Eversource Energy Stock

Good day, everyone, and thank you for standing by. Welcome to Eversource Energy Second Quarter 2026 Earnings Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. Now it's 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 2026 earnings call. During this call, we'll be referencing slides that are available on our website at investors.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 forecasts 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 on how they reconcile to GAAP results is contained within our news release, the slides we posted last night and in our most recent 10-Q and 10-K.

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're pleased with the terrific progress we have made this quarter. Our team is focused on executing the priorities we've 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 Orsted 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 time line for the court appeal. One thing is certain now, more than ever, the 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, but 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 the 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 CL&P 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 stage 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've 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 experiences 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've 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 the importance of keeping energy bills as manageable as possible, and we're 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 in the communities we serve.

Affordability and reliability are connected. An electric system that's 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 feel.

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 2,500 megawatts 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, evaluate 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 and engagement, protecting the environment and supporting the communities we serve. Overall, we're encouraged by the significant progress we've made during the first half of the year, which is a result of our continued focus on execution of 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 2026 earnings results, provide an update on regulatory matters and discuss our balance sheet progress in financing plan.

I'll 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 2025. 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 2025. 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 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's about a $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 multiyear PBR mechanism that protects against future rate shocks. This PBR mechanism would provide gradual rate increases over time and ensure that customer builds reflect a 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 1 of this year. 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 order 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-2027. We have also escalated our challenge with a petition for review and a motion for a stay of the FERC decision with the D.C. Circuit Court of Appeals.

In our June filings with the D.C. 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 the 11.14% or the 10.57% rates were 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 the 9.57% ROE rate in a range previously found to be unjustly low.

The D.C. 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 a 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 28 and reply briefs by September 28, a new ROE rate is expected to go into effect on November 30.

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 remains 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 March 31, 2026, are 14.3% and 15.7% for S&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. PURA is deferring $60 million in storm costs pending the completion of a third-party audit review and audit $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 $26.5 billion, as shown on Slide 17. This reflects our 5-year utility infrastructure investments by segment through 2030. I do want to note that we have now highlighted the potential increase to our capital forecast from the announcement of ISO's 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 $4.57 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% by 2028. Of note, this guidance currently assumes the 9.57% base ROE rate or 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 result of the CL&P rate case request in mid-2027 and the sale of Aquarion, we are confident in our ability to achieve the higher growth as we move forward. With that, I would like to turn the call back to the operator for Q&A.

[Operator Instructions]

One moment for our first question, it comes from Shar Pourreza with Wells Fargo.

Just on the storm cost, I mean, obviously, the carrying costs were denied in full. It's 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?

Sure. Shar, this is John. Let me take a -- let me take the Storm decision that we received a couple of days ago. I think it's important and -- for us and first and foremost, that we are very pleased to finally have a decision and more importantly, the number in which we can move forward with securitization. Overall, when you read the decision, it is constructive, certainly better than what we've seen from other rate decisions coming out of PURA However, we are a bit disappointed with a couple of items that we don't really agree with, things like the $63 million that they deferred really doesn't make sense to us and certainly the carrying change. We continue to review the decision and really assess our options, as I stated in my formal remarks. But once again, it's -- we're encouraged that we finally have a number that we can move forward and get at 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 that we -- in our forecast that we have a high degree of conviction and more importantly, we have not recognized $1 of these retroactive carrying charges. So in -- one would conclude that in our financing plan because we don't 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's a pretty sizable ask at Connecticut Light and Power and PURA's posture and the storm decision, cost decision wasn't great. I guess what's your read on how pure approaches a filing of this size, especially kind of an election year. it's early, but I guess, how informed were stakeholders prefiling? Were they surprised? I mean, I guess, what's giving you confidence they're going to do the right thing?

Yes. It's -- obviously, it's a large ask. But the fact of the matter is we have not filed a distribution rate change since 2017. I'm very, very proud of the reliability metrics, the investments that we have made down there in Connecticut. And I think that, that will stand up in this proceeding. As John had mentioned, only 11% of the deficiency is coming from O&M. So you'll see how seriously we're taking cost controls. We feel very good about the investments. We think that our regulators will feel good about the investments. And the other 90% of the deficiency is CapEx, resiliency, taxes, depreciation. It's nothing that's optional. It's 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. It's encouraging what's been happening at PURA. If you look at the past 6 months of decisions, whether it's around Yankee, whether it's around storm cost recovery, they are a very, 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, very good questions. So we feel very good that we will get a fair hearing in Connecticut. I think that they're going to see that the money that was spent, the money we're seeking in rates is prudent. And I'm very, very confident that we'll be treated very fairly in Connecticut, just looking at the history over the past 6 months. It's very, very encouraging.

And keep in mind, as I tell folks, it is an election year. It's an election year in Massachusetts, it's an election year here in Connecticut, and with that comes additional amount of press and drama. But the fact of the matter is we will stick to the facts, we'll stick to our record, we'll stick to what we have done, and we are very, very proud of that effort.

Our next question comes from Carly Davenport with Goldman Sachs.

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'd consider rolling that into the base plan? Would that just be the 4Q call? Or is there anything we should watch there?

Yes. I think the third quarter call, you'll have some good insight. We're expecting stakeholder comments on August 14 on the preliminary recommendations. Then August, September, ISO New England will review it, they're 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.

And Carly, I'm sure you're going to have a follow-up question. I'm 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's great. Super clear. And then maybe just on the incremental revolution charge this quarter. Can you just expand a bit on, kind of, the drivers that, I guess, were unknown relative to last quarter? And then any kind of risks that you see around cost slipping incrementally relative to this update?

Sure. We have been watching this very closely in terms of our -- 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'm 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's no uncertainty around it. We're delivering over 300 megawatts of capacity right now to the ISO New England grid and we're ramping up. We're heading towards the 704 number.

So I feel good about it. But the fact of the matter is the project is nearly complete. We have an in-service date of 2026, and we're going to finish this and get it over the goal. So I do feel very good that with the number that we have captured to date, and I don't see any other types of risks that worry me are going to keep me up at night, Carly. I feel very good about it. We're going to bring this in and I'm very, very proud of the work that was done. And obviously, we couldn't control the shutdowns, but we just wanted to capture that and make sure that we are upfront about charges.

One moment for our next question, please. It comes from Nicolas Woods with Bank of America.

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. I thought I saw -- maybe I didn't see it correctly, but I didn't see a percentage completion figure this time. So I just want to get a sense of where we're at in terms of that, if we can start from there.

Sure, yes. So the project is over 95%, now actually 97% complete. So we are really in the final -- we're on the 5-yard line to get over the goal. So we feel very good about that.

Got it. And then just touching on the FERC ROEs. There are several processes, as you guys highlighted that are running kind of in parallel. You guys mentioned before that ultimately you would -- guys want like an ALJ to be appointed and get like an overall global resolution to all these outstanding dockets. But has that view changed? Or what do you guys expect from all of this?

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 kind of 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 go into effect on November 30, which is very quickly. And I think once we have that and we see the rate and I think that could potentially get parties to reengage and hopefully look at a global settlement.

Our next question comes from Sophie Karp with KBCM.

I'm just curious, guys, now that the bunch of overhangs and I guess, uncertainties are get in -- you get into the -- have them in a rearview mirror. Have you given any thought to maybe revising your long-term growth targets or at least like having them. So you're one of the few peers that don't express that we have a rate base growth target in your materials, things like that. So is there a path here now to higher precision and disclosures?

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's been, it's grown slightly over an 8%, an 8% CAGR. So we do have that slide every year when we give forward-looking guidance. So we just felt it was something that wasn't really needed because we do give enough color that someone could arrive at the annual rate base growth. I don't know if you're familiar with the slide that I'm 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, right. In the okay, secondly, on -- I guess, on the AMIs, right? Can you maybe talk a little bit about the timeline of the rollout there? And how will that reflect in rate base?

Sure, sure. So let me start off with the process that we're nearing the end in Massachusetts. It's really a 5-year journey. And as it relates to Connecticut, right now, we have included that proposal, as I made in my formal remarks in the rate case. But we also, outside of the rate case requested an 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 were used in Massachusetts. So we feel that getting the green light for us to proceed with AMI in Connecticut by this fall, we could -- customers in Connecticut would take -- we'll 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 in next year. And 5 years later, it's when 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.

Our next question is from Anthony Crowdell with Mizuho.

Just two quick questions. One is, I think, on the FERC refund, there was a decision out, I don't know, a month or 2 ago in MISO. I'm just curious if that strengthens your appeal arguments or complicate your appeal argument? And then I have a follow-up.

Anthony, I would say no impact. Our facts and circumstances from a legal standpoint is 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's much, much greater. So our legal position is different than the MISO, and we feel good about our legal position. And we just -- we've done everything we can as far as the motion for a stay, and we're waiting for the court to rule on that, which could come any day now. But certainly, we're hoping before we commence any refunds, which we have not at this point, initiated any of those refunds at this time.

Great. And then if I could just -- Slide 15, you give a lot of clarity on the credit cushion. Just I'm 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 show 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've been very successful, as you can see on that slide. So that's our priority. And I feel good about the forecast and us achieving that steady state. As it relates to the refund, if we are in a position where we do have to refund the incremental $880 million, we would do that in a balanced manner.

One moment for our next question. It comes from David Paz with Wolfe.

I just wanted to confirm on equity. So you're now with Acquarion done and everything and all the orders you have 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 setting aside for refund. Is that the way to read this?

Yes. Correct. Yes, that slide does not assume that we would be in a position to refund the FERC other than the 15-month refund that we've already accounted for and booked.

Okay. And you said no more equity issuances for 2026?

Correct. That is correct.

Got it. All right. 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 2026 parent drag, and then how to think about that beyond '26?

Yes. I mean as you can see, year-over-year, we're pretty much flat. So I think we have more normalcy, if you will, it's a parent and other. But once again, the taxes is the -- that 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 kind of the steady state going forward. We don't have very much at the parent and other, other than taxes and interest.

And our next question is from Jeremy Tonet with JPMorgan.

This is actually Aidan Kelly on for Jeremy. Yes, just one 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 in 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 $700 million, and we're sitting on about $450 million of New Hampshire storm costs that we're waiting for the final tranche to be approved. That's about $450 million. So we've included that in this slide as an update because now we have the legislation in hand. And then the difference between those 2 items and the $1.8 billion would be the carrying charges as it pertains to the Connecticut storms. As I've 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 within a 5-year period. So we've included that in there as well. So that's the composition of the $1.8 billion.

And our last question comes from Julien Dumoulin-Smith with Jefferies.

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, but that turns negative on an NPV basis. Can you just provide some details regarding the proposal and prospects for implementation, given the negative NPV for net benefit?

Yes, sure. I think the primary driver is -- let me step back. This docket has been open for a multitude of years. If we had approvals and 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 haven't been able to get to a mutual place where we would feel comfortable in making the investment without having the assurance that we have recovery, we haven't done so. And we have updated the analysis and the costs have gone significantly higher. So the benefits really haven't changed. Now the cost component has changed. And that's why we're really close. Over time, we think it's the right thing to do, and we'll give customers the tools that they need to manage their energy consumption. And we think that, that brings a lot of value to the table.

Understood. 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 our growth rate certainly between now and 2030 moving towards the upper half. So one 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 second -- in the upper half of that 5% to 7%. One would conclude that on a sustainable basis that '28, '29 and '30 to get us to the upper half by the end of 2030. So that's the trajectory that we're out there with.

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're 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.

Good day, and thank you for standing by. Welcome to the Eversource Energy First Quarter 2026 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Rima Hyder, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today on our First Quarter 2026 Earnings Call. During this call, we'll be referencing slides that are available on our website at investors.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 forecasts 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 to GAAP results is contained within our news release, the slides we posted last night and in our most recent 10-Q and 10-K.

