John Moreira: Well, the appeal process, obviously, we would love to have a positive data point, but the appeal process will continue to make its way. You’re probably looking at least a year in the making. But we are continuing to move forward with launch in Phase I of the process relatively soon and then we’ll make the decision at that point.
Nicholas Campanella: Okay. So still moving ahead, it seems. I appreciate that. I guess just a follow-up on Carly’s question just around the FFO to debt. Just the South Forks tax equity investment would probably be, I would guess, more onetime in nature to the, I guess, cash flow improvement. But just I just wanted to kind of confirm like net of these kind of onetime items, you still see this path getting you to 14% to 15% and what’s really kind of driving that net of the one-time issues?
John Moreira: Yes. No, we certainly do, Nick. The tax equity, we actually think as I stated 24 months, that’s probably a bit conservative. I think that will probably bleed into 2026. We do have other tax benefits that we want to utilize for us before we tap into those ITCs. So that can be elongated a bit which is great. And then longer term, yes, that does fall off the cliff. But we have other items that will certainly kick in. We are sitting on a pretty large deferred storm balance. So, I see those costs coming in, in potentially 2026, certainly 2027 and beyond to really maintain that high level of FFO to debt.
Nicholas Campanella: Thanks. And then just one last one for me just on Sunrise. I know that you’re not giving the price, but last quarter there was negative book value. I don’t believe that the queue is out, but is that still the case or something that you can kind of talk about or do we have to wait for the sale agreement to be public for you to revise that?
John Moreira: It does. And that’s really, we have to follow the accounting rules. And the accounting rules basically says that if you have a contingent gain, you have to wait to get your cash, right? So therefore, the transaction has to close. So, we’re probably I would say you should expect a true up of those balances to occur likely in the third quarter of this year.
Operator: The next question comes from the line of Jeremy Tonet with JPMorgan. Your line is now open.
Jeremy Tonet: Good morning. Thanks for having me. Maybe just continuing with Slide 10 here real quick, Thanks for all the color provided. Just wanted to confirm the major drivers, everything on the right hand of that slide, that’s all treated as FFO and not debt reduction when you talk about the walk from into 14% to 15%?
John Moreira: Yes. No, it’s a mixed bag. So obviously what’s more critical is that we have the cash coming in, right, which will displace debt and obviously enhance our operating cash flows.
Jeremy Tonet: Got it. And so maybe just pivoting towards Aquarion here in just a little bit more detail, I guess, on where you guys are in the process right now and how you — what you prioritize here, pace of transaction versus value that you can achieve or just any other thoughts on the parameters of how you see this process unfolding?
John Moreira: Sure. I would frame it this way. It’s not about a dash to the finish line. It’s about a thoughtful process that we will run for the greatest value that we possibly can harvest. So that’s what’s important to us is obtaining the greatest maximum value we possibly can. So, if transaction takes a bit longer, we are fine with that. The rating agencies are fully aware of the timeframe that we’ve mapped out with them. And obviously, they are comfortable with that.
Jeremy Tonet: Got it. Thank you for that. And then just to confirm real quick here, the sales proceeds are going to be helping FFO in this, illustration here. Just wanna make sure, I was straight on that.
John Moreira: Oh, absolutely. Absolutely. Because it displays it displaces that.
Jeremy Tonet: Got it. I’ll leave it there. Thank you.
Operator: The next question comes from the line of Steve Fleishman with Wolfe Research. Your line is now open.
Steve Fleishman: Good morning. So, just, maybe tie up one more question on Aquarion on the you mentioned appealing to the Supreme Court. Is there, like a timeline? I don’t know if you already filed that or when would you file that and when would you know if they take the case?
John Moreira: We filed that, early, April, that request. So, we feel good that the Supreme Court will take the case, and that will just expedite the whole process. Once the court accepts it, then you’re probably looking at a 9-to-12-month process is what we’re estimating.
Steve Fleishman: Okay. But you’re not gonna hold off the sale process to wait for that? You just move forward?
John Moreira: No. We’re not.
Steve Fleishman: Yes. Okay.
John Moreira: And then just I was going to say, Steve, in the meantime, we are expecting to implement the original rate change and we actually accounted for that in the first quarter of this year. Once we get that, then the company can move forward with the filing for their WICA program, which will give them much which will give them about 30%, 35% of their annual capital program cost recovery on.
Steve Fleishman: Okay. And then just on Connecticut regulatory environment, appreciate the decisions being made there. Early in the year, there had been talk about the governor maybe kind of expanding the commission and some change you know, some changes there. And is that still being considered at all? And just, I know you’ve been on an initiative to try to highlight these issues. Just do you feel like you’re making any progress in resonating on the kind of quality of the regulatory environment being kind of investable?
Joseph Nolan: Yes. Steve, a couple of things. The governor has the ability to appoint five commissioners. He has vacillated over that and I’m not really sure at this point whether he wants to take it up to five. As you know, all three commissioners remain in holdover status and I’m not really quite sure what the current plan is around that. Obviously, we have grave concerns about the environment there. I think you know that, I think everyone knows that. We enjoy a very productive working relationship in our other two jurisdictions. We are so aligned that no light shines between kind of the state’s initiatives in our initiatives. And when you collaborate, I think you have tremendous outcomes. You look at the benefits that Massachusetts is achieving.
