Eversource Energy - Earnings Call - Q3 2017
November 2, 2017
Transcript
Speaker 0
Welcome to the Eversource Energy Third Quarter Earnings Call. My name is Christine, and I will be the operator for today's call. At this time, all participants are in a listen only mode. Later, will conduct a question and answer session. Please note that this conference is being recorded.
I will now turn the call over to Jeffrey Katkin. You may begin.
Speaker 1
Thank you, Christine. Good morning and thank you for joining us. I'm Jeff Katkin, Eversource Energy's Vice President for Investor Relations. As you can see
Speaker 2
on slide one, some of
Speaker 1
the statements made during this investor call may be forward looking as defined within the meaning of the Safe Harbor provisions of The US 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. Some of 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 ks for the year ended 12/31/2016, and the 10 Q for the three months ended 06/30/2017. Additionally, our explanation of how and why we use certain non GAAP measures is contained within our news release and the slides we posted last night on our website under Presentations and Webcasts and in our most recent 10 ks.
Turning to slide two. Speaking today will be Phil Lembo, our Executive Vice President and CFO and Lee Olivier, our Executive Vice President for Enterprise Energy Strategy and Business Development. Also joining us today are Jay Booth, our Vice President and Controller John Marreira, our Vice President of Financial Planning and Analysis and Christine Vaughan, our Treasurer and Vice President for Regulatory. Now I will turn to Slide three and turn over the call to Phil.
Speaker 2
Thank you, Jeff. Today I'll cover our third quarter and year to date financial results, the status of key regulatory dockets, the status of our Aquarian Water Company transaction, and give an update on our capital plan and several of the transmission projects. So let's turn to our quarterly financial results on slide three. Earnings were $0.82 per share in the third quarter of twenty seventeen compared to $0.83 per share in 2016. The primary drivers of our results were higher electric transmission earnings being offset by lower electric distribution results.
Our transmission segment earned $0.31 per share in the third quarter of 'seventeen compared with $0.28 per share in the third quarter of twenty sixteen. The primary driver here for these earnings was higher transmission rate base. We've invested $600,000,000 in our transmission system this year through September. And our transmission capital plan for the year is just under $1,000,000,000 On the electric distribution side, we earned $0.50 per share in the third quarter of 'seventeen. This compares to earnings of $0.53 per share in 2016.
This decrease was primarily due to lower sales reflecting much milder weather we experienced in July and August this year compared to 2016. This primarily impacted NSTAR Electric and our New Hampshire Public Service of New Hampshire operation, neither of which has yet to implement revenue decoupling. In Boston, for example, cooling degree days were down nearly 34% in the third quarter of twenty seventeen compared to the same period in 2016. This is nearly 8% below normal, in terms of cooling degree days for the third quarter. And not only was it mild overall in the summer, but additionally we never really had a hot stretch of weather or heat wave, so to speak.
So peak loads were modest and demand related revenue also declined. So in addition to lower electric revenues, we recorded higher property tax, depreciation, and interest expense in the quarter. We're able to offset much of these impacts with our continued success in controlling our costs. Lower non tracked O and M costs added $02 per share to our third quarter results. On the natural gas distribution side, we lost $02 per share in the third quarter of 'seventeen, which was comparable to last year.
The Eversource parent and other, we earned zero three dollars per share in the third quarter, and this compares to earnings of $04 per share in 2016. The decline was primarily due to higher interest expense resulting from higher levels of debt and higher interest rates on short term debt, reflecting the impact of recent Fed interest rate hikes. Turning from the third quarter to the nine month results, we earned $2.36 per share for the first nine months of twenty seventeen compared with $2.24 per share last year. Improved results were due to higher transmission earnings, improved results at the parent, and lower O and M costs. In fact, lower O and M costs added $06 per share to our year to date results.
For the full year, we expect to earn between $3.05 and $3.2 per share. And for the long term, we continue to project 5% to 7% long term EPS growth. We are pleased with our results to date and remain comfortable with our 2017 guidance. Although I'd like to see some very cold weather in November and December, that would really help us reach the higher end of our earnings range for 'seventeen. From the financial side, I'd now turn to our regulatory activity on slide four and start with our New Hampshire Generation divestiture, which is moving along very well.
