Good morning and welcome to the Eversource Energy Second Quarter 2021 Results Conference. My name is Brandon and I’ll be your operator for today. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note this conference is being recorded. I will now turn it over to Jeffrey Kotkin. You may begin, sir.

Thank you, Brandon. Good morning and thank you for joining us. I’m Jeff Kotkin, Eversource Energy’s Vice President for Investor Relations. During this call, we’ll be referencing slides that we posted last night on our website, and as you can see on Slide 1, some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainty, which may cause the actual results to differ materially from forecasts and projections. These factors are set forth in the news release issued yesterday. Additional information about the various factors that may cause actual results to differ can be found in our annual report on Form 10-K for the year ended December 31, 2020 and on our Form 10-Q for the three months ended March 31, 2021. Additionally, our explanation of how and why we use certain non-GAAP measures and how those measures reconcile to GAAP results is contained within our news release and the slides we posted yesterday and in our most recent 10-K and 10-Q. Speaking today will be Joe Nolan, our President and Chief Executive Officer; and Phil Lembo, our Executive Vice President and CFO. Also joining us today are John Moreira, our Treasurer and Senior VP for Finance and Regulatory; and Jay Booth, our VP and Controller. Now, I will turn to Slide 2 and turn over the call to Joe.

Thank you, Jeff. We hope that all on the phone are safe and well and we look forward to seeing you in person later this year. I will cover a few topics this morning and then turn over the call to Phil to discuss our mid-year financial results in some new and important grid modernization and AMI developments in Massachusetts. I know the most recent months have resulted in weather challenges across the country. In the West, our peers have needed to deal with heat and wildfires. In New England, with that increased level of thunderstorm activity topped off by a glancing blow from Tropical Storm Elsa. [Employees] have worked around the clock many days restoring power to our customers from tree caused damage to our overhead system. While our implementation of new technology in vegetation management has limited the scope of many of the resulting power outages, our dedicated crews continue to be on the frontline completing a large amount of emergency restoration work in hot and humid conditions over the past month and a half in doing so in a safe and effective manner. Their work has been excellent, and we continue to receive notes of appreciation from both our customers and municipal leaders. I was out all day in Connecticut, the day Elsa passed through, and I cannot say enough about our team and preparing for and responding to storm damage in coastal regions of Connecticut and Massachusetts. We greatly appreciate the recognition of those efforts that we received from Connecticut PURA Commissioners at the July 14 meeting. As I mentioned during our first quarter earnings call, improving our relationship with Connecticut policymakers and customers is my top priority as CEO. Earlier this week, a number of Connecticut legislators joined several state community education and labor leaders…

Thank you, Joe. This morning I'm going to cover three areas: our second quarter results, the status on several of the regulatory dockets pending, and some exciting opportunities ahead for us in terms of Grid Modernization and AMI that Joe alluded to. I’ll start with our results for the quarter in Slide 6. We earned $0.77 per share for the quarter, including $0.02 per share of cost, primarily relating to the transitioning of Eversource Gas Company of Massachusetts into the Eversource Systems. Excluding these costs, we earned $0.79 per share in the second quarter, and $1.87 per share in the first half of 2021. So, let's take a look at each of the segments performance in the quarter. Our electric transmission business earned $0.40 per share in the second quarter of 2021, compared with earnings of $0.39 cents per share in the second quarter of 2020. A higher level of necessary investment in our transmission facilities was partially offset by higher share counts there. Our electric distribution business earned $0.35 per share in the second quarter of 2021, compared with earnings of $0.34 per share in the second quarter of 2020. Higher distribution revenues were partially offset by higher O&M, depreciation, and property taxes. The higher O&M was largely driven by increased storm activity in the second quarter of 2021 in higher employee medical expenses. The higher medical expenses was mostly due to the fact that in the second quarter of 2020, in the midst of the worst COVID in New England, the worst COVID in New England, many routine medical appointments were being canceled, but this is largely returned to normal now in our area. Our natural gas distribution business earned $0.01 per share in the second quarter of both 2021 and 2020. As you know, natural gas utilities…

Thank you, Phil. And I'm going to turn the call back to Brandon just to remind you how to enter your questions.

Thank you. [Operator Instructions]

Thank you, Brandon. Our first question this morning is from Shahriar Pourreza from Guggenheim. Good morning, Shahriar.

Good morning, Jeff. Good morning, team.

Good morning.

Good morning, Shah.

