10-K: Eversource Energy Reports Strong 2025 Earnings, Raises Dividend

Eversource Energy announced a significant increase in 2025 earnings, driven by regulated business growth and reduced offshore wind losses, while also raising its quarterly common share dividend.

Summary

• Eversource Energy reported GAAP Net Income Attributable to Common Shareholders of $1.69 billion, or $4.56 per share, in 2025, a substantial increase from $811.7 million, or $2.27 per share, in 2024.
• Excluding non-GAAP charges related to offshore wind investments and the Aquarion sale, 2025 non-GAAP earnings were $1.77 billion, or $4.76 per share, compared to $1.63 billion, or $4.57 per share, in 2024.
• The company projects 2026 earnings guidance between $4.80 and $4.95 per share, with a long-term EPS growth rate of 5% to 7% through 2030, using a 2025 non-GAAP EPS base of $4.76.
• Cash flows provided by operating activities increased to $4.11 billion in 2025 from $2.16 billion in 2024, primarily due to improved regulatory recoveries.
• Capital expenditures totaled $4.16 billion in 2025, down from $4.48 billion in 2024, with projected capital expenditures of $26.51 billion from 2026 through 2030 across its segments.
• The quarterly common share dividend increased to $0.7875 per share, payable March 31, 2026, up from $0.7525 per share in 2025.
• The sale of the Aquarion water distribution business was denied by PURA in November 2025 but the denial was appealed and remanded by the Connecticut Superior Court in January 2026, with a final decision expected by March 25, 2026.
• PSNH received approval for a permanent distribution rate increase of $100.7 million, effective August 1, 2025, including an alternative regulatory framework with formulaic annual revenue adjustments through 2028.
• NSTAR Gas and the Massachusetts Office of the Attorney General reached a settlement allowing a $45.0 million rate base reset effective January 1, 2026, but included a $10.2 million customer credit penalty for missed performance metrics.
• Yankee Gas received a PURA-approved distribution rate increase of $95.7 million, effective November 1, 2025, but faced disallowances of certain capitalized overhead costs, which are under reconsideration.
• Eversource recognized a pre-tax charge of $284.0 million in 2025 related to an increase in its offshore wind contingent liability for expected future payments to GIP, following updated construction cost projections for Revolution Wind.
• The company issued 7,130,134 common shares in 2025 through an at-the-market (ATM) equity offering program, raising $465.4 million net of issuance costs.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong operational earnings growth, increased dividends, and significant planned capital investments in regulated assets, despite ongoing challenges with offshore wind liabilities and the Aquarion sale.

Positives

• Net Income Attributable to Common Shareholders significantly increased to $1.69 billion ($4.56 per share) in 2025 from $811.7 million ($2.27 per share) in 2024.
• Non-GAAP earnings, excluding one-time charges, grew to $1.77 billion ($4.76 per share) in 2025 from $1.63 billion ($4.57 per share) in 2024, indicating strong operational performance.
• Cash flows from operating activities improved substantially to $4.11 billion in 2025, up from $2.16 billion in 2024, driven by better regulatory recoveries.
• The quarterly common share dividend was increased to $0.7875 per share, reflecting confidence in future financial performance.
• PSNH received approval for a permanent distribution rate increase of $100.7 million, effective August 1, 2025, and an alternative regulatory framework allowing formulaic annual revenue adjustments through 2028.
• Yankee Gas secured a distribution rate increase of $95.7 million, effective November 1, 2025.
• NSTAR Electric, EGMA, and the Massachusetts Office of the Attorney General reached a settlement allowing recovery of $82.3 million in acquisition and integration costs for EGMA.
• The Connecticut Superior Court sustained the appeal of PURA's denial of the Aquarion sale, remanding it back to PURA and validating the prudence standard for cost recovery.
• Eversource has expanded GHG reduction targets: 45% reduction in Scope 1 and 2 emissions by 2035, and net zero emissions by 2050 for Scope 1, 2, and 3.
• The company achieved service quality metrics at or above target for all NSTAR Electric's SQ metrics in 2025, avoiding penalties.

