Eversource Energy

Phase A — Understand the business

Lens 1 · Company Overview

Eversource Energy is a public utility holding company headquartered in Boston, MA and Hartford, CT, engaged "primarily in the energy delivery business" through wholly-owned regulated subsidiaries. It is, in plain terms, a pure-play regulated wires-and-pipes business across the three southern New England states — it delivers electricity, natural gas and (for now) water, and earns a regulator-set return on the capital it sinks into poles, wires, substations, transmission lines and mains. It is not a competitive generator: critically, "CL&P does not own any generation assets" and procures supply on a pass-through basis for customers. That makes the commodity a wash — Eversource is an infrastructure rate-base compounder, not a power-price play.

The operating subsidiaries:

• The Connecticut Light & Power Company (CL&P) — electric distribution, CT (~1.32 million customers).
• NSTAR Electric Company — electric distribution, eastern + western MA (~1.62 million customers); plus subsidiary Harbor Electric.
• Public Service Company of New Hampshire (PSNH) — electric distribution, NH.
• NSTAR Gas, Eversource Gas of Massachusetts (EGMA), Yankee Gas — natural gas distribution across MA and CT.
• Aquarion — five regulated water utilities in CT/MA/NH (held for sale; see Lens 10).

Headcount: 10,731 employees as of FY2025.

Four reportable segments: electric distribution, electric transmission, natural gas distribution, water distribution.

Customers / suppliers / competitors. Customers are the ~4.5M+ retail meters across CT/MA/NH — there is no customer concentration risk (it's a residential/commercial/industrial book). "Suppliers" in the operating sense are energy/gas wholesale markets (ISO-NE), but those costs are passed through with no markup, so they don't touch earnings. The real "counterparty that matters" is the regulator — PURA (Connecticut), the DPU (Massachusetts), the NHPUC (New Hampshire), and FERC (transmission). Competition is muted in the natural monopoly franchise, but FERC is "encourag[ing] competition for transmission projects… which could result in being exposed to cost caps or a reduced ROE in order to win a project bid" — a structural threat to the transmission growth engine.

Contract structure / payment terms. This is the defining feature of a regulated utility: revenue is the regulator-approved cost of service plus an allowed return on rate base. Rates split into (a) base distribution rates — set in periodic rate cases, the part that actually drives earnings — and (b) tracked/reconciling revenues — energy procurement, transmission charges, energy-efficiency, decoupling true-ups — which are recovered dollar-for-dollar and have no earnings impact. Decoupling mechanisms at CL&P, NSTAR Electric, the gas utilities and Aquarion-CT break the link between sales volume and revenue, so weather and conservation don't swing the regulated earnings — the rate case and the allowed ROE do.

Lens 2 · Supply Chain

For a wires utility the "supply chain" is the electron/molecule delivery chain plus the regulatory recovery chain. (supply-chain.md is missing in the commercial layer — grounded from the filings + web.)

Upstream (energy/gas commodity) → Eversource → end customer:

• Wholesale generation / ISO-NE market → Eversource procures energy supply via competitive RFPs and the ISO-NE wholesale market. CL&P supplied ~50% of customer load at standard-service/last-resort rates in 2025 (other 50% migrated to competitive suppliers); NSTAR Electric supplied ~12% at basic service (88% on municipal aggregation or competitive supply); PSNH supplied ~56% at default service. Migration is limited to the energy-supply commodity and has no impact on the distribution business or operating income — Eversource is the agent, not the principal.
• State-mandated long-term contracts — CL&P recovers costs of long-term state-mandated purchases from the Millstone and Seabrook nuclear plants through its NBFMCC mechanism, net of ISO-NE wholesale sales. These are pass-through.
• Transmission interconnection — NSTAR Electric holds a 14.5% interest in two companies that transmit hydroelectricity imported from Hydro-Quebec.

