Eversource Energy’s Strong Financial Performance in Q1 2025

Eversource Energy, a leading utility holding company, has reported impressive financial results for the first quarter of 2025. The company’s diversified business segments, including electric distribution, electric transmission, natural gas distribution, and water distribution, have all contributed to its overall success.

Earnings Overview and Future Outlook

In the first quarter of 2025, Eversource earned $550.8 million, or $1.50 per share, compared to $521.8 million, or $1.49 per share, in the same period of 2024. This represents a year-over-year increase in earnings per share (EPS) of 0.67%.

The company has reaffirmed its 2025 earnings guidance range of $4.67 to $4.82 per share. Additionally, Eversource has reiterated its long-term EPS growth rate projection of 5% to 7% through 2029, using its 2024 non-GAAP EPS of $4.57 as the base year.

Liquidity and Cash Flows

Eversource’s cash flows from operating activities totaled $1.04 billion in the first quarter of 2025, compared to $291.3 million in the same period of 2024. This significant increase was primarily driven by improved regulatory recoveries and the timing of collections for various cost tracking mechanisms.

The company’s cash and cash equivalents stood at $111.4 million as of March 31, 2025, up from $26.7 million as of December 31, 2024. Eversource also had $1.16 billion in available borrowing capacity under its commercial paper programs as of March 31, 2025.

During the first quarter of 2025, Eversource issued $1.20 billion in new long-term debt and repaid $300 million of existing long-term debt. The company’s Board of Trustees approved a common share dividend payment of $0.7525 per share, payable on June 30, 2025, to shareholders of record as of May 15, 2025.

Strategic Developments

On January 27, 2025, Eversource announced that it had entered into a definitive agreement to sell its Aquarion water distribution business. The aggregate enterprise value of the sale is approximately $2.4 billion in cash, which includes $1.6 billion for the equity and $800 million of net debt that will be extinguished at closing. The sale is subject to regulatory and other approvals and is expected to close in late 2025. Eversource plans to use the net proceeds from the sale to pay down parent company debt.

Segment Performance

Eversource’s regulated companies, which comprise the electric distribution, electric transmission, natural gas distribution, and water distribution segments, contributed $609.8 million to the company’s net income in the first quarter of 2025, compared to $540.8 million in the same period of 2024.

Electric Distribution Segment The electric distribution segment’s earnings increased by $20.3 million in the first quarter of 2025, compared to the same period in 2024. This was primarily due to higher revenues from base distribution rate increases at PSNH and NSTAR Electric, as well as increased electric system improvements at CL&P.

Electric Transmission Segment The electric transmission segment’s earnings increased by $22.7 million in the first quarter of 2025, compared to the same period in 2024. This was primarily due to a higher transmission rate base as a result of Eversource’s continued investment in its transmission infrastructure.

Natural Gas Distribution Segment The natural gas distribution segment’s earnings increased by $27.8 million in the first quarter of 2025, compared to the same period in 2024. This was primarily due to higher revenues from base distribution rate increases at EGMA and NSTAR Gas, as well as continued investments in natural gas infrastructure.

Water Distribution Segment The water distribution segment’s earnings decreased by $1.8 million in the first quarter of 2025, compared to the same period in 2024. This was primarily due to the absence of a benefit recorded in the first quarter of 2024 to recognize the impacts of the Aquarion Water Company of Connecticut’s rate case decision from PURA, partially offset by lower interest expense.

Eversource Parent and Other Companies Eversource parent and other companies’ losses increased by $40.0 million in the first quarter of 2025, compared to the same period in 2024. This was primarily due to higher interest expense resulting from the absence of capitalized interest as a result of the sale of Eversource’s offshore wind investments in the third quarter of 2024, as well as higher interest costs from long-term debt.

