Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Eversource Energy — EEI Financial Conference 2016
29 slides from Eversource Energy (d/b/a)'s conference presentation, November 2016
Slide 1: Eversource Energy EEI Financial Conference
Eversource Energy EEI Financial Conference November 5-9, 2016
Slide 2: Safe Harbor
EEI FINANCIAL CONFERENCE Safe Harbor All per share amounts in this presentation are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings and EPS of each business do not represent a direct legal interest in the as
Slide 3: The Eversource Investment Thesis
EEI FINANCIAL CONFERENCE The Eversource Investment Thesis Fully regulated business model Strong FERC regulated electric and gas 5% - 7% EPS and transmission growth Dividend CAGR Attractive natural gas segment growth from Very strong financial conversions and infrastructure upgrades condition Highest
Slide 4: We've Delivered Top-Tier Shareholder Returns
EEI FINANCIAL CONFERENCE We’ve Delivered Top-Tier Shareholder Returns ES outperformed the Philadelphia Utility Index over the 1, 3, 5 and 10 year periods Total Shareholder Return 2015 3-Year 5-Year 10-Year ES -1.3% 44.6% 89.3% 263.1% Philadelphia Utility Index -6.3% 33.5% 57.6% 89.1% S&P 500 1.4% 52
Slide 5: Long-Term Earnings Growth
EEI FINANCIAL CONFERENCE Long-Term Earnings Growth $2.90– $2.28 $2.53 $2.65 $2.81 $3.05 $2.81 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E Key Drivers for EPS Growth in 2016 and through 2019: Positive Negative FERC-regulated electric and natural gas Increasing depreciation & property transmission
Slide 6: A Core Eversource Strategy: Clean Energy Solutions for New England
EEI FINANCIAL CONFERENCE A Core Eversource Strategy Going Forward is to Develop and Implement Clean Energy Solutions for New England New England has aggressive renewable, carbon reduction targets Thousands of megawatts of New England’s nuclear, coal and oil units have retired in recent years and tho
Slide 7: These Targets Are Among the Nation's Most Aggressive
EEI FINANCIAL CONFERENCE These Targets Are Among the Nation’s Most Aggressive Regional Greenhouse Gas Emission Targets MMTCO2e Renewable Portfolio Standards in Place 2015 2020 2025 CT 19.5% 27% 27% MA 19.25% 23.5% 29.75% NH 8.3% 20.3% 24.8% (Percentage of electricity that must come from qualifying r
Slide 8: Key Elements of New Massachusetts Energy Legislation
EEI FINANCIAL CONFERENCE Key Elements of New Massachusetts Energy Legislation – H 4568 – An Act to Promote Energy Diversity • Signed by Governor Baker on 8/8/16 • Authorizes long-term contracting for 1,600 MW of off-shore wind • First solicitation for at least 400 MW commencing on or before 6/30/17
Slide 9: Rate Base by Business – Current and Future
EEI FINANCIAL CONFERENCE Rate Base by Business – Current and Future Higher Earnings from Transmission Becoming a Growing Share of Rate Base $18.3 billion* Note: Rate Base Excludes 10% Access Northeast and $14.7 billion Clean Energy Connect 5% 9% 48% 51% $2.5 Billion Increase in Transmission Rate Bas
Slide 10: Expected Changes in Next Transmission CapEx Projection
EEI FINANCIAL CONFERENCE Expected Changes in Next Transmission CapEx Projection in February 2017 Northern Pass HVDC Line to Canada. NPT Actual Forecast CapEx to be primarily in $807M $3.9 Billion 2018 and 2019 due to NHSEC scheduling order $1,200 Other initiatives Greater Hartford Central Connecticu
Slide 11: Transmission – Northern Pass Update
EEI FINANCIAL CONFERENCE Transmission – Northern Pass Update • 1,090 MW of clean energy • $1.6 billion HVDC line, terminal and AC facilities • Approximately 192 miles of new transmission using HVDC technology with AC/DC converters in Quebec and NH • DOE draft Environmental Impact Statement issued 7/
Slide 12: Northern Pass Timeline
EEI FINANCIAL CONFERENCE Northern Pass Timeline July 21, 2015 October 19, 2015 December 18, September 30, Late 2017/ Late 2019 Department of Northern Pass 2015 2017 Early 2018 Energy (DOE) filed application NHSEC accepted NHSEC approved DOE permit Expected in- issued Draft with New application deadl
Slide 13: Progress on Major Transmission Reliability Projects
EEI FINANCIAL CONFERENCE Progress Progress on on Major Transmission Major Transmission Reliability Reliability Projects Projects • Greater 27 projectsHartford for GreaterCentral Connecticut Hartford, Manchester, Greater Boston Reliability Solutions (GHCC) Southington, Middletown and NW CT • 27 proje
Slide 14: Initiatives to Support Growth Beyond 2019
EEI FINANCIAL CONFERENCE Initiatives to Support Growth Beyond 2019 Investment Status Amount Time Period Initial pipeline Assessing next steps Access Northeast $1.2 billion (ES share) 2019; LNG with state processes afterward Possible bid into MA Clean Energy Connect clean energy RFP – April ES share:
Slide 15: Carbon Reduction Goals Will Help Electrify Transportation Sector
