Eversource Energy - Q1 2023
May 4, 2023
Transcript
Operator (participant)
Good morning. Thank you for attending today's Eversource Energy first quarter 2023 earnings call. My name is Jason. I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I'd now like to pass the conference over to our host, Jeff Kotkin.
Jeff Kotkin (VP of Investor Relations)
Thank you very much, Jason. Good morning, 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 yesterday on our website. 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 risk 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 afternoon.
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, 2022. Our explanation of how and why we use certain non-GAAP measures and how those measures reconcile the GAAP results is contained within our news release and the slides we posted last night and in our most recent 10-K. Speaking today will be Joe Nolan, our Chairman, President, and Chief Executive Officer, and John Moreira, our Executive Vice President and CFO. Joining us today are Jay Buth, our VP and Controller, and Bob Becker, our Director of Investor Relations. I will turn to slide 3 and turn over the call to Joe.
Joe Nolan (Chairman, President, and CEO)
Thank you, Jeff, and thank you everyone for joining us on this call this morning. I know that you had many other choices of calls that you could have joined, so I'm very grateful. We had an excellent start in 2023 as we continued to deliver safe and highly reliable service to our 4.4 million customers. Our key metrics illustrate the continued strong state of our operations. Our service reliability, as measured by months between interruptions, remains in the top decile, and our safety ratings remain very strong. Our employees also performed very well in completing significant storm restoration in New Hampshire following a March nor'easter that caused widespread damage and brought historic snowfall amounts that made it extremely difficult for crews to access certain regions to make repairs.
Turning to slide three, in our offshore wind partnership with Ørsted, we continue to advance our three projects through the development process. Construction continues at South Fork, which will be the first large-scale offshore wind project completed in North America. Installation of the South Fork subsea transmission cable that will deliver wind power to New York is half complete, and the installation of the foundations, wind turbines, and offshore substation will follow. We continue to expect that South Fork will be fully operational by the end of the year. In early April, the U.S.-flagged Eco Edison, the first Jones Act-compliant wind farm service operation vessel, reached the 50% completion milestone. This vessel, which will be based in Port Jefferson, New York, will play a key role in supporting our partnership's offshore wind projects.
Just a few days ago, Eversource and Ørsted were joined by Rhode Island Governor Dan McKee to announce the start of construction of our advanced foundation components for our Revolution Wind project. This $100+ million investment is creating more than 125 union jobs for Rhode Island's skilled tradesmen and women and represents the largest supply chain commitment in Rhode Island yet. Last week, we announced with Ørsted our single largest New York offshore wind industry supply chain contract with the selection of Long Island-based contractor Haugland Energy. This contract with Haugland will create more than 400 jobs for New York union workers to install the underground duct bank system for Sunrise Wind's onshore transmission line in Brookhaven on Long Island. That contract helped raise the percentage of costs locked in for our three projects to approximately 92%.
You will see this reflected on our offshore wind project updates on slide 4. You'll notice that some of the spend has been moved from 2023 into 2024, which John will touch on in his remarks. This change does not impact the in-service dates for our projects, as you can also see here on slide 4. We continue to make progress on the strategic review of our offshore wind investment. We have shortlisted final interested parties in both our 3 offshore wind projects and in nearly 175,000 acres of uncommitted lease areas that are part of our 50/50 joint venture with Ørsted. We are making progress through extensive due diligence and continue to expect updates on an outcome of the strategic review later this quarter.
Although offshore wind may not be a right fit for our portfolio of regulated T&D assets. We are big believers in the essential role offshore wind will play in bringing much-needed clean energy to the New England region in lessening our reliance on natural gas for power generation. Eversource is well-positioned to be the leading electric infrastructure provider connecting this clean energy supply to New England's load centers. We remain focused on advancing our numerous climate initiatives in support of our region's efforts to significantly reduce carbon emissions. We continue to make progress in facilitating solar development in Massachusetts through our distributed energy resources investments at NSTAR Electric. After receiving DPU approval late last year for the first cluster of six capital investment projects, regulatory proceedings for the remaining five clusters are now complete. We expect Massachusetts regulators to issue final orders on those five clusters sometime this summer.
