Company Closes on the Sale of Revolution Wind
and South Fork Wind to Global Infrastructure Partners
Eversource Energy (NYSE: ES) today announced that it has
completed the sale of its 50 percent interest in the 132-megawatt
South Fork Wind project (South Fork Wind) and the 704-megawatt
Revolution Wind project (Revolution Wind) to Global Infrastructure
Partners (GIP). Adjusted gross proceeds from the transaction were
$745 million.
Adjusted gross proceeds from the sale were reduced by
approximately $375 million as compared with the expected purchase
price of approximately $1.12 billion. This reduction reflects
approximately $150 million due to lower capital spending between
announcing the transaction and closing, and lower proceeds of
approximately $225 million related to the final terms of the sale
transaction, primarily due to the delay of the commercial
operations date of Revolution Wind.
“We have reached an important milestone today in our commitment
as a pure-play regulated pipes and wires utility that delivers
superior service and value to our customers,” said Eversource
Chairman, President and Chief Executive Officer Joe Nolan. “We are
proud of the role we have played to advance offshore wind projects,
and we will continue to be a leader in employing our transmission
expertise to conduct onshore work that supports the clean energy
transition and enables the continued development of renewable
resources for our region.”
With the completion of this sale and the previously completed
sale of the Company’s 50 percent interest in the Sunrise Wind
project (Sunrise Wind) to Ørsted announced on July 9, 2024,
Eversource expects to record an aggregate net loss on the
completion of its offshore wind divesture of approximately $520
million in the third quarter of 2024. This aggregate net loss
includes the final gain on the sale of Sunrise Wind of $370 million
and anticipated increases in Revolution Wind construction costs and
other project related charges. This estimate is subject to change
as Eversource finalizes results for the third quarter ended
September 30, 2024. Eversource expects to recognize a liability of
approximately $360 million, that is included as part of the
aggregate net loss of $520 million on the sale, in the third
quarter of 2024. The majority of this liability is expected to be
settled in 2026.
“We have completed an important step in our journey to
strengthen our balance sheet and improve our credit metrics, with
the closing of this transaction and resulting proceeds,” said
Eversource Executive Vice President and Chief Financial Officer
John Moreira. “Our equity issuance plan of up to $1.3 billion over
the next several years is unchanged, and we look forward to working
with Ørsted and GIP to complete the onshore construction of these
projects to enable clean energy in the New England region. In
addition, this transaction is not expected to have a material
impact to our targeted FFO/Debt ratio of 14% to 15% by 2025.”
The following factors were included in the aggregate net loss of
$520 million on sale and related expected liability:
- A gain on the sale of Eversource’s 50 percent interest in
Sunrise Wind to Ørsted of approximately $370 million.
Offsets include:
- Lower proceeds related to final terms of the sale transaction
to GIP of approximately $225 million related to non-construction
costs for the Revolution Wind and South Fork Wind projects.
- Forecasted higher capital construction costs as a result of a
delay in the anticipated commercial operation date related to
Revolution Wind of approximately $350 million.
- Anticipated post-closing adjustments of approximately $315
million as a result of final economics of the Revolution Wind and
South Fork Wind projects, which include Eversource’s obligations to
meet GIP’s requirements until the projects reach commercial
operations date, as specified in the definitive transaction
agreement with GIP.
Proceeds related to this sale may be further adjusted due to
final construction costs and updated project economics as of the
commercial operation date of Revolution Wind. South Fork Wind has
achieved commercial operations and, as a result, Eversource does
not expect a material financial impact related to this project.
With the previously announced sale of Sunrise Wind to Ørsted,
Eversource has no ongoing financial obligations associated with
Sunrise Wind. With the completion of this sale, Eversource has now
divested all its ownership interests in the offshore wind business.
Eversource will maintain its previously announced tax equity
investment in South Fork Wind. The sale of the offshore wind
projects has no impact on Eversource’s regulated entities.
Factors that could cause Eversource’s total net proceeds to be
higher or lower at Revolution Wind’s commercial operations date
include the following:
- Revolution Wind’s eligibility for federal investment tax
credits at other than the anticipated 40 percent level;
- The ultimate cost of construction for Revolution Wind. Under
the purchase and sale agreement, Eversource and GIP will share the
difference between a base construction forecast and the aggregate
cost of the two projects up to an effective cap of approximately
$240 million. Eversource will have responsibility for GIP’s
obligations for any additional costs in excess of the cap amount
consistent with the existing joint venture terms;
- Further delays in constructing Revolution Wind, that would
impact the economics associated with the purchase price adjustment;
and
- Lower operation costs or higher availability of the projects.
Eversource can benefit, but not be harmed, from lower costs of
operations and/or higher availability as compared to a base level
assumed in the projects’ financial models through the period that
is four years following commercial operation date of the Revolution
Wind project.