Speaking today will be Joe Nolan, our Chairman, President and Chief Executive Officer; and John Moreira, our Executive Vice President, Chief Financial Officer and Treasurer. Also 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, and good morning, everyone, and thank you for joining us today for our first quarter 2026 earnings call. Beginning on Slide 4, we are starting the year on a strong operational footing and with a clear plan for disciplined execution of our key strategic objectives of safety and reliability, strengthening the balance sheet and derisking our business profile.

As you can see on Slide 5, our team delivered excellent operational performance, especially during the powerful blizzard we experienced in February. With over 40 inches of snow and wind gust over 70 miles per hour, this Nor'easter was one of the most severe blizzards to impact the Northeast, particularly Massachusetts in recent years. We executed our large coordinated restoration effort, mobilizing thousands of line crews, leveraging mutual aid and using remote switching and pre-staged materials to restore service quickly while keeping safety and critical facilities top of mind.

Our team worked in tight coordination with local and state agencies to prioritize life safety, accelerate restorations and support impacted communities. In total, we responded to over 2,000 fire, police and safety events and restored power to more than 500,000 customers. These efforts in our successful restoration reflect the benefits of ongoing infrastructure investments for our electric grid and emergency preparedness.

We are very grateful for the support and positive feedback from numerous state and local policymakers, first responders and our customers. A majority of the customers surveyed after the blizzard said they greatly appreciated how quickly service was restored.

Moving on to Slide 6. As we look to the current year, we recognize that there are some remaining items that we need to resolve to further strengthen our balance sheet and derisk our business profile. First, on the sale of Aquarion, we received final approval from PURA in March. Last week, PURA denied an appeal from certain parties. We are now waiting for an additional appeal period to end in mid-June before we can close the transaction.

Second, on Revolution Wind, as Orsted recently reported, the project is about 95% complete. The commercial operation date is still expected to be in the second half of this year, and we look forward to this much needed source of generation for the New England region. Given the latest construction update and cost estimates, we believe that the current contingent liability balance due to GIP remains appropriate.

Finally, the recent decisions from FERC on the New England transmission owners base ROE that was an attempt to address a 15-year long complaint is flawed. We believe this decision by FERC departs from the statutory limitations imposed by the Federal Power Act, and long-standing judicial precedent requiring FERC to set just in reasonable rates of return sufficient to attract the capital needed for essential utility investment.

As priorities have changed over multiple administrations and commissioners at FERC, one thing has remained constant, New England's need for new energy supply resources to address affordability, ensure reliability and support economic development. Achieving these goals requires a modern, more resilient transmission system regardless of the energy source powering it. 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 making the grid more resilient.

Funding these investments requires a stable predictable regulatory environment to attract long-term capital at the lowest possible cost. For more than a decade, uncertainty stemming from FERC's lack of action after U.S. Court of Appeals vacated FERC's prior order in the case in 2017 has challenged investor confidence. Unfortunately, this FERC decision further undermines utilities' ability to secure the capital needed to support state and federal policies and mandates to build and upgrade grid infrastructure and maintain safe operations and top-tier reliability for customers.

As you have seen from some of our recent actions, we have appealed this decision and filed a motion for stay in the courts. We have also submitted a Section 205 filing following the exact FERC methodology used in their March 19th order but with updated data. The data FERC used to derive the 9.57% ROE is over a decade old. By updating the data for current market conditions, the ROE comes to 11.39%. A key procedure of this filing is the potential for settlement. We are hopeful that all parties in this proceeding can come together to reach an outcome that benefits customers while also providing reasonable financial support for New England transmission owners to continue to upgrade and build the much needed transmission system for future load growth.

On the back of the FERC ROE decision, which lowered our transmission base ROE to 9.57%, we did adjust our guidance for 2026, which John will reiterate in a few minutes. We are reaffirming our long-term earnings growth rate of 5% to 7% off the midpoint of our revised 2026 guidance.

Let me now highlight a few key states policy developments across our territory. On Slide 7, in Massachusetts, in March, Governor Healey signed an executive order to secure Massachusetts' energy future, establishing a comprehensive strategy to strengthen the Commonwealth's energy reliability, affordability and independence. This order responds to extremely adverse shifts in federal policy, rising electricity demand, volatile fossil fuel prices and global energy supply disruptions by directing state agencies to rapidly expand energy resources and modernize the distribution and transmission systems.

The executive order recognizes that Massachusetts energy supply needs are growing. It cites ISO New England projections that electricity consumption could rise by nearly 15% by 2035 and by nearly 50% by 2045, and with peak demand increasing even faster. The order also emphasizes the need for immediate action to maximize federal tax credits for clean energy projects before they expire under accelerated time lines established by recent federal law.

We appreciate Governor Healey's recognition that addressing regional supply constraints through when all of the above approach is essential to achieving energy affordability. As an energy delivery company, we remain focused on maintaining and upgrading infrastructure to integrate new energy resources, enhance reliability and control costs for customers. We look forward to continued collaboration with the administration, the legislature and other stakeholders to advance solutions that deliver lasting reliability and affordability benefits.

In Connecticut, as we mentioned last quarter, we are going to begin our first rate review for CL&P in about 8 years. We see that as an incredible opportunity to show how we vastly improved reliability and that those investments are valuable to customers. We expect to file a letter of intent with PURA for the CL&P rate case later this month. We recognize that this will be a big ask, and as we do in other jurisdictions, we will collaborate with PURA and other key stakeholders to submit a rate case filing that is constructive, responsible and designed to protect the interests of customers. Our filing will address customers' need for reliable electric service, affordability and stable, predictable rates.

Another key item for us is the recovery of storm costs. We expect to receive a final decision from PURA on our Connecticut storm cost prudency review in July, which would allow us to begin the legislative backed securitization process. Importantly, securitization enables timely cash collection, improving our FFO to debt metrics while addressing affordability concerns for our customers.

In New Hampshire, Governor Ayotte signed House Bill 1539, a bill allowing for the securitization of storm costs, which provides an affordable path for recovery of our outstanding storm costs, which are currently under review at the PUC. We are grateful for the support of the governor and the general assembly for passing this important legislation.

As we have stated before, 2026 will be a truly transformational year for us as we operate within a changing regulatory landscape and navigate affordability concerns. We will maintain transparent communication with all our stakeholders and take decisive actions to mitigate potential risk.

I will now turn the call over to John to discuss our financial results. Thank you.

Thank you, Joe, and good morning, everyone. This morning, I will review our first quarter 2026 earnings results, provide a regulatory update, including the recent FERC ROE decision, and also discuss our balance sheet, progress and financing plan.

I'll start with our first quarter results on Slide 9. Our GAAP earnings per share for the first quarter was $1.61 compared with GAAP earnings of $1.50 per share in the first quarter of 2025. GAAP results for the quarter include an after-tax charge of $43.9 million or $0.12 per share related to the FERC ROE decision representing the refund for the first 15-month complaint period. Excluding that charge, our non-GAAP earnings were $1.73 per share for the quarter as compared to GAAP as well as non-GAAP earnings of $1.50 per share in the first quarter of 2025. The $0.23 per share improvement over the prior year is primarily in the Gas segment with an $0.18 per share improvement driven by rate-based increases in Massachusetts and implementation of the Yankee Gas rate case in Connecticut.

Electric transmission improved $0.06 per share primarily driven by continued investment in the system. Electric and water distributions are both up as well due primarily to rate increases and cost control. Offsetting these positive drivers were higher losses of $0.05 per share at parent and other, primarily due to higher effective tax rate and higher interest costs. Overall, the first quarter was in line with our expectations.

Moving to Slide 10. The FERC decision that was issued on March 19 arbitrarily reduce the base transmission ROE from 10.57% to 9.57%. As you can see on this slide, this case has been ongoing for nearly 15 years, since the first complaint was filed on October 1, 2011. The 10.57% rate was established on October 16, 2014, and Eversource and the other New England transmission owners have continued billing at this rate, even though the U.S. Court of Appeals for the D.C. Circuit vacated FERC's order in April of 2017, which would have otherwise allowed us to bill customers using the original 11.14% rate.

Since 2011, FERC has gone through 22 separate commissioners and 13 different chairs, each nominated by 1 of 5 separate presidential administrations before issuing this arbitrary and capricious decision on March 19. The decision was based on a record of evidence over a decade old for a refund period far beyond what is allowed in the Federal Power Act. Since the decision was issued, Eversource and the other transmission owners have taken several actions to protect the right to a fair rate of return on invested capital.

On April 2, we filed a motion for stay at FERC, seeking to pause the order refund obligations and ensure time for an appropriate legal review. This was followed by a similar filing at the U.S. Court of Appeals for the D.C. Circuit on April 14. We Also, on April 2, we filed a motion for an extension of the refund deadline. Without this extension, FERC's order would have required that we issue refunds within 30 days, ignoring the necessary process of working with ISO New England and load-serving entities throughout the region. This extension was granted by FERC extending the deadline to May of 2027.

On April 20, we filed a request for rehearing at FERC, seeking to resolve the decision's multiple legal deficiencies. And lastly, on April 30, we made a Section 205 filing with FERC to establish a new base ROE using current market data, not market data that's over a decade old. Using FERC's own methodology from its recent decision and current market data, we arrive at a just and reasonable base ROE for transmission of 11.39%. We expect that this updated rate will be implemented towards the end of this year, subject to refund. This filing also includes a change to the ROE cap on transmission investments, raising the cap to 12.89%.

We are disappointed with FERC's actions in this proceeding. And while we will continue to protect our right to a fair rate of return on invested capital, we did make 2 disclosures during the quarter to reflect FERC's March 19 decision. The first was an adjustment to our 2026 non-GAAP EPS guidance as disclosed in our 8-K filed on March 31. The change in the base ROE is expected to lower Eversource's future after-tax earnings in the aggregate by approximately $70 million for 2026. And we also adjusted for the potential Aquarion sale as a result of PURA's approval. These items together resulted in revised 2026 non-GAAP earnings guidance in the range of $4.57 to $4.72 per share. The second disclosure was the after-tax charge of $43.9 million or $0.12 per share related to the FERC decision that I discussed earlier.

Moving on to some state regulatory updates. I won't cover everything that Joe discussed, but I do want to touch on a few items. First, on Aquarion. Should the transaction not close, we would proceed with the pending rate case as filed with PURA, seeking a distribution rate increase of $88 million. The rate case is expected to be completed towards the end of the year, and it would support Aquarion's ability to continue investing in its infrastructure and to provide reliable service for customers. We are pleased with PURA's decision approving the sale. However, should the transaction not close, we are prepared to replace the sale proceeds with other alternative financing solutions, if necessary.

Also in Connecticut, I would like to acknowledge the RAM decision that was issued on April 22. The decision addresses 2 very important things. For us, PURA authorized the funding of $100 million reserve for storm restoration costs. The second is that the decision uses forecast data to set rates associated with PPAs. The use of forecast data is a change that we have long advocated. It also allows for rates to be adjusted on a more timely basis, avoiding large over or under recoveries. Both of these changes result in more stable rates for customers and more stable and predictable operating cash flows for Eversource. On top of that, PURA's decision makes these changes while lowering rates for customers. We thank PURA for their thoughtful and constructive decision.

Lastly, in New Hampshire, Joe mentioned the new storm cost securitization law. This means that now in Connecticut and New Hampshire together, Eversource should recover approximately $2 billion in deferred storm costs and carrying charges through these securitization transactions within the next 12 to 18 months.

Moving to Slide 11 for a financing update. We executed on one of the latest steps in our plan to continue building balance sheet stability when we issued our first junior subordinated notes in February. We were very pleased that the offering was more than 5x oversubscribed and continues to trade at or above par. This gives us confidence that should we decide to issue something similar in the future, the market supports our strategy. I will underscore that our financing strategy is unchanged since the update we provided during our fourth quarter earnings call. We continue to expect that our equity needs over the next 5-year forecast period are in the range of $800 million to $1.1 billion. As communicated previously, this financing plan includes flexibility related to the Aquarion transaction outcome.