Negatives

• Eversource recorded a pre-tax charge of $284.0 million in 2025 due to an increase in the offshore wind contingent liability, reflecting higher projected construction costs and delays for the Revolution Wind project.
• The Aquarion water distribution business sale was initially denied by PURA in November 2025, causing uncertainty and reclassification of assets from 'held for sale' to 'held and used'.
• NSTAR Gas is required to pay approximately $1.6 million to customers in service quality charges for not meeting certain customer service-related performance metrics in 2025.
• The NSTAR Gas settlement agreement resulted in a pre-tax charge to earnings of $12.2 million in Q4 2025, including a $10.2 million customer credit penalty for missed performance metrics.
• Yankee Gas's rate case decision resulted in an $8.5 million pre-tax loss in Q4 2025, primarily from the write-off of disallowed capitalized employee compensation costs.
• The DPU declined to approve NSTAR Gas's rate base reset of $45.0 million for non-GSEP plant additions in October 2025 due to missed performance metrics, deferring recovery to the next rate case.
• CL&P's Advanced Metering Infrastructure (AMI) investment and implementation plan faced challenges, with PURA's initial decision not providing a reasonable path for cost recovery and modifying the prudence standard.
• The New Hampshire Department of Energy and the Office of the Consumer Advocate filed appeals challenging aspects of the PSNH distribution rate case decision, introducing regulatory uncertainty.
• The OBBBA law phases out federal tax credits for renewable energy for projects beginning construction after July 4, 2026, and not placed in service before December 31, 2027, potentially impacting future clean energy investments.

Risks

• Cyber events or breaches, including acts of war or terrorism, affecting systems or third-party systems, could severely impair operations, lead to disclosure of confidential information, and harm reputation.
• Unauthorized access to, and misappropriation of, confidential and proprietary Company, customer, employee, financial, or system operating information could adversely affect business operations and reputation.
• Actions or inaction of local, state, and federal regulatory, public policy, and taxing bodies, including changes in laws, regulations, or policy, may impact compliance costs and strategic initiatives.
• Adverse publicity can harm reputation, influence legislative and regulatory bodies, and result in unfavorable outcomes.
• Variability in costs and final investment returns of the Revolution Wind and South Fork Wind offshore wind projects, related to post-closing adjustments under the sale agreement, could increase financial exposure.
• Inability to qualify for investment tax credits or changes to tax law could materially adversely affect financial position, results of operations, and cash flows.
• Extreme weather, including severe storms due to climate change, and fluctuations in weather patterns, could cause significant damage and require extensive unrecoverable expenditures.
• Adequacy, contamination of, or disruption in water supplies, or failure of dams, may disrupt water distribution and result in substantial additional costs.
• Physical attacks or grid disturbances that may damage and disrupt electric transmission and electric, natural gas, and water distribution systems.
• Ability or inability to commence and complete major strategic development projects and opportunities.
• Breakdown, failure of, or damage to operating equipment, information technology systems, or processes of transmission and distribution systems.
• Changes in levels or timing of capital expenditures, including unplanned expenditures and increased requirements.
• Changes in business conditions, including disruptive technology or development of alternative energy sources.
• Substandard performance of third-party suppliers and service providers, or counterparties not meeting their obligations.
• Limits on access to, or increases in, the cost of capital, including disruptions in capital markets.
• Changes in economic conditions, including impact on interest rates, tax policies, tariffs, and customer demand and payment ability.
• Changes in accounting standards and financial reporting regulations.
• Actions of rating agencies.
• Integration of artificial intelligence (AI) introduces risks such as inaccurate forecasts, biased recommendations, service disruptions, regulatory penalties, and reputational harm.
• Customer affordability concerns, driven by energy supply costs, public policy mandates, and inflation, may limit cost recovery or funding for infrastructure upgrades.
• FERC changing its methodology on developing ROEs or eliminating certain transmission incentives could negatively impact financial position.
• Competition for transmission projects, including ISO-NE's LTTP competitive solicitation process, could result in cost caps, reduced ROE, or delays.
• Costs of compliance with environmental laws and regulations, including those related to climate change (e.g., PFAS, lead, RPS requirements), may increase and not be fully recoverable.
• The view of natural gas as an attractive fuel source may be at risk due to opposition from environmental groups, investors, and governmental entities.
• Market performance or changes in assumptions may require significant contributions to pension and other postretirement benefit plans.
• Goodwill and long-lived assets, if impaired and written down, could adversely affect future operating results and total capitalization.
• Counterparties may not meet their obligations or may exercise termination rights, adversely affecting earnings.
• As a holding company, Eversource parent's liquidity is dependent on dividends from subsidiaries and access to capital markets.

