Eversource Energy (D/B/A)

in the call today. If you'd like to ask a question at the end of the presentation, you can press star followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two. And I'll hand it over to your host, Bob Becker, Director for Investor Relations. Please go ahead.

Good morning, and thank you for joining us. I'm Bob Becker, Eversource Energy's Director for Investor Relations. During this call, we'll be referencing slides we posted on our website. And as you can see on slide one, 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 this morning, and in our most recent 10-K and 10-Q. Speaking today will be Joe Nolan, our Chairman, President, and Chief Executive Officer, and John Marrera, our Executive Vice President and CFO. Also joining us today is Jay Booth, our Vice President and Controller. Now I will turn the call over to Joe.

Thank you, Bob, and thank you, everyone, for joining us on this call this morning. I look forward to our conversation today and to seeing many of you at the EEI conference next week. First, let me start with a topic that I am certain is top of mind to all of you, which is an update on the sale of our offshore wind investment. We are very pleased to have closed the sale of our 50% stake in the uncommitted lease area to Orsted in September, along with our South Fork wind tax equity investment. We are delighted to have these transactions behind us. As for the seal of our interest in the three projects which are under development, we have substantially completed our contract negotiations with a buyer and continue to make good progress on this front. What remains to be completed is for the buyer in Orsted to finalize several documents, such as their new joint venture agreement, We expect this process to wrap up shortly, allowing us to execute our sales agreement with the buyer and announce the terms of the sale. As you see on slide number three, I'm very happy to report that our South Fork wind project is expected to fully go into service in early 2024. The onshore construction is complete and connected to our export cable, while offshore construction is significantly advanced with the offshore substation and array cables installed and connected. Currently, the turbine installation is underway, and we expect to have seven to nine turbines operationally complete by the end of this year, with the remaining turbines installed in January. This project will spearhead the US offshore wind industry and will be one of the country's first utility-scale offshore wind farms built by Connecticut Labor from various unions. On October 31st, our joint venture announced that we have taken our final investment decision, or FID, on Revolution Wind. This is an important project milestone that allows it to advance to full onshore and offshore construction and installation and have this project in service in late 2025. I'd like to now address the recent events in New York, which I know have been a source of great interest for many of you. On October 12th, the New York Public Service Commission denied petitions for pricing adjustments from several renewable developers, including the petition for our Sunrise Wind project. The petition sought to address the extraordinary macroeconomic challenges from higher inflation in interest rates, along with supply chain disruptions that developed since our OREC agreement was executed in the fall of 2019. These factors were incorporated by the New York State Energy Research and Development Authority, or NYSERDA, in their recent offshore wind solicitation. While we are disappointed with the New York PSC's decision, especially given that NYSERDA had publicly advocated for pricing adjustments, we support their commitment to transparent, competitive RFP process. We are very encouraged to see that New York is working to establish an accelerated rebidding process, which includes an accelerated track where winning bids could be announced as early as next year. Together with our JV partner, Orsted, we responded to NYSERDA's request for information. Together, we will work towards developing a bid that will reflect the attractive nature of this project. We feel confident that Sunrise Wind will deliver clean and reliable energy to New York and support economic development in the region much earlier than many other projects. We will continue to evaluate ways to maximize project economics and to ensure project schedules remain on track. We have begun limited onshore construction for Sunrise Wind And we have also identified solutions for our installation vessel, which many of you have been asking us about to maintain the project schedule for Sunrise Wind and Revolution Wind. We expect both projects to be in service in late 2025. We're excited by the recent actions taken by the six regional governors who asked the Biden administration to clarify tax benefits for current U.S. offshore wind projects. and provide relief on federal offshore wind lease costs, as well as encouraging an accelerated permitting process for offshore wind projects. And in October, Connecticut Governor Ned Lamont announced the first of its kind partnership between Connecticut, Massachusetts, and Rhode Island to seek offshore wind proposals that will expand the benefits for the region and help reduce costs. All three states have issued RFPs to procure over 6,000 megawatts with bids due in early 2024. Eversource will play a key role in providing the transmission and distribution infrastructure investment needed to connect these important resources to our grid. Moving over to our core business, as you know, everything we do here at Eversource is done with a focus to continue to enhance our service for customers. As shown at the top of slide four, we continue to serve customers well, delivering top decile electric