Just starting with the PURA and sort of the 90 basis points RE reduction, it sounds like, you know one of the more recent notices open the door for parties to petition for a defined penalty period versus something more perpetual. You know, how should we, sort of think about, kind of this opening, if you will, to a you know, a fixed length reduction versus indefinite. And then just remind us again, what we should be watching for here going forward?

Sure, Shah. This is Phil. As I mentioned, the docket is open and recently PURA did notify the parties that they could submit testimony on the applicability of the term of the penalty. So, to me that indicates there is a consideration of what a term would be as you know, the initial language was using the word indefinite. So, I think that's positive development in terms of setting a specific, you know, a term for the penalty. So, in the docket, the information that came out last week, sort of indicates the file information there. So, you know, what we should be looking for the areas there is a, you know, there is a process that will continue on that docket. There's an expectation that an order would be issued in October with any changes out of there, effective November 1 is the current timeline.

Got it. Thank you for that. And then, just lastly, and maybe just shifting to offshore wind and starting with the logistics side, you know, redevelopment of the Connecticut State peer and New London has had some cost increases, right, from 93 million to roughly 235 million, obviously paid by the state. But it sounds like everything else is, kind of proceeding, is there kind of any supply chain issues you're kind of keeping an eye on or logistics that remain, kind of unknowns?

Yeah, thanks, Shah. This is Joe. I'll take that. So, water work is underway at the New London Port. We were just out there for some inspections. We do have all our onshore permits, it’s going very, very well. Last week the state finalized the funding. Any of those increases, the state is absorbing. So, we feel very, very good about that. And now with regard to supply chain, there are no issues that are impacting any of our three projects. All of the projects have everything locked down. So, we feel good about that.

Okay, perfect. That's all I had. Pretty clear cut quarter. Thanks, guys.

Thank you.

Thanks Shah. Next question is from Jeremy Tonet from JP Morgan. Good morning, Jeremy.

Hi, good morning, guys. It's actually [Ryan] on the Jeremy.

Hey, Ryan.

Just wanted to start on the offshore and maybe on some of the deciding process you guys have kind of talked about during the script and thinking about the progress you guys have been making with some of the fishermen, I know, this is kind of an issue with South Fork in Rhode Island specifically, we kind of want to, kind of, just get a latest on the, kind of the progress you're making in terms of, you know, other stakeholders, kind of agreements and kind of the process you are making with those relationships?

So, thank you for the question, Ryan. We've had a lot of dialogue down there. And I think we've got some, you know, a good path forward. And we've got a, obviously a positive decision we received in July from the [CRMC] down there and positive decisions in New York, as well as in Massachusetts. So, we think a lot of the concerns, or at least the path is pretty clear, and we feel good about it.

And then maybe just one on Connecticut, we saw UI kind of get their settlement over the finish line there, just kind of wandering prospects, you know, you're kind of seeing in the say, with some stakeholders in terms of maybe potentially settling some of these issues and what, kind of timeline we might be thinking about in terms of somebody coming out on that front?

Sure. So, generally speaking, you know, a broad multi-party settlement is something that's obviously attractive to us. We have a long history of settlements, whether it's the NSTAR merger in 2012 or the CL&P rate case, or the Yankee rate case. So, you know, we feel good about that. I have been spending most of my time in Connecticut. We've been out with multiple parties. And, you know, I think that the temperatures certainly has reduced and folks are in a good place. I think, you know, we need to prove ourselves down there. We know that. I think, tropical storm, the recent one was Elsa, which passed through, was really a good exercise for us to show that, you know, a lot of things have changed for our business. So, by and large a settlement is something that's attractive to us. We were pleased to see that [indiscernible] settlement was, was approved. So, we see some possibilities there.

Got it. Makes sense. I'll stop there. Thanks for answering my question.

Thank you, Ryan.

Thank you, Ryan. Next question is from Durgesh Chopra from Evercore. Good morning, Durgesh.

Hey, good morning, Jeff. Thank you. Just going back to the Connecticut docket, the temporary rate reduction docket, [indiscernible] when you're on the [indiscernible], I’m just wondering where that stands and did you guys expect this final order not for the rate reduction effective [number there], you know, that's addressed as well, or that's finalized as well?

Durgesh, you broke up a little bit on the questions. Are you talking about the testimony from the intervener that went in?

That's correct. The equity ledger. That's exactly right.

