Eversource Energy (D/B/A)

and decide that it's the right decision.

Thanks, Joe. That's great. All right.

Thank you, Ross. Next question is from Paul Patterson from Glenrock.

Good morning. Can you hear me?

Yes.

So I wanted to follow up on a few things. First of all, on the preceding question, in Massachusetts by Commonwealth Edison asking for a delay. You guys filed a joint letter, I believe, on Tuesday with National Grid and Unitil, I think, basically indicating that you guys had no intention to renegotiate the contract. And then I guess I saw that yesterday the governor of Massachusetts seemed a little bit more open to the idea. I just wanted you to give us a little bit more color on how you see And I guess if you can, why you guys see yourselves in a different position with your projects as opposed to this one that's asking for renegotiation?

Keep in mind that our pricing is higher. It's in the 100 to 110 megawatt hour range. The project that we're talking about came in here and did very, very low pricing. against, you know, projects that we had bid. You know, I do not feel the likelihood of success for any renegotiation. And, you know, keep in mind that what the governor said is that he would allow Avigrid to make a proposal. He didn't say that he was going to go and renegotiate with them. And so there's a lot of players that will have to, you know, decide on this. Certainly it's our regulators. Our regulators, at the end of the day, are the ones that are going to decide what is best for the customer's And so that's the reason why you're not seeing any of our projects in there right now looking to renegotiate.

Okay, that's great. And then just I was wondering what kind of response you've gotten. I mean, you sort of answered it, I think, just now with respect to the White House and your letter, which makes a lot of sense. But I'm just thinking in general, I'm just wondering, is this a wake-up call maybe that I mean, you just sort of wonder, you know, the fact that LNG is being imported as a significant part of New England's reliability situation, is this any sort of a wake-up call that maybe infrastructure, maybe the region should be more open to infrastructure, or maybe the federal government should be sort of pushing this stuff along? Do you follow what I'm saying? Whether it's, I don't need to go through Northern Pass, or just a whole variety of projects that have been delayed. And it just, you sort of wondered, is... Is there any change in Washington that you're noting in the region with respect to perhaps getting real about reliability? Do you follow what I'm saying in the need for significant infrastructure improvements to be streamlined and what have you?

You're preaching to the choir here, absolutely. you know, I do see that each of these governors realize the seriousness of this. I mean, we are at a fragile point in time as we transition to this clean energy environment. And so, consequently, we're going to need some relief, whether it's the Jones Act relief or other types of projects. Certainly, you know, it's disappointing. You know how hard we worked on Northern Pass to bring hydro down, another great resource that this region could really use. So I do think, I mean, we're all working collaboratively. We've You know, we were up in Burlington, Vermont. We had, you know, all of the states along with the FERC, and we're looking at these issues. And, you know, listen, a lot of smart people at the table, a lot of people understand the seriousness of it. And so I'm fully confident that we're going to be able to put steps in place that are going to allow us to transition uneventfully to a clean energy future. It's going to be challenging. It's going to be challenging. It's going to require a lot of work. But I know that the folks and the people at the table can get this done.

Okay. Thanks so much. Have a good one.

All right. Thanks, Paul. Next question is from Paul Zimbardo from Bank of America. Good morning, Paul.

Hey, good morning. Thank you. Just a couple for me. Following on Jeremy's question, what interest rates are you assuming in the cost of debt on the offshore wind when you give those expected long-term average RLEs? And just has that evolved since you gave that original target?

Well, are you referring to next year?

The expected long-term average ROEs from this slide.

Okay. Well, just looking at it from a long-term perspective, you know, the interest costs associated with offshore wind, you know, post-close, you know, once we divest, those proceeds will be used to reduce our short-term as well as our long-term debt. For 2023, we have $1.2 billion of long-term debt that's maturing at the holding company. So the timing could not align any better for us. And then on another positive note, if you look at the total utility debt that's maturing, it's probably the lowest amount that I've seen in a long time. we only have about $800 million of debt maturing at the utilities. So that sets us up very nicely. But nevertheless, we have to fund our capital program. So I'm not seeing a huge headwind, and I'm not seeing a huge movement in our long-term guidance as a result of this environment that we are in from an interest rate perspective.

Okay, I was more referring to like the actual projects. I didn't know if the interest rates were pressure and there's an offsetting mitigation positive to keep the average RLEs intact.

Well, number one, because these projects are under construction, the interest costs that we are incurring during construction is capitalized. So we're not seeing any impact from a financing standpoint for these projects. And then once we get the proceeds from the divestiture, that will be used to offset the debt that we currently are carrying.

Yes, yes, understood. Okay, great. And then briefly, I know you gave some commentary last call about pension. Just if you give any updated thoughts there about pension returns or just your overall thoughts as we head into next year. Thank you.

Sure, sure, glad to do so. So pension returns, just like our peers, are not heading in the right direction for us. But even with that said, there will be some headwinds, but once again, not anything material, not anything that we cannot overcome.

Okay, excellent. Thanks a lot.

Thank you, Paul. Next question is from Travis Miller from Morningstar. Good morning, Travis.

Good morning. Thank you. Not to belabor the point here too much, but back to the idea about what might happen in a harsh winter environment. In the past, on a regulatory standpoint, you guys have had some headwinds when we've had difficult weather events. Do you think something has changed? Are you trying to set up a scenario here where if there are issues in terms of energy deliverability, resiliency, Is there a way you can turn that into a positive from a regulatory standpoint and get approval for more capital investment instead of getting penalized for not meeting a certain requirement?

Well, you know, I think what we're focused on with the regulators now are solutions to deal with this current winter. I don't know that maybe that would translate into some longer-term types of investments. But right now, you know, this fuel security program where, you know, maybe these generators get given funds to have, say, a seven-day supply of fuel on site, those are the types of measures we're looking at, short-term measures with our regulators. But I think that during that dialogue is where you can demonstrate to the regulator that a particular transmission investment would unlock, you know, potentially, you know, a certain number of megawatt hours in a region and lower the cost. I think, you know, the fact is we have very good regulatory relationships. We have very good, you know, regulators that are very engaged, and we're engaged with them on these issues. So anytime you have engaged parties, you get much better solutions.

Okay, great. And then one more on the governor's race, anything near term after the election that could be impacted either in programs that you're seeking approval for or things you'd expect in the next year or so on the policy front, depending on the outcome?

No, I think we have eyes on all of the states. I think we've got pretty stable regulatory climate, and we have plans. We have multi-year plans. We don't expect it. But everyone's agenda around clean energy, around AMI, those are all consistent no matter who the candidate is. I think everyone recognizes that. We need to have a grid that can enable all sorts of resources to operate on it, whether it's your charging your electric vehicle, your solar panels, or any type of a distributed resource. So I wouldn't expect any changes no matter who wins in what state.

Okay. Great. Thanks so much. Appreciate the thoughts.

Thank you. Thanks, Travis. Thanks, Travis. Well, that was the last question that we have this morning, so we want to thank you all very much for joining us. We look forward to seeing you at the – any of you at the EEI Annual Finance Conference. If you have any more follow-ups today, please send me an email or give me a call. Thank you.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines.