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February 13, 2024

Amid PURA rate dispute, Eversource announces potential sale of water business, Aquarion

Steve Laschever Eversource CEO Joe Nolan in his Prospect Street corner office in downtown Hartford.
By Andrew Larson

Eversource Energy announced Tuesday evening that it may sell its water distribution business, Aquarion Water Co., to “reduce equity needs and improve regulatory diversity.”

The potential sale comes as Aquarion is in a battle with the Public Utilities Regulatory Authority over a rate increase request.
 
Also, the Hartford-based utility announced it will fully exit the wind energy business with the sale of two of its offshore wind projects to a private equity company.

Eversource made the announcements as part of its latest earnings release, which detailed the company’s fourth quarter and full year 2023 financial results. 

The company said it lost $442.2 million, or $1.26 per share, last year. In 2022, it saw annual earnings of $1.4 billion, or $4.05 per share.

Eversource also reported a fourth-quarter loss of $1.2 billion, or $3.68 per share, due partly to a previously announced impairment related to the sale of its offshore wind holdings. The company anticipated taking a charge of up to $1.6 billion due to its divestment from its three offshore wind projects, joint ventures with the Danish company Ørsted.

Eversource said it has reached an agreement to sell its stakes in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners, an infrastructure investment company based in New York, which has an office in Stamford.

The 132-megawatt South Fork Wind project is based in New York. Revolution Wind is located about 32 miles off the Connecticut coast and is expected to generate 304 megawatts of energy.

Ørsted had previously agreed to acquire Eversource’s stake in the third project, Sunrise Wind, a 924-megawatt offshore wind farm, also in New York.

Separately, Eversource said it plans to launch a process to explore market interest in the sale of Aquarion.

The water company had a $1.3 billion rate base as of Dec. 31, 2023, making it “likely of substantial value to another owner as part of a larger strategic water business or infrastructure platform,” according to the announcement.

The timing of the sale has not been determined.

“Aquarion has been a meaningful investment to Eversource, and I appreciate the hard work and dedication of the Aquarion team and its leadership,” said Joe Nolan, president and CEO of Eversource. “The company is well recognized and respected for its operational excellence in the water distribution business.”

Eversource and PURA have been at odds since last March, when the utilities regulator not only rejected Aquarion's rate increase request, but decreased its annual revenue requirement by $2 million from the current level — about a 1% reduction.

Aquarion, which serves 208,000 customers in 59 cities and towns in Connecticut, has appealed PURA’s decision in New Britain Superior Court.

Eversource said its core distribution and transmission businesses are “well positioned to deliver solid operational and financial results” moving forward.
 

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