Eversource Energy (ES) Q2 2026 Earnings Report, Transcript and Summary

Good day, everyone, and thank you for standing by. Welcome to Eversource Energy Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. You will then hear a message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. Now it is my pleasure to hand the conference to the Vice President of Investor Relations, Rima Hyder. Please proceed.

Good morning, and thank you for joining us today on our second quarter 2020 earnings call. During this call, we will be referencing slides that are available on our website at eversource.com. As you can see on Slide 1, some of the statements made during this investor call may be forward looking. These statements are based on management's current expectations and are subject to risk and uncertainty. Which may cause the actual results to differ materially from forecast and projections. We undertake no obligation to update or revise any of these statements. Additional information about the various factors that may cause actual results to differ and our explanation of non GAAP measures and how they reconcile the GAAP results is contained within our news release, the slides we posted last night and in our most recent 10 Q and 10 ks. Speaking today will be Joe Nolan, our chairman, president, and chief executive officer and John Moreira, our Executive Vice President, CFO, and Treasurer. Joining us today is Jay Buth, our vice president, controller, and chief accounting officer. I will now turn the call over to Joe.

Thank you, Rima. Good morning, everyone, and thank you for joining us. Starting on Slide 4, as we complete the midpoint of the year, we are pleased with the terrific progress. we have made this quarter. Our team is focused on executing the priorities we have established over the past year. Including completing the sale of Aquarion, delivering strong operational performance and strengthening the balance sheet. At the same time, we are continuing to advance the investments needed to support safe reliable and more resilient electric and natural gas systems for our customers. As you can see on slide 5, we have several recent accomplishments. From an earnings perspective, we delivered second quarter recurring earnings per share of $0.87 in line with our expectations and we are reaffirming our long term EPS growth guidance of 5% to 7%. We have also delivered on maintaining a strong financial foundation. Which is a major focus for us. Our disciplined approach to capital allocation and balance sheet management continues to position us well to fund critical infrastructure investments. While preserving the financial flexibility needed to support long term growth. The recent Moody's change to our outlook from negative to stable is a testament to our consistent execution and commitment to strengthening our balance sheet and the sustainability of our financial strategy to support our long term growth. We continue to make progress. On key initiatives that will deliver higher growth for our business and further derisk our business profile. First, we completed the sale of Aquarion. Which resulted in net proceeds of $1.7 billion This sale was a significant milestone in furthering our strategic position as a pure play regulated pipes and wires utility. It allows us to optimize our portfolio by focusing on our core electric and natural gas operations across New England. While efficiently reinvesting capital for the benefit of our customers. Second, the Revolution Wind project continues to progress. Through advanced stages of construction and commissioning. As we do each quarter, we continue to evaluate our contingent liability. Associated with the sale of Revolution Wind. Based on revised cost projections, of total construction costs. Which included cost increases stemming from 2 stop work orders we recognized an after tax charge of $164 million. In the second quarter to increase this liability As Austin has previously stated, the project is on track to reach its commercial operation date later this year. Lastly, on the FERC ROE decision, we have taken multiple actions. To address this decision. Appealing to FERC as well as the DC Court of Appeals. We expect that FERC will make a decision on the prospective ROE by November 30. John will cover the process and the timeline for the court appeal. 1 thing is certain: now, more than ever, New England region needs more transmission investment and utilities need a predictable regulatory environment to attract long term capital. To fund these investments for the benefit of customers. Our investments in transmission have delivered billions of dollars in savings for customers over the years. By eliminating significant congestion costs for the region while also making the grid more resilient. We see ample need and opportunities for transmission infrastructure investment. To further alleviate overall costs for customers. In fact, as you can see on Slide 6, following a comprehensive evaluation of 6 bids, submitted in response to ISO New England's 2025 longer term transmission planning RFP, ISO New England has preliminarily selected the joint proposal submitted by Eversource and Avangrid as the preferred solution. This transmission project is designed to increase transmission capacity between Maine and New Hampshire. While strengthening the transmission interface between Northern and Southern New England. Eversource's share of the $2.2 billion project is approximately $700 million with an anticipated in service date of 2032. There are still significant steps ahead before a final solution is reached in the coming months. If this project is ultimately successful, it will greatly help address the affordability challenge facing New England by enabling increased supply and easing congestion costs. This would mark the second competitive transmission bid awarded to Eversource. Following the Boston 2028 solution study project in 2020. That project was successfully completed by Eversource