Analysis of Key Financial Metrics

Operating Revenues Eversource’s operating revenues increased by $785.8 million, or 23.6%, in the first quarter of 2025 compared to the same period in 2024. This increase was driven by higher base distribution revenues, as well as increased tracked distribution revenues, which are fully recovered from customers through regulatory cost tracking mechanisms.

The electric distribution segment’s operating revenues increased by $516.0 million, primarily due to base distribution rate increases at PSNH and NSTAR Electric, as well as higher tracked revenues related to energy supply procurement, the CL&P non-bypassable federally mandated congestion charge (NBFMCC), and wholesale market sales.

The natural gas distribution segment’s operating revenues increased by $235.4 million, primarily due to base distribution rate increases at EGMA and NSTAR Gas.

The electric transmission segment’s operating revenues increased by $40.0 million, primarily due to a higher transmission rate base as a result of Eversource’s continued investment in its transmission infrastructure.

Purchased Power, Purchased Natural Gas, and Transmission Expense Eversource’s purchased power, purchased natural gas, and transmission expense increased by $104.3 million, or 8.4%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily driven by higher energy supply procurement costs, other electric distribution costs, natural gas supply costs, and transmission costs, partially offset by a decrease in the retail transmission cost deferral.

Operations and Maintenance Expense Eversource’s operations and maintenance expense increased by $24.5 million, or 5.3%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to higher base (non-tracked) costs in the electric distribution, natural gas distribution, and water distribution segments, as well as higher tracked costs in the electric distribution and electric transmission segments.

Depreciation Expense Eversource’s depreciation expense increased by $39.7 million, or 11.7%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to higher net plant in service balances across the company’s regulated businesses.

Amortization Expense Eversource’s amortization expense increased by $457.7 million in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to the deferral adjustment of energy-related and other tracked costs at CL&P, NSTAR Electric, and PSNH, which can fluctuate from period to period based on the timing of costs incurred and related rate changes to recover these costs.

Energy Efficiency Programs Expense Eversource’s energy efficiency programs expense increased by $44.2 million, or 20.7%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to the deferral adjustment that reflects the actual costs of energy efficiency programs compared to the amounts billed to customers.

Taxes Other Than Income Taxes Eversource’s taxes other than income taxes increased by $35.0 million, or 14.8%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to higher property taxes as a result of higher utility plant balances and higher mill rates at NSTAR Electric, as well as higher Connecticut gross earnings taxes.

Interest Expense Eversource’s interest expense increased by $50.0 million, or 19.9%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to the absence of capitalized interest as a result of the sale of Eversource’s offshore wind investments in the third quarter of 2024, as well as higher long-term debt costs.

Other Income, Net Eversource’s other income, net, increased by $1.3 million, or 1.4%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to higher pension, SERP, and PBOP non-service income components, as well as higher interest income, partially offset by lower capitalized AFUDC related to equity funds, lower equity in earnings of unconsolidated affiliates, and lower investment income.

Income Tax Expense Eversource’s income tax expense increased by $2.7 million, or 1.7%, in the first quarter of 2025 compared to the same period in 2024. This increase was primarily due to higher pre-tax earnings, higher state taxes, a decrease in amortization of EDIT, and a higher share-based payment tax deficiency, partially offset by a decrease in items that impact the company’s tax rate as a result of regulatory treatment and permanent differences.

Outlook and Conclusion

Eversource’s strong financial performance in the first quarter of 2025, with increased earnings, improved cash flows, and a robust liquidity position, positions the company well for the remainder of the year and its long-term growth. The company’s diversified business segments, strategic investments in infrastructure, and effective cost management have all contributed to its success.

The pending sale of the Aquarion water distribution business and the use of the proceeds to pay down parent company debt further strengthen Eversource’s financial position and flexibility. The company’s reaffirmed earnings guidance and long-term growth projections demonstrate its confidence in its ability to continue delivering value to its shareholders.

Overall, Eversource’s first quarter 2025 results highlight the company’s operational and financial strength, as well as its commitment to providing reliable and sustainable energy and water services to its customers.