In another record year, Eversource Energy reported $1.4 billion in profits in 2022, an increase of about 15 percent from 2021 and the third consecutive year the multistate-energy company has reported revenues of more than $1.2 billion.
The company has faced renewed scrutiny as the cost of electric supply it offers its customers doubled in January. Eversource passes through the cost of electric supply to its customers, so it doesn’t make or lose money from that spiking price.
But the company’s rates of return set by state regulators across its regulated electric, gas and water businesses in New England meant its profits increased across the board despite global turmoil in the energy markets, and while Connecticut customers face 40 percent increases in their electric bills.
Eversource CEO Joe Nolan told investors on a call Tuesday that the company was concerned heading into the winter about the impact of higher energy prices, and uncertain supplies of natural gas and oil for New England.
“Fortunately mild temperatures this winter have reduced customers’ energy consumption and tempered the impact on bills,” Nolan said. “They have also contributed to a sharp reduction in natural gas prices, which has started to lower natural gas bills for some customers.”
Nolan said most electric customers will see lower supply costs reflected in their bills in July.
The company's $1.4 billion in profits are driven by how much they earned in their regulated businesses in Connecticut, Massachusetts and New Hampshire, including electric distribution and transmission, and water and natural gas distribution.
On Tuesday, the company reported earnings of $592.8 million from its electric distribution service across the three states, up from $556.2 million in 2021. The company cited higher revenue from its distribution network, coupled with lower pension expenses for the higher profits this past year.
Eversource CFO John Moreira told investors on a call Tuesday morning that the company invested about $1.35 billion in its distribution system in 2022, up from $1.24 billion in 2021. The company also had higher operations and management costs, partly driven by higher storm recovery costs, he said.
The company reported that its $97.9 million in distribution profits for the fourth quarter of 2022 were down from $105 million in the fourth quarter of 2021 because the company committed $10 million to Operation Fuel to fund more grants for customers in Connecticut who can’t afford their high bills this winter.
Eversource CEO Joe Nolan told investors the company is earning below its allowed 9.25 percent return on equity for its electric distribution system in Connecticut, but can likely wait until the end of 2025 to ask PURA for a rate increase. The company has not been before PURA for a full rate case since 2014, and it is barred from requesting a distribution rate increase before January 2024.
“That rate case will trigger recovery of storm costs [from customers], so you could very well see some filings that we want to start the review of the prudency of those storm costs later this year,” Nolan said.
Moreira said it was “still a little too early” in PURA’s process of establishing performance-based regulations for Connecticut utilities for the company to comment on the direction of that investigation.
“We are working with [PURA] to share with them some concerns that we have and what the consequences could be if they go in a certain direction,” Moreira said.
Eversource reported that its electric transmission profits increased from $533.6 million in 2021 to $596.6 million in 2022, its natural gas distribution profits increased from $204.8 million to $234.2 million, and its water distribution profits stayed flat at $36.7 million.
Moreira said the company projects to spend about $21.5 billion on its electric, natural gas and water distribution systems over the next five years – largely to replace older equipment on the electric distribution system.
“This investment continues to make our transmission system more reliable, even during extreme weather events,” Moreira said. “Increased storm hardening and system resiliency has resulted in no transmission-related outages through the last several severe storm events.”