Next, on Slide 12. I would like to share the latest affirmation of our strategy, which is that our FFO to debt metrics remain strong. Our latest metrics are 14.2% and 14.5% for S&P and Moody's, respectively. Consistent with our guidance, these are each over 100 basis points above the downgrade thresholds. In addition, on April 10, following the FERC ROE decision, S&P reaffirmed its ratings and stable outlook for Eversource and our subsidiaries. These objective measures reflect the successful execution of our previously communicated strategy.

Next, let me reaffirm our 5-year capital plan of $26.5 billion, as shown on Slide 13. This reflects our 5-year utility infrastructure investments by segment through 2030, and we are off to a good start with CapEx of nearly $800 million through March as compared to our 2026 forecast of $5.1 billion. As you can see on this slide, Connecticut AMI is not included in our plan. We look forward to the next steps on this opportunity following the recent constructive hearings held by PURA earlier this year. As we stated in the briefs we filed in March, our goal is to deliver the highest benefit for customers at the lowest possible cost.

Turning to Slide 14. We continue to look towards a meaningful inflection in our earnings growth driven by improved regulatory outcomes. That includes the recovery of storm costs through securitization in both Connecticut and in New Hampshire. It includes the completion of alternative financing opportunities and distribution rate adjustments, including the results of our CL&P rate request in 2027.

Lastly, on Slide 15, we remain confident in our ability to deliver earnings growth towards the upper half of our long-term target of 5% to 7% by 2028. And just to be clear, this would be off of the midpoint of our revised 2026 non-GAAP earnings EPS range.

With that, I will turn the call back to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Carly Davenport of Goldman Sachs.

Maybe just to start on Aquarion. I guess, as you mentioned, we're still about 5 weeks or so out from the new appeal window sort of closing. So maybe could you just provide kind of your latest thoughts on the potential for further appeals to be filed in that process and I guess your temperature on this progressing to close?

Yes. We, obviously, we were pleased with the PURA decision. I think it was very clear, and I think that they spoke to the issues that the appeal, what's running the appeal, and I felt very good about the decision. We continue to be watchful down there as you know. They are not just the parties that appeal, there are others involved. So we are vigilant. But as we've said in the past that we don't have a gun to our head anymore if we do intend to close the transaction, but if it wasn't to close, it's not going to be the end of the world.

Got it. Okay. Great. That's helpful. And then just on the FERC ROE decision on -- you're obviously attacking this from a few different angles. But just on the 205 filing, you did mention potential to reach settlement there. So just maybe could you talk a little bit about what that timing could look like in the case that settlement is on the table versus if it has to go sort of at full length?

Sure, sure. As we -- as I said in my formal remarks, we feel that a new rate will be implemented towards the end of the year. I would say to your exact question, Carly, the first process or procedure out of the gate once we hit back from FERC within 60 days of the date of our filing is a point of a settlement judge to the case to bring the parties to the table. So hopefully, we can settle on the rate prospectively as well as address the legal deficiencies in the FERC order as part of that settlement conference. So that should happen later this year.

Our next question comes from the line of Shar Pourreza of Wells Fargo.

This is actually [ Marcela ] on for Shar. Also kind of talking about the FERC decision, what's your level of confidence on the 15-month refund period? And what milestones should investors be watching for, for clarity on whether that interpretation prevails in court? Maybe for example, should we be paying attention to the MISO proceeding as something that might read through? And how should we be thinking about timing on that case?

Sure. From a data point, if we go the full process and not be able to settle with the parties, yes, I would agree, the MISO decision is going to be a significant data point for us. But I think the process that we put forth, and to your question specifically on the 15-month window, we do recognize that we are subject to a 15-month refund period. And therefore, we accrued for that in the first quarter, as I mentioned. So the 15-month refund period is law, and we recognize that. But arbitrarily, picking a retroactive date for the refund is where we think PURA -- I'm sorry, FERC did not follow the letter of the law.

That's really helpful. And then maybe shifting gears to New Hampshire storm cost securitization. Just how should we be thinking about how much you'll pursue, if there's any carrying costs included in that? And then timing on when we might expect to see that filing?

Sure. So we're hoping the timing is soon that we can get to the table and work with the PUC and the Department of Energy in New Hampshire. I think the dollar amount is probably in the $4 to $4.70 range, and that would include the carrying charges that has already been -- that continues to accrue. So it's really to the customer's benefit, the sooner we complete the securitization, the better off our customers would be in lowering the ultimate cost that would, in fact, be securitized. So we hope then we could complete that transaction, I would say, in a reasonable time frame, late 2027.

Our next question comes from the line of Steve Fleishman of Wolfe Research.

So great. On the FERC, just a follow up on the FERC questions. When we think about the other parties that you might settle with, like who are the parties in this case at FERC? Is it your state advocates? Is it transmission customers? Or yes.

It's a broad range of stakeholders that would be involved. Obviously, as you very well know, this is a New England tariff. So all 6 New England state transmission owners are impacted. So you can expect that every consumer advocate from those states, the AG's office from 6 New England states will have a seat at the table. And we are prepared to have those discussions with everyone involved.

Okay. And is there like a man -- it sounds like, as you said, you can implement subject to refund by a certain date. Is there a deadline though, where they actually have to rule by?

Sure. Yes. Good question. Our understanding is that FERC has 60 days from the data filing to let us know when the rate can be implemented. And there's a -- FERC can take up to 5 -- suspend the rate up to 5 months. So I think we can all expect that, if you take the 60 days plus to 5 months, so within 7 months from the filing date is where we would expect the rate to be implemented, as I've mentioned on the subject to refund basis.

Okay. And then just on the Aquarion and I mean, what are we actually waiting for at this point to decide whether to close or not just for the -- I mean, they rejected the reconsideration. So what is actually left from here?

Yes. We're waiting for the appeal period to be exhausted. And so this is the second of the appeal period, they exhaust on June 14.

And that's at the commission or at the court?

At the commission.

Our next question comes from the line of Sophie Karp of KBCM.

So my question is, in light of all of the uncertainties you guys are facing with the FERC process and the [indiscernible] Aquarion situation as you wait out the appeal window, how are you thinking about the timing of equity capital here? Does that make sense to just like issue the amount that you need and rip the Band-Aid off? Or would you wait and see these pieces kind of fall into place before you rightsize the offering? Like what's your thinking process here?

Sure. Sophie, this is John. So let me just reiterate our guidance is between now and 2030 to issue between -- in the range of $800 million to $1.1 billion. Clearly, that's a very nominal number over the next 5-year period.

Also, as another reminder, in February, we did do our first [ JSN ] offering, which I was very excited about. That brought in $1.5 billion of cash. So right now, we're seeing how this thing plays out. And also, as I highlighted in my formal comments, within the next 12 to 15 months, we would expect up to around $2 billion of incremental cash coming in through the Connecticut and New Hampshire storm securitization proceeds. So we will be very thoughtful and mindful of all of these significant interactions -- transactions that could have an impact on our equity needs.

So we really have no urgency to go to market right now. So it's -- we'll pay a close eye as to how these transactions ultimately materializes.

And then my other question clearly not normal, something that impacts your Eversource's economics. But when we think about energy supply situation in New England and Millstone upcoming recontracting potential rate and forward prices in New England given the situation in global oil and gas markets. Clearly, that impacts affordability. And so what are you seeing in terms of a policy response maybe across these territories to this intended impact from higher energy pricing in your territory specifically?

Yes, I've been very encouraged. I mean we're injecting 2,600 megawatts of new power into the region. So that is really going to help moderate the clearing price at ISO New England. I think that if you look at the volatility in ISO New England, it's really not -- it's not a very volatile market compared to [ PJM. ] So I feel good about it. When I look at Clean Energy Connect injecting 1,100 megawatts into our system, I look at Revolution Wind at 704 megawatts, and I look at Vineyard Wind in at over 800 megawatts, that's having a significant impact on pricing in the region, so I feel very encouraged.

Couple that with the fact that we are resisting data centers. I'm really not interested in the data center coming here. It's of no value to our residential customers, actually any customer. It's only going to drive up the price of energy. And so those are some of the things. And then you take a state like Massachusetts, where they had an executive order that's looking at all things that we can possibly do. I mean they have approved a natural gas pipeline enhancement with Enbridge that we're going to partner with to bring in additional gas capacity into the region. As you know, we did purchase a 26-acre site from Joe Dominguez at Constellation, that's going to allow us to inject upwards of 2,400 megawatts of power into the region.

So I feel we're very well positioned to help our customers manage any cost, energy cost and try to drive. We want to drive that clearing price down and make sure that we provide a stable, reliable network for it to operate on. I mean I continue to be encouraged by the number of requests that we're getting to inject into our system. This clean energy resources, whether it's the hydro or the offshore wind, and offshore wind is at a 50% capacity. In fact, it's very, very good. And it's at a time when we really need it. Those winter months, that's when it's really peaking.

So I'm not really that concerned. Obviously, I love more generation. I wish we had a dozen more combined cycle plants built here. But the fact of the matter is, I think we're still very well positioned and we're not going to see the volatility that some of these other exchanges are seeing.

Our next question comes from the line of Andrew Weisel of Scotiabank.

Another one on the transmission ROEs. I understand what you're saying about the 205 process and how you can implement subject to refund. My question is, what would you be booking on a prospective basis in terms of earnings, say, 2027 and beyond? Will you assume the 11.39% up and until the FERC or a court indicates that you shouldn't? Will future guidance be based on the 11.39? Or the 9.57% as a base ROE?

Well, first and foremost, the current guidance that we just reiterated and updated back when we issued the 8-K, which was March 31, assumed the current rate, which is 9.57%, okay? So we'll wait to see how this 205 ultimately shakes out later this year. We'll have -- we'll know that definitively. And we'll revise our guidance to reflect whatever rate we can bill to customers. But that will be done on the fourth quarter call in February once we've solidified this issue.

Right. Okay. So your assumption is that you'll get resolution before the fourth quarter call when you gave guidance?

Yes. Under the current procedure on the Federal Power Act, we expect a decision from FERC to determine when we can implement this new proposed rate. And as I've said, on a subject to refund basis. So we will be billing customers, provided that we don't mutually reach a settlement agreement with the stakeholders. We will -- this rate will go live and it will -- and the process to review and decide the ultimate rate that's just unreasonable. FERC will have plenty of time to do that.

Right. Okay. Let's hope they stick to the schedule. They don't always stay on time, but let's hope they do.

Then the second question, if I can, on the refunds of $880 million or so. I know the refund period was extended through mid-2027. From an accounting perspective, have you taken any sort of reserves? Or will you have to? Or is that just sort of looming while the challenging appeals play out?

We'll see how things progress, but our position based on the legal merits of our case that we have filed with FERC counsel and our own internal counsel, we feel we have a strong legal position that supports us not booking anything until we have further determination and clarity on the retroactive piece going back to 2014. So I want to be clear.

But we do know that we have exposure and we are subject to the 15-month refund period as FERC just validated. We were also pleased and we feel it was the right thing for FERC to do -- to dismiss complaint 2, 3 and 4. So we have that validated. But we do agree that we are subject on the Federal Power Act to the 15-month refund period. And that's why we booked that this quarter.

Our next question comes from the line of Travis Miller of Morningstar Inc.

Just one quick follow-up for me on FERC. I appreciate all the details here in the script. But on that FERC high level, given the uncertainty there, depending on what happens over the next year, what's the flexibility you have on your transmission investments in your CapEx? Is that an area where you could potentially move around some CapEx if there's a decision that goes against you? Or is there even a need to move around CapEx?

We certainly will look at that. I don't want to get ahead of our skis here, but that's something that we can look at. But right now, where we have -- and we said that in our formal remarks that we were a bit taken back by this harsh decision that was just issued by FERC because as Joe mentioned, we need more supply, right? And utilities and transmission owners should be incentivized to explore investment opportunities that would reduce the overall cost for customers. If you recall back a decade ago, where New England was under tremendous amount of congestion pressure, and we unlocked that congestion and saving customers billions of dollars eliminating that price differential. So those investments have resulted in tremendous cost savings for our customers throughout New England.