This innovative model, put in place by the Massachusetts Department of Public Utilities with full participation of Eversource, will alleviate significant distributed energy development roadblocks, and it's expected to lead to the addition of up to 1,000 megawatts of new solar energy capacity in Massachusetts. Turning to slide 5. Design work on our geothermal network project in Framingham, Massachusetts, is now complete, and construction proposals are being evaluated. We expect to commence operation in time for the 2023 winter heating season. If the pilot is determined to be successful, we intend to make it available as a clean energy solution for customers. Last, I'd like to provide a very positive update on the trajectory of customer bills.
While the mild winter mitigated the impact on bills as a result of lower consumption, it also contributed to a significant decline in natural gas prices that is currently being reflected in natural gas customer bills. Natural gas prices also help drive electric generation supply rates in New England, and electric supply rates are expected to decline significantly in July for customers on basic or default service in Connecticut and Massachusetts. We will file proposed tariffs with regulators later this month. This will be very welcome relief for our customers following the unprecedented spike we saw in electric bills in January. Thank you again for your time. I will now turn the call over to John Moreira.
John Moreira (EVP and CFO)
Thank you, Joe. Good morning, everyone. This morning, I will review our results for the first quarter of 2023, discuss our recent Aquarion rate decision, and review our most recent financing activity. I will start with slide 6. Our GAAP earnings were $1.41 per share in the first quarter of 2023, compared with GAAP earnings of $1.28 in the first quarter of 2022. First quarter results for 2022 include $0.02 per share impact, primarily related to the integration and transition of the acquisition of the assets of Columbia of Massachusetts, now known as Eversource Gas Company of Massachusetts. The $1.41 per share in the first quarter of 2023 is best compared with $1.30 per share, excluding those costs in the first quarter of last year.
Looking at some additional details on the first quarter earnings by segment. Our first quarter 2023 electric distribution earnings were $0.47 per share, compared with $0.41 in the first quarter of 2022. Improved results were driven largely by higher revenues at NSTAR Electric. This resulted from two factors, both related to the conclusion of our rate review from last year. The 1st was a base rate increase that was effective January 1st of this year, which provided about $0.03 per share benefit in the first quarter. The second was a rate design change that also took effect January 1st of this year. This design change eliminated the higher summertime demand charge.
This change will have the effect of moving about $0.08 per share of after-tax revenues out of expected 3rd quarter results and into the 1st quarter and the 4th quarters of this year in roughly equal $0.04 per share split. This annual rate design change is illustrated on slide 7. Continuing with the quarterly results on slide 6, the 1st quarter 2023 benefits from those changes and the additional distribution revenues at Connecticut Light & Power were partially offset by higher interest costs and higher depreciation as well as pension expense. Our electric transmission segment earned $0.45 per share in the 1st quarter of 2023 as compared with earnings of $0.43 in the 1st quarter of 2022.
Improved results were driven by higher level of investment in our transmission facilities. Our natural gas distribution segment earnings were $0.49 per share in the first quarter of 2023, as compared with earnings of $0.47 in the first quarter of 2022. Improved results were due primarily to higher base distribution revenues that took effect November 1st of 2022 at NSTAR Gas, as well as Eversource Gas Company of Massachusetts. This was partially offset by higher depreciation, interest, and property tax expense related to increased investment in our natural gas delivery systems to better serve our customers. Our first quarter water distribution segment earnings were $0.01 per share lower this year as compared to the first quarter of 2022. This is due primarily to higher operations and maintenance costs.
Eversource Parent and other companies after-tax losses decreased $12.5 million in the first quarter of 2023 as compared with the first quarter of 2022. This is due primarily to benefit from our equity investment in a renewable energy fund, partially offset by a contribution to our charitable foundation. This resulted in a $0.03 per share benefit for the quarter. Additionally, after-tax transaction and transition costs decreased by $4.8 million in the first quarter of 2023 as compared to the same period in 2022. Those benefits were partially offset by higher parent company interest expense for a net year-over-year improvement in the parent and other of about $0.02 per share.