Future Outlook

Eversource Energy projects 2026 earnings per share (EPS) to be between $4.80 and $4.95, and anticipates a long-term EPS growth rate of 5% to 7% through 2030, using its 2025 non-GAAP EPS of $4.76 as the base. The company plans significant capital expenditures of $26.51 billion from 2026 through 2030, primarily focused on electric distribution, natural gas distribution, and electric transmission infrastructure. Future growth is expected to be driven by these regulated investments and ongoing rate case approvals. The company also aims to achieve a 45% reduction in Scope 1 and 2 emissions by 2035 and net zero emissions by 2050 for Scope 1, 2, and 3, aligning with regional climate goals.

Management Comments

• We earned $1.69 billion, or $4.56 per share, in 2025, compared with $811.7 million, or $2.27 per share, in 2024.
• We project that we will earn within a 2026 earning guidance range of between $4.80 per share and $4.95 per share.
• We also project that our long-term EPS growth rate through 2030 will be in a 5 to 7 percent range, using 2025 non-GAAP EPS of $4.76 per share as the base year.
• We believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business.
• We expect the future operating cash flows of Eversource, CL&P, NSTAR Electric and PSNH, along with our existing borrowing availability and access to both debt and equity markets, will be sufficient to meet any working capital and future operating requirements, and capital investment forecasted opportunities.
• Eversource believes that the contingent liability balance as of December 31, 2025 is a reasonable estimate to cover this contingent liability for purchase price adjustments related to offshore wind.
• Eversource does not believe there is any indication of an inability to recover costs or risk of impairment of NSTAR Gas and EGMAs natural gas assets at this time.
• We continue to perform substantially better than the performance goal range and within the top half of the industry, albeit slightly below our DART metric from the prior year, from 0.76 in 2024 to 0.87 in 2025.
• We believe that our storm restoration costs deferred were prudently incurred, meet the criteria for cost recovery, and are probable of recovery.
• The NHPUC, as the deciding agency, is afforded the highest level of deference by the New Hampshire Supreme Court, and therefore the Department of Energy and the Office of Consumer Advocate will have a very high burden to meet to be successful on appeal regarding the PSNH rate case decision.

Industry Context

StockSavvy.ai notes that Eversource Energy's focus on regulated utility operations, with significant planned capital expenditures in electric transmission and distribution, aligns with broader industry trends towards grid modernization, reliability enhancements, and clean energy integration. The company's expanded GHG reduction targets position it favorably within the utility sector's increasing emphasis on environmental, social, and governance (ESG) factors. The ongoing regulatory challenges, such as the Aquarion sale denial and FERC ROE complaints, highlight the inherent complexities and risks of operating in a highly regulated environment, a common theme across the utility industry. The company's ability to secure rate increases and cost recovery mechanisms, despite some setbacks, is crucial for maintaining financial health and funding future investments in a capital-intensive sector.

Comparison to Industry Standards

• Eversource's DART (Days Away Restricted Time) metric of 0.87 in 2025, while slightly higher than 0.76 in 2024, is noted as 'substantially better than the performance goal range and within the top half of the industry', indicating strong safety performance relative to peers.
• The company's long-term EPS growth rate target of 5% to 7% through 2030 is competitive within the regulated utility sector, which typically offers stable but moderate growth compared to other industries.
• The authorized regulatory ROE of 9.5% for PSNH and 9.32% for Yankee Gas are within the typical range for regulated utilities, reflecting a balance between investor returns and customer affordability concerns.
• The PBR plan for NSTAR Electric, allowing annual adjustments for inflation and capital additions, is a common regulatory mechanism designed to provide utilities with predictable revenue streams for infrastructure investments, similar to those seen in other regulated markets like National Grid and Con Edison.

