year forecast period.

As I have stated before, we expect our FFO to debt ratios for 2025 to be approximately 100 basis points above the rating agency thresholds. In fact, our Moody's FFO to debt ratio as of the first quarter of this year of 11.5% reflects an improvement of over 200 basis points from December 31, 2024. In early September, we met with all three rating agencies and received positive feedback on our execution of cash flow enhancements. Moody's recently reaffirmed its ratings for both Eversource Energy and NSTAR Electric, which we were very pleased to see. Unfortunately, Moody's also announced a downgrade for Connecticut Light & Power to Baa1 from A3. Moody's cited the Connecticut regulatory environment as their reason for the downgrade.

As we shared with you last quarter and as shown on Slide 14, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet condition. As a result, our operating cash flows have continued to improve, increasing over $1 billion year-over-year through the first half of this year.

We also see further opportunity for customer build stabilization and balance sheet enhancement through Senate Bill 4 in Connecticut, by establishing a legal foundation for securitization of storm costs. This would certainly benefit our cash flow position and our balance sheet improvement efforts. As a reminder, our forecast did not assume securitization as the cost recovery for the Connecticut deferred storm costs.

Staying with Connecticut. We recently supplemented our storm cost recovery filing, with an additional $171 million of storm costs for the period of February 2023 through December of 2023. This brings the total balance of deferred storm costs currently with PURA for prudency review to $980 million. We continue to believe that all of the storm restoration costs we filed were prudently incurred and should be recovered from customers. It's important to note that we now have approximately 85% of the $2 billion of deferred storm cost balance being recovered in rates or in the prudency review process across all three states.

Moving to Slide 15, I would like to share a progress update on debt maturities at the parent level and also cover our at-the-market equity issuance program. Our plan to retire $600 million of maturing payment debt during 2025 is progressing as planned, and we are prepared to manage the final maturity this month with existing resources, as shown on the slide. We anticipate no new long-term debt issuances this year at the parent company.

During the second quarter, we issued approximately $200 million of equity under the ATM program. We will closely manage further issuances and in the second half of the year as we monitor the status of the Aquarion transaction and our short-term commercial paper balances.

Next, I will turn to 2025 earnings guidance as shown on Slide 16. With the first half of the year in the record books, we are reaffirming our 2025 recurring earnings per share in the range of $4.67 to $4.82, and our longer-term EPS growth rate of 5% to 7% off of 2024 EPS base. We remain confident in our EPS growth outlook, underpinned by the disciplined execution of our strategic plan. Our customer-focused investments in electric transmission and distribution that are supported by constructive regulatory mechanisms, ensuring timely cost recovery for the majority of our businesses. At the same time, ongoing progress on storm cost recovery and O&M cost discipline are expected to provide a solid foundation, positioning Eversource to provide consistent long-term value to our shareholders.

I'll now turn the call back to Rima to begin our Q&A session.

Michelle, we're ready to begin our Q&A session.

[Operator Instructions] You first question is going to come from the line of Carly Davenport with Goldman Sachs.

Maybe just to start on the balance sheet. I appreciate the updates there. So the 11.5% FFO to debt at the end of 1Q, just can you walk us through kind of the confidence levels in hitting that 14% level by the end of the year and some of those drivers in addition to the asset sales, which, if I recall, was expected to add about 100 basis points to that ratio?

Carly, it's John. Very highly confident. The biggest driver to enhance our FFO to debt is in rates, and that is the recovery of the deferrals. Albeit, I don't expect to see the significant sizable improvement in the second half of the year because we have already recovered the $900 million that went into rates July 1 of last year. So we're on track. It's not just the public benefits. We also have cost recovery of deferrals, as I mentioned, storms in my formal remarks and other regulatory assets that we have coming into rates in the other jurisdictions. The -- in my formal remarks, I mentioned that we will monitor the progress that we're making on the regulatory approval for Aquarion. That in and of itself with at about 100 basis points. So highly confident that we'll reach the 13 handle with the Aquarion of closing towards the end of the year, that will contribute approximately 100 basis points to get us to that nice cushion.

Got it. Great. And then just on Connecticut. You mentioned, obviously, the securitization of the storm cost was not in your base plan. So could you talk a little bit about how that potentially could impact the longer-term FFO to debt levels? And then just from a logistics perspective, how should we think about the timing to filing for that securitization and when that could ultimately have an impact on the balance sheet?