Overall, as you can see on our income statement, we have managed our O&M quite well in the quarter despite the storm events we experienced in March and slightly higher pension costs. Turning to slide 8. We are maintaining our full year guidance of $4.25-$4.43 per share with a somewhat different quarterly earnings profile as compared to 2022. We expect that NSTAR rate design change to add about $0.04 per share to the fourth quarter earnings as it did in the first quarter of this year, will lower the third quarter earnings by about $0.08 per share. The rate design changes will have no impact on the full year results.
In addition to reaffirming our long-term EPS growth rate of solidly in the upper half of the 5%-7% range, we also reaffirm our $21.5 billion five-year regulated capital program that we discussed during our fourth quarter in February earnings call. Core business. Our core business capital expenditures totaled approximately $790 million in the first quarter of 2023. As Joe noted earlier, we have changed the timing of some of our offshore wind construction costs. Previously, we had projected $1.9 billion-$2.1 billion of 2023 construction costs related to our share of our joint venture with Ørsted.
Due to an expectation that the joint venture will be able to move approximately $1 billion of payments from late 2023 to future periods, we are now expecting $1.4 billion-$1.6 billion of offshore wind-related expenditures in 2023, effectively lowering our capital projection by $500 million in 2023 and raising it by $500 million over the following years. Overall, we have made no change to the estimated costs of completing our three projects or their timetable and continue to expect South Fork to be in service later this year and for RevWind and Sunrise Wind to enter service in 2025. In the first quarter of 2023, our share of capital expenditures totaled about $200 million, putting our total offshore wind investment through March of this year at $2.16 billion.
Moving to regulatory update. For the first time in a while, we currently have no active rate reviews underway and have long-term rate plans in effect for many of our utilities. In March, we received a very disappointing decision in the Aquarion Connecticut's first rate review in about 10 years. The rate decision, which ordered a $2 million reduction to Aquarion rates, was not unanimous. Two of the three commissioners commented that the 8.7% authorized return on equity provided a very negative signal for utility investment in Connecticut. Due to concerns with the legality of the decision and the negative long-term impact on customers, we have appealed the decision to the Connecticut Superior Court, where a temporary stay is currently maintaining existing rates and preventing the rate reduction order by PURA.
The next hearing on the stay is scheduled for May 15th. We look forward to working through the appeal process and believe we will come to a reasonable outcome that complies with the law, is good for customers, and provides us with the opportunity to recover our cost of service, including a fair return on our investments. Turning to financing activities. Since our previous earnings call, we have issued $750 million of parent company debt and retired $450 million of parent debt just this week. As you can see from slide 9, we have issued no additional shares through our ATM program. Through April, we distributed approximately 400,000 of treasury shares to meet our dividend reinvestment and employee incentive programs. As some of you may know, Jeff Kotkin will be retiring from Eversource later this summer.
I want to acknowledge Jeff for his many years of outstanding service to our company, the financial community, and our shareholders. I have had the pleasure of working with Jeff for more than 12 years, and I am sure you will agree he always goes the extra mile. Since the first day Jeff joined the communications department at the former Northeast Utilities nearly 48 year, 38 years ago, he has been an integral part of Eversource's journey, contributing to the company's growth, evolution, and success amidst various challenging challenges over the years. Throughout it all, Jeff has delivered exceptional service to investors, been very supportive of his colleagues while providing steady guidance to senior management and our board. It's no wonder why Jeff has been widely recognized as the best IR professional in our industry for many, many years.
We are all truly thankful for his devoted service, and we wish him all the best as he spends more time with his growing family, whether it be on the Connecticut shoreline or in the beaches of Hawaii. Thank you, Jeff, you will certainly greatly be missed. Thank you.
Jeff Kotkin (VP of Investor Relations)
Thank you, John.
John Moreira (EVP and CFO)
With that said, I want to thank everyone for joining us this morning, and looking forward to seeing many of you very soon. Now I'll turn the call over to Bob for Q&A.
Bob Becker (Director of Investor Relations)
Thanks, John. Before we start Q&A, I'll return the call to Jason to let everyone know how to enter questions. Jason?
Operator (participant)
If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by 2. Again, to ask a question, it is star 1.
Bob Becker (Director of Investor Relations)
Thanks, Jason. Our first question this morning is from Shar at Guggenheim. Good morning, Shar.
Shar Pourreza (Senior Managing Director)
Morning, Joe.
Joe Nolan (Chairman, President, and CEO)
Good morning.
Shar Pourreza (Senior Managing Director)
Good morning. Joe, why don't we maybe start with a little bit more color, if you could provide on the sale process and maybe just additional thoughts beyond sort of the prepared remarks. I mean, are we still looking at, you know, 3 buyers think you can offload all the projects? Then just maybe how you're feeling about pricing. Joe, the reason why I ask the pricing question is, you know, some investors are pitching that, you know, you'll sell the projects at, you know, substantial discount to book value. Maybe just give us any color on how you've seen valuations evolve, even if it's generally.
Joe Nolan (Chairman, President, and CEO)
Yeah. Well, thanks Shar for joining us this morning. We're very grateful. You know, the process, as I have talked about in the past, when you don't own 100% of an asset, things take a little longer to transact. I will tell you that this is very. Our transaction will involve two parties. It is very far along in the process, and that's why we can tell you with a high degree of confidence that you will have an answer, or you'll have an announcement in the second quarter. You know, I will tell you that certainly the lease areas are highly coveted lease areas. I think we saw what has happened in the marketplace. You know, that I don't think has any impact.
Obviously, you know, on the project side, these are very mature projects. These are not, these are not just, concepts on paper. These are projects that are very mature and in the process. For that, I think, we'll recognize, good value for those projects. You know, obviously that's about the extent of what I can share with you. I will tell you that, we've been pleased, with the process. We're pleased with what we're seeing. We're pleased with the results. You know, I think that at the end of the day, it will be a very good outcome for Eversource and Eversource's shareholders.
Shar Pourreza (Senior Managing Director)
Okay. Perfect. Lastly, Joe, there's obviously been a good deal of attention in the investment community on the backdrop in Connecticut and the prospects really for lawmakers to tighten sort of the regulatory guardrails around things like settlements with, you know, SB 7. I guess, how do you see that process evolving as the session enters its final innings? Do you and other utilities even have a seat at the table in those conversations? Just some aspects of the state have become somewhat very adversarial. I'd love to maybe get some thoughts there. Thanks.
Joe Nolan (Chairman, President, and CEO)
Yeah. Thank you. A valid question. I mean, when you look at Aquarion, obviously very disappointing. I'll tell you, around the legislative front, we have a seat at the table. In terms of the governor, you know, I do speak with him regularly. I spoke with him last week. We talked about a host of issues. One of the pieces that he highlights, and I think it's important for this community to understand this, number one, he insists that we have a seat at the table, and he wants us to participate. He, you know, he basically shared that with folks that, you know, who's better equipped around performance-based rate making than the utilities? We do very well in that environment. I mean, we do incredibly well here in Massachusetts.
We have a PBR model in place. We've had it in place for some time, and I think when you look at our track record, our performance, you know, that just, you know, it speaks for itself how well we do. With regard to the legislative front, you know, great relations with the legislature. You know, we're with them. We talk with them. You know, this happens every year. I grew up in this part of the business, you know, and it's unfortunately, it's, you know, it's like making sausage, you know? It's a very challenging process, and sometimes it's not too attractive. At the end of the day, you can be assured that we do have a seat at the table and that we are communicating.
