Eversource Energy Q1 Earnings Call Highlights
Eversource Energy (NYSE:ES) reported higher first-quarter earnings and said it remains focused on strengthening its balance sheet, resolving regulatory issues and reducing business risk, even as a recent Federal Energy Regulatory Commission decision lowered the company’s transmission return on equity and prompted a guidance revision.
Chairman, President and Chief Executive Officer Joe Nolan said the company began 2026 “on a strong operational footing” and is pursuing strategic priorities centered on safety and reliability, balance sheet strength and de-risking its business profile.
The utility reported first-quarter GAAP earnings of $1.61 per share, up from $1.50 per share in the same quarter of 2025. Executive Vice President, Chief Financial Officer and Treasurer John Moreira said GAAP results included an after-tax charge of $43.9 million, or $0.12 per share, related to the FERC return-on-equity decision. Excluding that charge, non-GAAP earnings were $1.73 per share, compared with $1.50 per share a year earlier.
Moreira said the year-over-year improvement was led by the gas segment, which added $0.18 per share due to rate base growth in Massachusetts and implementation of the Yankee Gas rate case in Connecticut. Electric transmission added $0.06 per share, primarily from continued system investment, while electric and water distribution results also improved due to rate increases and cost control. Those gains were partly offset by $0.05 per share of higher losses at parent and other, tied mainly to a higher effective tax rate and higher interest costs.
FERC ROE Decision Drives Guidance Revision
A major focus of the call was FERC’s March 19 decision reducing the base transmission ROE for New England transmission owners to 9.57% from 10.57%. Nolan called the decision “flawed,” saying it departs from statutory limits and precedent requiring returns sufficient to attract capital for essential utility investment.
Moreira said the proceeding dates back nearly 15 years, with the first complaint filed on Oct. 1, 2011. He said Eversource and other New England transmission owners have taken several steps in response, including filing motions for a stay at FERC and the U.S. Court of Appeals for the D.C. Circuit, seeking an extension of the refund deadline, requesting rehearing at FERC and submitting a new Section 205 filing.
That Section 205 filing seeks to establish a new base transmission ROE using current market data. Moreira said that applying FERC’s own methodology with updated data produces an 11.39% base ROE. The filing also seeks to raise the ROE cap on transmission investments to 12.89%. Moreira said the company expects the updated rate to be implemented toward the end of the year, subject to refund.
As a result of the FERC decision, Eversource revised its 2026 non-GAAP earnings guidance to a range of $4.57 to $4.72 per share. Moreira said the lower transmission ROE is expected to reduce future after-tax earnings by about $70 million in 2026. The revised guidance also reflects the potential sale of Aquarion following approval by Connecticut regulators.
Nolan said the company is reaffirming its long-term earnings growth target of 5% to 7%, measured from the midpoint of the revised 2026 guidance range. Moreira added that Eversource remains confident in its ability to deliver growth toward the upper half of that target by 2028.
Aquarion Sale Awaiting Appeal Period
Eversource said it received final approval from the Connecticut Public Utilities Regulatory Authority in March for the sale of Aquarion, and PURA denied an appeal from certain parties last week. Nolan said the company is now waiting for an additional appeal period to end in mid-June before it can close the transaction.
Asked by Goldman Sachs analyst Carly Davenport about the likelihood of additional appeals, Nolan said the company was pleased with PURA’s decision and viewed it as clear, but remains “watchful” and “vigilant” because other parties remain involved. He added that while Eversource intends to close the transaction, failure to do so would not be “the end of the world.”
Moreira said that if the sale does not close, Eversource would proceed with Aquarion’s pending rate case before PURA, which seeks an $88 million distribution rate increase. He said the company is prepared to replace the sale proceeds with alternative financing solutions if necessary.
Storm Costs, Securitization and Regulatory Updates
Nolan highlighted the company’s response to a severe February blizzard that brought more than 40 inches of snow and wind gusts above 70 miles per hour in parts of the Northeast, particularly Massachusetts. He said Eversource mobilized thousands of line crews, used mutual aid, deployed remote switching and pre-staged materials, and restored service to more than 500,000 customers. The company also responded to more than 2,000 fire, police and safety events.
In Connecticut, Nolan said Eversource expects to file a letter of intent later this month for CL’s first rate review in about eight years. He said the filing will address reliability, affordability and stable rates. The company also expects a final PURA decision in July on a storm cost prudency review, which would allow it to begin a legislative-backed securitization process.
In New Hampshire, Nolan said Gov. Kelly Ayotte signed House Bill 1539, allowing securitization of storm costs. Moreira said Eversource should recover approximately $2 billion in deferred storm costs and carrying charges across Connecticut and New Hampshire through securitization transactions over the next 12 to 18 months. In response to a Wells Fargo analyst question, Moreira said the New Hampshire amount is likely in the $400 million to $470 million range, including carrying charges, and said the company hopes to complete that transaction in a reasonable time frame, potentially in late 2027.
Capital Plan and Balance Sheet
Moreira said Eversource’s financing strategy remains unchanged. The company continues to expect equity needs of $800 million to $1.1 billion over the next five-year forecast period. He noted that Eversource issued its first junior subordinated notes in February, raising $1.5 billion, and said the offering was more than five times oversubscribed.
Moreira said Eversource has “no urgency” to go to market for equity and will monitor the Aquarion transaction, storm securitization proceeds and other financing developments. He said funds-from-operations-to-debt metrics remain above downgrade thresholds, at 14.2% for S and 14.5% for Moody’s, and noted that S reaffirmed its ratings and stable outlook after the FERC ROE decision.
The company reaffirmed its $26.5 billion five-year capital plan through 2030. Moreira said capital expenditures totaled nearly $800 million through March, compared with a 2026 forecast of $5.1 billion.
Nolan also pointed to energy policy developments in Massachusetts, including Gov. Maura Healey’s executive order aimed at strengthening energy reliability, affordability and independence. He said Eversource supports efforts to address regional supply constraints through an “all-of-the-above approach” and remains focused on infrastructure upgrades that integrate new resources and enhance reliability.
In closing, Nolan said Eversource is carrying momentum into 2026 with a focus on resolving key open items, de-risking the business and positioning the company for sustainable long-term growth.
About Eversource Energy (NYSE:ES)
Eversource Energy (NYSE: ES) is a publicly traded, regulated energy company headquartered in Hartford, Connecticut. The company's core business is the delivery and transmission of electricity and natural gas to residential, commercial and industrial customers across parts of New England. Eversource operates transmission and distribution networks, maintains electrical infrastructure, responds to outages and storms, and manages natural gas pipeline and distribution systems in the regions it serves.
Eversource serves customers primarily in Connecticut, Massachusetts and New Hampshire, operating through locally regulated utility subsidiaries that administer customer service, billing, meter reading and localized operations.
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