Eversource Energy 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed on March 19, 2026, by Eversource Energy and its subsidiaries (The Connecticut Light and Power Company, NSTAR Electric Company, and Public Service Company of New Hampshire). The filing addresses a recent order by the Federal Energy Regulatory Commission (FERC) regarding the return on equity (ROE) for New England transmission owners.
Key Financial Metrics and Impacts
- ROE Adjustment: FERC established a base ROE of 9.57% and a maximum ROE for transmission incentives of 12.09%.
- Earnings Impact: The change in base ROE and related incentive adders is expected to lower Eversource's future after-tax earnings by approximately $70 million for 2026.
- Aquarion Sale Impact: A potential $15 million negative impact on 2026 earnings is recognized if the Aquarion transaction closes this year, reflecting the loss of approximately 70% of Aquarion's earnings which typically occur in the second half of the year.
- Revised Guidance: Revised 2026 non-GAAP earnings guidance is now expected to be in the range of $4.57 to $4.72 per share.
- Long-Term Outlook: Cumulative long-term earnings per share growth is expected to be within the range of 5% to 7% through 2030, using the adjusted 2026 mid-point of $4.65 per share as the base.
Material Changes and Regulatory Actions
The filing details a material regulatory change where FERC reduced the ROE using what the Company describes as outdated, decade-old data. Eversource is taking legal action to prevent retroactive refunds, including filing a motion for stay of the order. The Company is also evaluating a Section 205 filing with FERC to request a change in rates based on current economic conditions. The Company warns that if retroactive refunds beyond the 15-month statutory limit are upheld, it could lead to credit downgrades and increased borrowing costs.
Guidance, Risks, and Management Commentary
Management emphasizes that the FERC decision erodes investor confidence and raises the cost of capital for vital infrastructure improvements. The Company expects annual earnings growth towards the upper half of its long-term guidance by 2028. Significant risks cited include regulatory uncertainty, potential credit downgrades, cyber events, extreme weather, and the variability of costs for offshore wind projects (Revolution Wind and South Fork Wind).
Key Facts for Investor Verification
- Verify the status of the motion for stay and the Section 205 filing regarding the FERC ROE order.
- Confirm the closing timeline of the Aquarion sale and its impact on the $15 million earnings adjustment.
- Monitor credit rating agency actions in response to the potential for retroactive refunds and increased regulatory risk.
- Track the Company's progress on the Revolution Wind and South Fork Wind projects and associated cost adjustments.
- Review the specific terms of the potential 18 to 24-month refund period if the FERC order is upheld.