Management Changes

Corporate Governance

Legal Proceedings

• Four separate complaints are pending at FERC challenging the New England Transmission Owners' (NETOs) base Return on Equity (ROE) and transmission incentive cap, alleging they are unjust and unreasonable. The resolution could materially impact financial condition, results of operations, and cash flows.
• The U.S. Court of Appeals for the D.C. Circuit vacated FERC's decisions in MISO ROE proceedings and remanded them, finding FERC's new methodology arbitrary and capricious. MISO transmission owners have petitioned for review of FERC's subsequent order on remand.
• CL&P is undergoing a prudency review proceeding by PURA for approximately $978 million in storm costs incurred between 2018 and 2023, with a final decision expected around July 29, 2026. While CL&P believes costs were prudently incurred, some amounts could be disallowed.
• CL&P's Advanced Metering Infrastructure (AMI) investment and implementation plan faced regulatory challenges, with PURA's decision not providing a clear path for cost recovery and modifying the prudence standard, leading to CL&P filing motions for reconsideration.
• Yankee Gas's distribution rate case final decision included disallowances of certain capitalized overhead costs, which are subject to a motion for reconsideration by PURA, with a final decision expected by March 15, 2026.
• The New Hampshire Department of Energy and the Office of the Consumer Advocate filed appeals with the New Hampshire Supreme Court challenging aspects of the PSNH distribution rate case decision, including the alternative regulatory framework and revenue requirement.
• The Aquarion sale was denied by PURA in November 2025 due to governance concerns, but the Connecticut Superior Court sustained an appeal and remanded it back to PURA, with a final decision expected by March 25, 2026.
• The Yankee Companies (CYAPC, YAEC, MYAPC) filed a fifth set of lawsuits against the DOE seeking $120.4 million in monetary damages for failure to accept spent nuclear fuel from 2017-2020, later amended to include 2021 costs of $33.1 million. A settlement of $145 million was approved in November 2024, but the Department of Justice filed a Notice of Appeal on an issue outside the settlement scope.
• Aquarion opted into class-action settlements with 3M Company, E.I. duPont de Nemours and Company, Tyco Fire Products LP, and BASF Corporation to resolve PFAS contamination claims, receiving $17.8 million in proceeds in 2025, with future recoveries anticipated.

Related Party Transactions

• Eversource parent provides loans to its subsidiaries to assist in meeting their short-term borrowing needs, charging interest at the same weighted-average interest rate as its commercial paper program.
• As of December 31, 2025, intercompany loans from Eversource parent to PSNH totaled $49.3 million.
• Eversource Service, Eversource's service company, provides centralized accounting, administrative, engineering, financial, information technology, legal, operational, planning, purchasing, tax, and other services to Eversource's companies.
• The Rocky River Realty Company and Properties, Inc., other Eversource subsidiaries, construct, acquire or lease property and facilities used by Eversource's companies.
• Yankee Gas, NSTAR Gas, and EGMA purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline project, an unconsolidated affiliate, totaling $77.7 million annually.
• Eversource made contributions to the Eversource Energy Foundation, an independent not-for-profit charitable entity, of $7.0 million in 2025 and $20.0 million in 2023.