You know, I think the last piece that you should take away is at that event that the Governor spoke at around performance-based rates, you know, he highlighted by name, both myself as well as Pedro, about our ability to invest dollars. We have choices where we can invest dollars. If it's not attractive, then obviously we've got other places we can go. I think that he was stressing that point to kind of get the message across to our regulators that, you know, it's important that we have a seat at the table, that they collaborate with us, and that in fact, it's a fair and equitable place to do business.
I am confident, as I have been in the past, that we will get to a resolution that is workable and good for all. Char.
Shar Pourreza (Senior Managing Director)
Got it. Perfect. Then, Jeff, congrats, on phase two. You're gonna be really missed, and, drinks, unlimited drinks on Mr. Nolan and I. Thanks.
Jeff Kotkin (VP of Investor Relations)
Appreciate it, guys.
Joe Nolan (Chairman, President, and CEO)
Every IR professional, in the, in the country is cheering 'cause they might have a shot at the number 1 slot this year. That's what's going on there.
Shar Pourreza (Senior Managing Director)
There you go.
Joe Nolan (Chairman, President, and CEO)
Thank you.
Shar Pourreza (Senior Managing Director)
Congrats, guys.
John Moreira (EVP and CFO)
Thank you.
Jeff Kotkin (VP of Investor Relations)
Thank you, Char.
Bob Becker (Director of Investor Relations)
Thanks, Char. Our next question comes from the line of Durgesh at Evercore. Good morning, Durgesh.
Operator (participant)
I think they dropped their question.
Bob Becker (Director of Investor Relations)
All right. Our next question comes from the line of Paul Patterson. Good morning, Paul.
Paul Patterson (Senior Analyst)
Hello?
John Moreira (EVP and CFO)
All right.
Jeff Kotkin (VP of Investor Relations)
Hey, Paul.
Hi, Paul.
Paul Patterson (Senior Analyst)
Okay. Good. You can hear me. Okay. Just to follow up on a few. First of all, congratulations, Jeff, again. Just to follow up on a couple things. You mentioned that you've got PBR, you've got some experience with PBR and what have you. One of the things I think that you guys were focusing on as well as UI was regarding this CapEx, OpEx sort of U.K. portion of the order when it was a draft order, and it stayed in the order. I was just wondering how you guys see that. Also, you know, you mentioned the press conference that happened afterwards.
I mean, how do you think about, I guess, the this element of the of the performance-based rate making order?
John Moreira (EVP and CFO)
Hey, Paul. It's John. You know, first of all, I think, you know, the order that came out was really more of a framework. You know, the details are still out. You know, we'll be picking this up in April of next year to finalize and work on the specifics. I think it's too early to make the determination. You know, clearly the U.K. model is significant difference from how we've been operating through the traditional cost of service. If we were to change to something that drastic, it would have significant ramifications financially and otherwise to the utilities in the country.
I think it's too early for us to indicate one way or the other as to where things ultimately will shake out.
Paul Patterson (Senior Analyst)
Okay. We'll stay tuned, I guess. With respect to the May 15th Aquarion, hearing, what should we think about, as being, what do you guys expect to happen at that hearing, I guess?
John Moreira (EVP and CFO)
I mean, our expectation is that the stay would be a permanent stay from where it currently stands today. We feel very, you know, we based on our assessment, we feel very comfortable with our position and the commentary that we've made in our filing, and we will make in our filing on Monday. Our briefs are due on Monday. More to come on that front. You know, hopefully that permanent it'll move from a temporary to a permanent stay and until we see the appeal process work its way through.
Paul Patterson (Senior Analyst)
Okay, great. Then in the prepared remarks on the offshore wind, just sort of wondering, with respect to the potential for retaining some ownership of the JV, how should we think about that? Is that a strong possibility or-
Joe Nolan (Chairman, President, and CEO)
No, no, it's not. It's not a strong possibility. We see a path for a clean exit from this. That is definitely not the case.
Paul Patterson (Senior Analyst)
Okay, great. Thanks so much, guys. Once again, congratulations, Jeff.
Joe Nolan (Chairman, President, and CEO)
Thank you, Paul.
John Moreira (EVP and CFO)
Thank you, Paul.
