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EVERSOURCE ENERGY 8-K Report, Corporate Update (Feb 29, 2024)

Filed February 29, 2024For Securities:ES

Summary

Eversource Energy (ES) announced on February 29, 2024, a significant development regarding the Sunrise Wind offshore wind farm. The project, a joint venture with Ørsted, has been selected by New York in its latest solicitation (New York 4) to advance climate goals and deliver economic benefits. This award allows Eversource to maintain its role in leading the onshore construction of the project, which is slated to be the largest U.S. offshore wind farm upon completion in 2026. Crucially for investors, Eversource has finalized an agreement to sell its 50% interest in Sunrise Wind to its joint venture partner, Ørsted. Upon the completion of this sale, Eversource expects to eliminate any risk exposure related to the project, including potential abandonment costs. This transaction is anticipated to close later this year, subject to customary regulatory approvals and the signing of an OREC contract with NYSERDA. The project is on track to begin construction this summer and become operational in 2026.

Key Highlights

  • 1New York has selected the Sunrise Wind offshore wind farm project in its latest solicitation (New York 4).
  • 2Eversource will continue to lead onshore construction for the project.
  • 3Eversource has agreed to sell its 50% interest in Sunrise Wind to joint venture partner Ørsted.
  • 4Upon sale completion, Eversource expects to have no further risk exposure to Sunrise Wind, including abandonment costs.
  • 5The sale of Eversource's interest is expected to be completed later in 2024, subject to regulatory approvals and contract finalization.
  • 6Sunrise Wind is projected to be operational in 2026 and is designed to be the largest U.S. offshore wind farm.
  • 7The project has secured key agreements, including major supplier and labor agreements, and has received design review acceptance from state agencies.

Frequently Asked Questions

The selection by New York in its 'New York 4' solicitation is a critical step for the Sunrise Wind project, confirming its viability for advancing climate goals and delivering economic benefits. For Eversource, it means the project can move forward, allowing them to fulfill their role in onshore construction and proceed with the sale of their interest to Ørsted.

The sale of its 50% stake in Sunrise Wind to Ørsted is a significant de-risking event for Eversource. Once the transaction is complete, Eversource will no longer have any financial exposure to the project, including the previously assumed abandonment costs. This allows the company to focus on its core utility operations and other strategic initiatives.

The completion of Eversource's sale of its interest is contingent upon several factors, including the signing of an OREC (Offshore Wind Renewable Energy Certificates) contract with NYSERDA, finalization of acquisition agreements, receipt of the federal Construction and Operations Plan (COP), and obtaining relevant regulatory approvals. For the project itself, full construction commencement is dependent on receiving federal permits this summer and Ørsted's final investment decision, anticipated in Q2 2024.

Sunrise Wind is scheduled to be operational in 2026. Upon completion, it is expected to be the largest offshore wind farm in the United States.