ahead of schedule and under budget. As we have stated previously, incumbent utilities are uniquely positioned to deliver reliable, cost effective transmission solutions for the region. Leveraging their operational expertise existing infrastructure, and established relationships with stakeholders and communities. This is another example of our keen focus as a pure play pipes and wires utility. To deliver cost effective solutions that provide benefits to customers. Moving on to Connecticut regulatory front, on Slide 7. We received our final storm cost decision this week and are pleased that we can now proceed with securitization financing. To enable the recovery of these storm costs. Something we intend to execute on as soon as possible. We also filed our CLMP rate review earlier this month the first in almost a decade. Our proposal creates a sustainable path forward. That balances affordability with the investments needed to maintain and strengthen the electric system that Connecticut depends on. A safe, reliable, and resilient electric grid is the cornerstone of the state's economy and enables the achievement of many important goals. Including carbon reduction and electrification. The decision from this rate review will shape the state's electric infrastructure for the next decade. And prepare the state for future economic growth. Over the last 10 years, our customers in Connecticut have enjoyed increased reliability. As a direct result of our strategic investments in the electric system. Continued investment is needed. To maintain the level of affordable reliability and resiliency that customers have come to expect This includes addressing aging infrastructure, that is nearing the end of its useful life. Responding to more frequent and unpredictable severe weather events, and making the necessary upgrades to support the growing electric demand in the state. Since our last rate case in 2017, we have invested over 4 billion to improve and upgrade our electric distribution infrastructure serving our 1.3 million customers across 157 cities and towns in Connecticut. In our rate filing, we have clearly demonstrated how our Connecticut customers have directly benefited from the investments we have made. Nearly half of all power interruptions experienced by customers in 2025 were restored remotely in a matter of minutes. The average customer experience is 1 outage nearly every 2 years which is a 15% improvement since 2017. Additionally, we estimate that more than 1.5 million customer outages were avoided across Connecticut last year thanks to automated technology installed on the system. And lastly, through targeted initiatives such as system upgrades, and enhanced system operating training we have further improved our accuracy. In determining and communicating estimated times of restoration. During outages by 14% since 2017. Resulting in clearer, more consistent information available to customers. At the same time, we recognize that importance of keeping energy bills as manageable as possible and we are committed to working with our regulators and other stakeholders across our service territories to strike the right balance between investing in the future of energy system and delivering value for our customers, and the communities we serve. Affordability and reliability are connected. An electric system that is allowed to degrade becomes less reliable and over time, more expensive to maintain and fix. This balance between affordability and reliability can be accomplished through efficient operations rigorous cost control, and strategically investing to maximize long term customer value at the lowest reasonable cost. Our approach has been to make proactive, strategic investments that address aging infrastructure in a cost effective manner long before they fail. From a regional perspective, another area of focus for us is energy supply. Which remains the greatest challenge to affordability for customers. While we do not control or earn any profit from energy supply, we want to be an integral part of the conversation to lower cost for our customers. Bringing additional generation to the region is key to reducing energy supply costs for electric customers. Since last year, Eversource has directly supported 2.5 thousand MW of new generation coming into the region. Currently, 80% of this new generation is online. While this is a great step forward for the region, we know that we need more to support the growing electric demand across New England. In fact, if we want to capture economic opportunities around data centers, and welcome them to the region, Additional generation and expansion of gas capacity is critical. Growing energy supply alongside demand will help moderate cost increases. Preserve system reliability, and ensure that all customers benefit from the growth rather than bearing the cost of constrained resources. This is why we support a comprehensive all of the above strategy to tackle energy affordability evaluating all opportunities. Including identifying new sources of energy supply into the region. Another highlight for us this quarter was the publication of our annual sustainability report. As shown on Slide 8. The report showcases our continued leadership in building a clean energy future fostering a workplace that prioritizes culture, engagement, protecting the environment, and supporting the communities we serve. Overall, we are encouraged by the significant progress we have made during the first half of the year, which is a result of our continued focus on execution on our key priorities. The strength of our operations, the dedication of our employees, and the discipline with which we are executing our strategy gives us confidence in our ability to deliver on our commitments for the balance of the year and continue creating long term value for our stakeholders. Let me now turn the call over to John to discuss our financial results and outlook as well as provide a regulatory update.