On October 12, we submitted to the New Hampshire Public Utility Commission two purchase and sales agreements for the sale of our remaining generation assets in New Hampshire for a total purchase price of $258,000,000 The New Hampshire PUC has opened a docket to review these contracts with approval expected before the end of this year. We continue to expect a closing by the end of the year or very early next year with securitization activities to follow soon thereafter. The book value currently on PSNH generating assets including fuel and inventory totals approximately $770,000,000 as of the September. Under the New Hampshire PUC approved settlement, we'll recover through securitization our investment in the plants that's not collected through the sale process. After completion of these transactions and implementation of market based competitive solicitations for power for our New Hampshire customers, we expect overall energy supply rates to decline going forward.
Turning to slide five and our current distribution rate case activity, as many of you know, hearings and briefings are now complete on our Massachusetts electric rate case. This has been a very comprehensive case with our proposed merger of NSTAR Electric and Wameco, the movement of NSTAR Electric onto revenue decoupling, proposals for performance based rate making and expansion of our vegetation management program, some significant rate design changes, and our grid modernization proposal, including $145,000,000 for energy storage and electric vehicle support expenditures. We're pleased with how the case went and the case that we presented, and look forward to a decision by the November with new rates taking effect early next year. In Connecticut, we filed a letter of intent last week stating that later in November we'll file a general rate case for CLNP supporting a three year plan. This case is required by our 2012 merger settlement.
The increases we're requesting are being driven largely by higher depreciation, property, and other tax expense, much of which relates to the hundreds of millions of dollars we invest annually in Connecticut distribution system that helps achieve top tier results for customers. This case continues to reflect our ability to move our electric performance higher while controlling costs for our customers. From a state regulation, I'll turn to slide six and the various New England transmission ROE dockets before FERC. As you may recall, on April fourteenth of this year, the DC Circuit Court of Appeals vacated and remanded FERC's twenty fourteen order that lowered the base ROE for New England transmission owners from 11.14% to 10.57%. In early June, the region's transmission owners, including Eversource, filed with the FERC to revert back to the ROE that was approved by FERC nearly a decade ago, which had a base ROE of 11.4.
FERC did not accept our request last month stating that changes to the billed ROEs now would complicate the computation of any surcharges or refunds or changes once a final decision is issued. As a result, we made no changes to our rates and continue to bill and recognize revenues based on a 10.57% base ROE until we receive a new order from FERC. Next on slide seven, pending transaction involving Aquarium Water Company. This also is moving along very well. Regulators in Connecticut and New Hampshire and all relevant federal agencies have signed off on the transaction.
As a result, we'll be able to close the transaction once we receive approval from the Massachusetts Department of Public Utilities. We have completed all the hearings and briefings before the DPU and are awaiting a decision. We expect to close the transaction before year end. On slide eight, we profile our four largest reliability projects underway in our system. We expect all of these projects to be completed in 2019.
And we've made considerable progress to date with 28 of the 55 projects associated with Greater Boston and Greater Hartford, those being already in service. We continue to review our 2018 capital budget. As you know, we'll discuss that in detail in February. But during the last earnings call in July, I noted that we expect to offset, some of the revisions to the Northern Pass timeline through increased investments in our electric, natural gas, and water distribution systems such that our capital budget would likely remain approximately $2,800,000,000 Since then, we've also identified about $100,000,000 of additional reliability related electric transmission investments across our service territory that we would expect to complete in 2018. This investment will allow us to further improve transmission reliability and harden our system.
We're also making significant progress on our Massachusetts solar initiative. As many of you know, in August of this year, legislation allowing us to build 62 megawatts of solar was amended to provide an additional two years to complete the facilities. As a result, and to lower costs for our customers, we adjusted our construction schedule such that a small amount of capital spending for the solar program will take place in 2018 rather than 2017. Approximately 50 megawatts are now under construction with the remaining 12, will go into construction by the end of this year. Moreover, we remain well within our 200,000,000 budget.