Stakeholder Impact

• Shareholders: Benefit from increased GAAP and non-GAAP earnings, a higher quarterly dividend, and projected long-term EPS growth. However, they face risks from offshore wind contingent liabilities and regulatory uncertainties.
• Customers: Impacted by approved rate increases (PSNH, Yankee Gas, NSTAR Gas) and potential future rate adjustments for storm costs, AMI, and environmental compliance. They also benefit from bill relief programs (Massachusetts Winter Bill Relief) and state bond funding for hardship and EV programs (Connecticut).
• Employees: Benefit from competitive pay, comprehensive benefits, robust training programs, and a commitment to safety and workforce engagement. The transition to a cleaner energy economy may require new skill sets and retraining.
• Regulators: Actively involved in numerous rate cases, prudency reviews, and policy developments (e.g., PBR, Future of Gas, climate compliance plans), indicating ongoing scrutiny and influence over company operations and financial recovery.
• Creditors: The company's ability to access capital markets and maintain credit ratings is crucial for funding its capital-intensive operations and debt maturities. Compliance with debt covenants is essential.
• Suppliers/Counterparties: The company relies on third-party suppliers for equipment, materials, and services, and faces risks from substandard performance or non-fulfillment of obligations. Offshore wind project counterparties (GIP) are impacted by cost overruns and contingent liabilities.

Next Steps

• PURA is expected to issue a final decision on the reconsideration of the Yankee Gas rate case by March 15, 2026.
• Oral argument is scheduled for March 17, 2026, in the MISO ROE Court proceeding.
• PURA is expected to issue a final decision on the Aquarion sale by March 25, 2026.
• CL&P is required to submit a comprehensive Integrated Distribution System Plan (IDSP) filing every four years, aligned with rate amendment applications, and an annual IDSP filing to report on investments.
• CL&P is awaiting a final decision on its 2018 to 2023 storm costs prudency review, expected on or about July 29, 2026.
• PSNH is authorized three formulaic annual revenue adjustments on August 1st of 2026, 2027, and 2028.
• PSNH is required to file its next base distribution rate case for effect in June 2029.
• NSTAR Gas will begin to recover the remaining 2025 GSEP revenue requirement on May 1, 2026, over 18 months.
• NSTAR Gas will not petition for a rate case with new rates effective December 1, 2026, as per settlement.
• EGMA's transaction and integration costs of $82.3 million will be collected from customers over a ten-year period from the time of the next EGMA rate case.
• NSTAR Electric, NSTAR Gas, and EGMA implemented a winter electric and natural gas bill relief program in February and March 2026, with remaining bill credits deferred for recovery from electric customers between April and December 2026 and from natural gas customers between May and October 2026.
• NSTAR Electric's ESMP Phase II proceeding will establish a long-term cost recovery mechanism, expected to be through base distribution rates.
• Eversource will continue to monitor developments and evaluate potential exposures related to the offshore wind contingent liability and revise its estimated liability as additional information becomes available.
• Eversource will respond to the New Hampshire Department of Energy and Office of the Consumer Advocate appeals regarding the PSNH distribution rate case consistent with applicable legal and regulatory processes.

Key Dates

Recommendation

Eversource Energy demonstrates solid operational performance in its regulated segments, reflected in strong non-GAAP earnings growth and a dividend increase. The significant planned capital expenditures in transmission and distribution infrastructure provide a clear path for future rate base growth and stable returns. However, the company faces material uncertainties and financial exposures, particularly the increased offshore wind contingent liability and the ongoing regulatory challenges surrounding the Aquarion sale. While the core regulated business is robust, these unresolved issues introduce a degree of risk that warrants a cautious approach. A 'hold' recommendation allows investors to maintain exposure to the stable utility business while monitoring the resolution of these significant contingent liabilities and regulatory proceedings, which could impact future financial performance and valuation.

Keywords

Eversource Energy, Utility, Electric Distribution, Natural Gas Distribution, Water Distribution, Electric Transmission, SEC Filing, 10-K, Financial Results, Earnings Per Share, Capital Expenditures, Dividends, Regulatory Rates, Offshore Wind, Aquarion Sale, Climate Change, GHG Emissions, Cybersecurity, Connecticut Light & Power, NSTAR Electric, Public Service Company of New Hampshire, Yankee Gas, NSTAR Gas, Eversource Gas Company of Massachusetts, PURA, DPU, NHPUC, FERC, Renewable Energy, Infrastructure Investment