Moody’s Ratings has changed Eversource Energy’s outlook to stable from negative, citing the utility’s recently completed $2.4 billion sale of Aquarion Water Co. and the expected recovery of hundreds of millions of dollars in storm restoration costs.
The ratings agency said Eversource’s improved financial flexibility following the June 30 sale should allow the company to retire roughly $800 million in debt and strengthen its balance sheet over the next 12 to 18 months.
Eversource received about $1.7 billion in proceeds from the Aquarion deal, Moody’s said.
Aquarion was acquired by the Aquarion Water Authority, a newly created quasi-public nonprofit that shares a board and executive team with the New Haven-based South Central Connecticut Regional Water Authority, but operates as a standalone entity.
In support of the upgrade, Moody’s cited a June 29 draft decision by the Public Utilities Regulatory Authority that found Eversource subsidiary Connecticut Light & Power Co. had prudently incurred about $944 million in storm restoration costs between 2018 and 2023.
The agency said it expects those costs will ultimately be recovered, including about $742 million through securitization proceeds expected in 2027.
The outlook change follows years of credit pressure on Eversource tied in part to Connecticut regulatory challenges. Moody’s said the Aquarion sale reduces the company’s exposure to Connecticut, which it described as a “very challenging regulatory environment” in recent years.
Moody’s also changed the outlook for NSTAR Electric Co., Eversource’s Massachusetts subsidiary, to stable from negative while affirming its A2 ratings.