Finally, turning to financing. In early October, Eversource Parent issued $450,000,000 each in a five year and seven year notes with yields of 2.52.94% respectively. The spreads on these debt issuances were amongst the lowest we've seen for parent paper in the industry, And we think that speaks volumes to our high credit quality. The Generation divestiture, the Aquarian acquisition should continue to solidify the attractive business risk position assigned to us by the, credit agencies. Before I turn the call over to Lee, I want to take a moment to discuss the severe wind and rainstorm that struck the Northeast Sunday night into Monday morning.
The near hurricane force winds resulted in hundreds of broken poles, dozens of down transformers, and many miles of downed wires. Across New England, approximately 1,300,000 electric customers lost power. In our service territory, New Hampshire was the hardest hit with more than 60% of all customers out of power at some point. While our restoration efforts are largely complete in Massachusetts and Connecticut, and they're progressing well in New Hampshire, I just want to recognize the tireless efforts of our employees and thank our customers for their patience. We'll see many of you on this call at the EEI Financial Conference next week.
So we're making this call somewhat briefer than last quarter. But now I'll turn the call over to Lee.
Speaker 3
Thanks, Phil. I'll provide you with an update on Pass and then turn the call back to Jeff for Q and As. Slide nine highlights the progress we are making on Nobun Pass. Cross examination of our witnesses wrapped up in the early October timeframe, and the hearings are now focused on intervener witnesses. Our witnesses made a highly compelling case for the New Hampshire site evaluation committee to approve the project as we have proposed it, with 60 miles of underground cables and 132 miles of overhead line.
They have discussed all the steps we have made to minimize the physical impact of Northern Pass while at the same time preserving the economic viability of a project that will bring billions of dollars of benefits to the state. We are now nearly halfway through the cross examination of intervener witnesses. Once the cross examination is complete and the record is closed, interveners will have fourteen days to file their final briefs on the project, and we will have another seven days to file ours. Then the seven members of the New Hampshire SEC Committee that have been assigned to review the Northern Pass project will vote. A simple majority is necessary to approve Northern Pass.
The subcommittee has targeted a vote no later than February 2838, but it could take place sooner. After the vote, the New Hampshire SEC staff council will prepare a written decision consistent with the majority position which the SEC has scheduled for no later than March thirty one of twenty eighteen. We consider the New Hampshire SEC schedule to be supportive of the project receiving all of the approvals necessary to commence construction in the second quarter of twenty eighteen. In addition to the SEC permit, we need to secure a presidential permit from the US Department of Energy. The DOE issued the final environmental impact statement on Nobden Pass in August.
In issuing the final EIS, DOE stated, quote, the proposed DOE action in the final EIS is to issue a presidential permit to the applicant, Novan Pass LLC, to construct, operate, maintain, and connect a new electric transmission line across The US Canada border in Northern New Hampshire. We now awaiting a record of decision and the presidential permit from the DOE and expect both to be issued this year. The project requires two federal permits, two additional ones, and we have made significant progress in both. The U. S.
Forest Service issued a Record of Decision two months ago that was supportive of the underground route that we were selected through the White Mountains National Forest. We expect a final audit from the Forest Service before the end of this year. We also expect to receive a final permit from the Army Corps of Engineers by the end of the year. On the state side, we achieved another important milestone yesterday when we filed a settlement agreement on the terms of Northern Pass's lease with Public Service of New Hampshire for most of Northern Pass's 192 mile route. The settlement was reached with the New Hampshire PUC staff and the Office of Consumer Advocate, the two principal intervenors in the case.
We expect the New Hampshire PUC approval of the settlement by the end of the year. Taken together, we are very pleased with our current position in the siting process with significant progress being made in all venues. During the slide 10, we continue to expect construction to commence by mid-twenty eighteen with completion in the third quarter of twenty twenty. At that time, Northern Pass would be fully constructed and operational testing would commence, allowing the project to enter service prior to the critical twenty to twenty one winter period. Supporting this time schedule are the firm, fixed price contracts we have signed with our major suppliers and contractors, including ABB and Quantas Services.
All parties involved in this project are primed and ready to commence work once we receive the final approvals. Finally,
Speaker 2
before
Speaker 3
we begin Q and A, I will touch on Bay State Wind and our partner, which the new corporate name of We are preparing our bid into the Massachusetts offshore wind RFP, which is due December 20, Given the vast experience of hosted in emerging offshore wind and our knowledge in the wind markets and transmission, we believe we will be able to submit a highly compelling set of proposals for review by the evaluators. Now I'll turn the call back to Jeff for Q and A.