reliability performance at nearly two years between interruption, and our gas emergency response are exceeding our internal target. These high performance levels are the result of the investment we've made in our electric and gas systems over the past several years. investments focused on ensuring our system is strong and resilient and ready to adapt to the needs of our customers for years to come looking at our clean energy focus we continue to move forward on enabling clean energy in our region and we continue to make good progress in reaching our carbon neutrality goal by 2030. in massachusetts we are investing nearly 2 billion dollars in our electric transmission and distribution system to advance clean energy resources. Moving to the bottom of slide four, our customers continue to be burdened by high energy prices, particularly during peak winter months. While this winter's supply prices will be high compared to summer rates, they are expected to be significantly lower than last winter's, a welcome relief for our customers. To date, Connecticut is fully procured at prices significantly lower than last year. Massachusetts is at 50%. New Hampshire is procured through January. If current market conditions continue, the expectation is that the winter supply rates in all three states will be much lower than last year. Though prices across the region are lower than last winter, we recognize that our customers are feeling the pinch of high costs in many areas. That's why we're doing what we can today to help our customers lower their bills this winter. Along with our industry-leading energy efficiency programs, we also launched a new outreach campaign in Connecticut to encourage customers to sign up with competitive suppliers to save money. We're also educating customers on new energy assistance options. I'm happy to report that Connecticut residential customers have responded. The share of residential customers receiving standard service from Eversource has dropped from over 90% last winter to 70% heading into this winter. To serve our customers and ensure they optimize their energy use, we continue to build out our industry-leading energy efficiency programs. In fact, Eversource ranks number one as the best energy efficiency provider in the country. As you can see on the left side of the slide, we invested over $600 million in these programs last year, avoiding lifetime greenhouse gas emissions of nearly 3 million metric tons. We'll continue to build on this great foundation moving forward. By enabling energy efficiency, encouraging customers to shop for supply, and educating customers on energy assistance options, we're doing what we can to lower customer bills today. Longer term, we're working with our states to provide the infrastructure investment necessary to access reliable, renewable energy like offshore wind and solar generation. Turning to slide five, the shift to electric vehicles and zero carbon heating will add tremendous incremental electric demand to our grid. As you can see here, New England electric demand growth is expected to more than double by 2050 and winter peak demand is expected by 2050. This is in stark contrast to a relatively flat electric demand we've seen over the past decade. Along with the rest of the utilities across the country, we are aggressively planning for the clean energy future here at Eversource. On September 1st, we filed our Electric Sector Modernization Plan, or ESMP. This plan is a roadmap for our partnership with Massachusetts to enable the state's Clean Energy Climate Plan. The plan details how we'll continue to maintain safe and reliable service for our customers as we transition to a decarbonized future. In addition to our base investments necessary to increase distribution system capacity, including the implementation of ami and other technology platforms eversource has proposed additional investment that goes beyond the nearly 2 billion dollars of clean energy investment in massachusetts through 2027. this investment will go towards improving the resiliency of our system integrating additional solar generation and implementing new technology to enable additional distributed energy resources. Our proposed plan is expected to exceed Massachusetts' 2040 goals and achieve 70% of the state's 2050 greenhouse gas emission goals. By requiring electric distribution companies to submit in a fully transparent manner their long-term grid modernization plans, Massachusetts is taking a leadership role in enabling decarbonization. They're not just setting policies, but tying infrastructure, clean energy, and customer engagement together. We're excited to engage with environmental justice and consumer and business advocates to establish the right framework for all Massachusetts customers to advance toward the clean energy future. We look forward to engaging with all stakeholders as we work towards a final decision from the DPU later next year. Moving on to Connecticut. The regulatory environment remains challenging, as evidenced by Aquarian and United Illuminating Rate Case decisions, which produce returns that are value-destructive for investment. But we are encouraged by the recent actions by Governor Lamont supporting offshore wind investment in the region. We see the Governor's support as a realization that investment at a reasonable return is necessary to provide the clean energy future that our region and country are moving toward. in closing i couldn't be prouder of the effort that the eversource team puts in every day providing for our customers needs we have the experience and the expertise to guide our customers as we develop a bold bright energy future for new england and the northeast thank you again for your time i will now turn the call over to john thank you joe and good morning everyone