Bob Becker (Director of Investor Relations)
Thanks, Paul. Our next question comes from the line of Steve Fleishman at Wolfe Research. Good morning, Steve.
Steve Fleishman (Managing Director and Senior Analyst)
Yeah. Hey, good morning. I am really happy I picked this call out of all the other ones at this time to wish Jeff the best of luck. Congratulations. I think I may be one of the few people that remembers IR before Jeff at Northeast Utilities. Yeah, congrats.
Joe Nolan (Chairman, President, and CEO)
Thank you.
Steve Fleishman (Managing Director and Senior Analyst)
Just to follow up on, I guess, couple questions on the offshore wind sale. In the past, you've talked about two separate transactions for the leases and for the contracts, and wanted to clarify if that's still the case. Do you expect them to be announced at different times? Do you expect each of those to be announced during the second quarter, if so?
Joe Nolan (Chairman, President, and CEO)
Yeah. Yeah. Thanks, Steve. couple things yeah. There's... We're talking about 2 announcements, 2 buyers in the 2nd quarter, and there might be a space of short period of time between announcements, but both in the 2nd quarter, yes.
Steve Fleishman (Managing Director and Senior Analyst)
Okay, great. Just on You mentioned, Joe, the clean exit, which is great. I just wanted to ask if there's any chance there need to be any, like, contingencies or stuff related to the projects that you need to commit to as part of this, other than just, you know, supporting them, you know, locally, just any financial contingencies?
John Moreira (EVP and CFO)
Steve, this is John. We're going through the negotiations right now, it's a little premature for us to indicate ultimately where that will shake out.
Steve Fleishman (Managing Director and Senior Analyst)
Okay. Just, on the... Sorry. On the Connecticut, it... you're basically expecting that to, you know, kind of argue this through the courts and basically address it that way? You sounded like almost you think it could be, like, settled at some point. just wanted to kind of clarify that.
Joe Nolan (Chairman, President, and CEO)
Yeah, I mean, obviously, you know, I think, I think you know our track record around settlement. If there's an opportunity there, we certainly will work with any parties around settlement. The Aquarion asset, you know, we've managed very, very well. We have very low rates. We've been making significant investments, as you know, that, I think it's one of the best run water companies. We do see an opportunity. We think we have allies in the state down there to kind of work through that. You know, it, as you know, it takes two to tangle in the settlement space, we need to have some willing participants. We'll always work towards settlement.
We think settlement is the way to go, and we're optimistic that we can probably have some type of an outcome that would benefit both parties.
Steve Fleishman (Managing Director and Senior Analyst)
Okay, great. Thank you for the update.
Joe Nolan (Chairman, President, and CEO)
Thank you, Steve.
John Moreira (EVP and CFO)
Thank you, Steve.
Bob Becker (Director of Investor Relations)
Thanks, Steve. Our next question comes from Jeremy Tonet at JP Morgan. Good morning, Jeremy.
Rich Sunderland (Senior Equity Research Analyst)
Hi. Good morning. It's actually Rich Sunderland on for Jeremy. Thank you for the time today.
Joe Nolan (Chairman, President, and CEO)
Hey, Rich.
Rich Sunderland (Senior Equity Research Analyst)
-on a higher level topic. Thank you. I wanted to touch on a higher level topic around what you're seeing on the offshore wind transmission side, just in light of the latest RFP? Any new thinking there or evolution of thought around incremental investment opportunities over the balance of the decade?
Joe Nolan (Chairman, President, and CEO)
Well, I mean, I think that was one of the one of the points that had us make the pivot because we think there's so much opportunity in both the land aspect of it and the investment around not only the projects that we were involved in, but the projects that everybody else is involved with. You know, we are very well-positioned in this region, at load centers, and people wanna get to those. Because they wanna get to them, you know, they're gonna go and spend time with us. We see a tremendous opportunity for investment in offshore wind as it relates to our regulated business, and that's really what our focus. Our focus has been around de-risking and focusing on the regulated assets.