Speaker 1
Thank you Lee. And I'll return the call to Christine just to remind you how to enter your questions. Christine?
Speaker 0
Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touchtone phone. Have question, please press stars and one on your touch tone phone.
Speaker 1
Great. Thank you, Christine. First question this morning is from Mike Weinstein from Credit Suisse. Good morning, Mike.
Speaker 4
Hi, good morning.
Speaker 5
Lee, would you
Speaker 4
mind talking a little bit about the SEC settlement or not the SEC, but the New Hampshire Public Utility Commission settlement that just arrived at? How significant is that for the project? How many miles of the line is covered by those rights of way? And also at the SEC, what's your impression, I guess now that the cross examination of intervener witnesses has started, what's your impression of their ability to delay the process in some way or get the vote done on time in February?
Speaker 3
Yeah. Hi Mike, this is Lee. In regards to the right of way, essentially it's all of the right of way with the exception of the underground in the northern part which is a private lease on about 22 miles land. So if you add the underground and the private lease, that's about 82 miles. So the rest of it is what remains of the 193 miles.
So it's very, very significant because obviously, you know, PUC approved Melvin Pass as a utility. And part of what they had to do to do that is to say that Melvin Pass would be in the public good utility in the state. So this now giving us the rights to use the right of way where there's other existing PSNH or Eversource New Hampshire rights of way is very, very important. It's one of the last major steps. It obviously, by the conclusion of that, again, it lends the credence to the project itself because it will be approved by the same many of the same members that sit on the USCC.
So we feel very good about that. I would just say in regards to the SEC hearing, those meetings have proceeded very well. I think the SEC has been very judicious in terms of allowing opposing cross examination and ensuring that the cross examination is timely, it's constructive, and does not mean to be essentially, you know, kind of drawing on or keeping the process going. So I think the SEC is determined and focused to bring this thing to a conclusion no later than earlier this year. And the schedule, as we have right now, would support all of the hearings being completed by the end of this year, early deliberations in first quarter, January timeframe, and then an oral vote and then a subsequent written decision.
Speaker 4
Great. And, you know, in terms of the RFP outcome that's happening in January for the Massachusetts Clean Energy RFP, is how significant is that for Hydro Quebec's support in your opinion at this point?
Speaker 3
Excuse me Mike, could you repeat that last part?
Speaker 4
How significant is the outcome of the Massachusetts Clean Energy RFP for Hydro Quebec's support of the Northern Pass project?
Speaker 3
You know, we talked with Northern Pass on the basis. Their goal is to double the revenue, double the earnings over the course of the next fifteen years is to further increase imports into The US, predominantly New England, which is their best market. They would like to, if possible, put three noven passes into New England. So they are very, very committed to this project. And, you know, if you look at this project, we're pretty much through the federal citing.
We should have the presidential permit by the end of this year or sooner. The SEC process is moving along quite nicely. We have all the contracts laid out. We have an in service date of by the end of twenty twenty. That's at least two to three years before anybody else.
And just looking at the Massachusetts RFP, provided in the RFP is additional credit, if you will, for projects that land by the end of twenty twenty when the state has their mandate to reduce carbon by, 20%. And if you look at Novan Pass, it will take 25% of the carbon out of the electric sector inside of Massachusetts. So And then you have the siting on the Canadian side. We will have the siting on the Canadian side about the end of this year. The other projects that would cross into Canada will take another two to three years of siting in Canada.
So no other project that exists as far as long as far along as we are and has the certainty that we have around fixed price contracts with contractors and in service dates that really meet the needs and goals of the Massachusetts Clean Air Plan.
Speaker 1
Okay. Thanks a lot, Lee. Thanks, Mike. Thanks, Mike. Next question is from Praful Mehta from Citi.
Good morning, Praful.
Speaker 5
Hi, Jeff. Thanks, guys. So just following up a little bit on Northern Pass. In terms of the SEC approvals, I guess the timeline is moving well, but just wanted to understand what are the risks here? I mean, there any possibility of delay further?