[Operator Instructions] Our last question comes from the line of Paul Patterson of Glenrock Associates.

So lots of questions answered. I just -- on the Connecticut PBR, is that -- I don't know. Are we going to wait 10 years for something on that? Or is that -- I'm just joking around, I apologize. But I mean what do you think is, I guess, what's the status of that?

Paul, as you know, we've been untangling a lot of things down there. It's a very, very positive turnaround. I think in PURA, we're getting very, very good decisions. We're getting fair decisions. In the [indiscernible], PBR would be great to have. But at this point, we're just trying to sort through and get an orderly regulatory environment to operate in. So I'm not going to go poke the bear and start to talk about PBR right now. Let's get some other things or some other priorities that I have on my plate before I'm going to poke the bear on PBR.

Okay. So just wait and see kind of thing, I guess, right?

Yes.

Okay. And then I guess one of my questions is, do you know what triggered FERC after all this time to sort of come out with this sort of out nowhere?

Yes. I mean we can suspect that it was a tough decision having to sort of linger out there for many, many years. I think the message that they've sent to New England transmission owners is we're going to let the courts make the decision on this proceeding. And that's why we're taking the legal action that we've discussed on this call today.

I am showing no further questions at this time. So I would like to turn it back to Joe Nolan for closing remarks.

Thank you again for joining us today. You still have time to get on David Campbell's Evergy call. We gave you 15 minutes. But our teams have weathered a lot of storms this past year, and we delivered top-tier reliability for our customers. We are carrying tremendous momentum into 2026 with a clear focus on derisking our business profile, resolving key open items ahead of us and positioning the company for sustainable long-term growth. Thanks very much.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Eversource Energy Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Rima Hyder, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today on the full year and fourth quarter 2025 earnings call. During this call, we'll be referencing slides that we posted on our website. 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 forecasts 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 to GAAP results is contained within our news release, the slides we posted last night, and are in our most recent 10-Q and 10-K.

Speaking today will be Joe Nolan, our Chairman, President and Chief Executive Officer; and John Moreira, our Executive Vice President CFO and Treasurer. Also joining us today is Jay Buth, our Vice President and Controller.

I will now turn the call over to Joe.

Thank you, Rima, and good morning, everyone, and thank you for joining us today for our year-end earnings call. I'm pleased to report that 2025 was another year of strong execution across the organization. Our team delivered excellent operational performance, continue to advance critical infrastructure needs for our customers, leveraging technology solutions to lower O&M costs, and remain focused on providing safe, reliable and affordable service to customers and communities we are proud to serve.

We also made meaningful progress working collaboratively with state policymakers, regulators and stakeholders to address critical priorities like affordability, while remaining focused on reliability. This remains a top priority for Eversource.

Our goal is to ensure state leaders have the tools they need to support customers and that we have the regulatory clarity to make the investments essential to balancing affordability and reliability. These challenges can only be solved through true partnerships, working together face-to-face with shared goals.

Moving to Slide 4. Let me take you through some of our 2025 accomplishments. Starting with our financial performance. I am proud to report that we delivered on our commitment of non-GAAP earnings with full year earnings per share of $4.76. We also paid dividends of $3.01 per share to our shareholders, representing a 5.2% increase.

Moving on to Slide 5. In 2025, our employees once again demonstrated their commitment to operational excellence. Throughout the year, we delivered high levels of service reliability, responded effectively to several significant weather events, and continued making progress on projects that strengthen the resiliency and sustainability of our electric, natural gas and water systems.

As a result, we had top decile performance for both the MBI and the SAIDI metrics that demonstrates our investments vastly improved reliability for customers. With this high level of performance, our electric customers, on average, experienced an outage only once in nearly 2 years.

We successfully deployed over $4 billion in capital investments in 2025. Our team has advanced grid modernization initiatives, expanded customer energy efficiency programs, and continued supporting the region's long-term decarbonization goals. These efforts reinforce our role as a trusted partner for New England's clean energy future and demonstrates our ability to execute consistently across a broad set of priorities.

Our advanced metering infrastructure or AMI program has officially reached over 100,000 smart meter installations in Massachusetts, a significant milestone in this multiyear effort to upgrade more than 1.5 million meters statewide and deliver more modern tools with greater functionality that will benefit customers. On the regulatory front, we obtained several constructive decisions that will support ongoing infrastructure needs, including rate outcomes and cost recovery mechanisms that align with our infrastructure investment needs.

We advanced key grid modernization initiatives, progressed on storm cost proceedings with 98% of our $2 billion in deferred storm cost in current rates are pending cost prudence reviews, and we continue to engage with policymakers on the affordability and reliability implications of the region's energy transition and address low growth.

Our commitment to building strong regulatory relationships is enabling productive dialogue in all 3 state jurisdictions. The outcomes we obtained last year reflect a shared recognition of the importance of modernizing the distribution system while keeping customer affordability at the forefront.

Last month, in Massachusetts, we worked with Governor Healey's administration to implement a rate relief plan for electric and gas customers, which is a constructive step in support of affordability for Massachusetts customers. The plan provides customer discounts in February and March during peak winter usage. The discounts are partly funded by the state, and we will gradually recover our portion of the discounts over the lower usage period this year. This approach aligns with our efforts to smooth bill impacts for our customers.

Strengthening our balance sheet was a top priority for us in 2025. And over the last 12 months, ending September 30, we have delivered an improvement of more than 400 basis points in our FFO-to-debt ratio at Moody's. As a result of the cash flow enhancements previously outlined. Maintaining this improvement will be a continued key focus area for us in 2026. In January 2025, we broke ground on the Cambridge underground substation, a $1.8 billion investment, which is the largest underground substation in the nation and critical investment in strengthening the electric system that serves one of the fastest-growing and most energy-intensive areas of our region. Construction on this project continues to progress very well.

We completed the construction of the onshore substation for the Revolution Wind project late last year. And as Orsted recently announced, the project is expected to achieve first power within the coming weeks. Orsted has also stated that construction of Revolution Wind has resumed since the preliminary injunction on the recent stop work order was granted, and the project is 87% complete.

Currently, given the latest construction updates and cost estimates, we do not need to change the contingent liability that we recorded in the third quarter of 2025. Another one of our proud accomplishments for the seventh year in a row was that Newsweek recognized Eversource as one of America's most responsible companies. This recognition highlights our excellence in environmental, social and corporate governance areas. This recognition is a reflection on the hard work and dedication of nearly 11,000 Eversource employees who do the right thing every day, and I want to sincerely thank them for that.

Moving to Slide 6. As we look at 2026, our priorities remain clear, and well aligned with the needs of the region. First, we will continue to deliver top-tier operational performance for our customers, maintaining high reliability enhancing customer experience, and ensuring the safety of our workforce, and the public are our core commitments. Second, we will advance our infrastructure investment program, including grid modernization, resiliency projects, and targeted upgrades that support reliability today while enabling the clean energy transition of tomorrow. The service we provide is critical, and replacing the aging infrastructure and addressing capacity requirements to meet demand growth is extremely important for our customers.

John will discuss in greater detail our new 5-year capital investment plan of $26.5 billion. This new plan increases our necessary infrastructure investment over the next 5 years by $2.3 billion. The majority of this increase is aimed at electric and natural gas distribution investments to address aging infrastructure needs under a multiyear project, such as the electric sector modernization plan, and the underground cable modernization program as well as complying with applicable state safety regulations.

Third, we will continue to actively pursue our constructive engagement with regulators and stakeholders. In each of our states, new leadership in government brings fresh perspectives, new conversations and new opportunities to partner in shaping the future of energy in our region.

In Massachusetts, our smart meter initiative is a cornerstone of that future, offering customers more insight, more control and more connection to the way they use energy.

Last year in Connecticut, we reached an agreement to sell Aquarion Water Company. This decision followed a thoughtful and disciplined review of our investment portfolio. While we were disappointed with PURA's initial decision, we will continue to work with them on the judge's remand. The commission recently announced that we can expect to revise draft and final decision in March.

Aquarion is a well-run business with a strong local team, and this transaction positions the water system for continued investments under a dedicated water operator while also delivering value to our customers and shareholders. In addition, as this business is still part of Eversource, we have provided PURA with notice of intent to file a rate case for Aquarion, consistent with our responsibility, to seek appropriate recovery for ongoing investments that ensure safe, reliable and sustainable water service for customers.

We will also begin our first rate review in Connecticut for CL&P in about 8 years. We see that as an incredible opportunity to show how we've provided best in the industry reliability and that those investments are valuable to customers. Another key item for us is our recovery of storm costs. We expect to receive a decision from PURA on our Connecticut storm cost prudency review in July, which would allow us to begin the legislative-backed securitization process.

Importantly, securitization enables timely cash collection, improving our FFO to debt metrics while reducing near-term bill impacts for customers. This year, we're also looking at how we thoughtfully and responsibly use artificial intelligence, which is helping us reimagine how we work, from safety to line inspections, to system planning to customer service, and even leveraging AI in how we prepare and respond to regulatory proceedings.

Using AI to optimize our system operations can reduce costs for our customers. And finally, we will continue to execute with financial discipline. We remain committed to a strong balance sheet, prudent capital deployment and delivering stable, predictable long-term value for our stakeholders. I want to thank our employees across the organization for their commitment, professionalism and exceptional work throughout 2025. Their dedication is the foundation of everything we do, and it positions us well for another productive year ahead, and continued long-term success with a keen eye on enhancing our earnings and derisking our business profile. 2026 will be a truly transformational year for us as we operate within a changing regulatory landscape and navigate affordability concerns. We are driving forward on several major fronts.

We're executing relentlessly on completing our offshore wind commitments, enhancing storm cost securitization and managing the potential sale of Aquarion. At the same time, we remain laser-focused on delivering top decile operational performance across our systems to continue to deliver on our customers' expectations. This combination of strategic execution and operational excellence positions us to achieve earnings growth towards the upper half of our 5% to 7% long-term EPS range by 2028.

I will now turn the call over to John to discuss this long-term growth trajectory as well as our results. Thank you.

Thank you, Joe, and good morning, everyone. This morning, I will review 2025 full year earnings results, provide a regulatory update, share our updated 5-year capital investment plan and provide our 2026 EPS guidance, our 5-year financing strategy and our long-term earnings growth expectation.

Let me start on Slide 8 with a review of our 2025 earnings results. Our GAAP results for 2025 were earnings of $4.56 per share compared with GAAP earnings of $2.27 per share in 2024. GAAP results for 2025 include a net loss of $75 million or $0.20 per share, related to an increase in our liability for expected future obligations to global infrastructure partners. As part of the September 30, 2024, sale of South Fork Wind and Revolution Wind projects, net of tax effects associated with the sale of these projects.

For the quarter, our GAAP as well as our non-GAAP earnings results were $1.12 per share compared with GAAP earnings of $0.20 per share for the fourth quarter of 2024, and non-GAAP earnings results of $1.01 per share for the fourth quarter of 2024.

As a reminder, GAAP results for the full year 2024 included a net loss of $2.30 per share related to the divestiture of our offshore wind investment recognized in the third quarter of last year. As well as a loss on a potential sale of Aquarion Water, which we recognized in the fourth quarter of 2024. Excluding those after-tax losses, our non-GAAP earnings were $4.76 per share for the full year 2025 as compared to $4.57 per share in 2024. As you may recall, our revised non-GAAP earnings guidance for 2025 was in the range of $4.72 to $4.80. Breaking down the 2025 full year earnings by segment, Electric Transmission earned $2.09 per share in 2025, as compared with earnings of $2.03 per share in 2024. The improved results were driven by continued investments in our electric transmission system to address service reliability and demand growth.