Yes, this is Phil. During the course of that proceeding, there was testimony and certainly, you know, we provided our own input to that testimony and – as well as question the witness. So, you know, by the nature of it being part of the questioning, I would expect that somehow it could be considered in that proceeding going forward. So, there's no specific area that is to be decided there. I think it was just a testimony that was filed by the EOE. It’s a EOE witness, that's a section of the Connecticut PURA. So…

Got it. Thank you. That's helpful. And then maybe just quick clarification Phil, the AMI filing in Massachusetts, what portion of that 500 million to 600 million that you mentioned would be incremental to the current CapEx plans?

We have currently no CapEx in our five-year forecast for AMI in Connecticut or in Massachusetts. So, any spending in either state would be incremental.

Got it? And do you – do we see a final decision in mid-2022 or is that just sort of, like what are – the response means, like, is this a formal sort of yes or no, or just feedback from the Massachusetts GPU?

No, we expect a decision in 2022. You know, mid-year is as good an estimate as any at this stage. So, this has been a, you know, long standing sort of desire, I think of the Commission, you know, we certainly have a need to make a decision on our metering infrastructure. So, the timing is good. So, we fully expect a decision in mid-year 2022.

Okay, perfect. Thanks, guys. Much appreciate the time.

Thanks, Durgesh. Next question is from Julien Dumoulin-Smith from Bank of America. Good morning, Julien.

Good morning, team. Thanks for the opportunity to connect. Maybe to pick up a little bit off the last question and flip it a little bit, when you think about the various scenarios, you've a history of executing well, you talked about upper half and five to seven, there's a variety of different pieces that are moving your puts and takes. How do you think about your confidence level under various scenarios in the upper half here? And I'll let you answer that accordingly because there's a lot of, probably too many scenarios to talk about and point-out here. I'd be curious as you think about the, sort of the decision tree here or pathway potential?

Thanks, Julien. As we see our five-year, our long-term forecast, I'm very confident in our ability to achieve our growth expectations. As you mentioned, there are always puts and takes. That's what we do as a as a management team. And that's what any company would do as manage that process and address issues that don't go your way and look for other opportunities. So, there are various puts and takes that can occur over the course of any forecast period, but I am confident in our ability to achieve our targets.

Got it. Excellent. I'll leave that subject there. Maybe coming back to this offshore wind subject, as opposed to the highest level observation or question back to you after Shah’s question would be, given the more coincident construction of these projects here, any considerations around logistics that we should be focused on here, I suppose, just given that they're now increasingly lining up against each other [in parallel]?

Yeah. Thank you. Good morning, Julien, Joe Nolan. We feel we feel great about the timing, our projects are really scheduled in a perfect formation. So, we do think there's a lot of opportunity there on mobilization, demobilization to allow these projects to be able to be constructed in a very orderly fashion. And that's what really excites us. So, yeah, definitely opportunity is there. The timing is perfect for actually all three of them.

Right, excellent. And then lastly, just coming back to this question on settlement, and I know – I appreciate your comments earlier. Curious to the extent to which you can resolve perhaps in a comprehensive manner, all variety, including potential rate case and filing next year, in the context of some, sort of settlement here. Just want to push on that subject just a tad more, if you don't mind?

Yeah, you know, Julien, we've, I think you've had an opportunity to see our success in the past. We can do settlements that are quite comprehensive. We feel confident that if, you know, if we get to the table, we've got, obviously at the parties that we have great relationships with, and a comprehensive settlement is definitely possible here, and it's something that obviously will be attractive to acknowledge a loss I think to a number of the parties. It is obviously very, very busy time down at Connecticut right now. And so, you know, I'm optimistic.

All right, excellent. Well, thank you very much and best of luck on those efforts.

Thank you.

Thank you, Julien.

Thanks, Julien. Next question is from Paul Patterson from Glenrock. Good morning, Paul.

Hey, good morning, guys. How you doing?

Good. Paul, how are you?

Alright. So, just to, sort of pick up on Julien's question there on the – and Joe you said, you were optimistic about Connecticut, and the potential for settlement. Could you give us a feeling for what the key sticking points are? Because, as you know, having been did this a month ago, and I'm just wondering, how should we think about what the – what parties are the – might be the key issue or what specific issues are the ones that probably are the ones for us to focus on being resolved?

Sure. I mean, it's the same parties that we've dealt with. You’ve got the attorney general's office. You got the OCC, you have deep, I mean, these are the parties, obviously, that we've dealt with in the past. And, you know, that would be the same folks that we would see if we did enter into some settlements.

Okay. And is there any key points or key issues that are the sticking points? That are the key things that people are focused on that's causing more of an issue than others?

No, I wouldn't say, there's any sticky points. There’s no specific issues.