Or what if the decision doesn't go your way? In that case, what are the options you have at that point?
Speaker 3
Yeah. I would just say is there to answer the first party question, is there opportunity to delay further? I would say no. We we have a very strong governor in New Hampshire that supports this project. The legislature supports this project, including the senior members of the legislature.
The SEC chairman has been very efficient and very judicious in the process. So we don't see any delays there. A number of the interveners have tried previous litigation ensued, all of which have failed. We think from a long experience with the SEC process that it's quite frankly long. It's very judicious.
It's very comprehensive. But when it's complete, it has always withstood legal challenge. And we believe so will the presidential permit. So we do not see delays there. So I'm very confident that we will get our decision.
It will be in time for the three state RFP. And we will be successful inside of that RFP.
Speaker 5
Got you. All right. And you've talked about from growth perspective, right, the 5% to 7% growth platform through 2020. But you've also talked about like the $100,000,000 of incremental transmission CapEx today. Is that helping you move to the upper end of that range?
Is that just keeping it at the midpoint? And also wanted to understand what were the approvals required for that incremental transmission spend? So
Speaker 2
the short answer to that is that's total amount that helps to fill the gap that we talked about earlier when Northern Pass changed its schedule, so that Northern Pass, capital spending was moving out of, '18 and into 1920. So that's just one more element of the package that we've discussed that will support the capital spending plan in 2018 as Northern Pass moves over. So I'd say it just replaces that. It doesn't sort of enhance number at this stage.
Speaker 5
Got you. Thanks. And then finally, in terms of Aquarian growth opportunities, what is that growth profile within your five to seven? Is that a higher growth profile versus the rest of the business or is it similar?
Speaker 2
It's similar, but a little bit on the higher end of that range. So it does enhance the number.
Speaker 5
Thanks guys.
Speaker 1
Next question is from Miller from Morningstar. Good morning, Travis.
Speaker 6
Good morning. Thank you.
Speaker 2
Just a quick one here. That 4¢ down on the retail electric revenues, how much or is all of that due to weather and if not, what else is going on in that number? No. That's that's pretty much due to weather. I mean, you looked at sort of normalized, it's it's down slightly.
So I guess there's a little bit more going on there relating to energy efficiency, etcetera. But it's as I said, we we had 34% fewer cooling degree days in Boston. You know, that's, you know, versus the previous year. The previous year was pretty warm. So even versus normal, you know, they were down 8%.
So it was just a bad weather quarter and it really was the driver of that number. Okay. That's all for now. I appreciate it.
Speaker 5
Thank you.
Speaker 1
All right. Thanks, Travis. Our next question is from Jeremiah Borum from Bank of America. Welcome back.
Speaker 6
Thank you, Jeff, hi, everyone. Good morning. Good morning. I just wanted to touch on the FERC decisions coming your way. Do you have any idea of the timing for when you could see a revision to Opinion five thirty one?
And also given that the NETOs have requested basically for all the complaints to be vacated. Is there a chance that that could come at the same time? And do you have any insight into kind of the process at the FERC since it seems like they're triaging some of their issues here?
Speaker 2
Well, think your last statement there is probably a good portrayal is that there probably is still some triaging going on of the highest priority items. And, you know, even though the FERC currently has a quorum, you know, it's not filled out, you know, with all the commissioners. So I think that, you know, predicting the timing of when we'd get a decision is probably not a, you know, a good item for any of us to be doing. But, you know, I wouldn't expect that we would see something until 2018, if I had to guess. So, you know, we've long, looked for, you know, all of these to be handled together.
And in fact, a couple of the complaints were combined, complaints two and three, but then complaint four came up. So, you know, we think that, it really doesn't do anybody any good to keep pancaking these types of complaints over and over again, for an investment that's a, you know, forty, fifty, sixty year investment. You know, it does provide some uncertainty there. So that's the approach we'd like to take, and that's why we filed it. But in terms of predicting, you know, when it will be decided, probably not in the very near term, would be my guess.
Speaker 6
Okay. Yeah. That's fair. And then just housekeeping question. Is there any reason to think that you guys would have other rate cases coming up in any of your other jurisdictions that we haven't talked about already?
