Eversource Energy 2025 Q3 10-Q Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 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 distribution services to approximately 4.6 million customers in Connecticut, Massachusetts, and New Hampshire. The filing includes a combined report for the parent company and its subsidiaries, which are classified as non-accelerated filers.
Key Financial Metrics (Nine Months Ended Sept 30, 2025)
- Operating Revenues: $10.18 billion (up 14.0% from $8.93 billion in 2024).
- Net Income Attributable to Common Shareholders: $1.27 billion ($3.44 per diluted share), compared to $739.1 million ($2.09 per share) in the prior year.
- Operating Income: $2.28 billion (up 10.5% from $2.06 billion).
- Cash Flows from Operating Activities: $3.20 billion (up significantly from $1.52 billion in 2024), driven by improved regulatory recoveries.
- Capital Expenditures (Investing Activities): $3.18 billion used for investments in property, plant, and equipment.
- Debt and Liquidity:
- Total Long-Term Debt: $26.85 billion.
- Cash and Cash Equivalents: $259.3 million (up from $26.7 million at year-end 2024).
- Available Borrowing Capacity: $1.13 billion under commercial paper programs.
- Dividends: Common share dividend of $0.7525 per share paid in Q3 2025.
Material Changes vs. Prior Period
- Earnings Improvement: The shift from a net loss of $118.1 million in Q3 2024 to a net income of $367.5 million in Q3 2025 is primarily due to the absence of the $524 million after-tax loss recorded in Q3 2024 from the sale of offshore wind investments. In Q3 2025, a smaller after-tax charge of $75.0 million was recorded related to offshore wind contingent liabilities.
- Revenue Growth: Driven by base distribution rate increases at PSNH (effective Aug 2024 and Aug 2025) and NSTAR Electric (effective Jan 2025), as well as higher transmission rate bases.
- Offshore Wind Contingent Liability: Increased to $507.7 million as of September 30, 2025, from $365 million at year-end 2024. This increase reflects a $284 million pre-tax charge due to revised construction cost projections for the Revolution Wind project, including impacts from a stop-work order and vessel damage.
- Regulatory Developments:
- PSNH: NHPUC approved a permanent rate increase of $100.7 million effective August 1, 2025, and an alternative regulatory framework with formulaic annual adjustments through 2028.
- Yankee Gas: PURA approved a distribution rate increase of $95.7 million effective November 1, 2025.
- CL&P: Received $107.8 million in state bond proceeds to reimburse hardship and EV charging costs, credited against regulatory deferrals.
Guidance, Outlook, and Risks
- 2025 Non-GAAP Guidance: Eversource narrowed its full-year 2025 non-GAAP earnings guidance to a range of $4.72 to $4.80 per share, excluding the impact of offshore wind charges. This compares to the previous range of $4.67 to $4.82.
- Long-Term Outlook: Reaffirmed a long-term EPS growth rate projection of 5% to 7% through 2029, using 2024 non-GAAP EPS of $4.57 as the base.
- Pending Sale of Aquarion: Eversource entered a definitive agreement to sell its Aquarion water distribution business for approximately $2.4 billion in cash. The sale is expected to close in late 2025, with proceeds used to pay down parent debt. Assets are classified as "Held for Sale."
- Key Risks:
- Offshore Wind Contingencies: Potential for additional losses if construction cost overruns for Revolution Wind materialize or if federal investment tax credit eligibility changes.
- FERC ROE Complaints: Four pending complaints regarding transmission Return on Equity (ROE). Eversource maintains a reserve of $39.1 million but cannot estimate a range of loss for the proceedings.
- Regulatory and Legislative Changes: Impact of the "One Big Beautiful Bill Act" (OBBBA) on tax credits and bonus depreciation, and ongoing state regulatory proceedings regarding storm cost recovery and performance-based regulation.
Investor Verification Checklist
- Offshore Wind Liability: Verify the magnitude of the $507.7 million contingent liability and the specific cost drivers (Revolution Wind stop-work order, vessel damage) that led to the Q3 2025 charge.
- Aquarion Sale Timeline: Confirm the expected closing date (late 2025) and the regulatory approvals required (PURA, DPU, NHPUC) to ensure the $2.4 billion proceeds are realized as planned.
- Rate Case Outcomes: Monitor the implementation of the new PSNH alternative regulatory framework and the Yankee Gas rate increase to assess future revenue stability.
- FERC ROE Exposure: Review the status of the four FERC complaints and the potential impact of the MISO ROE order remand on Eversource's transmission earnings and reserves.
- Capital Expenditure Execution: Assess the $3.18 billion in YTD capital spending against the approved rate base and the ability to recover these investments through future rate cases.