Under the agreement, Eversource’s existing and certain
additional credit support obligations for Revolution Wind are
expected to roll off as the project completes construction.
Eversource engaged Goldman Sachs as its financial advisor to
assist with the sale. Ropes & Gray LLP served as its legal
counsel.
Eversource (NYSE: ES), celebrated as a national leader for its
corporate citizenship, is among the top energy companies in
Newsweek’s list of America’s Most Responsible Companies for 2024
and recognized as a Five-Year Champion, appearing in every edition
of the list. Eversource transmits and delivers electricity and
natural gas and supplies water to approximately 4.4 million
customers in Connecticut, Massachusetts and New Hampshire. The #1
energy efficiency provider in the nation, Eversource harnesses the
commitment of approximately 10,000 employees across three states to
build a single, united company around the mission of safely
delivering reliable energy and water with superior customer
service. The company is empowering a clean energy future in the
Northeast, with nationally recognized energy efficiency solutions
and successful programs to integrate new clean energy resources
like a first-in-the-nation networked geothermal pilot project,
solar, offshore wind, electric vehicles and battery storage, into
the energy delivery system. For more information, please visit
eversource.com, and follow us on X, Facebook, Instagram, and
LinkedIn. For more information on our water services, visit
aquarionwater.com.
This document includes statements concerning Eversource Energy’s
expectations, beliefs, plans, objectives, goals, strategies,
assumptions of future events, future financial performance or
growth and other statements that are not historical facts,
including anticipated third and fourth quarters of fiscal 2024 and
fiscal 2025 financial impacts of the now-divested offshore wind
investment, the timing of liability settlement, Eversource’s equity
issuance plans and the timing thereof, Eversource’s future onshore
work, and the development of offshore wind in New England. These
statements are “forward-looking statements” within the meaning of
U.S. federal securities laws. Generally, readers can identify these
forward-looking statements through the use of words or phrases such
as “estimate,” “expect,” “anticipate,” “intend,” “plan,” “project,”
“believe,” “forecast,” “would,” “should,” “could” and other similar
expressions. Forward-looking statements involve risks and
uncertainties that may cause actual results or outcomes to differ
materially from those included in the forward-looking statements.
Forward-looking statements are based on the current expectations,
estimates, assumptions or projections of management and are not
guarantees of future performance. These expectations, estimates,
assumptions or projections may vary materially from actual results.
Accordingly, any such statements are qualified in their entirety by
reference to, and are accompanied by, the following important
factors that may cause our actual results or outcomes to differ
materially from those contained in our forward-looking statements,
including, but not limited to: the ability to qualify for
investment tax credits; variability in the costs and projected
returns of the offshore wind projects and the risk of deterioration
of market conditions in the offshore wind industry; cyberattacks or
breaches, including those resulting in the compromise of the
confidentiality of our proprietary information and the personal
information of our customers; disruptions in the capital markets or
other events that make our access to necessary capital more
difficult or costly; changes in economic conditions, including
impact on interest rates, tax policies, and customer demand and
payment ability; ability or inability to commence and complete our
major strategic development projects and opportunities; acts of war
or terrorism, physical attacks or grid disturbances that may damage
and disrupt our electric transmission and electric, natural gas,
and water distribution systems; actions or inaction of local, state
and federal regulatory, public policy and taxing bodies;
substandard performance of third-party suppliers and service
providers; fluctuations in weather patterns, including extreme
weather due to climate change; changes in business conditions,
which could include disruptive technology or development of
alternative energy sources related to our current or future
business model; contamination of, or disruption in, our water
supplies; changes in levels or timing of capital expenditures;
changes in laws, regulations or regulatory policy, including
compliance with environmental laws and regulations; changes in
accounting standards and financial reporting regulations; actions
of rating agencies; and other presently unknown or unforeseen
factors.
Other risk factors are detailed in Eversource Energy’s reports
filed with the Securities and Exchange Commission (SEC). They are
updated as necessary and available on Eversource Energy’s website
at www.eversource.com and on the SEC’s website at www.sec.gov. All
such factors are difficult to predict and contain uncertainties
that may materially affect Eversource Energy’s actual results, many
of which are beyond our control. You should not place undue
reliance on the forward-looking statements, as each speaks only as
of the date on which such statement is made, and, except as
required by federal securities laws, Eversource Energy undertakes
no obligation to update any forward-looking statement or statements
to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events.
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version on businesswire.com: https://www.businesswire.com/news/home/20240930672791/en/
Kaitlyn Woods (Media) kaitlyn.woods@eversource.com 603-860-3123
Rima Hyder (Investor Relations) rima.hyder@eversource.com
781-441-8062
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