Our electric distribution earnings were $1.80 per share in 2025, as compared with earnings of $1.77 per share in 2024. The higher results were due primarily to increased revenues from base distribution rate increases for Eversource's Massachusetts and New Hampshire businesses, partially offset by higher O&M, interest costs, depreciation and property taxes.

The natural gas distribution segment earned $0.97 per share in 2025 as compared with $0.81 per share in 2024. The improved earnings results were due to base distribution rate increases at Eversource's natural gas businesses, and continued investment in our gas system to replace aging infrastructure with a focus on safety.

These higher revenues were partially offset by higher O&M, which included a $12.2 million charge as part of NSTAR Gas' settlement agreement with the Attorney General's Office in December of 2025 as well as higher depreciation, interest and property tax expense.

Eversource parent and other reflected a GAAP loss of $0.42 per share in 2025, as compared with a GAAP loss of $2.46 per share in 2024. These results include the impact from our offshore wind divestiture and the potential Aquarion sale that I discussed earlier. On a non-GAAP basis, Eversource parent and other loss was $0.22 per share in '25 as compared with a non-GAAP loss of $0.16 per share in 2024. This higher loss was primarily driven by increased interest costs offset by the benefit from a settlement with the Massachusetts Attorney General for the recovery of previously incurred EGMA integration costs as approved by the DPU and to a lower effective tax rate.

That wraps up 2025 a solid financial year despite the challenges we faced. We are proud to have delivered another year of recurring non-GAAP earnings and dividend growth.

Turning to our updated 5-year capital plan for 2026 through 2030, as shown on Slide 9, which reflects our utility infrastructure investments by segment. As a reminder, this plan includes only those projects that we have a clear line of sight on from a regulatory approval perspective. Over this 5-year period from '26 through 2030, we expect to invest approximately $26.5 billion in our regulated electric and natural gas businesses, representing a $2.3 billion increase as compared to our prior 5-year plan and a $1.5 billion increase from 2026 through 2029, the overlapping period.

The $26.5 billion does not include Aquarion Water, which would amount to an additional $1.3 billion over this 5-year period. This infrastructure investment plan will allow us to continue to provide customers with safe and reliable service support low growth and address our state's clean energy objectives.

Looking at the $1.5 billion increase from a segment standpoint, as shown on Slide 10, electric distribution is the largest driver of the increase at $696 million. Our updated capital forecast now includes over $11 billion of electric distribution investments, with a continued focus on system resiliency and top-tier electric reliability for our customers. This level of investment is primarily driven by the Massachusetts electric sector modernization plan as well as over $300 million remaining for the AMI program in Massachusetts. The next driver of the increase in our capital investment plan is natural gas distribution at $523 million. The updated capital forecast plan includes nearly $7 billion of natural gas distribution investments, centered around reliability and safety. Contributing to this increase are a variety of mandatory safety regulations that recently became effective, which represents approximately 25% of the growth in this gas distribution plan. Our transmission plan increased by $233 million for the overlapping period.

The revised plan includes over $7 billion of infrastructure investments over the next 5 years. These investments include replacement of aging infrastructure, to harden the system and increase resiliency during extreme weather events as well as innovative substation and other infrastructure projects undertaken for reliability and load growth.

Rounding out our capital plan, are investments in technology and facilities, which increased by $75 million and now is forecasted at $1.2 billion, including cybersecurity investments, AI tools to enable our employees to work more efficiently and tools to protect customer information. As shown on Slide 11, the transmission capital plan includes future ESMP substations towards the end of the 5-year forecast period. For this reason and to address load growth for the New England region, the plan includes sizable transmission investments for NSTAR Electric, which will have the largest transmission rate base in our service territory, projected at nearly $8 billion by 2030.

The resulting impact to rate base from the updated capital investment plan is shown on Slide 12. The customer-focused core business investments included in the capital plan results in an 8.3% growth in rate base from 2024 through 2030. On the regulatory front, we had another busy year with encouraging results.

Our key 2025 regulatory proceedings are highlighted on Slide 13. Highlighting some recent outcomes starting with Massachusetts, we received approval of our PBR rate adjustments with a $55 million increase for NSTAR Electric implemented on January 1 of this year, and a $10 million increase for NSTAR Gas effective November 1, 2025.

Also in Massachusetts, we received approval to implement a settlement agreement that included the recovery of EGMA, acquisition and integration costs, and to solve some long-standing regulatory matters related to pension and other deferred cost recovery items. EGMA integration costs of $82 million will be recovered over a 10-year period and will be implemented as part of our next EGMA rate case.

The pension and other cost settlement will result in a onetime bill credit for NSTAR Electric customers in 2026 of approximately $20 million. This impact was recognized in the fourth quarter of 2025.

Lastly, in Massachusetts, we successfully worked with the Attorney General's office on a settlement, which was approved by the DPU for the NSTAR Gas rate base roll-in, which resulted in a $45 million base rate increase and a onetime customer credit of $12.2 million, which will be effective in 2026. This impact was also recognized in the fourth quarter of 2025.

In Connecticut, we continue to pursue the sale of Aquarion Water with PURA. In January, the Superior core overturn PURA denial of the Aquarion sale and sent the transaction back to PURA on remand to address some items. The court agreed with our argument that the first decision was legally incorrect, finding that PURA lacked the authority to reject the legislatively mandated governance structure of the newly created Aquarion Water Authority.

On February 4, PURA issued a new procedural schedule that includes briefs, a proposed decision with an opportunity for written exceptions, and a final decision to be issued on March 25. We will continue to engage with PURA and all stakeholders as the process moves ahead. We recognize the uncertainty surrounding the Aquarion sale, and our priority is to ensure that Aquarion continues to make necessary system investments to maintain reliable service for customers.

As a result, we have submitted a notice of intent to PURA disclosing our plan to file a rate case for Aquarion, seeking a preliminary rate request of $88 million in additional revenues. This rate request is necessary so that we can support the system long term in the event that PURA does not approved our application for the sale of Aquarion.

Let me now talk about our financing needs over the next 5 years. Without the Aquarion proceeds, we anticipate incremental financing needs, and we are reviewing a number of alternatives to ensure we continue to fund the business efficiently.

Looking at Slide 14, you can see our financing activities. Overall, we need to fund $27.8 billion of infrastructure investments, which includes Aquarion and dividends in the range of $6.7 billion to $7.2 billion for a total cash need of $34.5 billion to $35 billion.

Over the next 5 years, we expect cash flows from operations to be in the range of $24.2 billion to $24.7 billion, which would fund nearly 70% of our cash needs. We are looking at approximately $8.5 billion to $9 billion to come from incremental debt and other financing solutions. Within this range, we are looking at various alternatives for these solutions, such as junior subordinated notes, minority interest sale or minority, like capital structured financing transactions. These alternative financing solutions would qualify for equity content in the range of $1.3 billion to $2.5 billion. We expect a decision from PURA regarding storm prudency that would allow us to move forward with securitization and anticipate proceeds of up to $1.5 billion, providing roughly 3% of the cash -- of cash inflows.

Should an Aquarion sale occur, we would use the proceeds to lower the need for these alternative financing solutions. If we don't close on Aquarion, we would look towards these alternative financing solutions to meet our financing needs. The remaining cash needs would come from equity issuances of roughly $800 million to $1.1 billion.

It's important to note that this equity need is not impacted by the Aquarion sales. As Joe stated, we continue to be laser-focused on improving our balance sheet. As you can see on Slide 15, we have followed through on our commitment to cash flow and balance sheet improvements with over 400 basis points of enhancement on the FFO to debt metrics at Moody's, and 300 basis point improvement at S&P for 2025.

Assuming no Aquarion sale, our financing plan for the 5-year forecast is built to maintain at least 100-basis-point cushion over the S&P and Moody's downgrade threshold each year.

Next, I will turn to our 2026 earnings guidance on Slide 16. Our guidance this year does not assume that the Aquarion sale will occur. And therefore, we have included water segment earnings as part of our full year guidance. With that said, we are projecting earnings per share in the range of $4.80 to $4.95 for 2026.

For 2026, we expect earnings growth to be more moderate due primarily to the timing of key regulatory outcomes. Importantly, we view the 2026 headwinds as transitory and not reflective of the underlying strength of the business or our long-term growth outlook. These outcomes include the potential sale of Aquarion, the recovery of storm costs in Connecticut as well as in New Hampshire.

The positive drivers impacting our guidance this year include transmission investments to improve system resiliency and to address increased electric demand. Distribution rate increases, thanks to our PBR mechanisms in Massachusetts and now in New Hampshire, and our strong focus on managing O&M expense. These positive drivers are expected to be partially offset by higher depreciation and property taxes from increased investments, higher interest costs, the impact of share dilution and a higher effective tax rate.

Turning to Slide 17. As we move into 2027 and 2028, we expect a meaningful inflection in earnings growth, driven by improved regulatory outcomes, recovery of storm costs completion of alternative financing opportunities and distribution rate adjustments, including the result of CL&P rates request in 2027.

As a result, while 2026 reflects a year of transformation, we see clear upside starting in 2027 and continuing throughout the forecast period. We are projecting the 5-year long-term earnings per share growth rate to be in the range of 5% to 7%, based off of our 2025 non-GAAP recurring EPS of $4.76 per share.

We remain confident in our ability to deliver earnings growth towards the upper half of our long-term target of 5% to 7% by 2028. Just to be clear, this expectation would be off of the expected 2027 earnings results.

In closing, our long-term fundamentals remain firmly intact. We have line of sight to improving our earnings as we move beyond 2026, supported by constructive regulatory progress, capital investments moving into rate base in a timely manner and continued focus on disciplined execution.

Importantly, from an earnings growth perspective, these drivers provide increase in visibility into 2027 and beyond. Adding to this is a resilient regulated portfolio of investments, a steadily improving balance sheet and a clear strategy for long-term value creation. We are confident in our ability to deliver sustainable growth and enhance shareholder value over time.

I will now turn the call back to Rima for Q&A.

Daniel, we're ready for our Q&A now. Thank you.

[Operator Instructions] Our first question comes from Shar Pourreza with Wells Fargo.

So just really quickly, the first one is, obviously, Joe, your growth trajectory is predicated on the balance sheet and funding, and you say, like, obviously, financing is somewhat flexible. If you sort of get the Aquarion sale approval on March 25 and storm cost recoveries, that will obviously eliminate the hybrids, but could that also take out some of the straight equity? And could that situation, so post-sale and storm cost, recoveries be accretive to the 5% to 7%, since you're already at the upper half under a base assumption and a lot of your funding needs will be eliminated.

Yes, I'm going to let John touch on that.

Shar, so to start off with Hawaii. To start off with the approach we're taking, just to your point, given the uncertainty around the Aquarion deal is we've given you all kind of range of potential alternatives, as I said in my prepared remarks, that level of $0.8 billion to $1.1 billion of common equity issuances does not -- it's not impacted by whether or not the Aquarion transaction is completed, where we have the flexibility is in the debt -- in the alternative financing to your point. I do expect us -- as you know, we have not issued any junior subordinated debt. So the expectation is with or without Aquarion, we do expect to go to market to -- with that instrument.

And that's despite storm cost recoveries.

Yes, storm cost recoveries will come in, in 2027. And given the procedural schedule that PURA just issued with a final decision, by July, we probably won't be able to complete the securitization and get the cash in the door until Q3 time frame of 2027. So that's why we feel that even with an Aquarion sale moving forward, we still need to go to market with these junior subs. As you know, it is accretive to issuing straight equity. And yes, yes, let me just leave it at that.

And you're 5% to 7%. So obviously, in that situation, you would need less funding. And your base assumption is already at the higher end of 5%.

Correct.

Yes, exactly, Shar.

Correct. So where we have the lever to push and pull, if Aquarion happens, then the alternative financing solutions will be pulled back. So I would view it this way. Within Aquarion deal closing in a timely fashion, it moves our growth rate for the outer years to a much better start.