Thank you, Joe, and good morning, everyone. This morning, I will review our second quarter 2020 earnings results. Provide an update on regulatory matters and discuss our balance sheet progress and financing plan. I will start with our first quarter results on Slide 10. Our GAAP earnings for the second quarter were $0.14 per share compared with GAAP earnings of $0.96 per share in the second quarter of 2020. GAAP results for the quarter were impacted by a noncash after tax charge of $111.4 million or $0.30 per share related to the carrying value of Aquarion Water Company as we have closed on the sale. The results also include an after tax charge of $164 million or $0.43 per share related to an increase in our estimated offshore wind contingent liability. Excluding these charges, our non GAAP or recurring earnings were $0.87 per share for the quarter. Compared with GAAP as well as non GAAP earnings of $0.96 per share in the second quarter of 2020. The decrease in recurring earnings over the prior year is primarily due to lower earnings in the Electric Transmission and Gas Distribution segments. Lower earnings in the transmission business were primarily driven by the base ROE rate reduction ordered by FERC back in March. Lower earnings in the gas distribution segment were impacted by a prior year benefit for recoverable expenses. These results were partially offset by increased earnings in the Electric Distribution segment thanks to higher electric distribution revenues. Our results in the parent and other segment were flat as compared to prior year. Moving on to a regulatory update on Slide 11. Let me start with the CL&P rate case filing we made on July 14. A rate request that balances affordability and reliability for our customers. This was the first general rate request for CL&P since 2017. The rate request calculates a revenue deficiency of $451 million. Reflecting a proposed ROE rate of 10.25%. The proposed increase would result in an 11% impact on the total customer bill. Approximately 90% of this revenue deficiency is related to capital investments future storm resiliency investments, storm restoration costs, depreciation, and taxes. Only 11% of the filed revenue deficiency is for increased O&M since our last rate increase. Compared to inflation, that is about $45 million in expenses that have been avoided for our customers. We are proud of how the filing demonstrates our commitment to cost control. Additionally, as Joe described, we have clearly demonstrated in this filing that we can deliver strong reliability benefits in an affordable manner. Our customers, and our regulators need to know that when we make investments in our system, those investments are being made to protect safety, improve reliability, and achieve state policy goals in the most efficient and cost effective way possible. The filing also proposes a multi year PBR mechanism that protects against future rate shocks. This PBR mechanism would provide gradual rate increases over time and ensure that customer bills reflect the fair cost of doing business. In the filing, we have included a plan for implementing AMI for Connecticut. With nearly $1 billion of capital investment, and $300 million of O&M expense. As detailed in our filing, AMI would deliver customer benefits in excess of this estimated cost. Lastly, I want to highlight the economic development and heat pump rates proposed in our filing. These rates were designed after years of working closely with Connecticut stakeholders and policymakers to align our rate design with customer needs and state policy. Moving briefly to New Hampshire. I want to mention the annual base rate adjustment that was approved on July 21. You will recall that as part of our New Hampshire rate case, we proposed a multiyear PBR plan. The July order approved an increase of approximately $24 million that will be effective August 1st. This is another example of how a well designed PBR mechanism can help moderate rates long term. Moving to Slide 12. I would like to update you on the FERC ROE decision. That was issued back in March. Which reduced the base transmission ROE rate and ordered a refund going back more than a decade. We have made several filings with FERC and with the courts challenging this decision. As part of these actions, we did receive approval from FERC to extend the refund until mid-2020. We have also escalated our challenge with a petition for review and a motion for a stay of the FERC decision with the DC Circuit Court of Appeals. In our June filings with the DC Circuit Court, we made multiple arguments. First, we argue that FERC exceeded its authority by ordering a refund for a period longer than 15 months allowed by the federal power act. Second, FERC failed to declare that either 11.14% or 10.57% rates unjust and unreasonable until March of this year. Third, that FERC denied Eversource and other New England transmission owners the opportunity for due process by delaying their