We do see, Rich, a great opportunity, not only with Ørsted, but with these other wind partners. It's already playing out, right now with other wind partners that we don't have any ownership on, to build, to build wind and transmission-related assets, to help them, you know, inject clean energy into the New England and New York grid.
Rich Sunderland (Senior Equity Research Analyst)
Got it. Thanks for the color there. You touched on this already around customer bills, but curious now that we're coming out of winter, how do you see the overall regional backdrop into next winter? You're really thinking around the supply concerns that you highlighted into this past winter.
Joe Nolan (Chairman, President, and CEO)
I mean, just a great question, and we've been talking about that. As you know, it was front and center for me, and the company last late summer, fall. It's still on my, on my radar, and I'm concerned about it. I'm concerned about, you say fuel supply for generators
We're very interested in, you know, you saw what happened in PJM, where folks didn't show up. We had a similar situation on a smaller scale take place in the ISO New England market, where folks didn't show up when they were expected to show up. You know, I think it was a shocker, the number, the penalties they were talking about in PJM. I mean, up here, they were pretty significant. We are focused every day on what we can do to help minimize the risk to our customers. Cause you know, although we could line up significant supply for our customers, at the end of the day, if people don't perform and the lights go out, they're gonna come knocking on our door. You know, we are...
You know, obviously, you know, it's not our fault, you get blamed because the lights go out. We are focused every day in our energy supply area, in our transmission area, in our engineering area as to what we can do to facilitate solutions to fully enable this grid to operate during, you know, very challenging conditions. In doing that, what it's gonna also do is it's gonna drive the price of energy down in the region, which is what our goal. We want to lower the clearing price in the region so that our customers are not getting the type of shock that they're getting, which has been, you know, devastating to them, we know that.
Rich Sunderland (Senior Equity Research Analyst)
Got it. Very clear. Thank you for the time today. To Jeff, congrats and all the best. Thank you.
Joe Nolan (Chairman, President, and CEO)
Thank you.
John Moreira (EVP and CFO)
Thank you.
Bob Becker (Director of Investor Relations)
Thanks, Richard. Our next question comes from Paul Zimbardo at BofA. Good morning, Paul.
Paul Zimbardo (Equity Research Analyst)
Hi. Good morning. Thank you. I know it's been said many times. Sad to hear the formal news, Jeff, and a big congrats. You're one of the few IRs I've worked with in my entire career. Well-deserved retirement.
Joe Nolan (Chairman, President, and CEO)
Thank you, Paul.
Paul Zimbardo (Equity Research Analyst)
Thank you. To dive into the actual quarter for a second, I know that you had the monetization of the clean energy investment. Was that the full investment? Because I know that there's typically that mark-to-market in the second quarter. Just wanted to confirm if you sold the full position there.
John Moreira (EVP and CFO)
Yes, Paul, we did.
Paul Zimbardo (Equity Research Analyst)
Okay. Great. Thanks for all the context on Connecticut. I wanted to check, do you have any revised expectations on timing for any Yankee Gas rate case in the future?
John Moreira (EVP and CFO)
No, we at this point, we do not. We're we continue to assess the timing of that rate request.
Paul Zimbardo (Equity Research Analyst)
Okay. Great. Thank you, all. Appreciate it.
Joe Nolan (Chairman, President, and CEO)
Thank you, Paul.
John Moreira (EVP and CFO)
Thanks, Paul.
Bob Becker (Director of Investor Relations)
Thanks, Paul. Our next question comes from Ryan Levine at Citi. Good morning, Ryan.
Ryan Levine (Senior Equity Analyst)
Good morning. Hoping to follow up on the offshore wind process. To the extent that you do move forward with announcing 2 transactions this quarter, what regulatory or other closing procedures would be needed, or any sense around timing of any cash received for the company?
