Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Eversource Energy — 2020 EEI Financial Conference
36 slides from Eversource Energy (d/b/a)'s conference presentation, Nov 9, 2020
Slide 1: 2020 EEI Financial Conference
2020 EEI FINANCIAL CONFERENCE November 9 - 11, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement 1 All per - share amounts in this presentation are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings and EPS of each business do not represent a direct legal interest in the assets and li
Slide 3: Largest New England Utility and One of the 10 Largest in the US
Eversource is the Largest New England Utility and 1 of the 10 Largest in the United States Eversource Electric Customers 3.22 million Natural Gas Customers 880,000 Water Customers 220,000 Employees 9,000 2
Slide 4: Total Shareholder Return Has Outperformed in Short and Long Term
Eversource’s Total Shareholder Return Has Outperformed Significantly in Both the Short and Long Term 3 Total Shareholder Return YTD Oct. 31, 2020 2019 3 - Year* 5 - Year* 10 - Year* Eversource 4.7% 34.4% 68.7% 85.8% 356.7% EEI 39 - Company Index - 2.8% 25.8% 45.7% 64.4% 214.0% S&P 500 2.6% 31.5% 53.
Slide 5: EPS Growth Expected with Gas of MA Earnings
4 Eversource Gas of MA Earnings Expected to Supplement 5 - 7% EPS CAGR through 2024 $2.28 $2.53 $2.65 $2.81 $2.96 $3.11 $3.25 $3.45 2012A* 2013A* 2014A* 2015A* 2016A 2017A 2018A 2019A* 2020E* 2021E 2022E 2023E 2024E *Excludes merger and integration costs in 2012 - 2015, NPT charge in 2019, and acqui
Slide 6: Dividend Growth Continues to Outperform Peers
Dividend Growth Continues to Outperform Peers 5 Annualized Dividend 5% - 7% $1.78 $2.02 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2016 2017 2018 2019 2020 Payout Ratios: 60% 61% 62% 62%* +$0.11 +$0.12 +$0.12 +$0.12 $2.27 $1.90 $2.14 *Excludes charges related to NPT in 2019 +$0.13
Slide 7: 2020 Guidance, Long-Term Growth Rate Intact
2020 Guidance, Long - Term Growth Rate Intact Key 2020 Earnings Drivers EPS Range $3.60 - $3.70* • Distribution rate adjustments • Transmission capital investments • Distribution capital tracking programs • Higher depreciation and property taxes • Higher interest expense • Higher share count 6 Long
Slide 8: Regulated Utility Capital Investment Program
Regulated Utility Capital Investment Program 7
Slide 9: Projected Capital Expenditures for Core Businesses
8 $889 $994 $1,030 $910 $832 $855 $711 $668 $1,082 $1,145 $1,221 $1,347 $1,208 $1,162 $1,170 $1,234 $335 $404 $453 $470 $498 $501 $507 $537 $14 $102 $110 $124 $127 $134 $147 $153 $152 $185 $239 $220 $169 $165 $171 $171 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2017A 2018A 2019A 2020E 2021E 2
Slide 10: Key Expected Changes to Capital Program
9 Key Expected Changes • Adding Eversource Gas Company of MA capital program • Annual updates for electric, natural gas and water distribution • Electric Transmission update to reflect refined cost estimate, completion of several projects, and additional projects identified as needed for reliability
Slide 11: Eversource Has Acquired MA Natural Gas Assets of NiSource
10 Eversource Has Acquired MA Natural Gas Assets of NiSource ▪ Transaction closed on October 9 ▪ All - cash $1.1 billion* transaction (1.1x rate base) ▪ Transaction pre - financed; equity sold in June; debt in August ▪ Expected to be accretive over first 12 months and incrementally accretive over fo
Slide 12: Key Elements of Settlement Approved by MA DPU
Key Elements of Settlement Approved by MA DPU on October 7 ▪ Joint settlement with MA AG, DOER, NiSource and low - income network ▪ Eight - year rate plan ▪ Day One rate base of approximately $1 billion ▪ Authorized ROE: 9.7% ▪ Authorized equity in capital structure of 53.25% ▪ General rate increase
Slide 13: NSTAR Electric Clean Energy and Grid Modernization Initiatives
12 NSTAR Electric Clean Energy and Grid Modernization Initiatives Grid Modernization: • Approved $133 million in grid facing investments in visibility and automation • New 2022 - 2024 plan expected to DPU by mid - 2021 Solar: • All sites now in service • 70 MW in operation – enough to power 11,000 h
Slide 14: Key Elements of Eversource's Grid Mod Filing in CT
Key Elements of Eversource’s Grid Mod Filing in CT AMI • Recommend a full rollout to all CL&P customers by the end of 2024 • Significant economic, environmental and operational benefits for the state, 1.25 million CL&P customers • $500 million capital investment from 2021 - 2025 with most spending i