decision for almost a decade. In response to a higher court order for remand. And lastly, we argue that FERC set a 9.57% ROE rate in a range previously found to be unjustly low. The DC Circuit Court will consider our arguments and FERC's actions over the next several months. Staying with the FERC topic on Slide 13, I would like to provide an update on the Section 205 filing we made with FERC on April 30. To determine the prospective ROE rate. As a reminder, our filing calculated the new base ROE rate of 11.39% by using FERC's existing ROE methodology and only updating it to reflect current market conditions. As required by law, FERC issued their order in response to our 205 filing on June 29, accepting and suspending tariff revisions and establishing a paper hearing procedure. FERC's order was in line with our expectations, suspending the implementation of the requested ROE rate for the maximum 5-month period allowed by law. Next steps in this process are that parties will file initial briefs by August 28th and reply briefs by September 28th. A new ROE rate is expected to go into effect on November 30th. Moving to Slide 14. For a financing update. We continue to focus on enhancements to our balance sheet condition. We are pleased that we have closed on the sale of Aquarion on June 30 generating a net cash benefit to Eversource of $1.7 billion These proceeds will be used to displace debt at the parent company. The closing of the Aquarion transaction leaves our balance sheet in a much stronger position, and we do not currently anticipate any changes to our financing plans as described on this slide. Our equity needs over the 5-year forecast period remain in the range of $800 million to $1.1 billion and we do not expect to issue any equity over the remainder of this year. We continue to consider a variety of debt and alternative financing solutions for our future needs. Including the securitization of deferred storm costs in both Connecticut and New Hampshire. Next, on Slide 15, I would like to share the latest affirmation of our financial strategy. Which is that our FFO to debt metrics remain solid. Our latest FFO to debt ratios as of June 30, 2026 are 14.3%, 15.7% for S and P and Moody's respectively. Consistent with our commitment these results are each over 100 basis points above the downgrade thresholds. We were also very pleased that Moody's changed Eversource's and NSTAR Electric's outlook from negative to stable. In recognition of what we have recently accomplished. These objective measures reflect the successful execution of our previously communicated financing strategy. Looking at Slide 16. We are encouraged by the final storm cost decision we received from PURA 2 days ago. Of the approximately $975 million that we requested, PURA approved approximately $870 million. Pure is deferring $60 million in storm costs pending the completion of a third party audit review and an audit, and $40 million in exclusions. Of the $870 million approved, approximately $200 million have already been recovered in rates. This results in approximately $670 million that is expected to be securitized. PURA did not approve the recovery of carrying charges that we requested. We are evaluating our options and next steps. With this final decision, we can now move ahead on the securitization process starting with filing our financing plan at PURA in early fall. After hearings and PURA's review, we expect to receive a final financing plan decision in the first quarter of next year. This will allow us to begin the rating agency review. File the SEC registration statement, and begin marketing. With those steps completed, we anticipate cash in the door approximately 1 year from now. Next, let me reaffirm our 5 year capital plan of $21.5 billion as shown on Slide 17. This reflects our 5 year utility infrastructure investments by segment through 2028. I do want to note that we have now highlighted the potential increase to our capital forecast from the announcement of ISO preliminary decision on the transmission RFP selection. As well as AMI in Connecticut. Turning to Slide 18. We reaffirm our non GAAP EPS guidance range of $4.52 to $4.72 per share for 2026. This guidance was revised in March, for the lower base ROE rate of 9.57% as well as the sale of Aquarion. Lastly, on Slide 19, we remain confident in our ability to deliver earnings growth towards the upper half of our long term target range of 5% to 7%. through 2028. Of note, this guidance currently assumes the 9.57% base ROE rate for transmission investments. As you can see on this slide, we have executed on many of our key initiatives. Through improved regulatory outcomes such as storm cost securitization in both Connecticut and New Hampshire the results of the CLMP rate case request in mid-2020 and the sale of Aquarion, we are confident in our ability to achieve a higher growth as we move forward. With that, I would like to turn the call back to the operator for Q and A.

