Eversource Energy Q1 2025 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2025, for Eversource Energy and its wholly-owned regulated utility subsidiaries: The Connecticut Light and Power Company (CL&P), NSTAR Electric Company, and Public Service Company of New Hampshire (PSNH). Eversource operates as a public utility holding company providing electric, natural gas, and water delivery services to approximately 4.6 million customers across Connecticut, Massachusetts, and New Hampshire.
Key Financial Metrics
| Metric | Q1 2025 | Q1 2024 |
|---|---|---|
| Operating Revenues | $4,118.4 million | $3,332.6 million |
| Operating Income | $926.4 million | $846.0 million |
| Net Income | $552.7 million | $523.7 million |
| Net Income Attributable to Common Shareholders | $550.8 million | $521.8 million |
| Diluted Earnings Per Share (EPS) | $1.50 | $1.49 |
| Operating Cash Flow | $1,040.6 million | $291.3 million |
| Capital Expenditures (Investing) | $1,007.4 million | $1,149.4 million |
| Long-Term Debt (Carrying Amount) | $27,599.0 million | $26,704.8 million |
| Cash and Cash Equivalents | $111.4 million | $26.7 million (Dec 31, 2024) |
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased by $785.8 million (23.6%) year-over-year. This was driven primarily by base distribution rate increases at PSNH (effective August 2024) and NSTAR Electric (effective January 2025), as well as higher revenues from CL&P's capital tracking mechanisms and wholesale market sales due to higher ISO-NE electricity prices.
- Profitability: Net income attributable to common shareholders rose by $29.0 million. Regulated companies contributed $609.8 million in earnings, up from $540.8 million in Q1 2024.
- Cash Flow Surge: Operating cash flows improved significantly to $1.04 billion, compared to $291.3 million in Q1 2024. This increase was largely due to improved regulatory recoveries, specifically the timing of collections for CL&P's non-bypassable Federally Mandated Congestion Charge (NBFMCC) and other tracking mechanisms.
- Interest Expense: Interest expense increased by $50.0 million, primarily due to higher long-term debt balances and the absence of capitalized interest following the sale of offshore wind investments in late 2024.
Guidance, Outlook, and Risks
- Guidance Reaffirmed: Management reaffirmed its 2025 earnings guidance range of $4.67 to $4.82 per share. Long-term EPS growth is projected at 5% to 7% annually through 2029.
- Strategic Divestiture: On January 27, 2025, Eversource entered a definitive agreement to sell its Aquarion water distribution business for an aggregate enterprise value of approximately $2.4 billion. The sale is expected to close in late 2025, with proceeds used to pay down parent company debt. Aquarion assets are now classified as "Held for Sale."
- Offshore Wind Contingency: Following the sale of its 50% stake in South Fork Wind and Revolution Wind, Eversource recorded a $365 million contingent liability related to post-closing purchase price adjustments, including cost overrun sharing and internal rate of return maintenance obligations.
- Regulatory Risks: Four pending FERC complaints regarding the Return on Equity (ROE) for transmission rates remain unresolved. Eversource maintains a reserve of $39.1 million for the second complaint period but cannot estimate the range of loss for the other proceedings. A 10 basis point change in the base ROE would impact annual after-tax earnings by approximately $6 million.
- Dividends: The Board approved a quarterly common share dividend of $0.7525 per share, payable June 30, 2025.
Investor Verification Checklist
- Aquarion Sale Closing: Monitor regulatory approvals (PURA, DPU, NHPUC) and the expected late 2025 closing date for the $2.4 billion water business divestiture.
- Offshore Wind Liability: Track construction cost updates for the Revolution Wind project, as cost overruns could increase the $365 million contingent liability.
- FERC ROE Proceedings: Watch for developments in the four pending FERC complaints regarding transmission ROE, which could materially impact future earnings.
- Rate Case Outcomes: Verify the impact of new base distribution rates and performance-based regulation (PBR) proposals in Connecticut and Massachusetts on future revenue streams.
- Debt Management: Confirm the use of Aquarion sale proceeds for debt reduction and monitor the company's leverage ratios post-closing.