ES — Eversource Energy

Eversource Energy Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• GAAP Earnings Per Share (EPS): $1.61, up from $1.50 in Q1 2025.
• Non-GAAP EPS: $1.73, compared to $1.50 in Q1 2025, reflecting a $0.23 improvement primarily from the gas segment and electric transmission.
• After-tax Charge: $43.9 million ($0.12 per share) related to the FERC ROE decision.
• Revised 2026 Non-GAAP EPS Guidance: $4.57 to $4.72 per share, adjusted due to the FERC ROE reduction and potential Aquarion sale.

2. Strategic Updates and Business Highlights

• Operational Performance: Successfully managed a severe blizzard in February, restoring power to over 500,000 customers, highlighting infrastructure investments and emergency preparedness.
• Aquarion Sale: Received final approval from PURA; awaiting the end of an appeal period in June 2026 before closing.
• Revolution Wind Project: 95% complete, with commercial operations expected in the second half of 2026.
• Regulatory Environment: Massachusetts Governor signed an executive order to enhance energy reliability and affordability, addressing rising demand and supply disruptions.
• Rate Review in Connecticut: First review in eight years planned for CL&P, with a letter of intent to be filed soon.

3. Forward Guidance and Outlook

• Long-term Earnings Growth Rate: Reaffirmed at 5% to 7% off the midpoint of revised 2026 guidance.
• Capital Expenditure Plan: $26.5 billion over five years, with nearly $800 million spent in Q1 2026.
• Securitization of Storm Costs: Anticipated recovery of approximately $2 billion in deferred storm costs through securitization in Connecticut and New Hampshire within 12 to 18 months.

4. Challenges and Points of Concern

• FERC ROE Decision: Reduction of base transmission ROE from 10.57% to 9.57% has led to a $70 million reduction in expected after-tax earnings for 2026. Eversource is pursuing legal actions against this decision.
• Regulatory Uncertainty: Ongoing challenges with FERC's decisions have created an unstable environment for capital investment, impacting investor confidence.
• Appeals and Delays: Potential delays in closing the Aquarion sale due to ongoing appeals, which could affect financial planning and operations.

5. Notable Q&A Insights

• Aquarion Sale Outlook: Management remains optimistic about closing the transaction despite the pending appeal period, indicating no urgent pressure.
• FERC ROE Settlement: Potential for settlement discussions to occur within 60 days of the filing, with hopes for a new rate to be implemented by year-end.
• Storm Cost Securitization: Expected to include carrying costs, with a projected amount of $400 million to $470 million.
• Market Positioning: Eversource is focused on increasing energy supply in New England to stabilize prices and manage demand effectively, while resisting large data center loads that could increase costs for residential customers.

Overall, Eversource Energy is navigating a complex regulatory landscape while maintaining a focus on operational reliability and strategic growth, despite facing significant challenges from regulatory decisions impacting financial performance.