Thank you so much. To ask a question, please press star then the number 1 on your telephone and wait for your name to be announced. To remove yourself from the queue, please press the pound or hash key. 1 moment for our first question. It comes from Shar Pourreza with Wells Fargo. Please proceed.

Morning, guys.

Morning, Shar.

Morning, Joe. Joe, just on the storm cost, I mean, obviously, the carrying costs were denied in full at kind of material. I guess,, how does that compare against what you had embedded in the financing plan? I guess, what are the offsets? And next steps there? And just, I guess, what are the components of the $1.8 billion from storm cost securitization? Just in terms of how much is Connecticut versus New Hampshire? Thanks.

Sure, Shar. This is John. Let me take the how are you? Let me take the storm decision, and we received a couple of days ago. I think it is important and, you know, for us, first and foremost, that we are very pleased to finally have a decision and more importantly, the number that we can move forward with securitization. Overall, when you read the decision, it is constructive. You know, certainly better than what we have seen from other rate decisions coming out of PURA. You know, however, we are a bit disappointed. With a couple of items, that we do not really, you know, agree with. Things like the $63 million that they deferred, really does not make sense to us. And certainly the carrying charge. We continue to review the decision and really assess our options as I stated in my formal remarks. But once again, it is we are encouraged that we finally have a number that we can forward and get nearly $700 million in the door a year from now. As it relates to the carrying charge specifically, I do want to mention we only include things in our forecast that we have a high degree of conviction. And more importantly, we have not recognized $1 of these retro retroactive, carrying charges. So in 1 would conclude that in our financing plan, because we do not have a high level of degree of conviction that we have not assumed that we would get the retroactive piece. But we think that we continue to be entitled to it, and we will assess our next steps as it relates to the carrying charge.

Got it. Perfect. And then just the last thing is on the rate case. I mean, Joe, obviously, it is a pretty sizable ask at Connecticut Light & Power. and PURA's posture in the storm decision, cost decision was not great. I guess, what is your read on how PURA approaches a filing of this size, especially kind of an election year? it is early, but I guess how informed were stakeholders prefiling Were they surprised? I mean, I guess, what is giving you confidence they are going to do the right thing?

Yeah, you know, it is obviously, it is a large ask, but the fact of the matter is, we have not filed a distribution rate change since 2017. I am very proud of the reliability metrics, the investments that we have made down there. In Connecticut. And I think that will stand up in this proceeding. You know, as John had mentioned, only 11% of the deficiency is coming from O&M. So you will see how seriously we are taking cost controls. We feel very good about the investments. We think that our regulators will feel good about the investments. The other 90% of the deficiency is CapEx, resiliency, taxes, depreciation. it is nothing that is optional. it is about keeping the lights on and getting fair cost recovery. Not investing in the system, as you know, would be far more expensive. So, as I said earlier, I am very optimistic. You know, it is encouraging what is happening at PURA. If you look at the past 6 months of decisions, whether it is around Yankee, whether it is around storm cost recovery, They are a very engaged regulatory body. All 5 of them are on the bench. All 5 of them are engaged. All 5 of them are asking very good questions. So we feel very good that we will get a fair hearing in Connecticut. I think that they are going to see that the money that was spent, the money we are seeking, in rates is, you know, prudent. And, you know, I am very confident that we will be treated very fairly in Connecticut. Connecticut just looking at the history over the past 6 months, it is very encouraging. And, you know, keep in mind, as I tell folks, it is an election year. it is an election year in Massachusetts, election year here in Connecticut. And, with that comes an additional amount of press and drama. But the fact of the matter is we will stick to the facts. We will stick to our record. We will stick to what we have done, and we are very proud of that effort.

Okay. Perfect. Appreciate it, guys. Have a good morning.

Thank you.

Thank you.

Our next question comes from Davenport with Goldman Sachs. Please proceed.

Good morning, Carly.

