Eversource Energy factored a possible $30 million charge from the Public Utilities Regulatory Authority into its quarterly earnings this week, noting that the proposed fine — intended as a penalty for the utility’s performance during Tropical Storm Isaias last year — could be passed on to shareholders in the form of reduced earnings.
In announcing first-quarter net income of $366.1 million on Monday, the energy conglomerate disclosed that the Public Utilities Regulatory Authority’s proposed sanction — which includes $28.4 million in ratepayer credits and a $1.6 million fine to the state — could cost 7 cents per share after taxes.
During a conference call with analysts, newly-appointed Eversource CEO Joe Nolan said he was personally distressed by PURA’s report on the company’s preparation for and performance during and after Isaias, which found that Eversource did not meet certain accepted performance standards and, through oversights, opened up risks to public safety.
“We’re engaged in all the communities that we serve, we’re focusing in on their priorities,” Nolan said. “We took the audit to heart. We know there are areas where we could use some improvement.”
The CEO reserved special praise for Eversource’s lineworkers and said the company put forward an unprecedented effort to deploy and coordinate repair crews during Isaias, which came in the midst of the COVID-19 pandemic, complicating the movement of equipment and people. Still, he acknowledged that many Connecticut residents found elements of the company’s response insufficient and pledged to improve.
PURA’s report also criticized certain aspects of United Illuminating’s handling of Isaias, though it still found that the Avangrid subsidiary had performed considerably better than Eversource. UI is facing around $2.1 million in penalties.
Both utilities have the option of appealing PURA’s ruling in Superior Court.
“We are currently reviewing PURA’s final decision on storm Isaias to assess next steps for appeal,” said Eversource spokesman Mitch Gross. “Our internal emergency response teams are working hard to prepare for the next storm as the beginning of hurricane season is upon us, and we have a strong desire to focus on the future, particularly related to the implementation of improvements to our communications with customers and communities. However, there are foundational legal issues that may benefit from court review to establish the going-forward framework applicable to storm performance. Any appeal must be filed within 45 days of the final decision. We also anticipate participating in the Notice of Violation proceeding, to address the violations alleged with complete and accurate factual information.”
Eversource saw its first-quarter earnings rise around 9% on a year-to-year basis, growing from $334.8 million, or $1.01 per share, in the first quarter of 2020 to $366.1 million, or $1.06 per share. The company’s electricity distribution business saw lower income as a result of the regulatory charges, but other segments, including electricity transmission and natural gas distribution, reported gains.
The utility also reported quarterly costs of $6.2 million associated with its acquisition of assets from Columbia Gas of Massachusetts, which it bought in October 2020.