All right. That's perfect. Okay. And then just lastly, another obviously, uncertain here is Revolution Wind. I guess, where do we stand on potential post-close liabilities to Orsted. And at what point does that liability end? So like, at EEI, you guys mentioned First Power was the cutoff point. So does that mean that if the project reaches First Power, even if the BOEM lawsuits are still ongoing, you are off the hook?

Yes. Thank you. I'll tell you, we have not had this level of clarity around some of the uncertainty, certainly in my tenure as CEO. We expect first power in the next couple of weeks. That is not the trigger though. The trigger is COD, we deliver just as we did with South Fork. We feel very comfortable with the number that we're carrying now. I'm watching weather as we speak, and we expect that 60th turbine to head out to the lease area, and we will have first power in a few weeks. So it's going very, very well. All the land construction that we were responsible for was done. So you take Revolution Wind and the clarity around that and the end being very near, you take the Aquarion decision coming in March, whether it's approved or not, at least it's bringing clarity.

You've got storm costs recovery. You've got a decision coming in July. We already have the securitization vehicle in place. So all of these things, coupled with the rate base rolling that we've got in Massachusetts, we feel very, very comfortable about our future.

Shar, one more. Just to be clear, we don't have any liability to Orsted. Our obligation is to GIP just for...

Our next question comes from Carly Davenport with Goldman Sachs.

Maybe just a follow-up on the sources and uses of cash. Maybe could you just dive in a little bit more on what could potentially make sense from a minority interest sale standpoint and how you might consider structuring that in the context of regulatory approval needs?

Yes. Sure, Carly. This is John. So that's -- we're looking at -- as I said in my formal remarks, we're looking at many alternatives. I would say from a minority interest sale, we wouldn't -- we're looking at kind of a traditional equity interest or a kind of think of it as a minority interest capital structure deal. So it's a little bit different than a true minority interest in the equity position at a line of business or at one of our utilities.

So I think it's a little premature for us to start talking about the level of details, because that would be -- we're not looking to do that immediately. It's just something that we have on the table or as I like to refer, it's a tool that we have in our toolkit.

Great. Okay. That's helpful. And then you're still highlighting $1 billion of upside to the new capital plan tied to Connecticut AMI. Obviously, a lot going on in Connecticut at the moment. So just kind of any sense of when you think from a timing standpoint, you could get some resolution on that and potentially see that start to roll into the plan?

Yes, sure. So we expect that we'll be meeting in Connecticut on AMI. All we want really is to get a woeful application of the prudent standard. And then we'll have to update the implementation schedule, and that meeting is going to be next week. So we're optimistic that we can, at least, get additional clarity around, number one, the desire and the rules of the road down there to make it fair for us to make that investment. But we're not going to make the investment until we feel comfortable with the recovery mechanism. As you know, we've got a lot of money on the line down there right now, and we want to get our storm costs back. We've got a CL&P rate case, and if AMI is important to them, we certainly are ready to implement. I'm thrilled to tell you that 100,000 meters have been put in, in Massachusetts. It's going very, very well.

And I think it's to be a great opportunity for the customs of Connecticut to be able to enjoy the benefits of AMI. And I think that we're in a good position to be able to deliver on that.

And Carly, I would just add that $1 billion that we have on the slide, you need to, at this point in time, view that as a placeholder that number from a cost perspective is kind of stale. So the team is looking at updating that. As Joe mentioned, we do have some discussions happening next week, and we will file a revised cost estimate for that program.

Our next question comes from Bill Appicelli with UBS.

Just going back one step to something you guys said earlier, and I think to make sure I understand it. When you guys say that the upper half -- towards the upper half, I guess, one, just to be clear, that means into the upper half in '28, and then -- and when you say -- you mean rebasing that essentially off of the '27, right? So you're not -- there's no risk of rebasing off of '26, which is obviously a lower number, right? When you say you're sort of off of '27, you're referring to more normalized earnings power in '27 and then growing into the upper half into '28. That's the intention there?

That you are spot on, and that's why in my formal remarks, I made it perfectly clear as to what the base year was. So we -- the expectation is we're going to be at the upper half, which implies over 6% off of the earnings that we delivered for 2027.

All right. Understood. And then -- as far as the tax benefits from South Fork and how much of that is reflected in earnings for '26? And what's the runway there?

From an ITC standpoint associated with our tax equity ownership, zero. Okay? We have not dipped into that bucket yet. So we still have roughly $500 million that we will be utilizing in the coming years. And quite honestly, that it will allow us to be for all intents and purposes, a noncash taxpayer, certainly at the federal level for the next several years and hopefully, towards even the tail end of our forecast period. .

Okay. And then -- so you're utilizing other credits that are available to you this year because there...

I mean, yes, we always have puts and takes from a credit standpoint, a tax standpoint. As I continue, as I've highlighted throughout 2025, in 2025, we were able to harvest a bit more than what we were planning on. And I've also guided you all that don't expect it to be at the same level for 2026. So -- and then Bill, I just want to clarify that the ITC credits that we are yet to utilize, those do not generate a P&L impact, just to be clear. So that is strictly a cash.

Right. Okay. Understood. And then, I guess, the last question, just any other color you can give on drivers into '27 because of sort of the importance of that. Obviously, the CL&P case, but anything else you can sort of frame out when we think about how earnings will shape up in '27 over this '26 number you gave today?

Sure, Bill, and thank you for raising that question. To address that topic, we did introduce a brand-new slide that I hope you find everyone finds useful. It highlights those major drivers, and the timing of when we would expect things to start materializing. So if you look at that slide, it's Slide 17 in the deck that we disseminated, we have the Aquarion transaction. We have the storm case. We have the Aquarion rate case, we have the securitization, and we have revolution get behind us. All key overhangs that we've had for a long time will not be solidified in 2026. The 2027 enhancements will be, obviously, if Aquarion closes, the CL&P rate case as we continue to forecast, we will likely file that case midyear of '26 with a rate adjustment kicking in midyear of 2027. And the storm cost prudency, securitization transaction will happen around the Q3 of 2027. So those are the major drivers that will give us the momentum from a growth standpoint into '27 and beyond.

Our next question comes from Sophie Karp with KBCM.

So I guess I'm wondering, can you give us some sense when is the COD on the Revolution Wind going to occur after you have first power, which you will have in a few weeks? Like what's the time line there? And that just will you press release that? Will we know that? Or are you going to wait until the next time you report?

Yes. We're targeting the second half of 2026. We are very, very pleased with the progress. As you know, we've pulled that schedule in significantly. It continues to improve. I see nothing standing in the way of that schedule only getting better. And again, the only situation that we worry about is weather and something that none of us can control. But -- so second half of 2026 at this point, yes, and as we get more clarity as we get first power in another week or 2, I think that Orsted, who was actually has the lead, we're not really the one that's able to disclose that. We'll give updates to the market.

[Operator Instructions] Our next question comes from Paul Patterson with Glenrock Associates.

So just to sort of -- and I apologize for being a little slow on this. With the Aquarion sale, what is the difference if you get it or you don't in terms of the incremental amount of equity or equity hybrids that were that we're talking about? Could you just fill that out for me? I just -- I'm not completely clear. I apologize.

Sure. So once again, Paul, this is John. No change to what we just rolled out as our equity needs, $800 million to $1.1 billion from a pure-play equity raise, where we have the flexibility is in the other alternative financing. We were assuming that in the current transaction to get $1.6 billion of the equity portion of the sale of Aquarion. So that's what you should think about as being the impact.

And also, we'll put them on notice if we do not transact we will file for a rate case to improve those earnings down there as well. I mean it is a phenomenal asset, but we made the decision to exit that business to improve our balance sheet. And that was a decision that we made. But if, in fact, we don't exit it, it still is a very, very good business.

Yes, I see that. Also on the Eversource Gas benefit in the fourth quarter that -- if I read the press release correctly, it was in the parent. I was just wondering, could you -- how much was that? And why is it in the parent and not in the gas business? Or what am I missing?

Okay. Very, very good question, Paul. So those are costs that we had incurred several years ago when we were integrating EGMA. It's not in-stock gas, it's EGMA. And per the settlement agreement that we executed back when we acquired the company back in 2020, it did provide similar to what we have been granted in previous M&A transactions in all 3 jurisdictions, quite honestly, okay? Those costs -- those integration-related costs were incurred by the parent company as the source of fund. So those costs are at the parent company. We recorded the benefit at the parent company to reimburse the parent. The recovery, the recovery, the dollars will come in from EGMA customers, because the EGMA is the -- are the customers that are reaping the benefits of that.

I'm showing no further questions at this time. I would now like to turn it back to Joe Nolan for closing remarks.

Thank you all for joining us today. 2025 was a solid execution of our business plan. Our team delivered top-tier reliability for our customers we advanced major strategic priorities. We enhanced our financial condition, and we strengthened the foundation of the business.

As we move into 2026, we're carrying that momentum forward, with a clear focus on derisking our business profile, resolving the key open items ahead of us, and positioning the company for sustainable long-term growth. We are firing on all cylinders to finish this work, and I'm confident that the disciplined execution you've seen for us this year will continue as we deliver on the commitments we've made to our customers, communities and shareholders. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Eversource Energy Q3 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Rima Hyder, Vice President of Investor Relations.

Good morning, and thank you for joining us today on the third quarter 2025 earnings call. During this call, we'll be referencing slides that we posted this morning on our website. 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 forecasts 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 to GAAP results is contained within our news release, the slides we posted and in our most recent 10-Q and 10-K.

Speaking today will be Joe Nolan, our Chairman, President and Chief Executive Officer; and John Moreira, our Executive Vice President, Chief Financial Officer and Treasurer. Also joining us today is Jay Buth, our Vice President and Controller.

I will now turn the call over to Joe.

Good morning, and thank you for joining us today.

Starting on Slide 4. Over the past 10 months, our team's relentless focus on executing on our key strategic initiatives has driven strong results and consistent performance. We are well on our way to delivering against these initiatives and ending the year on a strong note. Our strong results have also greatly improved our standing among our peers. On a year-to-date basis, our share price has been a top performer among the EEI peer group. Today, I'll walk you through how we're capitalizing on our unique market position fueling sustainable growth and strengthening the balance sheet to power our future outlook.

Moving to Slide 5. In the last few months, we have gained more clarity on the Connecticut regulatory environment and the impact for our ongoing and future regulatory proceedings at PURA. Additionally, each day of construction that passes yields progress on the derisking of Revolution Wind. We're seeing a constructive shift in Connecticut's regulatory landscape. Last month, Governor Lamont appointed 4 new commissioners at PURA, filling out the 5-member requirement under Connecticut law. With this new commission on the way, there is now a genuine opportunity to collaborate with all parties on regulatory initiatives and to achieve more balanced regulatory outcomes. This will enable us to better serve the needs of our customers in this state and to do so with a strong focus on safety, reliability and affordability. Critical needs exist for state and regional infrastructure investments to maintain a strong, reliable and resilient grid that can accommodate new sources of generation to meet the increasing levels of projected electric demand, a transparent and predictable regulatory process is going to benefit all stakeholders, including our customers, and we are looking forward to getting back to work on Connecticut's energy goals.

For our ongoing Yankee rate case, we submitted a motion to adopt an alternative resolution with PURA. This was in response to PURA's request for parties to reach a consensus based resolution to reestablish trust in balance in the regulatory process and avoid further legal appeals. Our proposal includes important customer affordability provisions that we believe are supportive of all stakeholders affordability goals. We expect to see a final decision from PURA today. We remain on schedule to receive a final decision for the sale of Aquarion Water on November 19 and we continue to expect to close the transaction by the end of this year. As you may be aware, we filed a comprehensive offer of compromise to address concerns raised by the Connecticut Office of Consumer Counsel. The commitments that were outlined in the offer of compromise provide additional assurances that the transaction will serve the interest of Connecticut and the customers served by Aquarion Water.