Slide 15: Projected Investment in Pipe Replacements 2019-2024
Projected Investment in Pipe Replacements 2019 - 2024 All With Timely Cost Recovery $68 $72 $79 $87 $95 $103 $113 $112 $126 $130 $137 $144 $181 $184 $205 $217 $232 $247 $0 $50 $100 $150 $200 $250 2019A 2020E 2021E 2022E 2023E 2024E CT Accelerated Replacement Program MA Gas System Enhancement Program
Slide 16: Incremental Investments to Grow Aquarion Rate Base
15 Incremental Investments Expected to Grow Aquarion Rate Base Nearly 3 Times Faster Than Before Eversource Acquisition $690 $710 $740 $760 $820 $887 $927 $996 $1,077 $1,167 $1,257 2014A 2015A 2016A 2017A 2018A 2019A 2020E* 2021E* 2022E* 2023E* 2024E* Year - End Rate Base $ in Millions *Reflects rat
Slide 17: Eversource Offshore Wind Initiative
Eversource Offshore Wind Initiative 16
Slide 18: Offshore Wind Delivering on Northeast Energy and Environmental Goals
Offshore Wind – Delivering On The Northeast’s Energy & Environmental Policy Goals 17 Eversource - Ørsted’s Offshore Wind Portfolio Power for more than 2 million homes Reduces GHG emissions by more than 6 million tons Equivalent to removing more than 1 million cars from the road Offshore Wind Benefit
Slide 19: Expected Timeline for Eversource-Ørsted Projects
Expected Timeline For Eversource - Ørsted Projects 18 Size: • 130 MW Year 1 Price: • ~ $160.33/MWH for 90 MW • ~ $86.25/MWH for 40 MW • (avg. annual escalator: 2%) Contract Status: • Negotiating agreement to increase original 90 MW to 130 MW. NY Comptroller and AG approval required Most Recent In -
Slide 20: Remaining Lease Capacity Positioned for Disciplined Growth
19 Remaining Lease Capacity Is Well - Positioned To Maintain Our Disciplined Growth Strategy Ørsted & Eversource Leases 7.2 GW Remaining 1.6 GW Remaining 1.2 GW Remaining 0.6 GW Remaining 0 2 4 6 8 10 NY MA CT RI GW Awarded Authorized State Offshore Wind Procurement Authority
Slide 21: Regulatory Update
SS A everseurce ENERGY Regulatory Update
Slide 22: 2020 Rate Cases
21 2020 Rate Cases • PSNH filed a general rate case to raise annual base distribution rates by approximately $70 million, including an increase sought on a temporary basis • On 6/27/19, NHPUC allowed PSNH to raise annual distribution rates by $28 million on a temporary basis, effective 7/1/19, until
Slide 23: Previous Distribution Rate Decisions
22 ▪ Effective Date: 5/1/18 ▪ Authorized ROE: 9.25% ▪ Term: 3 years ▪ Base rate increases: 5/1/18 = $64.3M 5/1/19 = $31.1M 5/1/20 = $29.2M ▪ Tracking mechanism for capex over $270 million ▪ Effective date: 11/15/18 ▪ Authorized ROE: 9.3% ▪ Base rate increases: 11/15/18 = $1.4M 1/1/20 = $15.8M 1/1/21
Slide 24: FERC Transmission New England ROE Update
23 FERC Transmission New England ROE Update • Current base: 10.57%; Cap: 11.74% (2014 Opinion 531A) • Oct. 2018 FERC Order in New England ROE cases proposed a new methodology to address issues raised by Court in vacating Opinion 531A (New England ROE Complaint I) • This new methodology provided a pa
Slide 25: Historic Storm Comparison
Historic Storm Comparison Damage comparison of Tropical Storm Isaias, Superstorm Sandy, the October ’11 Nor’easter, and Superstorm Sandy. Measured using standard major exclusion day metric from date of the event to the last major exclusion day. The duration of time from the event to substantial comp
Slide 26: New Legislation and PURA Storm Review
25 New Legislation and PURA Storm Review Key Points of Legislation ▪ Nov 20 – Rebuttal to Nov 6 th pre - filed testimony due ▪ Dec 14 - 22 – Evidentiary hearings ▪ Feb 5 - Briefs (tentative) ▪ Feb 19 – Reply briefs (tentative) ▪ Mar 19 – Draft decision (tentative) ▪ Apr 28 – Final decision (tentativ
Slide 27: ESG at Eversource
SS A everseurce ENERGY ESG at Eversource
Slide 28: Executing Its Business Plan During COVID Crisis
Eversource Executing Its Business Plan During COVID - 19 Crisis ▪ Extensive efforts to protect employees, moving to remote working, hygienically cleaning facilities and fleet, promoting social distancing ▪ Essential field work continues with states exempting utility work from statewide business rest
Slide 29: Only US Energy Utility Targeting Carbon Neutrality By 2030
28 Eversource GHG Emissions in Metric Tonnes CO2e Eversource Only US Energy Utility Targeting Carbon Neutrality By 2030 Reducing our Carbon Footprint from Corporate Operations HOW WE’LL GET THERE • Reduce our own energy use by improving the efficiency of our facilities and reducing fleet emissions.
