Eversource CFO Says A 154-Month Transmission Refund Will Be Hard To Finish By FERC's May Deadline
Accuracy matters more than the deadline, John Moreira says, and an accounting charge could arrive before the court rules.
Eversource Chief Financial Officer John Moreira said on the company's third-quarter earnings call that recalculating a transmission refund reaching back 154 months will be challenging to finish by the federal regulator's May 2027 deadline. Eversource, a utility holding company serving electric and gas customers in Connecticut, Massachusetts and New Hampshire, may seek an extension.
Getting it right before getting it done
Moreira, who is Eversource's Executive Vice President, Chief Financial Officer and Treasurer, called the job "incredibly complex, labor intensive": it means recalculating more than 10 years of load settlement and billing data with ISO New England, the other New England transmission owners and the utilities that serve customers. He said the data sits with ISO New England, and the key question is who supplied the load each month, so that refunds go to exactly the right party.
Asked by a Goldman Sachs analyst whether the May deadline could move, he said it was "too early to predict" whether an extension is needed. He noted that MISO, another grid operator, requested one for its multi-year refunds, and that making sure the calculations are adequate comes "first and foremost."
To a Jefferies analyst he was blunter: it is "more priority for us to get the calculations correctly than it is for us to meet a deadline." He said Eversource still feels very good about its legal position.
The cash will not all leave by May, he added. Retail pass-through timing differs across Eversource's three utilities, so the outflow will stretch beyond that date.
A charge before the court rules
Eversource is appealing the retroactive refund in the DC Circuit Court. Moreira said the court approved a schedule with final briefs due in early April, which could produce a decision in late summer or early fall of next year. He said the company is cautiously optimistic.
Accounting rules, though, may require Eversource to book the final refund before the case ends. Moreira said the company is working through the two tests: whether a loss is probable and whether it can be estimated.
Earnings down, ROE ruling awaited
Third-quarter earnings were 92 cents a share on both a standard-accounting and adjusted basis, down from $1.19 in adjusted recurring earnings a year earlier. Moreira cited a March 19 FERC decision cutting the transmission return on equity to 9.57%, a disallowance of roughly $40 million of storm costs in Connecticut, the sale of its water business Aquarion, and a higher tax rate. He called these necessary steps toward becoming a pure-play electric and gas utility.
On the separate prospective return-on-equity case, briefing ended in late September and the company awaits FERC's decision. Eversource's own filing, using FERC's methodology with updated inputs, produced an 11.39% return, Moreira said. An alternative using Bloomberg data, which he said FERC has signaled it prefers, produced 10.79%. Parties' ranges run from the low to high 9s, he said.
Eversource narrowed its 2026 adjusted earnings guidance to $4.62 to $4.70 a share, raising the midpoint to $4.66.
Sources
- Eversource Energy Q3 Earnings Miss Estimates, Revenues Decline Y/Y — Yahoo Finance
- Eversource Energy (ES) Q3 Earnings and Revenues Lag Estimates — Yahoo Finance
- Eversource: Q3 Earnings Snapshot — Associated Press
- Is Eversource Energy (ES) Undervalued As Earnings Misses Cloud Its Fair Value? — Yahoo Finance
- Eversource: Q3 Earnings Snapshot | khou.com — Associated Press