Sure. Sure. Let me start with your first question. First question is, how that it impacts? Right now, were not moving from the $1.2 billion need. Clearly, everything else being equal, that would certainly have an impact on our financing needs. The fact of the matter is within 6 months, we're going to do a clean refresh. And in February, we'll give you an update of what our revised the equity needs. And when we roll out our equity needs at that point in time, we'll certainly take into consideration the securitization aspects of those costs. Your second question as to how it would work. Where we stand right now, we just 2 weeks ago filed another wave of storm costs of about $171 million into PURA. So that puts the total cost, storm costs under the prudency review close to $1 billion. So that is a very sizable amount for the authority to review and go through it. In light of that filing, that latest filing, PURA did update their schedule, their procedural schedule to take us out through March of next year with hearings and briefs being filed. So I don't -- right now, we don't have an approval date for those -- for that review. But once we get the review, which is the most critical aspect, we already have the legislation, we will be off to the running with the securitization process, which we expect would take in and of itself about 12 to 18 months to get complete. So likely now, and we were hoping that we would be able to get that cash in the door by the end of '26. So with this push out in the schedule, it's looking more like 2027.

Our next question is going to come from the line of Jeremy Tonet with JP Morgan Securities.

I just wanted to kind of follow up with some of the points that we discussed there. I think the slides highlight the ending first quarter FFO to debt. I was just wondering if you could share updated metrics for the second quarter for Moody's and S&P and how you stand against those thresholds at this point?

Well for Moody's -- for S&P, we're already in a strong position there. So let me speak to Moody's. So we have line of sight I would tell you that every quarter, we'll continue to make progress. As I've said, this quarter on a 12-month basis, rolling basis, we improved over 200 basis points, which is very, very sizable just in 1 quarter. I expect that momentum to continue. And I would say in the coming quarters, we'll be at that 13%.

Got it. And I was just wonder if you could turn to New Hampshire a little bit here. If there's any other, I guess, process takeaways that you have from the outcome there. And views, I guess, on settlements versus full litigation and how you think things progress there?

Yes. No. Jeremy, I think it was fantastic. We had been in the rate arena since 2018. Every single case that we had had been settled prior to that. I talked to a lot of the folks on any recollection of any time we've had a litigated case. But I think it was a very, very good case that allowed us to flush a lot of the issues out. And I think that the regulatory climate there is very favorable. Obviously, in a situation like that, you don't get everything you want. But the fact of the matter was constructive, it was fair. It was transparent. We asked for after we netted out storms, we asked for 103, we ended up getting -- we got 100. We got an ROE of 9.5%. But what I like about it is it's very constructive, not only with the commission, but with all of the parties that were involve. So going forward, I think it's an example for other jurisdictions that this is really a nice way to kind of handle a rate case in a professional manner. So we're pleased. Obviously, we're looking at the order and -- there's some puts and takes and some things that we might like to have tweak. But at the end of the day, it's a good order for not only the customers, but it's a good order for the company as well.

And I would just add, let's not lose sight that we did get the PBR structure, which was important to us, and we hope that, that prevails. And very pleased that ultimately the revenue level was that we -- that the rate case provided for us is very supportive as that is kind of the cast off basis, if you will, for future rate increases as we move into this our PBR environment.

Our next question is going to come from the line of Andrew Weisel with Scotiabank.

One more on the balance sheet. So the ATM issuances of about $220 million during the quarter after -- whereas it was off during the first quarter. I know the commentary still shows the majority of equity towards the back half of the forecast period. So how should we think about that? What made you turn it on during the last quarter? And I know last year, you had that similar run rate of $1 billion over the year, about $250 million per quarter on average. So what should we expect going forward -- not a minute where you acted in July?

Well, you'll see that -- the third quarter happens So obviously, in my formal remarks, I said, look, our equity needs for this year will be dictated by how the Aquarion approval progresses and what our short-term debt balances are. So we saw a window of opportunity in June, and we did that raise all in the month of June as a way to provide liquidity for us, which is very important to us. So I've said that time and time again, what we need for this year is going to be based on the timing of the Aquarion and our short-term balances. So once again, I think the guidance that I just reiterated still holds. Once we close Aquarion, I don't see the need to raise any equity for some time.

Okay. That's helpful. A longer-term question on Connecticut. Between the legislative updates and the Connecticut court ruling, do you think you're positioned to redeploy some of the capital back into the state? In the past, you diverted some money away from Connecticut into other states, given the uncertainty. Do you think you're ready to reallocate? Or would you want to see some more constructive data plans from the commission itself first?

