Eversource Raises Capital Plan by $2.3B — But Growth Hinges on Storm Recovery and Sales

Date of Call: Feb 13, 2026

Financials Results

• EPS: GAAP EPS: $4.56 per share for full year 2025, up from $2.27 in 2024. Non-GAAP EPS: $4.76 per share for full year 2025, up from $4.57 in 2024.

Guidance:

• EPS guidance for 2026 is $4.80 to $4.95.
• 5-year long-term EPS growth rate expected to be 5% to 7% off of 2025 non-GAAP EPS of $4.76.
• Expect earnings growth towards the upper half of the 5% to 7% range by 2028, off of 2027 earnings results.

Business Commentary:

Financial Performance and Dividend Growth:

• Eversource Energy reported non-GAAP earnings per share of $4.76 for the full year 2025, with dividends paid amounting to $3.01 per share, representing a 5.2% increase.
• The growth was driven by strong execution across the organization, including operational performance, infrastructure investments, and regulatory outcomes.

Infrastructure Investment and Regulatory Developments:

• The company deployed over $4 billion in capital investments in 2025, focusing on grid modernization, energy efficiency programs, and decarbonization goals.
• Regulatory decisions, such as rate adjustments and cost recovery mechanisms, supported these investments, aligning with the company's infrastructure needs.

Capital Plan and Funding Strategy:

• Eversource announced a new 5-year capital investment plan of $26.5 billion, a $2.3 billion increase from the prior plan, aimed at addressing aging infrastructure needs.
• The funding strategy includes a mix of debt, alternative financing solutions, and potential equity issuances, with a focus on maintaining a strong balance sheet.

Operational Excellence and Reliability:

• The company achieved top decile performance in metrics like MBI and SAIDI, with electric customers experiencing an outage only once in nearly two years.
• This was attributed to effective responses to weather events and ongoing projects strengthening the reliability and sustainability of their systems.

Storm Cost Recovery and Affordability Initiatives:

• Eversource is progressing on storm cost proceedings, with 98% of $2 billion in deferred storm costs in current rates pending prudence reviews.
• The company is focused on affordability, exemplified by a rate relief plan that provides customer discounts during peak winter usage, funded partly by the state.

Sentiment Analysis:

Overall Tone: Positive

• "I am proud to report that we delivered on our commitment of non-GAAP earnings with full year earnings per share of $4.76." "2025 was another year of strong execution across the organization." "Our long-term fundamentals remain firmly intact." "We are confident in our ability to deliver sustainable growth and enhance shareholder value over time."

Q&A:

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Could the Aquarion sale approval and storm cost recoveries eliminate some straight equity in the financing plan and be accretive to the 5%-7% growth target?
  Response: Yes, the Aquarion sale would reduce the need for alternative financing (like junior subordinated debt) and move growth towards the upper half of the target range.

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Where do we stand on potential post-close liabilities to Orsted for Revolution Wind, and does reaching First Power end the liability?
  Response: No liability to Orsted; obligation is to GIP. First Power is not the trigger; Commercial Operation Date (COD) is. The project is expected to achieve first power in weeks, with COD targeted for second half of 2026.

• Question from Carly Davenport (Goldman Sachs Group, Inc., Research Division): Could you elaborate on what a minority interest sale might look like and its regulatory approval needs?
  Response: It would be a capital structure deal, not a traditional utility minority interest. Details premature as it's just one tool under consideration.

• Question from Carly Davenport (Goldman Sachs Group, Inc., Research Division): What is the timing for resolution on the Connecticut AMI investment and its potential inclusion in the capital plan?
  Response: Clarity expected from a regulatory meeting next week. The $1 billion cost estimate is a placeholder; a revised cost estimate will be filed after discussions.

• Question from William Appicelli (UBS Investment Bank, Research Division): Is the 'upper half' 5%-7% growth target for 2028 rebased off of 2027 earnings, not 2026, and can you clarify tax benefits from South Fork?
  Response: Yes, the growth target is rebased off 2027 earnings. ITC credits from South Fork are not yet used, providing a cash runway but no P&L impact for several years.

• Question from William Appicelli (UBS Investment Bank, Research Division): What are the key drivers for 2027 earnings growth?
  Response: Key drivers include resolution of Aquarion sale, CL&P rate case adjustment mid-2027, and storm cost securitization proceeds in Q3 2027.

• Question from Sophie Karp (KeyBanc Capital Markets Inc., Research Division): When will the COD for Revolution Wind occur after First Power, and will it be announced?
  Response: Targeted for second half of 2026. Updates will be provided by Orsted; Eversource will give market updates as clarity improves.