Speaker 2
Well, the only ones that we've announced are the ones that I talked about today in terms of Massachusetts and we filed the letter of intent in Connecticut. So we're always evaluating that. Some of the as you can imagine, some of the rate cases are driven by, what the returns are in those jurisdictions. Some are triggered by regulatory agreements that we have, things like that. So the only ones that are on the table are the Massachusetts and the Connecticut electric one.
Speaker 6
Okay. Thanks very much.
Speaker 1
Thanks Jeremiah. Next question is from Caroline Bone from Deutsche Bank. Good morning Caroline.
Speaker 0
Hey, good morning guys. So this is a follow-up on Northern Pass. So it does seem like you guys are pretty well positioned for the Massachusetts RFP. But are there any other RFPs in the pipe in the region in which Northern Pass could participate in if Massachusetts doesn't go your way?
Speaker 7
Well
Speaker 3
if you look at the region, Caroline, there's a number of states. Mean, you've got Massachusetts. Connecticut has, you know, 1,000 megawatts approximately of authorization, much of which could be hydro. They haven't gone out for an RFP for that. You know, Rhode Island has essentially an authorization of about a thousand as well for clean energy.
Governor has a mandate to have that in service by 2020, which would probably be difficult. But at least there is an authorization there. They have just not initiated the RFPs on those yet. So there are other authorizations, and they're really awaiting RFPs. I think that's one of the reasons why, quite frankly, when we talk to the folks in Hydro Quebec, they really feel that they can do three Northern Passes.
They can do at least two more of them into the region. And of course, as the region moves forward, and ISO New England will issue its fuel security report that's a little bit held up because of the FERC milfur around coal and nuclear. But when they issue that, I think that will lead to say that the region has to have more firm fuel, not only potentially potentially gas but, you know, hydro as well as the older plants, including nuclear retire over time.
Speaker 0
Okay. And so do you know I mean, you know what's holding up Connecticut and Rhode Island given, I guess, if if Rhode Island has this target by 2020, you know, why why haven't they launched something?
Speaker 3
I I know I just think in the case of Connecticut, they are, you know, shall we say they're busy with other issues.
Speaker 0
Yeah, I get Connecticut.
Speaker 3
They're busy with other issues. Hopefully they're through those other issues and they'll have a budget and they'll be able to move on. As you know, they also have a offshore wind authorization of 200 megawatts. You know, we've talked to folks there. They see offshore wind is really a bright future for the state, not only because, again, it's close to load, but, you know, they have seaports there that could be very constructive, particularly New London in servicing an offshore wind business.
They have essentially almost 800 megawatts of open access on the transmission system that interconnects from the Millstone facility into the three forty five kV system into the region. That's really because Unit 1 was shut down. They see a lot of opportunities. They're working through those opportunities. And in regards to Rhode Island, I really can't speak for where they are.
I really can't speak to that.
Speaker 0
Okay. Okay. And then just maybe one last one and this one's for Phil. And I know you guys are going to provide guidance on the Q4 call but I'm just wondering if you can at least talk to some preliminary drivers that we should be thinking about, particularly around the rate cases, the query and all of these kind of moving pieces.
Speaker 2
Well without giving guidance that we're not going to give to February that is a little difficult Caroline. But I think that, you know, certainly the levers that we've talked about in the past with you and others in terms of our transmission growth and our ability to keep costs under control and, you know, a manageable level of, you know, rate expectations. I think those are, you know, certainly a key assumption will be, you know, what comes with the issue we talked about earlier, you know, the FERC ROEs, you know, how those get settled and what the rates on that are going forward. So I think that we've spent a lot of time over the last couple of years talking about the weather impact on our sales and whatnot. But the, you know, the outcome of Massachusetts rate case will remove a great part of that.
I mean, it's, you know, we'll have, you know, most of our jurisdictions on the, you know, with electric and gas, you know, mostly decoupled after this. So that I think removes a bit of, you know, sort of the variation in the risk on the sales side. So that might be a little bit easier prediction. So I mean, I think the drivers would be consistent. You know, I think we still have, you know, a good pipeline of projects that, you know, we'll probably be able to discuss and the key assumption I think would be maybe what comes out of the FERC ROE.