The chokepoints that actually matter for Eversource are not physical — they are regulatory and financial:

1. The rate-case recovery chain — every dollar of capex must be approved into rate base by PURA/DPU/NHPUC/FERC before it earns a return. A disallowance (e.g. storm-cost prudency review) breaks the chain. $2.06 billion of deferred CL&P/NSTAR/PSNH storm costs have yet to be filed, are pending approval, or are subject to prudency review as of 2025-12-31 (incl. $1.19B at CL&P) — a live recovery-chain risk.
2. The capital markets — as a holding company "with no revenue-generating operations, Eversource parent's liquidity is dependent on dividends from its subsidiaries, its commercial paper program, and its ability to access the long-term debt and equity capital markets". Credit-rating access is the binding input (see Lens 10).
3. Equipment/labor for the build — the $26.51B 2026–2030 capex plan (Lens 11) depends on transformers, conductors, switchgear and skilled line labor; the offshore-wind cost overruns flagged "tariff impacts… and supply chain constraints".

Lens 3 · Competitive Advantages (moats)

Eversource's moat is the regulated natural monopoly franchise — the strongest structural moat type there is, but one whose return is capped by the regulator, not the market. (positioning.md / bottlenecks.md missing — grounded from filings + web.)

• Franchise monopoly + switching costs ≈ infinite. No customer in CL&P/NSTAR/PSNH territory can choose another wires provider. The franchises are granted by state statute and are largely "unlimited as to time". This is the durable moat — demand is captive and recurring.
• Scale of rate base. $63.8B total assets, $26.51B forward capex plan — the bigger the approved rate base, the bigger the earnings stream. Eversource is one of the largest pure-play T&D utilities in the US.
• Transmission is the highest-quality moat slice. FERC-regulated transmission earns a formula-rate return with annual true-ups and historically the best allowed ROE — it generated $2.09 of FY2025 EPS, the single largest segment (Lens 4). But this moat just got narrowed: FERC cut the base ROE 100 bps (Lens 5/8/10).
• Bargaining power is asymmetric — and that's the problem. Over suppliers Eversource has normal buyer power (pass-through procurement). Over customers it has total pricing power within the franchise — but only up to what the regulator allows. The binding counterparty is the regulator, and in Connecticut that counterparty has turned adversarial: Moody's called Connecticut "the worst regulatory environment in the U.S." when downgrading. So the moat is real on the demand side and contested on the return side. A regulated utility's moat is only as wide as its allowed ROE — and Eversource's is being actively compressed in two of its jurisdictions (CT distribution + FERC transmission).

Lens 4 · Segments

By segment — FY2025 vs FY2024 vs FY2023 earnings & EPS (Regulated Companies, non-GAAP basis):

By revenue — FY2025 consolidated Operating Revenues $13,547.2M, up $1,646.4M YoY. Revenue variance by segment:

• Electric Distribution +$973.1M (largely tracked/pass-through; base electric +$114.1M is the earnings-relevant part)
• Natural Gas Distribution +$530.9M (base gas +$198.1M earnings-relevant)
• Electric Transmission +$162.3M
• Water +$7.6M; Other +$31.4M; Eliminations −$58.9M

By geography: CT (CL&P), MA (NSTAR Electric / NSTAR Gas / EGMA), NH (PSNH); the filing reports subsidiary-level results — FY2025 Operating Income: CL&P $870.7M, NSTAR Electric $884.1M, PSNH $408.5M. NSTAR Electric (MA) and CL&P (CT) are similar-sized; the MA book is the cleaner regulatory jurisdiction, the CT book (CL&P + Yankee Gas) is where the regulatory war is.

The cause of the trend. Earnings growth is base-rate-driven, not volume-driven (decoupling). Gas is the fastest grower (rate cases at EGMA, NSTAR Gas, Yankee Gas effective Nov-2024/Nov-2025). Transmission grows with rate base but the FY2025 +$0.06 EPS bump is muted relative to history because the FERC ROE cut (Lens 5) lands in 2026, not 2025.

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Phase B — Measure performance

Lens 5 · Earnings Result

FY2025 (the most recent full year) was the clean rebound year after two years of offshore-wind wreckage:

• Operating Revenues $13,547.2M (+13.8% YoY from $11,900.8M).
• Operating Income $2,988.6M (+24.1% from $2,408.7M). Operating margin ~22.1%.
• Net Income to Common $1,692.4M / GAAP EPS $4.56 vs $811.7M / $2.27 in FY2024 — the YoY GAAP jump is mostly the absence of the 2024 charges.
• Non-GAAP EPS $4.76 (+4.2% from $4.57) — the cleaner read of operating progress.