Okay. And in terms of timing, you guys give a very detailed, sort of rate case, you know regulatory proceeding outlook and stuff, but how should we think about, which occurred to before the hearing, or, how should we think about?

Well, you know, settlements can occur at any point, you know, as you know, on the process. So, and I, it's hard for me to say, we need to let certain things run their, kind of regulatory course.

Okay. And then on the affiliate, you called out the ratings downgrade potential, if you guys are downgraded, other than obviously, you know, I mean, obviously impacts the cost of borrowing, but other than that, is there anything else we should be thinking about? Is there any other, sort of potential trigger on covenants or anything we should be thinking about or anything else?

No, Paul, there are no other triggers that come into play here. And just for clarification, I think we all know that being on negative outlook doesn't necessarily mean that you're going to be downgraded. I think the agencies like to see certain progress in particular areas. So, you know, in the area that they, they sort of highlighted in terms of lowering the outlook was, sort of a Connecticut regulatory area. So, there are a lot of dockets going on there. And if those move in a direction that the rating agencies view as credit positive than that, that doesn't mean you're going to get the downgrade rates, they could put you back onto a stable outlook. So, but nonetheless, if something were to happen, there are no other triggers that would be in effect.

Okay, great. Most of the questions have been answered. Thanks so much, guys. Have a good weekend.

Thanks, Paul. You too.

Next question is from Andrew Weisel from Scotia. Good morning, Andrew.

Hey, good morning, everyone. Maybe I'll start by following up on that last question about the ratings agencies. I don't expect specific numbers, but I know there the agency's concern is the regulatory risks, not exactly the balance sheet. But if they were to downgrade, how would that affect your plans for the mix of debt versus equity in the coming years?

Well, there's a lot of hypotheticals there. I mean, it's, you know, if that happen. You know, I'd have to see what – was there something in a regulatory decision, what the impact of that would be? So, I say, we don't have any plans at this stage to make any really adjustments in our approach to our capital structure or what we're looking to do in terms of our debt financings. As you know, we identified that we had $700 million of additional equity financing that we had identified a couple of years ago that is still out there that we plan to do over some longer-term period on a periodic ATM on something basis. And then we're issuing about $500 million, about $100 million a year is a better way of saying it, out of our dividend reinvestment plan. So, we are continuing to do some dribbling out of equity and then we're doing long-term financings, but don't have any specific changes that I would highlight at this stage, the capital structure.

Okay, then next question. Joe, you opened your prepared remarks talking about the positive feedback here, preparation toward response to the storms, can you give some specific examples of ways that you've changed your protocols and strategies [indiscernible], and if there are any additional new initiatives that you're planning to roll out to help minimize from dividend outages?

Yeah, sure. Thank you, Andrew. One of the – I think the most impactful, kind of system will rolled out as a community based portal that allows communities to put their priorities in terms of public safety, [block roads], those types of items are in the – we also have crews in each of the communities that's allowed communities to have their priorities addressed. So, those are just some of the – I would say the other piece that really goes back to what we had done prior to Isaias because of the pandemic is, you know, we have folks that are located in each of these cities and towns. That's something we were not able to do with the Isaias. As you know, at that point time, everybody was in lockdown. It was a very complex recovery effort, because we needed double of everything. We had to have single workers in vehicles. We had to have single workers in hotel rooms. And it was a very, very challenging matter. So, you know when we had this last event, the Elsa, things were a little more back to normal. And we had a lot of kind of technology portals that we had deployed, which were very, very well received. I mean, I was out on the system. I had an opportunity to talk to several of the cities and towns and all the feedback I received was very, very positive.

Okay, great. That's helpful. Best of luck going to the [next level], hopefully you won't be tested anytime soon. But [hopefully], it won't be too bad. Thank you.

Thank you, Andrew. Next question is from Sophie Karp from KeyBanc. Good morning, Sophie.

Hey, good morning, guys. Thank you for taking my question. I wanted to take a stab at Connecticut, again, but maybe from a slightly different angle, you know, not to sound like a doomer, but you know, but the storm has become more frequent and some may even say a new normal, is there a room for a dialogue there that goes beyond just, kind of sorting through the penalties and the past performance and establishing the regulatory framework for dealing with consecutive forums as a new normal [line] and [what they've seen] in the hurricane belt where it's been around for a while? Is there room for [Technical Difficulty] on the commission level where you have securitizations or trackers for this type of stuff? Any real like mechanisms that are predictable, where you don't have to sort through each storm individually as we go forward? That's all I have.