Speaker 0
Okay. And did you guys just say one last follow-up on that. Did you say what the weather versus normal impact has been year to date? I apologize if I missed that.
Speaker 2
Well, we talked about it for the I mean, for the quarter, so for the quarter, this past quarter is more about cooling. So, you know, we did talk about the quarter being down about 34% in terms of cooling with a and it's it's off 7%, 8% in terms of normal. You know, if you get into the rest of the year, then you've got to talk about heating and cooling. But, you know, about $03 would be the, you know, the weather impact. You know, if added everything up for the year, weather has hurt us by about $03
Speaker 0
Okay. Okay, that's helpful. Thanks so much.
Speaker 1
Thanks Caroline. Next question's from Paul Patterson from Glenrock. Good morning, Paul.
Speaker 7
Good morning. So just to follow-up on Northern Pass finally. I would agree that it's been a very lengthy process. Certainly a lot of due process. What I was a little interested in was apparently there were some comments by the vice chair regarding the I guess the differing economic analysis and sort of hinging on the capacity market scenarios.
And I was just wondering when we might get some clarity. I think that happened on Friday. When we might, I guess from what I read, my understanding is that that will be resolved hopefully shortly. Do we have any, will there be a document filed or anything that sort of goes over that issue?
Speaker 3
Paul, this is Lee. Now we're, we, we're working with our partner HQ on that. And HQ has already made a statement that, you know, they have extensive experience in the full capacity markets. They have ongoing conversations with ISO New England and the market monitor. They are confident they will be able to receive capacity credit.
The line, as designed and built without any additional upgrades for 100% deliverability, could get over 800 megawatts, would be entitled to over 800 megawatts of capacity. And so I think really the plan here is to take that, reinforce that statement, and then early next year we would, you know, HQ would notify ISO of their intent to enter into capacity markets.
Speaker 7
Okay, awesome. That's great to hear. And then on the sales growth, just to follow-up on Travis' question, what was the sales normalized, normalized sales growth year to date on electric?
Speaker 2
Just about 1% down.
Speaker 7
Okay. And then finally on the, on the transmission, we we haven't seen any big any of these big cases, fully litigated, but we have seen some settlements. I'm sure you guys are aware of them on transmission ROE, base ROE, you know, and the adder. How should we think about those or how do you guys think about how should we think about those in the context of what with respect to what might happen with the transmission rate case for New England?
Speaker 2
Well, think that just part of the general process, Paul, is there is settlement discussions, you know, always, you know, as a first step and as an effort to reach agreement. So obviously we've gone through those steps in these processes and, you know, hadn't been able to do that. So we're, you know, our track record is, you know, if something is reasonable and we think it's in, you know, everybody's best interest, settlements are certainly something, you know, we're open to. But they have to be, you know, a reasonable outcome. And as I said, they're generally part they're part of the general process in the FERT proceedings.
And so we engage with others, you know, on an ongoing basis there.
Speaker 7
Okay. But the ones that we've seen so far, you don't think that they're applicable at all? Or how, I mean, in terms of just us from us looking afar here in terms of, we haven't seen any decisions, we have seen a number of different settlements across the country on sort of base and ROE. And I'm just wondering how should we think about that in the context of New England? Is there anything that we should think about being different there because of, I don't know, geography or something or
Speaker 2
No. I just I wouldn't expect that at this stage we'd, you know, we'd reach any settlement. As I said, we've gone through various processes in the past and we are where we are right now. So, you know, unless there's more cases or something like that, which I'm hopeful that that won't happen, but in the cases that exist now, they're pretty far along. You know, the fourth case is, you know, the least far along, I guess, of the cases.
So I guess that there could be some opportunities there. But it's hard once when you have an open case from many years ago, how do you settle something that's later until you get the one that's earlier. So I think we have to, you know, see what comes out of this complaint one and hopefully that'll set the trend for the rest of the cases.
Speaker 7
Okay. I appreciate it. Thanks a lot guys.
Speaker 1
Thanks. Thanks, Paul. So we don't have any more questions for this morning. We want to thank you for joining us. We look forward to seeing most of you who are on the call at the EEI Finance Conference starting Sunday.
Take care and safe travel.
Speaker 0
Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.