Good morning. Thanks for taking the questions. Maybe to start on the New England transmission opportunity that you highlighted, what are the next milestones that we should watch there to derisk that potential investment to the point that, you know, you would consider rolling that into the baseline? Would that just be the Q4 call, or is there anything we should watch there?

Yeah. I think the third quarter call, you will have some good insight. You know, we are expecting stakeholder comments on August 14th on the preliminary recommendations. Then in August and September, ISO New England, they will review it. They are going to respond to the stakeholders. And we currently anticipate a publication of a final recommendation in September. So we should be in a good position for the third quarter call to give you more updates, and that will allow us to roll that into the plan.

Yep. And, Carly, I am sure you are going to have a follow-up question. I am sure everyone is wondering how much of that 700 million will be rolled into our current 5 year forecast. Taking us through 2030. You should think of it as probably half, 50%, of that CapEx will incur during that forecast period.

Got it. Okay. that is great. Super clear. Thank you for that. And then maybe just on the incremental revolution charge this quarter, can you just expand a bit on the kind of drivers that, I guess, were unknown relative to last quarter? And then any kind of risk that you see around cost slipping incrementally relative to this update?

Sure. You know, we have been watching this very closely in terms of the remaining charges associated with Revolution Wind. As we had mentioned, the 2 stop work orders, led us to lose that vessel, and that vessel needed to get remobilized in order to finish the job. I am very encouraged by many factors associated with Revolution Wind. First of all, we have every component needed, to install it. The remaining pieces of the installation are very straightforward. there is no uncertainty around it. We are delivering over 300 MW of capacity right now to the ISO New England grid, and we are ramping up. We are heading towards 704 number. So I feel good about it. But, you know, the fact of the matter is the project is nearly complete. It has an in-service date of 2026. And we are going to finish this and get it over the goal line. So I do feel very good that, with the number that we have captured to date, and I do not I do not see any other types of risk that worry me or going to keep me up at night, Carly. Feel very good about it. We are going to bring this in. And I am very proud of the work that was done. And, obviously, we could not control the shutdowns. But we just wanted to capture that and make sure that we are upfront about our charges.

Understood. Great. Thank you so much for the color.

1 moment for our next question, please. It comes from Nick Woods with Bank of America. Please proceed.

Good morning, Nick.

Good morning, guys. Hey. How's it going?

Hey. I guess just going back to offshore wind a little bit. Can you give us a sense of like how much of the project is completed at this point? Yeah. I thought I thought I saw maybe I maybe I did not see it correctly, but I did not see a percentage completion figure this time. So I just want to get a sense where we are at in terms of that. We will start from there. Sure. Yeah. So the project is over 95%, not actually 97%, complete. So we are really in the final you know, we are in the 5-yard line to get over the goal. So we feel very good about that. Got it. Thanks for that. And then just touching on the FERC order, we-- there are several processes as you guys highlighted. That are running kind of in parallel. You mentioned before that ultimately, you would want, an ALJ to be, you know, appointed and get a overall global resolution to all these outstanding dockets. But has that view changed? Or what do you guys expect from all this? Hey, Nick. This is John. So the process is pretty much in line with what we were expecting. With the exception that there was no administrative judge appointed to work with the parties. But as you know, in any proceeding, settlement is always on the table. I think FERC is very what we like about it is FERC wants to accelerate this paper hearing to have a reasonable rate going into effect on November 30th. Which is very quickly. And I think once we have that and we see the rate, and I you know, I think, that could potentially, know, get parties to reengage and hopefully look at a global settlement. Great. Appreciate the time. Thank you so much. Thank you.

Thank you.

Our next question comes from Sophie Karp with KeyBanc. Go ahead, Sophie.

Good morning, Sophie.

Hi. Good morning. Thanks for the time. I am just I have heard you guys say now that bunch of overhangs and I guess uncertainties are getting--you get them, have them in the rearview mirror. Have you given any thought to maybe revising your long term growth targets at least, you know, having them. So you are 1 of the few peers that do not explicitly have a rate based growth target in your materials. Things like that. So is there a path here now to higher precision and disclosures?