What drove it (segment level): gas distribution earnings +$69.5M (rate cases), transmission +$52.1M (rate base), electric distribution +$35.4M (PSNH + NSTAR rate increases, lower tax rate). Offsetting: higher interest expense, higher O&M, higher depreciation/property tax, a NSTAR Electric customer-credit charge from the Dec-2025 MA settlement.

The charges that crushed prior years:

• FY2023: $1,953M after-tax offshore-wind impairment → GAAP EPS $(1.26).
• FY2024: $524M after-tax wind sale loss + $298.3M Aquarion impairment → GAAP EPS $2.27.
• FY2025: only $75.0M ($0.20/sh) residual wind charge (a $284M pre-tax contingent-liability top-up, offset by $209M tax benefit). The bleeding has nearly stopped.

Balance-sheet flags:

• Operating cash flow $4,113.6M, up from $2,159.7M — a near-doubling, the single most encouraging line in the filing.
• Capex (investments in PP&E) $4,158.7M (down slightly from $4,480.5M).
• Operating CF now nearly covers capex — but dividends ($1.12B) push it to an external-financing need; financing inflow was only $311.5M in 2025 vs $2.34B in 2024 (less new debt needed).
• Current liabilities exceed current assets by $2.73B at the parent — normal for a utility that bridges with commercial paper, but a liquidity-management item.
• Offshore-wind contingent liability $448.2M as of 2025-12-31 (up from $365.0M), recorded as a current liability — the residual tail risk (see Lens 13).

Q1 2026 (latest print):

• Operating Revenues $4,504.4M (+9.4% from $4,118.4M).
• Operating Income $1,076.1M (+16.2%).
• Net Income to Common $606.8M / EPS $1.61 vs $550.8M / $1.50 — +7.3% EPS, on track within the 5–7% long-term algorithm.
• Operating CF $1,675.2M (Q1) vs $683.4M — continued cash recovery.

Guidance & tone. 2026 EPS guidance $4.80–$4.95 — notably this guidance was reduced from a prior range after the FERC ROE order and Aquarion-timing (see Lens 8). Long-term EPS growth 5–7% through 2030 off the 2025 non-GAAP base of $4.76. Market reaction: ES trades ~$70.60 (Jun-2026), roughly flat-to-down on the year — the market is pricing the regulatory overhang, not the rebound.

Lens 6 · Earnings Calls (sentiment trend)

No transcripts/ on the shelf — sourced from web. The tonal arc over the last several quarters is "survivor's recovery, with regulatory grievance":

• Late 2024 / wind exit: defensive — completing the offshore-wind exit, taking a $520M Q3 loss, pivoting to "pure regulated".
• Throughout 2025: management leaned into the recovery narrative and publicly attacked Connecticut regulators — Eversource "blasts CT regulators, claims customers to pay price" over the S&P downgrade. This is unusually combative tone for a regulated utility CEO, and it cuts both ways (see Lens 9).
• Q3 2025 call: CEO Joe Nolan "highlighted surging electricity demand and a shifting regulatory environment in Connecticut that he said creates new opportunities" — and Eversource "reported a return to profitability".
• Most recent (2026): Nolan now frames it as "we're seeing a constructive shift in Connecticut's regulatory landscape". The recurring theme has shifted from grievance → cautious optimism on CT.

What they stopped saying: offshore wind (gone from the growth story — now only a contingent-liability footnote). What they keep saying: "fully regulated pure-play," "5–7% EPS growth," "constructive regulatory outcomes," "balance-sheet strengthening." On data centers, Nolan is conspicuously dismissive (Lens 12) — a notable divergence from peers who lead with AI load.

Lens 7 · Comps

US regulated electric/gas utility peers (from _index.json energy topic + obvious large-cap T&D names).

