Eversource Energy 2024 Annual Report (10-K) Summary
Business Context and Reporting Period
This report covers the fiscal year ended December 31, 2024, for Eversource Energy and its wholly-owned regulated utility subsidiaries: The Connecticut Light and Power Company (CL&P), NSTAR Electric Company, Public Service Company of New Hampshire (PSNH), and their natural gas and water distribution affiliates. Eversource operates in Connecticut, Massachusetts, and New Hampshire, serving approximately 4.6 million customers across electric, natural gas, and water segments. The company is a large accelerated filer.
Key Financial Metrics
| Metric | 2024 | 2023 |
|---|---|---|
| Operating Revenues | $11.90 billion | $11.91 billion |
| Net Income (GAAP) | $811.7 million ($2.27 EPS) | ($442.2 million) ($1.26 EPS) |
| Non-GAAP Earnings | $1.63 billion ($4.57 EPS) | $1.52 billion ($4.34 EPS) |
| Operating Cash Flow | $2.16 billion | $1.65 billion |
| Capital Expenditures | $4.48 billion | $4.34 billion |
| Long-Term Debt Issued | $4.50 billion | $5.20 billion |
| Dividends Per Share | $2.86 | $2.70 |
Material Changes vs. Prior Period
- Turnaround from Loss to Profit: GAAP net income swung from a $442.2 million loss in 2023 to an $811.7 million profit in 2024. This improvement is primarily due to the absence of the $1.95 billion after-tax impairment charge on offshore wind investments recorded in 2023.
- Offshore Wind Divestiture: Eversource sold its interests in the Revolution Wind, South Fork Wind, and Sunrise Wind projects in 2024. This resulted in an aggregate net after-tax loss of $524.0 million ($1.47 per share) and the recognition of a $365 million contingent liability for future obligations.
- Aquarion Water Business: The company recorded a $297 million goodwill impairment charge related to the pending sale of its Aquarion water distribution business. A definitive agreement to sell Aquarion for approximately $2.4 billion in enterprise value was signed in January 2025.
- Regulatory Environment: Earnings in the Connecticut segment were impacted by a challenging regulatory environment, leading to credit rating downgrades by S&P and Moody's. However, rate increases in Massachusetts (NSTAR Electric) and New Hampshire (PSNH) contributed to higher earnings in those jurisdictions.
Guidance, Outlook, and Risks
- 2025 Guidance: Eversource projects 2025 earnings per share (non-GAAP) in the range of $4.67 to $4.82. Long-term EPS growth is projected at 5% to 7% through 2029.
- Capital Plan: Projected capital expenditures for 2025–2029 total $24.17 billion, with significant investment in electric distribution ($10.22 billion) and transmission ($6.81 billion).
- Key Risks:
- Regulatory Risk: Adverse outcomes in Connecticut rate cases and prudency reviews (specifically regarding storm costs and AMI investments) pose a risk to cost recovery and credit ratings.
- Offshore Wind Contingencies: Post-closing adjustments related to the sale of Revolution Wind and South Fork Wind could result in additional losses if construction costs overrun or tax credit qualifications are not met.
- Climate Change: Physical risks from severe weather and transitional risks from decarbonization policies require significant capital investment and may impact cost recovery.
- FERC ROE Complaints: Four pending complaints regarding the Return on Equity (ROE) for transmission assets remain unresolved, creating uncertainty for future transmission earnings.
Investor Verification Checklist
- Verify the status of the Aquarion sale closing and the final net proceeds to be used for debt reduction.
- Monitor the Connecticut regulatory proceedings, specifically the prudency review of storm costs and the Advanced Metering Infrastructure (AMI) cost recovery decision.
- Track updates on the Revolution Wind project construction costs and the potential for additional post-closing purchase price adjustments owed to Global Infrastructure Partners (GIP).
- Review the outcome of the FERC ROE complaints and any potential impact on transmission rate base returns.
- Assess the impact of the credit rating downgrades on the company's cost of capital and access to credit markets.