Eversource CEO Joe Nolan said during the company’s second-quarter shareholders meeting that he continues to have concerns about Connecticut’s regulatory environment.
Recent decisions by the Public Utilities Regulatory Commission have spooked the investment community and sparked opposition from Eversource, which provides electricity to 1.3 million customers in Connecticut, and owns Aquarion Water Co.
“As you know, we will have our day in court, and if this remains as is, I assume that, UI will be in court as well,” Nolan said in response to an investment analyst’s question.
Nolan was referring to PURA’s July 1 proposed decision rejecting nearly all of the rate hike proposed by Orange-based United Illuminating Co.
UI sought a $130.7 million rate increase over three years, along with a 10.2% return on equity. But PURA pared UI’s request down to just $2 million. PURA also docked UI’s allowed return on equity of 8.8% down 52 basis points, to 8.28%.
Nolan said the proposed UI decision “appears to track the Aquarion decision, discouraging investment in the State of Connecticut.”
On March 15, PURA cut Aquarion’s request for a $37 million increase in distribution revenues and reduced the company’s revenue by about $2 million under current levels. It also lowered Aquarion’s request for a 10.35% return on equity to 8.7%.
That prompted credit-rating service Moody’s to lower the outlook for Aquarion to “negative,” calling the regulatory environment “unpredictable.”
Aquarion has appealed PURA’s decision in Superior Court, claiming the reduction would cause irreparable harm. A judge in May issued a temporary stay on enforcement of the rate cut.
Despite opposing PURA’s decision, Nolan said that Eversource remains on the same page as the governor, attorney general and other state leaders whose agenda is focused on clean energy and clean energy investments.
“We’re going to continue to work those relationships down there and try to get to a place that’s fair for our customers and for our shareholders,” Nolan said.
Nolan added that “any type of a chill on investment” would hurt clean energy companies, such as Connecticut-based fuel cell and battery companies that are looking to deploy new technology.
“We’ll have to see what the final decision looks like, but I just want everybody to know that I am personally involved in working on this, along with the 9,500 other employees of this company,” Nolan said. “We are going to work through these issues and I’m confident that we can get to a much better place.”
Eversource reported profits of $15.4 million, or 4 cents per share, in the second quarter of 2023, compared with earnings of $291.9 million, or 84 cents per share, in the second quarter of 2022. The reduction was largely due to a charge-off of $331 million related to the company’s agreement to sell its 50% stake in an offshore wind site off the south coast of Massachusetts to Ørsted.
Operating expenses were $291.3 million during the second quarter of 2023, which ended March 31, up from $268.8 million in 2022.
On Wednesday morning, Eversource shares were trading at $70.11, about a third of a percentage point lower than a day earlier.