We would like to see some more constructive data points coming out of the commission before we reassess our capital redeployment.

Okay. Do you think there's opportunity between now and the year-end update when you formally refresh the capital forecast? Or do you think it will take a little more time than that?

That's difficult to predict. But one of the events that we're watching very closely is what the outcome of the Yankee Gas case proceeding. .

And we also have a reconsideration on AMI, if we get some clarity around that and some rules of the road that are far to us, then that's also an opportunity as well.

Our next question will come from the line of Anthony Crowdell with Mizuho.

Joe, I don't want to start off on a bad foot, but the last earnings call, I made a call that Nick would be the Celtics.

Yes. I know you're good. I thought you were going to tell me happy 40th anniversary, as my 40th anniversary at the company. I start my 41st year, Anthony. I mean I thought you had something nice like that.

I worked at a utility and people were very fortunate. I guess a lot of like you do a lot of different jobs like your career really moves to different things. How many different jobs do you think you had over the 40 years?

While it was heartbroke and I had a stat in customer service, I thought it was terrible. I wanted to be in communications, and we look what happened. It was probably the best job I ever had starting in customer service because I ended up going back and running it. And I've done everything. There's not really a job that I haven't done. So it's been a great, great run.

Congratulations, 40 years is very impressive. I just had some housekeeping questions in New Hampshire. What's the percentage breakout in rate base in New Hampshire? I think you guys have a decent amount of FERC the rate base there, just a percentage between, I guess, what's regulated by the New Hampshire regulators and what's regulated by FERC. And then just a follow-up, the equity layer in -- at FERC assets in New Hampshire. Are they based on an actual equity ratio? Or what's set in rates, like our hypothetical structure?

Anthony, on the FERC side, the FERC side is based on the for all of New England, and it's based on the actual.

Great. And then in New Hampshire, how much of if I think of PSNH, how much of that rate base is state regulated versus regulated?

State regulated is about $2.1 billion on the distribution side. And on the FERC side, subject to check, I think it's 1.7, 1.8, if my memory serves me correct. But I can double check that.

That's great. Just -- sorry, go ahead.

No, I was just going to say follow up with you and confirm that for you. .

No, Joe, I mean John, how many years do you have with Eversource, even the of companies?

25. Going on my 26th year. And I've had numerous jobs, Anthony, not as exciting as Joe's though.

Our next question is going to come from the line of Angie Storozynski with Seaport.

Okay. So just one question about the equity needs vis-a-vis the storm cost recovery in Connecticut. Obviously, we're waiting to see the outcome of the Aquarion sale. But I'm just -- again, I'm trying not to get too excited here, but we will have lower equity needs. I mean because you are mentioning also additional CapEx, right? So assuming that at least a portion of that $1.5 billion to $2 billion comes in, that would carry additional equity needs, right? So it's not likely even with the sale of Aquarion and with securitization that there is a reduction in the total equity amount just that the equity is not going to rise meaningfully along with higher CapEx. Is this how I should think about it?

I think you're thinking about it correctly. As I said, -- and then the last question, within -- in February, we're going to do a refresh. As you know, there's a lot of puts and takes. And in February, we will know exactly where the Aquarion transaction, and I'm hoping that it closes. Our guidance is still to close that transaction by the end of the year. So we'll have that. And that's obviously assumed in our plan already. And then securitization, we'll see, we'll have better clarity on the timing and the amount by that point in time. And we'll also do a refresh of our 5-year capital plan at another year. So -- and we'll know we had a $1.5 billion to $2 billion potential adds. As Joe mentioned, a good portion of that is the AMI in Connecticut. So we'll see how that progresses. So we'll have much more clarity certainly by the end of this year.

Okay. And then on the Yankee Gas rate case vis-a-vis for -- so I mean, we obviously saw the comments from the Attorney General and Connecticut you've been out of for quite, what is it 7 years, right, since the last rate case.

2018.

Yes. And so I mean, again, is the -- so are we -- so this SB4 is going to apply here. So all of the commissioners need to apply on the rate case? So this is more like a test case, how future rate cases in the state are likely to go?

Yes. I think it's highly unlikely, they'll see two more in the time that this decision will be coming out Keep in mind, it's really general is an elected official. He's -- a lot of it is related to messaging for other audiences. I don't -- we have a good working relationship with the Attorney General, and we're going to continue to work out in that case to get get a decision that's fair. It's fair for us and it's fair for our customers. .

