Eversource Energy’s (NYSE:ES) four largest reliability projects are underway and expected to be completed in 2019, Phil Lembo, executive vice president and CFO, said during the company’s 3Q17 earnings call.
As noted on the company’s presentation, those projects are the:
- Greater Boston Reliability Solutions, which involve 28 projects, including seven new transmission lines, new substations, and substation expansion projects. Twelve projects have been placed in service, 10 projects are under construction, and four projects are in the Massachusetts Department of Public Utilities (DPU) siting process (with approval expected this year). The total projected investment is $560m, with the investment through Sept. 30 being $186.3m
- Greater Hartford Central Connecticut project, which involves 27 projects for Greater Hartford, Manchester, Southington, Middletown, and NW CT. Sixteen of those projects are in service, while eight projects are under construction, and three are in the siting process, with approvals expected by 1Q18. The total projected investment is $350m, with the investment through Sept. 30 being $192.3m
- Greenwich Substation Project, of which the original proposal was rejected without prejudice by the Connecticut Siting Council in 2016. The company collaborated with local officials on infrastructure upgrade options and energy efficiency/demand side management strategies. The new design includes a scaled down substation. The council’s vote is due this month
- Seacoast Reliability Project, which involves a new 13-mile line between Portsmouth and Madbury in New Hampshire. The New Hampshire Site Evaluation Committee’s (SEC) approval is expected in July 2018, and the total projected investment is $84m, with the investment through Sept. 30 being $19.7m
Lembo said during the call that Eversource will discuss its 2018 capital budget in February.
“[D]uring the last earnings call in July, I noted that we expect to offset some of the revisions to the Northern Pass timeline through increased investments in our electric, natural gas, and water distribution systems, such that our capital budget would likely remain approximately $2.8bn,” he said. “Since then, we’ve also identified about $100m of additional reliability related electric transmission investments across our service territory that we would expect to complete in 2018. This investment will allow us to further improve transmission reliability and harden our system.”
Discussing the Northern Pass transmission project and its progress at the SEC, Lee Olivier, executive vice president, Enterprise Energy Strategy and Business Development, Eversource, said during the call that cross examination of the company’s witnesses wrapped up in the early October timeframe, and that hearings are now focused on intervenor witnesses.
According to the project’s website, the 192-mile project is designed to bring 1,090 MW of clean energy from Hydro-Québec’s hydroelectric plants in Canada to New Hampshire and to the rest of New England; a total of 60 miles of the project would be placed underground.
Olivier said during the call that once the cross examination of intervenor witnesses is complete and the record is closed, intervenors will have 14 days to file their final briefs on the project, and Eversource will have another seven days to make its filing. The SEC has scheduled a written decision on the project for no later than March 31, 2018, he said.
“We consider the New Hampshire SEC schedule to be supportive of the project receiving all of the approvals necessary to commence construction in the second quarter of 2018,” he said, adding that the project needs to secure a presidential permit from the U.S. Department of Energy, which issued the final environmental impact statement on the project in August.
The presidential permit, as well as a final order from the U.S. Forest Service on the project and a final permit from the U.S. Army Corps of Engineers, are expected to be issued this year, he said.
Olivier also noted that the company filed a settlement agreement with the New Hampshire Public Utilities Commission staff and the Office of the Consumer Advocate (OCA) regarding the project.
As noted on an Oct. 31 post on the project’s website, commission staff, the OCA, Eversource, and Northern Pass Transmission LLC have reached the settlement, enabling Northern Pass to lease transmission rights of way from Eversource.
Under the proposed agreement, which is pending final approval by the commission, Northern Pass Transmission would make annual lease payments to Eversource, which would be used to offset Eversource’s transmission costs. The site further noted that Northern Pass has also committed to make annual payments, which would total $15m over the lifetime of the project.
The funds would be under the commission’s control and direction for “programs, projects or other purposes that provide benefits to New Hampshire distribution customers.” The site added that those programs may include investments in distributed generation, energy storage, electric vehicles, demand response and other initiatives.
“[W]e continue to expect construction [on Northern Pass] to commence by mid-2018, with completion in the third quarter of 2020,” Olivier said during the call, adding that the company has signed firm fixed price contracts with its major suppliers and contractors, including ABB and Quanta Services.
On solar power and storm restoration
Lembo noted that Eversource is making significant progress on its Massachusetts solar initiative. In August, legislation allowing the company to build 62 MW of solar power was amended to provide an additional two years to complete the facilities. As a result, and to lower costs for customers, Eversource adjusted its construction schedule such that a small amount of capital spending for the solar program will take place in 2018, rather than in 2017, he added.
About 50 MW are under construction, and the remaining 12 MW will go into construction by the end of this year, he said.
Among other things, Lembo discussed the severe wind and rain storm that hit the Northeast the night of Oct. 29 into the morning of Oct. 30.
“The near hurricane force winds resulted in hundreds of broken poles, dozens of downed transformers, and many miles of downed wires,” he said. “Across New England, approximately 1.3 million electric customers lost power. In our service territory, New Hampshire was the hardest hit, with more than 60% of all customers out of power at some point. While are restoration efforts are largely complete in Massachusetts and Connecticut, and they’re progressing well in New Hampshire, I just want to recognize the tireless efforts of our employees and thank our customers for their patience.”
Eversource on Nov. 1 reported earnings of $260.4m, or 82 cents per share, in 3Q17, compared with earnings of $265.3m, or 83 cents per share, in 3Q16. The company said that in the first nine months of 2017, it earned $750.6m, or $2.36 per share, compared with earnings of $713.1m, or $2.24 per share, in the first nine months of 2016.