Moving on to an update on offshore wind. We have substantially completed construction of the onshore substation for Revolution Wind project. We expect to provide back feed [indiscernible] to the offshore facilities by the end of November, which will support testing and commissioning of those facilities. In parallel, we will complete the final testing and commissioning of the remaining onshore equipment. Overall, as Orsted has stated, Revolution Wind is substantially complete and work has continued since the [ stop ] [indiscernible] lifted in September. We recognized an increase to our liability to GIP in the third quarter, which was largely offset by tax benefits. We continue to support the project's owners in their completion of this important generation resource for New England.

As I said at the start of the call, our execution has delivered positive results and we have made great headway on our many key strategic initiatives this year. We have continued to deliver on our operational metrics with top decile reliability performance among our peers. We have significantly improved our FFO to debt ratio through constructive regulatory outcomes and managed our balance sheet to support solid credit ratings. And we know we are not done yet. We have continued to invest in transmission and distribution infrastructure across our service territories. We are on track to invest nearly $5 billion this year. We have installed over 40,000 AMI meters in Massachusetts and completed the communication network deployment in the Western portion of our service territory. These achievements are just a few that underscore the strength of our execution engine and the depth of our operational rigor.

As you can see on Slide 6, we have many growth opportunities ahead of us. Our service area is truly the crown jewel of the country. This area is home to cutting-edge biotech and research in the best universities and health care in the world. As these industries expand, they turn to us for a reliable, resilient grid, making us an indispensable partner in their success. We're seeing robust load growth, driven primarily by electrification of transportation and heating, decarbonization initiatives from both the public and private sectors and economic expansion across manufacturing and commercial sectors. These factors help to ensure that our growth is broad-based, durable and aligned with state sustainability goals. Year-to-date, we have seen weather-normalized load growth of 2%. In this summer, we experienced a peak of [ over ] 12 gigawatts, the highest record since 2013 as load growth in our service territory has started outpacing the impacts of distributed generation such as rooftop solar.

The evolving electric demand landscape presents a need for numerous transmission projects such as upgrades linking onshore and offshore wind to load centers into connections, improving regional reliability and addressing congestion as the generation mix for our region evolves. Some of the projects we are pursuing to get ahead of this continued load growth include the Cambridge underground substation, which will be the largest in the nation in 1 of 14 substations currently on the drafting table that we expect to build in Massachusetts alone to support future growth. Being opportunistic about land acquisitions in our service territory to support this growth, such as the Mystic Land acquisition we did last year with more in the pipeline, responding to requests for proposals from ISO New England to address longer-term transmission solutions, such as the most recent 1 to bring power from Northern Maine to Southern New England. These opportunities, some being outside of our 5-year forecast period could add billions of dollars to our future investment plans. Each project that we are considering not only supports our growth trajectory, but also deepens our value proposition as a great innovator.

We also recognize that as demand increases, affordability must remain top of mind. We are working closely with our regulators to offer our customers various options to address affordability as shown on Slide 7. We collaborate with large and small customers to design rate structures that incent efficiency. For example, earlier this year, we worked constructively with our regulators in Massachusetts to offer a 10% discount to our gas customers during the winter peak months and recover that in the summer months to smooth the impact of high bills. Similarly, starting this month, we are offering a seasonal heat pump rate in Massachusetts. Eversource electric customers who use a heat pump to heat their homes can take advantage of a seasonal heat pump rate, which is a reduced rate during the winter months. We are expanding energy efficiency programs to provide incentives for residential and low income customers who choose to adopt energy-efficient technologies. These programs, coupled with AMI give customers greater transparency and control over their energy pocketbook. Our nation-leading energy efficiency programs have already generated $1.4 billion in savings for our customers.

We have also implemented low-income discount rates for our most vulnerable customers, and we are recognized for our leadership in advocacy for state utility partnerships in [indiscernible] programs. We are excited about new energy supply coming into our region, which should alleviate supply cost pressure on customer bills. Over the next 12 months, Eversource is directly supporting new generation coming into the region totaling over 2,500 megawatts. We aim to deliver reliable, sustainable energy while keeping costs manageable and partnering with customers to ensure affordability through cost-effective investments, efficient operations and equitable rate design.

Before I hand the call over to John, I want to thank our 10,000-plus employees for their dedication, our regulators for their collaborative spirit, and our shareholders for their trust. We're executing against a clear strategy serving extraordinary customer base and working to build the grid for tomorrow, responsibly and sustainably. I look forward to your questions in sharing more details on our path forward.

With that, I'll turn the call over to John Moreira.

Thank you, Joe, and good morning, everyone. This morning, I will review third quarter earnings results, provide a regulatory update and discuss our recent financings and progress on credit metrics.

I'll start with our third quarter results on Slide 9. As announced last month, during the third quarter, we recognized a net after-tax nonrecurring charge of $75 million or $0.20 per share related to our offshore wind liability. This charge increased our estimated liability for future payments to GIP by approximately $285 million, which was offset by $210 million of tax benefits. These tax benefits were the result of a change to previously estimated tax attributes primarily associated with Revolution Wind.

Our GAAP earnings for the third quarter of this year were $0.99 per share, including the impact of this recent offshore wind net charge. GAAP EPS for the third quarter of last year was a loss of $0.33 per share, reflecting the impact of the sale transaction of South Fork and Revolution. Excluding the after-tax losses from offshore wind in both years, non-GAAP recurring earnings for the third quarter of 2025 were $1.19 per share compared with $1.13 of non-GAAP recurring earnings per share last year.

Now looking at the quarter results by segment, starting with transmission. Higher electric transmission earnings of $0.01 per share were due to increased revenues from continued investment in the transmission system. Next, we have higher electric distribution earnings of $0.03 per share that reflect distribution rate increases in New Hampshire and Massachusetts provided for cost recovery for infrastructure investments in our distribution system. These higher revenues were partially offset by higher interest, depreciation, property taxes and O&M. The improved results of $0.04 per share at Eversource's Natural Gas segment were due primarily to base distribution rate increases in both Massachusetts utilities and from capital tracking mechanisms to provide timely cost recovery of investments in our Natural Gas businesses. These revenue increases were partially offset by higher interest, depreciation and property tax expenses. Water distribution earnings were lower by $0.02 per share for the quarter as compared with prior year, primarily due to higher O&M and depreciation expense.

Eversource parent earnings results were flat for the quarter, excluding the net impact from offshore wind that I mentioned earlier. As a reminder, all of these segment results reflect the impact of share dilution. Overall, we are very pleased with the solid performance for the third quarter and our recurring earnings are in line with our expectations.

Moving to some key regulatory items as shown on Slide 10. As Joe mentioned, we recently filed an alternative resolution proposal in the Yankee rate case. If adopted by PURA without modifications, the alternative resolution would waive our statutory right to appeal the final decision resulting in a fair and balanced outcome. The alternative resolution is an improvement over the draft decision, increasing revenues by approximately $104 million as compared with the PURA's draft decision of $55 million. The alternative resolution would also provide customer relief this winter to a greater extent than the draft decision by accelerating the refund of an existing regulatory liability.

Also, as Joe mentioned, on the Aquarion [ on sale ], PURA has maintained its final decision date of November 19 and pending that decision, we continue to expect to close the transaction by year-end. In Massachusetts, we received the approval of our NSTAR Gas PBR adjustment, and we also filed a motion for reconsideration on the NSTAR Gas rate base reset.

Next, let me reaffirm our 5-year capital plan of $24.2 billion, as shown on Slide 11, which reflects our 5-year utility infrastructure investments by segment through 2029. As a reminder, this plan only includes projects for which we have a clear line of sight from a regulatory perspective. Through September, we have executed on $3.3 billion of our $4.7 billion infrastructure investment plan. We are very pleased with this progress, and we are on track to meet our planned target for the year. We continue to see additional capital investment opportunities in the range of $1.5 billion to $2 billion within the 5-year forecast period. We plan to update our next 5-year capital plan in our fourth quarter earnings call.

Turning to Slide 12. We remain highly focused on improving our cash flow position and strengthening our balance sheet condition. As I have stated before, we expect our FFO to debt ratio for 2025 to be approximately 100 basis points above the rating agency thresholds by year-end. In fact, our Moody's FFO to debt ratio was 12.7% as of the second quarter of this year and reflects an improvement of over 300 basis points from December of 2024. We expect this ratio to be over 13% as of the third quarter.

As we have shared with you last quarter and as shown on Slide 13, we have executed on substantially all the items necessary to improve our cash flows and strengthen our balance sheet. As a result, our operating cash flows have continued to improve, increasing over $1.7 billion year-over-year through the third quarter.

Moving on to our financing activity on Slide 14. While earlier this year we did not anticipate issuing long-term debt at the parent company during 2025, however, we did see the need to capitalize on favorable credit spreads, proactively prefunding an early 2026 maturity and strengthening our liquidity position. Given where our short-term debt balances were forecasted to be and in order to maintain an appropriate level of liquidity, we issued $600 million of parent company debt. On the equity side, to date, we have issued $465 million of equity under the ATM program. We expect that this level will take care of our equity needs for the near term. We also continue to pursue recovery of our deferred storm costs. As of the third quarter, 98% of our deferred storm costs are either under review or already in rates. And as a reminder, our previous cash flow improvement forecast did not assume securitization as the cost recovery mechanism for the Connecticut deferred storm costs.

Next, I will turn to 2025 earnings guidance as shown on Slide 15. As announced in October, we are now in 2025 recurring earnings per share guidance to the range of $4.72 to $4.80 per share to a higher midpoint and reaffirming our longer-term EPS growth rate of 5% to 7% off of the 2024 non-GAAP EPS base. We remain confident in our EPS growth trajectory driven by disciplined execution of our strategic plan, targeted customer-focused investments in transmission and distribution are backed by constructive regulatory frameworks that enable timely cost recovery for our operations. Continued progress on storm cost recovery combined with strict O&M discipline strengthens our financial foundation and positions Eversource to deliver consistent long-term value to customers and shareholders.

I'll now turn the call back to the operator to begin our Q&A session.

Thank you. At this time, we will conduct the Q&A session. [Operator Instructions] Our first question today comes from Shar Pourreza from Wells Fargo.

So just on Yankee Gas, obviously, everyone is watching this one. You've got this motion to adopt the alternative resolution out there. There's some stuff coming out now on it, I think. Is there anything you want to flag? And just remind us, what's kind of embedded in the plan around the outcome? Is it fair to assume that you're kind of conservative around what you're embedding there? [indiscernible] sort of updates, I think we're starting to see some things come across. I appreciate it.

Sure. As you know, [indiscernible] started at 9:00 and the commission went in and the order is out. We need to go through it. As you know, the [ devils are in the detail ]. So we'll continue to take a good look at that, and I think we'll have some answers for folks on this call later today, I can promise you. John can talk to you a little bit about what's embedded in the plan.

Yes. No, Shar, I would say it's in line with our plan, and it appears that the decision is a little bit better than the draft decision, which is very encouraging for us. But as Joe mentioned, we have to go through it. It's -- the ink is not dry at this point. So -- but we will have much more information when we meet with you all at EEI.

Perfect. I'm just glad we're getting through this process. That's good. And then just on the NSTAR Gas PBR, right? I mean, you have a [indiscernible] for recovery of roughly [ 160 ]. Just walking through what you did and didn't get. Why did the Massachusetts, [indiscernible] deny that? Is there kind of an opportunity to get it later? And does this mean you're following a rate case? Obviously, the governor has been kind of warning around rates being too high, then guiding the DPU to scrutinize everything. So I just want to get a sense there. I appreciate it.

Good question, Shar. So the [ 160 ] component, the piece is 3 major items. One is a roll-in of GSEP, which is about $107 million. That really has no impact to customers. It's just going from the right hand to the left hand, the normal PBR adjustment, which was -- which did get approve of about $10 million.

