Eversource Energy (NYSE:ES) Q3 2023 Earnings Call Transcript

Joseph Nolan: Yeah. Well, thanks. Obviously, this is on everyone’s mind. It’s a process we’ve been working through. And as we’ve mentioned we have completed the terms with the buyer. The buyer now is working with our partner, Orsted. As we’ve mentioned, this buyer is very familiar to Orsted, they’ve done transactions with them. And we just need to see that play out. So I can’t give you a day, a week, or a month, unfortunately. All I can tell you is that all of the terms associated with transaction with Eversource have been completed and that we feel very good about that. The buyer is still very eager on these projects, and we are going to work through it. And John and I will remain focused and disciplined around the execution of our divestiture of the wind business.

Jeremy Tonet: Got it. Very helpful there. Thank you. And then just pivoting back to equity. Just want to clarify a couple of points here to make sure I got it right. The $1.2 billion of external equity needs, is this kind of embedding, I guess, offshore wind sales price to a certain level, and does this assume higher New York price and success on one of the two IPC adders? Just trying to get clarity on what is factored in at that point. And then just to confirm, I guess, what you talked about earlier, the plan reaffirmation is based on current stock price levels, or does that need to be kind of reevaluated later for the 5% to 7% growth?

John Moreira: Sure. Let me take, there’s a lot of items in there. So let me start with what we have left on our ATM is not $1.2 billion. We’ve already executed $200 million, so all we have is $1 billion left. And that assumption, and was reiterated on the call today, does assume that we would prevail on the — that $850 million contingent consideration that I highlighted. So we’ve assumed that that would come in and we feel very good about it to the points that we’ve made on the call. So going out on the stock price, I mean, we haven’t issued any equity this year for the simple fact of where values are. So we will continue to monitor that valuation as we move forward. As I’ve said, we have flexibility. Not looking to issue it all this year or next year, as I said, over time.

Jeremy Tonet: Got it. That’s helpful. I’ll leave it there. Thanks.

Operator: Thank you. Our next question comes from Anthony Crowdell from Mizuho. Your line is now open, please go ahead.

Anthony Crowdell: Hey, good morning. Just a couple of questions. First, on Sunrise, I think, on — Orsted last week lowered their probability of being successful on a rebid. I mean, you guys seem very optimistic on a rebid. Just curious if there’s any change in your thinking on Sunrise versus maybe last quarter.

Joseph Nolan: Yeah. No, I mean, we still feel very good about Sunrise, given where it is in the gestation process. And the fact of the matter is, the significant demand and appetite for offshore wind. And the pricing that we were seeking in our filing is less than what the average price was for others selected. The project is a great project. It’s got so much economic development, benefit, jobs benefits, location, point of interconnection in New York that we feel very, very good about it. So that’s our feeling on it. We feel it’s a winner.

Anthony Crowdell: Great. And just curious, on the pricing, I don’t know if you want to disclose it. But I just said the pricing you submitted to the New York Public Service Commission was attractive. On the rebid, could we assume that that price would exist on the rebid or through the rebid there’s a chance that pricing could even go up higher or lower? I mean, could the pricing change?

Joseph Nolan: As you might imagine, this is a highly competitive process. There are other players in there, and that’s something that we’re not comfortable disclosing.

Anthony Crowdell: Great. And then just lastly, a whole bunch of moving pieces in this story. Big improvement in FFO to debt we should start seeing in 24. Just when we think about when all the dust settles, I mean, does 2024 look like it becomes a transition year and the offshore wind clears up? Or do you think that happens sooner, or does the cleanup to a fully regulated story happen more in 2025?

Joseph Nolan: No, I feel very, very confident that 2024 is our year for a transition to a clean, pure, regulated utility seeking singles and doubles and keeping everybody on this call very comfortable.

Anthony Crowdell: Great. Thanks for taking my questions. I appreciate it.

Joseph Nolan: Thank you.

Operator: Thank you. Our next question comes from Julien Dumoulin-Smith of Bank of America. Your line is now open, please go ahead.

Julien Dumoulin-Smith: Hey, good morning, team. Thank you guys very much for all the details so far. Just to clean up on a couple of things, if you guys don’t mind. Just can we talk about capitalized interest year to date, where are we at the end of the day on the offshore wind projects? Can we talk about just what your expectations as you think about that new normal that you talked about singles and doubles? What is that parent level ongoing drag, if you want to call it that, in a kind of post-offshore world, if you will?

John Moreira: Sure, Julian. So the capitalized interest right now is about — I don’t know, I would say $25-ish million. And that’s all at the parent company, $25 million, $30 million.

Julien Dumoulin-Smith: Got it. Okay. All right. I capitalized tied to the offshore $25 million, $30 million. And then how do you think about going forward for the kind of — that new normal, if you will, at the parent here?

John Moreira: Well, with the cash inflows that I’ve mentioned, including some of the utilization of ITC, we can’t lose sight over that, that I feel we would be able to harvest within the next 12 to 18 months, that’s close to $500 million coming in the door, plus the proceeds from the offshore wind. We will turn the corner in 2024 and beyond. So, I do as Joe mentioned, 2024 is the pivotal turning period for us.

Julien Dumoulin-Smith: Right. Fair enough. Oh, yeah, go for it.