Slide 30: Recognized as the Leading Energy Company
Eversource Recognized as the Leading Energy Company 29 #1 Energy and Utilities Company on Newsweek magazine’s Most Responsible Companies list Eversource became a Most Honored Company in 2020 Top level ESG and ESG risk rating One of only four energy companies on Barron’s Most Sustainable Companies li
Slide 31: New England States Have Aggressive Renewable and GHG Targets
30 New England States Have Aggressive Renewable and GHG Targets Regional Greenhouse Gas Emission Targets MMTCO2e 2019 2020 2025 CT 27.5% 29.0% 38.0% MA 24.94% 27.7% 38.96% NH 19.7% 20.7% 25.2% Renewable Portfolio Standards in Place (Percentage of electricity that must come from qualifying renewable
Slide 32: Improve Energy Efficiency to Reduce Emissions
31 Most Effective Method of Reducing Emissions: Improve Energy Efficiency Source: American Council for an Energy - Efficient Economy 2019 Scorecard 15 3 20 1 6 3 Note: The lower the number…the more effective the Energy Efficiency Programs Retail Customer Count Up 3.3% Since 2014, While KWH Sales Dow
Slide 33: Addressing Largest Sources of New England Carbon Emissions
Eversource Addressing Largest Sources of New England Carbon Emissions: Transportation, Space Heating and Power Generation 48.1% 36.9% 30.7% 10.4% 15.6% 33.5% 5.6% 19.2% 0% 20% 40% 60% 80% 100% New England U.S. 2017 Energy Carbon Emissions by Source New England vs. U.S. Transportation Space heating P
Slide 34: EV Adoption Trajectory Insufficient for 2025 Target
Current EV adoption trajectory insufficient to ensure compliance with 2025 target EVs on the road in MA/CT MA/CT CO2 emissions by sector (2017) • Ambitious goals set forth in the 2008 Global Warming Solutions Act • MA: Net zero GHG emissions by 2050; CT: Reduce GHG emissions 80% below 1990 levels by
Slide 35: Third Quarter and First Nine Months EPS Results
34 3Q 2020 3Q 2019 3Q Change 9M 2020 9M 2019 9M Change $0.60 $0.61 ($0.01) $1.33 $1.32 $0.01 0.36 0.33 0.03 1.13 1.07 0.06 (0.04) (0.05) 0.01 0.22 0.18 0.04 0.07 0.06 0.01 0.11 0.08 0.03 0.03 0.03 0.00 0.01 0.04 (0.03) 1.02 0.98 0.04 2.80 2.69 0.11 0.00 0.00 0.00 0.00 (0.64) 0.64 (0.01) 0.00 (0.01)
Slide 36: 2020 Financings
Company Transaction Size / Coupon Issuance Date Maturity Eversource Parent Senior Notes $350M @ 3.45% Jan 10, 2020 Jan 15, 2050 Eversource Parent Settle Equity Forward Sale Agreement $106M (1.5 Million shares) $314M (4.46 Million shares) Mar 23, 2020 Mar 26, 2020 NSTAR Electric Green Bonds $400M @ 3