Summary
Eversource Energy (ES) has announced the closing of the sale of its uncommitted lease area off the south coast of Massachusetts to Ørsted for $625 million in an all-cash transaction. This significant divestiture, previously announced in May 2023, includes approximately 175,000 developable acres. The company received an initial payment of $575 million at closing, with the remaining $50 million expected by the end of Q3 2023, contingent on certain tax equity investment events related to South Fork Wind. Furthermore, Eversource will utilize a portion of these proceeds to make a substantial tax equity investment of approximately $545 million in South Fork Wind, LLC, an affiliate's wholly-owned subsidiary. This investment is anticipated to generate significant investment tax credits, which will be used to reduce the company's federal tax liability, with refunds expected over the next nine months. Eversource also expects to receive a distribution of roughly $273 million from the project before its commercial operations date, which is slated for late 2023.
Key Highlights
- 1Eversource Energy closed the sale of its offshore wind lease area to Ørsted for $625 million.
- 2The transaction is an all-cash deal, with $575 million paid at closing and $50 million pending.
- 3The remaining $50 million payment is anticipated by the end of Q3 2023, subject to specific conditions.
- 4Eversource will invest approximately $545 million in tax equity for the South Fork Wind project.
- 5This tax equity investment is expected to generate substantial investment tax credits for Eversource.
- 6Eversource anticipates receiving a distribution of approximately $273 million from South Fork Wind prior to commercial operations.
- 7South Fork Wind's commercial operation is expected in late 2023.