EEI FINANCIAL CONFERENCE Carbon Reduction Goals and Vehicle Emissions Standards Will Help Electrify Transportation Sector Connecticut & Massachusetts: Plug-in Electric MA and CT have adopted federal ZEV rules, Vehicles Adoption Rates and Future Mandates CA vehicle emissions standards 500,000 Lack of
Slide 16: "Make Ready" Approach
EEI FINANCIAL CONFERENCE “Make Ready” Approach We are considering a “make ready” model that includes Level II Chargers and DC Fast Chargers Third-party covers cost of chargers “Make Ready” Utility Infrastructure Charger Infrastructure Utility Pad Conductor Utility Distribution Utility EV Electric Mo
Slide 17: Policy Interest in Energy Storage Within the Region is Growing
EEI FINANCIAL CONFERENCE Policy Interest in Energy Storage Within the Region is Growing with Several Avenues for Cost Recovery Massachusetts – DOER / Clean Energy Center recommends Massachusetts develop policies for 600 MW of storage by 2025 in the “State of Charge: Massachusetts Energy Storage Init
Slide 18: New England's Natural Gas Transmission Capacity Dilemma
EEI FINANCIAL CONFERENCE New England’s Natural Gas Transmission Capacity Dilemma Today Key Gas Supply Issues New England natural gas (and power) market prices are highest in the country Marcellus area prices low as low cost production looks for outlets but pipeline projects lack funding or are delay
Slide 19: Dilemma Intensifies as Non-Gas Generation Retires by Mid-2019
EEI FINANCIAL CONFERENCE That Dilemma Intensifies as 2,000-3,000 MW of Non-Gas Key Gas Supply Generation RetiresIssues by Mid-2019 18
Slide 20: In the Winter New England Shifts to Coal and Oil
EEI FINANCIAL CONFERENCE In the Winter New England Shifts to Coal and Oil, Driving Up Costs Winter 2014-2015 Fossil Fuel Mix (MWh) (Average 2014-2015 winter wholesale price $76.64/MWh vs. $26.86 MWh in summer) Source: ISO-NE: Gordan van Welie presentation, November 2015 and January 2016 State of the
Slide 21: Access Northeast - Long-Term Solution to Gas Supply Challenge
EEI FINANCIAL CONFERENCE Access Northeast - Designed to Provide a Long-Term Solution to Challenge of New England Natural Gas Supply Project Scope: • Joint development with Eversource (40%), Spectra Energy (40%) and National Grid (20%) • ~$3 billion (100%); 900 MMcf/d, initial in-service 2019 • Will
Slide 22: Status of New England States' Activity on EDC Gas Capacity Contracting
EEI FINANCIAL CONFERENCE Status of New England States’ Activity on EDCs Contracting for Natural Gas Capacity Electric Distribution Co. (EDC) Purchase of Natural Gas Pipeline Capacity Public Act 15-107 enacted 6/22/15. DEEP canceled natural gas capacity RFP on 10/25/16, stating, “DEEP will monitor co
Slide 23: Recent State Regulatory Developments
EEI FINANCIAL CONFERENCE Recent State Regulatory Developments Massachusetts Solar Filing New Hampshire Generation Divestiture 62 MW proposal filed with DPU 5/30/16 Settlement approved by NHPUC on 7/1/16 35 MW for NSTAR Electric J.P. Morgan hired by NHPUC as auction adviser 27 MW for WMECO PSNH to re
Slide 24: Rate Case Activity
EEI FINANCIAL CONFERENCE Rate Case Activity Jurisdiction Company Commentary NSTAR Electric Base rates frozen through 12/31/15 WMECO Base rate cases to be filed in 2017 Massachusetts NSTAR Gas $15.8M base rate increase effective 1/1/16 CL&P Next case: 2nd half of 2017, effective 12/1/17 Connecticut Y
Slide 25: Multiple Complaints Pending at FERC Regarding Transmission ROE
EEI FINANCIAL CONFERENCE Multiple Complaints Pending at FERC Regarding New England Transmission ROE FERC ROE COMPLAINTS First complaint decided in 2014; resulted in base ROE of 10.57% and project cap of 11.74% Appeal pending in DC Circuit Court—Oral arguments 12/6/16 ALJ’s recommended decision issue
Slide 26: Third Quarter and Nine Months Results
EEI FINANCIAL CONFERENCE Third Quarter and Nine Months Results Nine Months Nine Months Q3 2016 Q3 2015 Change Change 2016 2015 Electric Transmission $0.28 $0.24 $0.04 $0.84 $0.70 $0.14 Electric Distribution $0.53 $0.53 $0.00 $1.20 $1.32 ($0.12) Natural Gas Distribution ($0.02) ($0.01) ($0.01) $0.16
Slide 27: ES: Highest S&P Rating in Industry and Multiple Upgrades
EEI FINANCIAL CONFERENCE ES: Highest S&P Rating in Industry and Multiple Upgrades Since Merger Ratings at Ratings at April 10, February January April May July July 19, 2012 2013 2014 2015 2016 2016 2016 S&P: BBB+ Moody’s S&P S&P: A- ES Moody’s: Baa2 upgrades upgrades Moody’s: Baa1 Unsecured Fitch: B
Slide 28: ES Has the Highest Credit Rating in Utility Industry
EEI FINANCIAL CONFERENCE ES Has the Highest Credit Rating in Utility Industry 16 14 14 Number of 1. ES (Positive) Issuers 2 1 A A- BBB+ BBB BBB- *Standard & Poor’s credit ratings 27
Slide 29: We Meet and Frequently Exceed Our Commitments to Investors
EEI FINANCIAL CONFERENCE We Meet and Frequently Exceed Our Commitments to Our Investors Our Commitments: Results Delivered: 1. Exceed industry EPS & Dividend Three-year average EPS and dividend growth of growth 7.2% and 8.2%, respectively 2. Reduce spending – Target 3-4%/yr. Three year average O&M r