Hey, Sophie. This is John. So, I mean, we give enough information. We give you the annual CapEx. So you can certainly, calculate a rough number. But our rate base growth and we do give that number as to what historically it is been, you know, it is grown slightly over 8%, an 8% CAGR. So we do have that slide. Every year when we give forward looking guidance. So we just felt there was something that was not really needed. We do give enough color that someone could arrive at the annual rate base growth. I do not know if you are familiar with the slide that I am referring to, but we do give what is expected for a rate base by 2030 based on our CapEx. So we do have that in our deck.

Right. Alright. In the k. Secondly, on, I guess, the AMIs, right, can you maybe talk a little bit about the timeline of the of the rollout there? And how will that reflect in rate base?

Sure. Sure. So let me let me start off with the process that we are nearing the end in Massachusetts. it is really a 5-year journey. And as it relates to Connecticut, right now, we have included that proposal as I said in my formal remarks in the rate case. But we also, outside of the rate case, requested expedited decision to move forward hopefully this fall, because we do want to take advantage of some contractual pricing that we were able to lock down for the vendors that we use in Massachusetts. So we feel that getting the green light for us to proceed with AMI in Connecticut by this fall, customers in Connecticut would take it we would be able to take advantage of that pricing. So with that, I would say if we get the green light this fall, we would start the project, mobilize it next year. And, you know, 5 years later, it is when, you know, everything will be, wrapped up. So that $1 billion, some of that will fall into will fall beyond our forecast period given that time frame.

Got you. Alright. Thank you very much. that is all for me.

Thank you.

Thank you.

Our next question is from Anthony Crowdell with Mizuho. Please proceed.

Good morning, Anthony.

Hey. Hey.

Good morning, John.

Good morning, Joe. How's it going?

Wonderful. Just 2 quick questions. 1 is I think on the FERC refund There was a decision out I do not know, a month or 2 ago in MISO I am just curious if that you know, strengthens your appeal argument or complicates your appeal argument, then I have a follow-up.

Anthony, I would say no impact. Our facts and circumstances from a legal standpoint are quite different. Than the MISO decision. And, obviously, as you know, the MISO impact on the rate was a couple of basis points Here in New England, it is much greater. So, our legal position is different than the MISO, and we feel good about our legal position. And we just we have done everything we can as far as the motion for a stay, and we are waiting for the court to rule on that, which could come any day now. But, certainly, we are hoping to be before we commence any refunds, which we have not at this point initiated any of those refunds. At this at this time.

Great. And then if I could just slide 15, you give a lot of clarity on the credit cushion. Just I am wondering if you guys have a targeted or a minimum, like, credit cushion that you operate in? And if the FERC refund was upheld, meaning you had to pay it back, I guess, would you use any other levers to maintain, like, the cushion you guys showed today or would you just use the balance sheet capacity that you have to maybe fund that refund?

So, first and foremost, we stand with our guidance that we want to be 100 basis points above the downgrade thresholds and we have been very successful as you can see on that slide. So that is our priority. And I feel good about the forecasting of us achieving that steady state. As it relates to the refund, if we are in the position where we do have to refund it, refund the incremental $880 million, we would do that in a balanced manner.

Great. that is all I had. Thanks for taking my questions. Thanks, Anthony. Thanks, Anthony.

You.

1 moment for our next question. It comes from David Pass with Wolfe. Please proceed.

Morning, David. Hey, David.

Good morning, guys. Just I just wanted to confirm on equity. So your now with Aquarium done and everything and all the orders you got in place, and assuming the securitization, as it stands today, what is it fair to say your equity is $800 million to $1.1 billion through 2030. Without any you know, setting aside for a refund. Is that is that the way that we just Correct.

Okay. That slide does not assume that you would be in a position to refund. The FERC other than the 15-month refund that we have already accounted for and booked. Okay. And you said no more equity issuances for 2026. Correct. You correctly. That is that is that is correct. Got it. Alright. Thank you. And then just switching gears to your parent and other drag. Is it fair to say that the first half of this year is a good indicator or a good run rate if we wanted to do a full year for the 2020 parent company drag. And then how to think about that beyond 2026? Yeah. I mean, as you can see, year over year, we are pretty much flat. So I think we have more normalcy, if you will, at the parent and other. But once again, you know, the taxes is what can go back and forth a bit. So but I think to answer your question, I think it would be a good number if you model the kind of steady state going forward. You know, we do not have very much at the parent and other than taxes and interest.