Read: ES trades at ~15x forward — a clear discount to the ~16.8x industry average and a steep discount to the premium regulated names (NEE ~22–24x, WEC ~20x, DUK ~19x). The discount is deserved and explainable: (1) the worst-in-class CT regulatory relationship and the multi-notch credit downgrades, (2) the FERC ROE cut to the highest-margin segment, (3) the unresolved Aquarion sale and offshore-wind tail. The investment question (Lens 12) is whether that ~5–8 turn discount is now too wide given the de-risking. EV/EBITDA and 5-yr-avg ROE for the peer set: n/a (not reliably available from the searches run).

Lens 8 · Stock-Price Catalysts (>5% moves, last ~5 years)

The pattern of what moves ES is dominated by offshore wind and regulatory/credit events, not earnings beats (mostly ``):

• 2023 (multiple legs down): $2.17B pre-tax offshore-wind impairment process; GAAP loss year. Stock de-rated hard as the wind thesis collapsed.
• Jul–Sep 2024: completed offshore-wind exit (sold Sunrise to Ørsted; South Fork + Revolution to GIP), $524M after-tax loss. Relief rally on de-risking, offset by the loss size.
• Dec 2024: S&P downgrade — CL&P A→A-, Yankee Gas A-→BBB; management publicly blasted CT regulators. Negative.
• Jan 2026: Fitch downgrade IDR BBB+→BBB, citing offshore-wind uncertainty.
• Aug 22, 2025: BOEM stop-work order on Revolution Wind (Trump administration) — Fitch put ES on rating-watch-negative; drove the Q3-2025 $284M pre-tax contingent-liability top-up. Negative.
• Nov 19, 2025: PURA denied the Aquarion sale — disrupted the deleveraging plan. Negative.
• Mar 19, 2026: FERC cut transmission base ROE to 9.57% from 10.57% (−100 bps, 15-yr litigation), ~$1.5B NETO refund ordered; Argus downgraded ES; ES trimmed 2026 EPS guidance. Negative — hit the crown-jewel segment.

What the pattern reveals: the market reacts to ES on regulatory/credit/policy headlines far more than on quarterly EPS. This is a regulatory-beta stock, not an operating-beta stock. The bull case therefore requires a catalyst reversal on the regulatory axis (CT turn + FERC appeal), not just steady earnings — and the de-risking already done (wind exit complete) is the main thing standing between today and a worse multiple.

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Phase C — Judge people & books

Lens 9 · Management

CEO: Joseph R. Nolan, Jr. — Chairman, President & CEO since 2021. A long-tenured Eversource insider (career executive, not an outside parachute), which fits the regulated-utility-operator archetype: the job is rate cases, capital deployment, storm response and regulatory relationships, not visionary product. Skin in the game: insider ownership is modest (typical for a large-cap regulated utility) — insider-transactions.csv not on shelf; precise ownership n/a.

1. Track record. The defining strategic act of Nolan's tenure is the complete exit from offshore wind (2023–2024) — a value-destroying bet entered before him and unwound under him. He took ~$2.8B of cumulative after-tax charges across 2023–2025 to get out. Whether you grade this a disaster cleaned up or disaster he co-owned depends on how much of the original commitment you attribute to him; the cleaner read is that the exit was the right call executed decisively. Post-exit, the company is a focused pure-play T&D — strategically cleaner than it has been in years.
2. Capital allocation. The pivot is now textbook regulated-utility: $26.51B 2026–2030 capex into rate base, fund the dividend (raised to $0.7875/qtr, ~5% growth), divest non-core (Aquarion water, offshore wind). ROE on the regulated book is solid — FY2025 regulated non-GAAP NI $1,848.5M on ~$16.2B common equity ≈ ~11.4% ROE, though consolidated GAAP ROE is lower after parent drag and was negative in 2023. The historic capital-allocation black mark is the offshore-wind venture itself.
3. Red flags (governance/behavioral). The most notable is management's unusually combative public posture toward Connecticut regulators — "blasting CT regulators" in the press. For a regulated utility, picking a public fight with your rate-setter is double-edged: it rallies investors short-term but can harden the regulatory relationship you depend on. Notably, PURA cited "managerial suitability… governance and oversight" concerns when denying the Aquarion sale — a regulator explicitly questioning Eversource's governance is a yellow flag, even if Eversource won the first court appeal.
4. Founder vs professional manager. Pure professional-manager / career-utility-operator — appropriate for this stage (the company needs steady regulatory execution and balance-sheet repair, not founder-style risk-taking; the founder-style risk-taking is exactly what produced the offshore-wind hole).