Thanks, Sophie. Some of those items have been discussed. Securitization certainly was a topic that’s come up from time-to-time. You know, in Connecticut, in terms of storm, storm costs, but you know, usually a, in a rate proceeding, you know, where you're looking at all your costs, and what's in your cost of service, etcetera. In our last settled rate proceeding at CL&P, we spent a lot of time on storms, and what the right level of storm activity was to collect in rates and what appropriate deferral mechanisms might be there. So, there's long been a recognition that these costs can move around, and what's the best way of making sure that customer rates, you know, remain as stable as possible, but there's still an opportunity for collecting these costs going forward. So, those kinds of discussions will continue and the dialogue will continue. There's nothing specifically on the, you know, on the table per se, in terms of, you know, storm cost recovery at this stage, but, you know, we've had discussions on various topics. And we’ve spent, you know, so before you get to storm recovery, one of the areas we do is try to not have to recover, right so that means we try to do an effective job on our vegetation management and the capital spending that we do on technologies to restore customers quickly and remotely. So, in the – we spend $200 million a year on vegetation management, just, you know, to cross our system to remove trees and open up rights away, etcetera. So, the best the best outage to have is not to have it. I guess that's the best possibility. So, we do think, and the Commission has been receptive to our requests for additional funding. But there's still a lot of tree work that can be done in Connecticut, as in other states, but that's an area that, you know, we continue, we'd like to continue to have a dialogue on.

Thank you.

Next – thank you, Sophie. Next question is from David Arcaro from Morgan Stanley. David?

Hey, good morning. Thanks so much for taking my questions. A quick follow-up just on that last line of thinking, is there a CapEx opportunity to look for more reliability, kind of system hardening investments in Connecticut, you mentioned, vegetation management and tree trimming, which seems more on the OEM side of things, but wondering if there's more capital to deploy to lower the impact of storms going forward in Connecticut?

We do have an approved capital tracking, sort of safety reliability program that we have in Connecticut right now that we operate under. So, as we do in the other in other states, too. So, there is – that would not be new. We do spend money on technologies to, again, enhance our ability to prevent outages or in the event that you do have an outage to recover quickly. So, there is an opportunity, and we currently have a mechanism in place to do that.

Okay, got it. Thanks. Shifting to offshore wind, I was just – wanted to clarify, what gave you the comfort this quarter to put specific year’s, specific dates out there for revolution and sunrise, was it the progress that you saw on the schedule that let you, kind of crystallize those years?

Yes, I’d say that's the primary driver. We've said, you know, when we first moved off the date, we said, as soon as we get more clarification, we would go back and work with our partners with Orsted and develop, you know, a schedule. So, in the case of revolution wind, we certainly, we have that in place. For sunrise, it's soon to get in place. So, we're, I guess, cautiously optimistic on that date and we'll have to wait till we see more information out of BOEM to be more certain, but that is it. We've seen movement, and we have much more clarity now on dates than we did, you know, a year ago.

Got it. That makes sense. Let me just, kind of last quick one, just wondering if there's any thoughts you might have on the Massachusetts RFP and your competitive positioning there for the next offshore wind project? Are there advantages you might be able to bring to the table as especially as some of the infrastructure comes online for your other projects that you could potentially lean on?

Sure. You know, like all state RFPs, you know, for when we're evaluating right now, look at how it fits into our plan there. We expect other states as well to have it. So, it's under consideration.

Great. Thanks so much.

Thank you.

Thanks, David. Next question is from Steve Fleishman from Wolfe. Good morning, Steve.

Hey, good morning. Thanks. Apologize if this was asked and just there's a lot of different issues in Connecticut that you might be, you know, able to, you know, settle on, I guess, if you get to that point of a settlement, just curious, if there is a way to deal with, kind of the need to file a rate case every four years, could that be part of this or is that something that has to happen no matter what?

Yeah, Steve. Good morning, Steve. This is Joe. Absolutely. That could be part of any type of a comprehensive settlement. If that was something that was important to the parties, that's something we would definitely put on the table.

And I'll add to that, that's really more of a legislative mandate, Steve, and it requires – it appears to review the rates. So, if the settlement, if there's information there that would be deemed as a review, you know, that could take care of that requirement, but that four year sort of review is more of a – in the legislative space.

Got it. No, that's helpful color, Phil. Thank you. That was it.

Great. Thank you, Steve. Looks like we're all set. We don't have any more folks in the queue. So, we want to thank everybody for joining us today. If you've got any follow up, please give us a call or send us an email and have a wonderful weekend.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.