Eversource Energy couples clean energy projects with strong balance sheet
Eversource Energy, New England’s largest utility, said it is positioning itself as a catalyst for clean energy with a lineup of proposed projects that include expanding the region’s access to hydro-power, natural gas and solar.
James Judge, president and CEO of Eversource, highlighted some of the company’s signature projects at the Edison Electric Institute’s financial conference in Phoenix this week. “These are investments that we think are in our customers’ best interest and a good opportunity for our shareholders,” he said.
Judge also made the case that the utility provides an investment opportunity given its strong financial performance and shareholder returns, coupled with it having the lowest risk in the industry as determined by a solid credit rating.
Eversource told investors that it plans to continue producing an annual long-term earnings and dividend growth rate of 5-7 percent. Judge said that the company has delivered total shareholder returns averaging 14.5 percent per year over a 20-year period.
In April 2015, Standard & Poor’s upgraded Eversource Energy’s corporate credit rating to A, at the top of its list of utility holding company ratings. S&P has also assigned Eversource a positive outlook, which means the rating may be raised to A+ in the future.
Eversource has multiple projects in the works that are expected to generate cost savings to customers.
The Northern Pass project, now in the final approval stages, will bring hydroelectricity from Hydro-Quebec into New England. The $1.6 billion project with 1,090 megawatts of hydropower is estimated to save customers about $800 million a year.
Eversource has also partnered with Spectra Energy and National Grid on the Access Northeast project. That project will upgrade the existing natural gas transmission pipelines in New England and expand gas capacity to generators and retail customers.
Access Northeast is expected to help meet demands for additional natural gas for heating, while reducing costs for electricity customers throughout New England. The company has said during a typical winter New England customers will save about $1 billion a year. Emissions also will be cut as cleaner natural gas replaces oil and coal-generated power.
The company sees another opportunity in solar and plans to spend $200 million a year on solar energy projects, Judge said.
“We have to think it is in the best interest of our customers. We think utility scale solar is a cheaper alternative than rooftop,” he said.
Eversource has constructed a large-scale solar generation facility in Massachusetts, which contributes to the state’s goal to install 1,600 MW of solar energy by 2020.
In addition, the Massachusetts Legislature passed a measure to expand its offshore wind energy target. The state will solicit proposals for long–term contracts to develop wind power, which Judge said was a transmission opportunity for the company.
On the regulatory front, Eversource has two rate cases in Massachusetts and Connecticut that are expected to proceed next year.
“The reliability numbers are now the best in the 100-plus year history of the company. We have improved efficiency and cost reductions, coupled with improved service, which is usually a win with regulators. So we feel pretty good about getting through those proceedings next year,” Judge said.