Yes. And Angie, as I said in my formal remarks, the team did a phenomenal job in presenting the justification for the investments that we've made to maintain that system very safe and reliable for our customers. So we did an excellent job taking into account some of the issues that PURA had raised and other rate proceedings. So we put a very, very strong case in front of them. We do we have to and we did. And I'm very, very pleased with how that progress. How that process has progressed. .

And then the last one on Aquarion, given the pushback. So I understand that the plan is to sell the assets. But are we -- I mean if this route doesn't work, how we -- I mean are you going to restart the sale process? Or is it just that -- if the commission doesn't approve the current transaction, you're just going to keep the asset and just address the funding needs with more equity.

Yes. I mean I think that case is going very, very well. The hearings finished last week, and I don't see any challenges around that. I think it's highly unlikely that we don't see that approved. I think the team did a phenomenal job. And keep in mind, you've got to keep in mind that the legislature and the governor enacted a law to allow this entity to buy that asset. So for that shift or something to happen there is the likelihood is highly unlikely. If it does, obviously, we'll cross that bridge when it comes to it. But I'm very optimistic that, that transaction will close this year, and we'll be in great shape.

[Operator Instructions] Our next question is going to come from the line of Ryan Levine with Citi.

Congratulations on 40 years. Just one clarifying question. In terms of the Connecticut Courts clarification around prudency standards, can you maybe unpack that a little bit more in detail around the implications for your business and how that could impact whether it's an AMI decision or other decisions that would be coming before in the future?

Sure, sure. We were very pleased with the cost decision kind of reiterating the prudency standard as it exists today in law, but the clarifying provision that we were very appreciative of is the fact that the commission that cannot apply hindsight in the rate recovery process. So prudency needs to be set at the time management makes the investment decision. And -- when you go in for the prudency review, which could be numerous years later, you can't introduce new facts and circumstances that existed after that period. So that was very, very encouraging for us.

Great. And does that have any implications for any AMI decision or any of the other upcoming decisions that would impact you?

Well, I think it will have a lot of effect on that because at the end of the day, we're making decisions based on the facts that are on the table today. And so if we pull the trigger and we decided to make the investment, it's not going to be something that 2 or 3 years from now that somebody is going to say, well, I think the rules have changed now and circumstances are different. So I think it has changed. I think it's improved. It's certainly improved my feeling around making that investment, that we wouldn't have to be concerned that the rules could change down the road. So I think very much so. I think it helps.

Our last question is going to come from the line of Julien Dumoulin-Smith with Jefferies.

It is Paul, and happy anniversary. Yes. No, I am 40 years. That is a high milestone. I hope I can make it that long. I have two quick follow-ups just to make sure I heard it right. Is the plan no additional equity needs in 2025 after you did you planned for June.

No, no. No, it's not what I said. What I said was we did the $200 million raise, and we will monitor our CP balances and also the progress that we're making on the Aquarion to maintain an appropriate level of liquidity. So -- but I don't see any -- that amount being significant this year. And obviously, having the proceeds from the Aquarion happen later this year, I'm not anticipating a big amount of equity, if any, issued in 2026.

And then the last one I had -- and just with respect to the quarterly and cadence of earnings, could you just describe some of the building blocks for the second half of the year? Just I noticed that the corporate was negative $0.34. I think it was in the first half and you half, yet a positive driver quarter-end third quarter -- just overall, if you could help on some of the building blocks on the...

Sure, Paul. So as I've -- for the last couple of quarters, I've highlighted the fact that interest costs are going to be a headwind. And I've also said that in the first half of 2025, it will be a far greater headwind. Because we closed on the sale of the transaction, a portion in July and then we closed on the GIP sale in -- on September 30. And -- so that's why it's -- the parent impact is a bit higher than it otherwise would have been. So the second half of the year, I'm not anticipating it being at least the interest component as being as significant as it was for the first half. So that's one item. And then typically, the tax -- the true-ups that we typically do is always happens in the third quarter. So that could have an impact on the parent. But on your point on the utility side, I think it's kind of steady state. I've given you guidance as to what the rate adjustments are going to be on November 1 for the gas companies. So that's pretty much locked in.

Thank you. And this will be concluding our question-and-answer session. And I would now like to hand the conference back over to Joe Nolan for closing remarks.

Well, thank you very much. Thanks, everybody, for joining us today on the call. We're very excited about the future, and we want to thank for taking the time this morning, and enjoy the rest of the summer.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.