Lens 10 · Forensic Red Flags

Acting as a forensic analyst. A regulated utility's accounting risk concentrates in regulatory assets, storm-cost deferrals, goodwill, and the gap between GAAP and non-GAAP — and Eversource carries real items in each:

• Regulatory assets are large and partly at-risk of disallowance. Total regulatory assets $7,693.7M (up from $7,070.7M), of which Storm Costs Net = $1,959.3M. $2.06B of deferred storm costs have yet to be filed, are pending approval, or are subject to prudency review (incl. $1.19B at CL&P). PURA opened a prudency proceeding (Dec 13, 2025) on CL&P's 2018–2023 storm costs (incl. ~$232M Tropical Storm Isaias, where PURA previously found CL&P's performance "below applicable performance standards"); final decision expected ~July 29, 2026. If material storm costs are disallowed, it's a direct write-off — a live forensic risk, not a hypothetical.
• Goodwill is significant. $4.23B goodwill on the balance sheet; the Aquarion goodwill already took a $297M impairment in 2024. Further impairment "could materially adversely affect… total capitalization".
• GAAP vs non-GAAP gap — but honestly disclosed. The non-GAAP adjustments (offshore wind, Aquarion) are large but clearly itemized and reconciled, and they're winding down ($0.20 in 2025 vs $2.30 in 2024). This is not the SBC-flattering kind of non-GAAP; the adjustments are genuine one-time charges. Lower forensic concern.
• Cash flow vs earnings. OCF $4.11B comfortably exceeds GAAP NI $1.69B — the divergence is favorable (non-cash impairments depressed GAAP NI, depreciation adds back). No earnings-quality red flag here; the opposite.
• Leverage / coverage. Long-term debt $26.87B + notes payable $1.53B vs common equity $16.20B → debt/total-cap ~62%; covenant cap is 70% (parent) / 65% (subs), all in compliance. High but normal for a utility; the direction (rising debt + downgrades) is the concern, not the level.
• Offshore-wind contingent liability $448.2M (current) with explicit language that "it is reasonably possible… it could result in additional losses… which could be material" if Revolution Wind cost overruns or ITC qualification disappoint. The largest residual off-balance-sheet-style risk.

Regulatory findings (required sub-section):

• SEC Litigation Releases: None found naming Eversource (EDGAR EFTS, LR, 2021-06-23 → 2026-06-23).
• SEC AAERs: None found (same search window).
• Non-SEC enforcement: No material federal enforcement action (FTC/DOJ/FDA/CFPB) surfaced. The material government actions are rate-regulatory, not enforcement: PURA's adverse rate orders and Aquarion denial, the BOEM Revolution Wind stop-work order, and the FERC ROE reduction with the ~$1.5B NETO refund. The FERC refund is a return-of-capital order from prior over-collection, not a penalty for wrongdoing.
• 10-K Item 3 (Legal Proceedings): Item 3 references the legal/regulatory matters incorporated from the MD&A and Note 13 — principally the FERC ROE complaints (four complaints since 2011 challenging the NETOs' base ROE; cumulative pre-tax reserve $39.1M for the second complaint period) and the storm-cost prudency proceedings.
• Verdict: No accounting-fraud or securities-enforcement findings. The risk is disallowance/return risk inside the regulated construct (storm costs, FERC ROE refund, Aquarion governance), not financial-statement integrity.

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Phase D — Project & stress-test

Lens 11 · Forward Projection

Built bottom-up from the latest actuals + company guidance and analyst consensus. Years are FY2026 → FY2028 (calendar = fiscal, Dec year-end).

Anchor: 2025 non-GAAP EPS $4.76; company guides 2026 to $4.80–$4.95 and 5–7% LT growth through 2030 off the $4.76 base. Consensus 2026 EPS ~$5.03 (range $4.71–$5.21) — sitting above the top of company guidance, which is a setup for either a guidance raise or a consensus trim.

