10-QPeriod: Q2 FY2026

EVERSOURCE ENERGY Quarterly Report for Q2 Ended Jun 30, 2026

Filed August 3, 2026For Securities:ES

Summary

Eversource Energy's (ES) third-quarter 10-Q filing for the period ending June 30, 2026, highlights the company's robust risk management practices across commodity prices, interest rates, and credit. Notably, the regulated entities have effectively hedged commodity price risk, with associated costs passed through to customers, mitigating direct earnings exposure. Similarly, the company's debt structure, being entirely fixed-rate as of the reporting date, significantly reduces interest rate sensitivity. While credit risk is actively managed through diverse customer and supplier relationships and collateral arrangements, the primary significant development impacting the company's financial outlook is the Federal Energy Regulatory Commission (FERC) order regarding Return on Equity (ROE) complaints. This FERC order, issued in March 2026, found the historically allowed base ROE to be unjust and unreasonable, mandating refunds with interest for a substantial retroactive period. This decision has a material adverse effect on Eversource's financial position, results of operations, and cash flows, creating uncertainty for future regulatory proceedings. The company also reported minimal share repurchases during the quarter, exclusively for 401k plan matching contributions. Overall, investors should focus on the implications of the FERC ROE decision and the company's continued strong operational risk management.

Key Highlights

  • 1Regulated companies have no direct exposure to commodity price risk as costs are passed to customers.
  • 2All long-term debt was at a fixed interest rate as of June 30, 2026, minimizing interest rate risk.
  • 3Credit risk is actively managed through diverse counterparties and collateralization, with $12.7 million in collateral held by regulated entities.
  • 4A significant adverse impact on financial position, results, and cash flows stems from a FERC order reducing allowed Return on Equity (ROE) with retroactive refunds.
  • 5The FERC ROE order, issued March 19, 2026, covers a retroactive refund period of nearly 12 years.
  • 6The company's disclosure controls and procedures were deemed effective by management, with no material changes to internal controls over financial reporting.
  • 7Minimal common share repurchases occurred during the quarter, totaling 2,398 shares at an average price of $72.81, solely for 401k plan matching.

Frequently Asked Questions

The primary financial risk highlighted is the material adverse impact on Eversource's financial position, results of operations, and cash flows resulting from a recent FERC order that reduced the allowed Return on Equity (ROE) and mandated significant retroactive refunds with interest.

For commodity price risk, Eversource's regulated companies pass the economic impacts of energy contracts to customers, eliminating direct earnings exposure. For interest rate risk, the company significantly mitigates this by maintaining a debt structure composed entirely of fixed-interest rate obligations, as confirmed at June 30, 2026.

The filing states that there have been no new material legal proceedings identified and no material changes to previously disclosed legal proceedings in the 2025 Form 10-K.

The FERC ROE decision has a significant adverse impact, particularly due to the extended retroactive refund period. It creates uncertainty regarding the company's ability to secure acceptable ROEs in future regulatory proceedings and adversely affects current financial standing and cash flows.