What we had proposed at the mitigation plan for the DPU was to allow us to roll in rate base similar to what we saw last year that the DPU approved for EGMA. That number is about $45 million. And we were very specific when we made that mitigation filing that if we did not receive the rate base role and then our alternative would be to file a general rate case. So as of yesterday, we filed a motion for reconsideration and we also filed our intent to file a rate case. There's been a lot of change, not only in the Connecticut PURA, but also in Massachusetts. These [indiscernible] 2 new commissioners really have not been there that long. So we're hopeful that the efforts that we will work very closely with the DPU will move in the right direction.

Okay. Perfect. Big congrats, Joe, on sort of the traction. It seems like you guys are getting to a pretty good inflection point here. So congrats.

Thank you. Well, I'm very, very proud of the team. We've worked very, very hard at that, getting our message out there. We've been all over actually all the states talking about the issues and engaging key decision makers. So we're really, really proud of the team. It took a [indiscernible], but thank you, and I will see you at EEI. I'm looking forward to seeing you.

Our next question comes from Carly Davenport with Goldman Sachs.

Maybe just to go back to Connecticut, I guess just as you think about the recent changes from a regulatory standpoint, are there any updates you can share from conversations with credit agencies in terms of their views, just given the focus on the regulatory environment and some of the credit rating changes that they've made recently?

Sure, sure. I would say, and I have -- I always have discussions with the credit rating agencies, but I'm sure you can appreciate. Right now, they're in a wait-and-see mode. They want to see some constructive regulatory outcomes to make the determination similar to what we expect and would like to see come out of PURA. But working collaboratively, we think that this new commission is focused on working collaboratively with all the utilities. So -- but I would say we're all there in a wait-and-see mode right now.

Got it. Okay. That makes a lot of sense. And then just 1 other one, I guess, on Connecticut as well. I know you guys have talked previously about kind of timing to file another rate case at CL&P. Just kind of curious how the recent shifts kind of impact your views on timing there?

Yes, sure. We had never really had any attention to filing prior to 2026. So we are looking at that, as you know, a filing of that nature is comprehensive. So we would need to get [ test year ] and that type of stuff. This would not be something that would happen until at least second, third quarter, if we were to file. Obviously, we're going through that now, and that's what we're looking at, at this point, Carly.

Our next question is from Jeremy Tonet with JPMorgan Securities.

This is actually [indiscernible] on for Jeremy.

You're breaking up. [indiscernible]

Can you guys hear me now?

Yes, it's better now. Yes.

[Technical Difficulty]

Jeremy, we're losing you again. Can you call in and we'll come back to you? We'll put you back in the queue?

Sounds good.

Our next question is from Andrew Weisel with Scotiabank.

Good morning, everybody. First question, Joe, you talked about the land acquisition strategy. I know Mystic was a big 1 last year. Can you talk a little more how you're thinking about this? Is this kind of like a land grab where you're trying to get as much acreage as possible in strategic locations for your own stand-alone development? Or is it working with potential customers or partners like large load customers or data centers? And would it be right to assume that dollars are small, it's more about optionality?

Well, yes, a couple of things. This would be for our own use, for our own regulated business. It's in locations that are strategic in nature to allow the injection of energy, whatever energy that is. We are not in the data center business. We're not attracting data centers. As you know, we have a final amount of generation in the region. What we're working on kind of the single and double strategy that I talked about is to be able to unlock captive generation that might be in the New England market to allow it to fall freely also to allow anyone else to interconnect into our territory. So we did purchase the Mystic, and we'll have some news on another very strategic site that we're excited about that will position this company for decades to come.

Interesting. Looking forward to that. Okay, great. Then on equity, just a couple of fine-tuning questions maybe for John here. It looks like the 2025 outlook went up by about $200 million and you removed the comment that the majority of the outlook will be issued in the back half of the forecast period. But John, I think I also heard you say that you're satisfied for the near term after the recent activity. I might have asked a similar question last quarter, but just wondering about the outlook. Maybe you can detail some of these changes, does that relate to kind of CapEx or the long term thinking of how to get to your targeted credit metrics?

Yes, yes. So I mean, as I said in my formal remarks, for the near term, I believe we're done, right? Although we took that off the slide, it was an indication that we're going to continue to issue equity. Still the majority is we may have issued like 37%, 38% thus far. So I still stick to my position that the majority of that will be issued once the latter half of next year.

With the approval of Aquarion, once we get that decision, that's going to bring in net cash at [ $1.6 billion. ] And then with the securitization of Connecticut storm costs likely coming in the door in '27, I think we're primarily covered for those years. So my position still stands. So as I said in my formal remarks, the near term, we're good for now. I have the appropriate level of liquidity. I'm very happy with that given the financings that we did in the last 2 months.

Okay. That's very clear, and it sounds like you're in a good position. Thank you so much.

Our next question is from Anthony Crowdell of Mizuho.

I guess JPMorgan did an update [indiscernible] system in a new building there. Just, I guess, quickly on Revolution. I think it was reported from Orsted this morning, it's 85% complete, Revolution. Just if you could talk about what are maybe the critical parts left bringing the project to completion to end and is it second half '26 when you believe it's all finished?

Yes, Anthony. Yes, Revolution is going very, very well. And right now, we're -- Orsted announced this morning that 52 of the 65 turbines are installed, I will tell you that the work that we're doing in Rhode Island is pretty close to being finished. We've got great job at that onshore substation, we're going to begin to see some power there at the substation very, very soon. So right now, I know that Orsted is talking about a second half of 2026. But I will tell you that we've made significant progress. We've brought the dates in by 4 to 5 months. So we're hoping that we can see that improve. But I will tell you that I feel very, very good about the project and the work that's been done down there. So I think we'll see that project schedule improve.

When is the first megawatt, first power expected to come online from the project?

Yes. That's an issue that Orsted to discuss. We are basically a partner that's building the onshore piece. They are the conductor of this particular train. So let them -- they can tell you what's going on.

Got it. And then just flipping to the storm cost securitization in Connecticut. I know it's with PURA. Any -- and I know the recent change there and it only recently has it changed. But any update on maybe the timing of getting resolution on the storm cost securitization?

Yes. So a couple of things. I mean, our focus has been on the Yankee case. It has been on the Aquarion sale. So when we start to sequence these items, those are the things that were top of the list for us. We now shift our focus onto storms. I think the team has done an extraordinary job of documenting everything. We've had tremendous success in both Massachusetts [indiscernible]. And I don't think it will be any different in Connecticut. We have been asked that we pulled that ahead right now. It's a second quarter event, second, third quarter that we'll see a decision. But we think given that the decks have been clear that PURA we're hoping that, that can improve, we can get a decision that will allow us to go forward with securitization and get that money in the door for us. So yes, and the other issue is the interest cost, which -- that will provide us a great opportunity there to stop the interest cost.

Our next question is from Julien Dumoulin-Smith from Jefferies.

Look forward to see you guys next week. Look, I wanted to just follow up on the Massachusetts backdrop. I know Shar asked it, but just how would you frame expectations here from gas on to the electric PBR? Just with respect to the backdrop here, anything to read -- again, I get that the gas PBR had very specific metrics but anything that you'd read into the backdrop here on the electric or EGMA?

Well, the -- similar to what we have on the electric side, we have the same composition on the gas side. We have to perform. And on the gas side, this was the first touch point being under the PBR structure for [ Yankee NSTAR Gas ]. So there's several performance metrics, there's really 3 criteria that you have to meet. One of them is you have to meet the performance measures that have been approved by [indiscernible] We -- there were 18 actually. We performed very well in 15. So 3, we did not perform. And those 3 are very, let's call it, very subjective opinion surveys like J.D. Powers and surveys that we do, which are very driven by how the customers perceive us.

The history of the precedent in front of the DPU as it relates to these performance measures is always viewed as while the company didn't have control, [indiscernible] the company couldn't have done anything. And obviously, in a high-cost environment, it's very challenging. So that was the reason that the DPU took the action and did not allow us to roll the [ $45 million ] into rate base. And as I mentioned earlier, yesterday, we did file for a motion for reconsideration. So we will continue to work with the DPU Obviously, as I mentioned, it's -- we have some new players sitting at the table, and we look forward to working with them very closely as we progress on this motion.

Right. But the PBR metrics on the electric side kind of have that same composition, though?

And we performed well. We have performed well. It's not an annual assessment with NSTAR Electric, it's a 10-year deal, you have a 5-year. The fifth year happens in 2028.

Excellent. No, indeed. And then just if I can -- I mean, obviously, you guys roll forward typically 4Q. But any early indications, especially as it pertains to transmission and long lead time investments where you perhaps had some visibility here already? And any indications from [indiscernible] New England's planning process this year?

Well, as you've seen in the last 5-year plan that we rolled out, the latter years are no longer a dip, and I expect that trend to continue where the outer periods will be more increasing versus what we've seen historically. So that's the reason -- that is the primary driver of that is because we have the clarity, and we have the projects that are in the queue to allow us to roll that into our plan.

Got it. All right. Excellent. We look forward to [indiscernible] nicely done. I appreciate the disclosures on the credit side, and we'll talk to you soon.

Operator, I would like to correct a statement that I made earlier to Andrew Weisel's question. I think I may have spoken I just want to get that on the record. The equity, I said that our equity needs in the near term are taken care of. And I stay with my statement that I had made previously that the majority of the equity needs will be towards the tail end of our forecast period. I think in my answering Andrew's question, I may have said next year. That is not the case.

Thank you for that clarification. Our next question is from Paul Patterson from Glenrock Associates.

So just on -- I'm having a little trouble with this. How should we think about your tax rate on an adjusted basis for the quarter and how you see it going forward?

Paul, this is John. So as I've said previously, over the past several years, we have taken advantage of some very attractive tax benefits last year, and I may have said this previously, we were in the high teens. The expectation is this year it's probably be in the low 20%, 20%. But I think next year in 2026, we probably would get to more of a normal sustainable level. But we've taken full advantage of some nice tax benefits for the past several years and we will continue to have any and all tax benefits that we can actually achieve.

Okay. Because when I look at the after-tax benefit or the -- excuse me, the hit on the offshore wind that was offset by the tax benefits, should we -- are all of those tax benefits reflected in the non-adjusted number? In other words, they seem to be allocated. When you talk about the write-off, it seems like that's being allocated to the write-off. And that isn't leaking into the -- correct?

That is not the case. So let me -- the percentages that I just mentioned only relates to our normal recurring results. The $210 million that we harvested to offset the tax liabilities directly related to offshore wind. And it's primarily the final change in estimate from where we were at the end of the year of 2024. And the characterization of that benefit is really we were able to deem the loss on wind as more ordinary versus capital. So we changed the percentage that we had used in '24 versus that tax split of capital at [indiscernible] increased in this year when we file our tax return in the third quarter. So we were able to allocate more as ordinary versus capital and ordinary, we can carry forward for 15-plus years. So that's really what changed in our tax position as it relates to offshore wind.

Okay. And there's -- and so okay, that answers the question, that's kind of what I thought. So okay, I appreciate the clarity.

Our next question is from Sophie Karp with KBCM.

I don't know if you guys know this on top of your head, but I'm curious what legally constitutes kind of the end of the Revolution project as far as your agreement with Orsted, like at what point are you no longer on the hook for anything there? Like is that first power? Is that something of other milestones? Any color would be helpful here.

Sure. So it's similar to the protocol we're using on the South Fork project. It would be COD. At COD, we will hand that over and that is when we are off the hook.

And what is COD specifically?

Full operation, turning over of all of the documents, anything associated with the work that we have done and the PPA is in full force.

Got it. Thank you so much.

I'm showing no other questions at this time. So I would now like to turn it back to Joe Nolan for closing remarks.

Thank you once again for taking the time to join us today. We know many of you who have been patient investors over a long time, and we will continue to execute our key strategic initiatives that create value for our customers and shareholders. We look forward to seeing many of you at EEI next week, safe travels. Operator, this ends our call today.

Thank you. This does conclude the program, and you may disconnect.