• Question from Paul Patterson (Glenrock Associates LLC): What is the difference in equity or equity hybrids if Aquarion sale is approved versus not?
  Response: No change to equity need ($800M-$1.1B). The sale would provide $1.6B to reduce alternative financing. If not sold, a rate case will be filed to maintain earnings.

• Question from Paul Patterson (Glenrock Associates LLC): Why was the Eversource Gas benefit in the parent and not the gas business?
  Response: The benefit relates to EGMA integration costs historically funded by the parent company, per the acquisition settlement agreement. Recovery comes from EGMA customers.

Contradiction Point 1

Revolution Wind Project Liability Trigger Point

Contradiction on whether "First Power" or Commercial Operation Date (COD) ends liability, impacting financial obligations and risk exposure.

What are your key priorities for the next fiscal year? - Shahriar Pourreza (Wells Fargo Securities)

2025Q4: The liability trigger is Commercial Operation Date (COD), not just 'First Power.' The company expects First Power in a few weeks and COD in the second half of 2026. - Joseph Nolan(CEO)

What is the status of potential post-close liabilities for Revolution Wind, and is the "First Power" milestone the trigger that ends liability despite ongoing BOEM lawsuits? - Sophie Karp (KeyBanc Capital Markets)

2025Q3: The project concludes at Commercial Operation Date (COD), which involves the full operation and turnover of all project documents and assets, at which point the PPA becomes fully operational and Eversource's obligations are complete. - Joseph Nolan(CEO)

Contradiction Point 2

Impact of Aquarion Sale on 2026 Equity Needs

Contradiction on whether the Aquarion sale affects the 2026 equity issuance requirement, impacting capital structure and growth trajectory.

What is the main question from Shahriar Pourreza of Wells Fargo Securities? - Shahriar Pourreza (Wells Fargo Securities)

2025Q4: The $800–$1,100 million equity issuance need is not impacted by the Aquarion sale. - John Moreira(CFO)

How will the Aquarion sale and storm cost recoveries impact the financing plan and 5% to 7% EPS growth trajectory, potentially reducing equity needs and being accretive? - Carly S. Davenport (Goldman Sachs Group, Inc., Research Division)

2025Q2: The closing of the Aquarion divestiture (~100 bps benefit) by year-end is also a key factor. - John Moreira(CFO)

Contradiction Point 3

Timing and Regulatory Clarity for Connecticut Storm Cost Securitization

Contradiction on the timeline for regulatory approval and cash availability from storm cost securitization, affecting 2026 financing plans.

? - Shahriar Pourreza (Wells Fargo Securities)

2025Q4: Connecticut storm cost recovery proceeds (expected in Q3 2027) will also not affect the 2026 equity need. - John Moreira(CFO)

How will the sale of Aquarion and storm cost recoveries affect the financing plan and 5% to 7% EPS growth trajectory, and could they eliminate equity needs and be accretive? - Carly S. Davenport (Goldman Sachs Group, Inc., Research Division)

2025Q2: After PURA approval (likely by March 2026), the securitization process itself would take 12-18 months, with cash expected by 2027. - John Moreira(CFO)

Contradiction Point 4

Aquarion Divestiture Timeline and Regulatory Status

Contradiction on the closing timeline and regulatory certainty of the Aquarion sale, impacting strategic growth and financing plans.

What's your revenue growth outlook for the next quarter? - Shahriar Pourreza (Wells Fargo Securities)

2025Q4: An Aquarion sale would reduce alternative financing and improve growth rates in later years. - John Moreira(CFO)

How will the sale of Aquarion and storm cost recoveries impact the financing plan and 5% to 7% EPS growth trajectory, particularly regarding equity needs and accretion? - Durgesh Chopra (Evercore ISI)

2025Q1: The transaction is on track to close by year-end 2025. Regulatory filings are complete across three states... - Joe Nolan(CEO)

Contradiction Point 5

Connecticut AMI (MVMT Docket) Cost Recovery and Investment Clarity

Contradiction on the company's ability to proceed with investments and the expected timeline for regulatory clarity, impacting capital allocation.

How did Goldman Sachs Group perform in the latest quarter? - Carly Davenport (Goldman Sachs Group)

2025Q4: The company will not proceed with investments until it has clarity on the recovery mechanism... A meeting with Connecticut regulators is scheduled for next week... - Joseph Nolan(CEO) and John Moreira(CFO)

When can the $1 billion upside potential from Connecticut AMI be realized, considering the regulatory environment? - James (on behalf of Shar Pourreza, Guggenheim Partners)

2025Q1: A reconsideration filing has been submitted to seek clarity on cost recovery. The company will proceed with spending as required but needs line of sight on recovery. - John Moreira(CFO)