John Moreira (EVP and CFO)
Sure, Ryan. It's different for the two pieces, right? It's different for the uncommitted lease area as it is for the contracted projects. Speaking of the contracted project, that's probably one that has a bit longer timeframe for regulatory approval. On that one there, Our subsidiary or the joint venture that holds those projects are considered a public utility company, so we would now need to obtain FERC approval, and that's probably a three-month process. Other than that, it's the traditional Hart-Scott-Rodino. Depending on who the ultimate buyer is, we could require CFIUS approval. Once again, I think that's very, that's weeks, not months.
Joe Nolan (Chairman, President, and CEO)
Keep in mind that, you know, there is a process in place. It took place when we acquired the deepwater asset. It's not, you know, uncharted waters.
Paul Zimbardo (Equity Research Analyst)
Appreciate the color. Given that timeline, curious how you're thinking about your financing plan. I know you issued some parent debt at 545 basis points year to date.
Joe Nolan (Chairman, President, and CEO)
Yeah.
Paul Zimbardo (Equity Research Analyst)
Are you considering the convert market, given that seems to be open to a lot of utilities in this environment?
John Moreira (EVP and CFO)
Very good question. Right now, you know, looking at the converts, you know, we feel it's not, the timing is not right for us, just given, you know, kind of the where we're currently trading and, you know, kind of the, you know, our valuations right now. It doesn't make sense for us to do that until we have a little bit more certainty and get some announcements made. We don't see that in the near term as being the right option for us. But, you know, we just given the timing, we, you know, we could be in the market, you know, for another holding company debt offering.
Paul Zimbardo (Equity Research Analyst)
Okay. I mean, you mentioned in your slide deck a May first maturity. Was there any update on what happened there?
John Moreira (EVP and CFO)
Yeah. That one the $750 million offering that we did in March kind of took care of that.
Paul Zimbardo (Equity Research Analyst)
Okay. I appreciate the color. Thank you.
John Moreira (EVP and CFO)
No problem.
Bob Becker (Director of Investor Relations)
Thanks, Ryan. Our next question comes from Travis Miller at Morningstar, Inc. Good morning, Travis.
Travis Miller (Senior Equity Analyst)
A public congratulations to Jeff. If you ever mistakenly find yourself in Chicago, let me know. I owe you drinks, et cetera, for all the help over the years. Try to avoid the wintertime here.
Jeff Kotkin (VP of Investor Relations)
Yeah. Thank you
Travis Miller (Senior Equity Analyst)
... offshore wind again.
Thinking about you mentioned the payment shift there, the $500 million. Thinking about the timing in terms of the close of any deal, does that payment shift save you, the $500 million of cash that you had previously planned to finance or allow you more capacity to invest in other places this year? Just thinking through the timing of that, how that affects the plan.
John Moreira (EVP and CFO)
No. Well, that $500 million was more towards the tail end of this year, as I mentioned in my comments. That just gets pushed out. Obviously, it's we avoid further construction costs commitments this year. Obviously the pricing would be adjusted accordingly by the buyer.
Travis Miller (Senior Equity Analyst)
Okay. Okay. I know this isn't your project, but there's another transmission line proposal out up your way from Canada. Any thoughts on differences between, say, Northern Pass or any of the other proposals that have been made over the decades that you know of?
Joe Nolan (Chairman, President, and CEO)
Well, I mean, we're the offtake. We're taking that power and, you know, as we've always said, anytime you inject, you know, 1,100 megawatts into the ISO or into the grid, that's good for all customers. You know, it's clean energy that will be coming down from there. You know, it's a lot of the same players that are involved in that opposition. We'll leave it at that. I will tell you that, you know, any type of injection of clean resources into our into our marketplace is a, is a good day for us. It's a good day for our customers.
Travis Miller (Senior Equity Analyst)
Sure. Okay. Very good. That's all I had. Thanks so much.
Joe Nolan (Chairman, President, and CEO)
Thanks, Travis.
Bob Becker (Director of Investor Relations)
Thanks, Travis. That was the last question we have this morning. We want to thank you all for joining us, and if you have any follow-up questions, please reach out to Investor Relations. Thank you.
Operator (participant)
That concludes the conference call. Thank you for your participation. You may now disconnect.