Right. Okay. that is it. Thank you. Thank you, David.

Thank you so much. And our next question is from Jeremy Bryan Tonet with JPMorgan. Please proceed.

Morning, Jeremy. Hey, Jeremy.

Hey, guys. This is actually Aidan Kelly on for Jeremy. Appreciate the time.

Hey, Aidan.

Just yeah, just 1 quick clarifying question on my end. I think it was asked earlier in the call. But could you just break down the key assumptions that comprise the $1.8 billion estimate in storm proceeds in your plan? I guess beyond the $700 million from Connecticut, which we talked about, could you just quantify the cash flow drivers elsewhere across your jurisdictions?

So let me start with what makes up the up to the 1.8 billion. So we talked about and we have it on the slide, the 700 million. That we will move forward with securitization from the Connecticut storm decision that just happened this week. So it is 700 million and we are sitting on about $450 million of New Hampshire storm costs that we are waiting for the final tranche to be approved. that is about $450 million. So we have included that in this slide as an update because now we have the legislation in hand. And then, the difference between those 2 items the $1.8 billion would be the carrying charges as it pertains to the Connecticut storms. As I have mentioned, we are reviewing the decision and looking at our options and next steps So we feel that there is a path forward for us to seek recovery of that. It would certainly be within our 5 year period. So we have included that in there as well. So that is the composition of the $1.8 billion.

Great. that is very helpful. Thanks, John. I will leave it there.

Okay.

Thank you.

Thank you. And our last question comes from Julien Dumoulin-Smith with Jefferies. Please proceed.

Morning, Julien. Hey, Julien.

Hi. Good morning, team. Sorry to disappoint you. This is actually Tanner James on for Julien. I just wanted to follow-up on that AMI filing in Connecticut. Particularly relating to the benefit cost analysis prepared. That analysis details a slightly positive nominal net benefit that turns negative on an NPV basis. Can you just provide some details regarding the proposal and prospects for implementation given the negative NPV of net benefit? Thanks.

Yeah. Sure. I think the primary driver is-- Let me step back. You know, this docket has been open for multitude of years. If we had approval then we had the green light to move forward with that, the cost benefit analysis would have been much, much stronger and positive. But because we have not been able to get to a place where we would feel comfortable in making the investment, without having the assurance that we have recovery, we have not done so. And you know, we have updated the analysis, and the costs have gone higher. So the benefits really have not changed, Now the cost component has changed, and that is why we are really close. Over time, we think it is the right thing to do, and we will give customers the tools that they need to manage their energy consumption. And we think that brings a lot of value to the table. Understood. Thanks. And maybe following up on the long term EPS guidance. I noticed the disclosure with the earnings report projects cumulative 5% to 7% EPS CAGR through 2030. Could you just provide an update regarding how you might view either the linearity or the shaping of the earnings profile or if there are other factors to consider regarding targeted EPS growth? Sure. I did state in my formal remarks that we see the trajectory of growth rate between now and 2030 moving towards the upper half. So 1 would imply and I also gave a bit more color that says by 2028 is when you can see that growth happening to put us in the upper half of that 5% to 7%. You would conclude that on a sustainable basis that 2028, 2029, and 2030 to get us to the upper half by the end of 2028. So that is the trajectory that we are out there with.

Great. Thank you very much. Appreciate it. Sure thing. Have a good day.

Thank you so much. And this concludes our Q&A session, and I will pass it back to Joe Nolan for final remarks.

Thank you for joining us today. We are pleased with our progress year to date. We remain confident about our execution momentum into the second half of the year. With a strengthened balance sheet, robust 5 year capital plan, and ample opportunities for investment, we are well positioned for higher growth. Operator, this ends today's call. Thank you all for joining us.

Thank you. And this concludes today's conference. Thank you for participating, and you may now disconnect.