• Base path = midpoint of the 5–7% algorithm (~6%) compounding off the $4.76 base.
• Bull requires the FERC ROE appeal to claw back basis points (NETOs asked for 11.39%) and a genuinely "constructive" CT turn improving the distribution allowed ROE / storm recovery.
• Bear = FERC appeal fails, CT disallows storm costs, additional offshore-wind contingent top-up, and rate-case lag — growth drops to the bottom of (or below) the algorithm.

Inputs: industry/load growth is modest in New England (~9%/decade, electrification-led — not the AI surge; see Lens 12); growth is rate-base-driven, not demand-driven. Share count rising (376.0M diluted Q1-2026 vs 367.3M prior-year ) → ~2.4% dilution is a real drag on per-share growth and must be funded for the capex plan.

Brier forecast: NOT logged — per --watchlist/unattended rules (Lens 11 forecast.ts create is skipped in the breadth loop; only log when genuinely committed to the base case, which requires the human gate).

Lens 12 · Bull vs Bear

Bull case. Eversource is a fully de-risked, pure-play regulated T&D compounder trading at a ~15x discount to ~17x peers. The offshore-wind nightmare is essentially over ($0.20 residual drag in 2025 vs $5.58 of impairment in 2023). Operating cash flow nearly doubled to $4.1B. A $26.51B 2026–2030 capex plan locks in 5–7% rate-base-driven EPS growth and a ~4.5% dividend yield growing ~5%/yr — a ~9–11% total-return algorithm with monopoly-grade visibility. If the CT "constructive shift" Nolan is now describing is real, and the FERC ROE appeal recovers even part of the 100 bps, the multiple compresses the discount to peers and the stock re-rates from ~15x toward ~17–18x — a double-engine (earnings + multiple) outcome. Contrarian view the market is missing: the market is so fixated on the CT-regulator headline risk that it's pricing ES like a structurally impaired utility, when the underlying T&D franchise and cash generation are actually inflecting up.

Bear case (2–3 permanent-impairment risks).

1. Connecticut regulatory hostility is structural, not cyclical. Moody's called it the worst regulatory environment in the US. If PURA keeps clipping allowed ROEs, disallows storm costs, and blocks asset sales, the earned ROE on the CT rate base stays below the allowed — permanently capping the value of ~40% of the book.
2. The FERC ROE cut permanently lowered transmission economics. Base ROE 9.57% vs 10.57% is a structural −100 bps on the highest-quality, largest earnings segment, plus a ~$1.5B industry refund. If the appeal fails, this is a permanent earnings-power reset, not a one-timer.
3. Balance-sheet fragility into a heavy-capex decade. Multi-notch downgrades (S&P, Fitch, Moody's Baa2 negative) raise the cost of the debt that funds a $26.5B plan, and the Aquarion-sale block removed a planned deleveraging lever. Rising rates + rising debt + equity dilution can grind per-share growth below the algorithm.

Pre-mortem (18 months out, thesis broke). It's late 2027. The FERC ROE appeal failed and the 9.57% stuck; PURA disallowed a chunk of CL&P's storm costs in the July-2026 decision; a fresh offshore-wind contingent top-up hit; Moody's pushed to Baa3. Equity issuance to fund capex diluted EPS, growth came in at the 4% bear-case floor, and the "constructive CT shift" proved to be rhetoric. ES de-rated to ~13x and the dividend-growth rate was cut to 3%.

Are multiples too high? No — the opposite. At ~15x ES is below the peer average; the debate is whether the discount is too wide, not whether it's expensive.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case. The bull story is "de-risked pure-play at a discount" — here's why the discount may be correct:

