Eversource Energy Reports First Quarter 2022 Results

Source: www.gulfoilandgas.com 5/4/2022, Location: North America

Eversource Energy reported first quarter 2022 earnings of $443.4 million, or $1.28 per share, compared with earnings of $366.1 million, or $1.06 per share, in the first quarter of 2021. Results for the first quarters of both 2022 and 2021 include after-tax costs associated with natural gas and water utility acquisitions. Those costs were $5.3 million, or $0.02 per share, in the first quarter of 2022, and $6.2 million, or $0.02 per share, in the first quarter of 2021.

Additionally, 2021 results reflected an after-tax charge of $24.1 million, or $0.07 per share, associated with customer credits related to an assessment by the Connecticut Public Utilities Regulatory Authority for The Connecticut Light and Power Company (CL&P) resulting from CL&P’s performance restoring power following the catastrophic impact of Tropical Storm Isaias in August 2020.

Also today, the Eversource Energy Board of Trustees approved a common dividend of $0.6375 per share, payable June 30, 2022, to shareholders of record as of May 19, 2022.

Electric Transmission
Eversource Energy’s transmission segment earned $148.5 million in the first quarter of 2022, compared with earnings of $135.4 million in the first quarter of 2021. Higher transmission earnings were primarily due to additional electric transmission system investment.

Electric Distribution
Eversource Energy’s electric distribution segment earned $140.9 million in the first quarter of 2022, compared with earnings of $117.3 million1 in the first quarter of 2021, excluding the CL&P charge noted above. Improved results were due primarily to lower pension costs and higher revenues, partially offset by higher expense related to operations and maintenance (O&M), depreciation, property tax, and interest.

Natural Gas Distribution
Eversource Energy’s natural gas distribution segment earned $164 million in the first quarter of 2022, compared with earnings of $147.6 million in the first quarter of 2021. Improved results were due primarily to higher revenues and lower pension costs, partially offset by higher O&M, property and other taxes, interest and depreciation expense.

Water Distribution
Eversource Energy’s water distribution segment earned $3.7 million in the first quarter of 2022, compared with earnings of $3.6 million in the first quarter of 2021.

Parent and other companies
Parent and other companies, including acquisition and transition costs, had net losses of $13.7 million in both the first quarters of 2022 and 2021. Lower acquisition-related costs were offset by higher interest costs.

The company today reaffirmed its 2022 non-GAAP earnings projection of between $4.00 per share and $4.17 per share, which excludes acquisition- and transition- related costs.

Also today, Eversource announced that it had initiated a strategic review of its offshore wind investment portfolio. As part of that review, the company will explore strategic alternatives that could result in a potential sale of all or part of its 50 percent interest in its offshore wind joint venture with Ørsted. The Eversource Energy Board of Trustees approved this action earlier today.

Joe Nolan, Eversource’s president and chief executive officer, said, “In light of the record-setting prices in the recent federal lease auction for tracts around the New York Bight and an evolving landscape, we are conducting a fulsome review of our interest in the joint venture with Ørsted to assess alternatives that will allow us to create shareholder value and continue building a leading clean energy company that is wholly supportive of our region’s climate change goals. Eversource remains committed to supporting offshore wind with advocacy, transmission investment solutions, and clean energy resource integration. We have seen up close why Ørsted is unquestionably the world leader in engineering, building and operating offshore wind and have no doubt that the joint venture we launched five years ago will be a tremendous source of clean energy and economic development for the Northeast.”

Eversource expects to complete this review during 2022. If the recommended path forward following the strategic review is a sale of all or part of Eversource’s interest in the joint venture, Eversource expects potential proceeds from such transaction would likely be used to support Eversource’s regulated investments in strengthening, modernizing and decarbonizing its regulated energy and water delivery systems. In February 2022, Eversource identified more than $18 billion of regulated investments it plans to make in its systems from 2022 through 2026. Some potential additional initiatives, such as advanced metering infrastructure and additional transmission investments to connect offshore wind projects through Cape Cod, are not yet reflected in its long-term forecast.

Nolan added, “Today, we are reaffirming our target earnings per share growth in the upper half of 5-7 percent through 2026 solely from our regulated businesses. This growth rate could be enhanced by utilizing proceeds from a sale of offshore wind assets to reduce financing needs and/or fund additional regulated investments to serve our 4.4 million customers.”

The joint venture includes three contracted projects with a total capacity of approximately 1,758 MW, as well as up to 175,000 acres of offshore wind area not allocated to a specific project. These existing projects and the open lease area are comprised of:

- South Fork Wind (130 MW): located 35 miles east of Long Island’s Montauk Point, will interconnect into eastern Long Island where it will deliver power to households under a long-term power purchase agreement with the Long Island Power Authority. Construction of South Fork began in early 2022 and the project is expected to be placed into service in late 2023.
- Revolution Wind (704 MW): located approximately 15 miles south of the Rhode Island coast, will deliver power under long-term contracts to Rhode Island (400 MW) and Connecticut (304 MW). Revolution Wind is expected to be placed in service in 2025.
- Sunrise Wind (924 MW): located approximately 30 miles east of Long Island’s Montauk Point, will deliver power to New York State under a long-term purchase agreement with NYSERDA. Sunrise Wind is expected to be commissioned in late 2025.
- Open lease area: Up to 175,000 acres located 25 miles off the Massachusetts South Coast that is open for additional wind development.
- As the strategic review proceeds, Eversource remains committed to continue providing oversight of the siting and construction of onshore elements of the three active projects noted above. Continued strong progress on these three important offshore wind projects will not be affected by Eversource’s strategic review.

Nolan added, “Eversource has solicited Ørsted’s input on the process of our strategic review and will continue to engage with our partner as the process moves forward.”

Eversource has engaged Goldman Sachs and Ropes & Gray as advisors for this strategic review. Eversource cannot provide assurances regarding the outcome of this review.

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