• The data-center bid does not apply to Eversource — at all. This is the most important point bulls who lump ES in with "AI power" miss. ISO-NE has only ~285 MW of large-load in the formal study phase, contributing ~110 MW to peak in the 2030s. New England load grows ~9%/decade on electrification, not AI. CEO Nolan literally said data centers are "of no value to our residential customer — actually, any customer". So ES gets none of the secular demand tailwind re-rating NEE, CEG, SO and the PJM/Southeast names. A bull pitching ES as an AI-power play is simply wrong on the geography.
• Concentration is regulatory, and the most dangerous "competitor" is the regulator. ~40%+ of the book sits in Connecticut, the jurisdiction Moody's rates worst-in-nation. There is no diversification away from it. PURA can — and has — denied sales, opened prudency reviews, and driven downgrades. The regulator already questioned Eversource's governance in writing (Aquarion denial). That is the dangerous adversary, and it is not going away.
• The moat's return is being actively compressed in two jurisdictions simultaneously — CT distribution (PURA) and FERC transmission (the −100 bps). A monopoly with a shrinking allowed return is a worse business than the franchise map suggests.
• Worst capital-allocation move: the offshore-wind venture itself — ~$2.8B of cumulative after-tax destruction. Management is the same institution that made it; the contingent liability ($448.2M, "could be material") is the still-bleeding tail.
• What must hold for today's price: that the FERC appeal recovers ROE, CT genuinely turns constructive, storm costs are recovered, no further wind top-ups, and the capex plan earns its allowed return without punitive dilution. That's a lot of regulatory goodwill to underwrite for a 4.5% yield.
• Growth disappoints 20–30%: if the 6% algorithm becomes ~4% and the multiple holds at 15x, you clip ~$0.10–0.15 off 2027 EPS and the stock is dead money — you're paid the ~4.5% dividend to wait, and that's the good outcome.
• Single scenario that permanently impairs: a sustained CT regulatory regime that holds earned ROE 150–200 bps below allowed across the CT book, combined with a Baa3 credit profile that raises financing costs on a $26.5B build — a slow, structural value leak rather than a single blow-up.

Lens 14 · Management Questions (15, ordered by information value)

1. The FERC base transmission ROE was cut to 9.57% from 10.57% — what is your realistic expectation for the appeal, and what is the EPS sensitivity per 25 bps of ROE on the transmission rate base?
2. You now describe "a constructive shift" in Connecticut's regulatory landscape — name the three concrete PURA actions or decisions that justify that statement, versus rhetoric.
3. On the ~$2.06B of unrecovered/under-review storm costs (incl. $1.19B at CL&P) — what is your base-case recovery percentage, and what would a material PURA disallowance in the July-2026 decision do to EPS and the balance sheet?
4. With Aquarion's sale denied by PURA and now in remand (decision due Mar 25, 2026) — if the sale ultimately fails, what is Plan B for the ~$1.6B of intended deleveraging?
5. Given multi-notch downgrades from all three agencies, what FFO/debt and equity-issuance trajectory funds the $26.51B plan without dropping to Baa3 — and how much equity dilution is embedded in the 5–7% growth algorithm?
6. The offshore-wind contingent liability is $448.2M and you flag further losses are "reasonably possible" — what is the maximum exposure if Revolution Wind ITC qualification comes in below the assumed 40%?
7. Your service-territory load grows ~2% weather-normalized while peers cite data-center surges — do you actively want large-load/data-center interconnection in New England, or is your dismissive stance final? What rate-base upside are you forgoing?
8. Of the $26.51B plan, $7.24B is transmission — how much of that is exposed to FERC's competitive-solicitation / cost-cap regime, and what return do you underwrite on competitively-bid projects?
9. Connecticut versus Massachusetts: what is the earned-vs-allowed ROE gap in each jurisdiction today, and how do you close the CT gap?
10. What is the realistic timeline to investment-grade rating stabilization (outlook back to stable across S&P/Moody's/Fitch), and what milestones gate it?
11. Management's public posture toward CT regulators has been combative — do you believe that strategy has helped or hardened your rate-case outcomes, and has the approach changed?
12. PURA cited governance/managerial-suitability concerns in the Aquarion denial — what specific governance changes have you made in response?
13. Gas distribution is your fastest-growing segment — how do Massachusetts/Connecticut decarbonization and building-electrification policies affect the long-term terminal value of the gas rate base?
14. What is your capital-allocation priority if the dividend-payout ratio drifts above your target band during the heavy-capex years — protect dividend growth, or protect the balance sheet?
15. Five years out, what does the segment mix (transmission / electric dist / gas) look like, and which single regulatory relationship most determines whether you hit the top vs bottom of the 5–7% range?

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