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Good morning and welcome to the Eversource Energy Second Quarter 2021 Results Conference. My name is Brandon and I’ll be your operator for today.
At this time, all participants are in a listen-only mode. [Operator Instructions] Please note this conference is being recorded.
I will now turn it over to Jeffrey Kotkin. You may begin, sir.
Thank you, Brandon. Good morning and 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 last night on our website, and 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 risks 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. 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, 2020 and on our Form 10-Q for the three months ended March 31, 2021.
Additionally, our explanation of how and why we use certain non-GAAP measures and how those measures reconcile to GAAP results is contained within our news release and the slides we posted yesterday and in our most recent 10-K and 10-Q.
Speaking today will be Joe Nolan, our President and Chief Executive Officer; and Phil Lembo, our Executive Vice President and CFO. Also joining us today are John Moreira, our Treasurer and Senior VP for Finance and Regulatory; and Jay Booth, our VP and Controller.
Now, I will turn to Slide 2 and turn over the call to Joe.
Thank you, Jeff. We hope that all on the phone are safe and well and we look forward to seeing you in person later this year. I will cover a few topics this morning and then turn over the call to Phil to discuss our mid-year financial results in some new and important grid modernization and AMI developments in Massachusetts.
I know the most recent months have resulted in weather challenges across the country. In the West, our peers have needed to deal with heat and wildfires. In New England, with that increased level of thunderstorm activity topped off by a glancing blow from Tropical Storm Elsa. [Employees] have worked around the clock many days restoring power to our customers from tree caused damage to our overhead system.
While our implementation of new technology in vegetation management has limited the scope of many of the resulting power outages, our dedicated crews continue to be on the frontline completing a large amount of emergency restoration work in hot and humid conditions over the past month and a half in doing so in a safe and effective manner.
Their work has been excellent, and we continue to receive notes of appreciation from both our customers and municipal leaders. I was out all day in Connecticut, the day Elsa passed through, and I cannot say enough about our team and preparing for and responding to storm damage in coastal regions of Connecticut and Massachusetts. We greatly appreciate the recognition of those efforts that we received from Connecticut PURA Commissioners at the July 14 meeting.
As I mentioned during our first quarter earnings call, improving our relationship with Connecticut policymakers and customers is my top priority as CEO. Earlier this week, a number of Connecticut legislators joined several state community education and labor leaders at our Berlin Connecticut campus to celebrate the first class of students who are completing our new Lineworker certification program in partnership with the Hartford based Capital Community College.
We continue to see steady monthly improvements in our customer favorability ratings and we appreciate the positive feedback we are receiving from municipal leaders. But we have to prove ourselves during the next major storm. I strongly believe that the changes we are implementing to our communication systems and processes will put us in a much better place the next time a multi-day storm cleanup effort occurs.
Next I want to provide an update on the offshore wind partnership with Orsted. Over the past few months, we have continued to make significant progress on the three projects that I noted on Slide 3. Perhaps the most significant development was the agreement we reached with Dominion Energy to charter the U.S. built Jones Act-compliant wind turbine installation vessel, currently under construction in Brownsville, Texas.
Once construction of the vessel was complete in late 2023, it will seal to New London, Connecticut where it will be used to install wind turbines for Revolution Wind and Sunrise Wind. The vessel will be one of the largest, most advanced of its kind in the world and will provide a more efficient approach to construction and use the feeder barges.
Work has recently begun at New London at the state-owned ocean facing Deepwater peer to convert into a major state area for offshore wind. As you know, the primary variable in our construction timetable is citing approval. We continue to be on a good path to secure Federal Bureau of Ocean Management or BOEM approval of 132 megawatts Southwark Project in January of 2022, which will enable construction to begin early next year, and be completed before the end of 2023.
During hearings this spring that resulted in Rhode Island Coastal Resource Management Council approval of the project, we indicated that we would install well, 11 megawatt turbines in connection with this project. We are making progress on the two larger projects as well. State permitting applications in Rhode Island for revolution wind and in New York for Sunrise Wind were filed last December.
In April, the Rhode Island energy facility signing board issued a preliminary decision in order and revolution when scheduled with advisory opinions for local and state agencies to be submitted by August 26, 2021. Evidentiary hearings are due to begin by mid-October. The Sunrise Wind application was deemed complete by New York officials on July 1, initiating the formal review process for the project.
As we noted in May, BOEM is targeting the completion of the review of Revolution Wind for the third quarter of 2023. Based on that review schedule, we now expect to be able to achieve commercial operation in 2025. We have not yet received the schedule for BOEM’s review of the Sunrise project, but we are in a good position with our New London, staging area, our turbine installation ship and our suppliers.
So, depending on the BOEM review schedule, that we expect to receive within the next few months, we expect Sunrise will reach commercial operation in 2025 as well. These dates are consistent with the vision of the Biden administration, which continues to accelerate the review of offshore wind projects proposed for the Atlantic Coast. It is also consistent with the administration's target of having 30,000 megawatts of offshore wind operating in the United States by 2030.
Offshore Wind is one of several initiatives underway to help our state's achieve the greenhouse gas reduction targets. On July 14, PURA took a major step forward in furthering the state's clean energy goals when it approved a comprehensive program to support the state's push for having at least 125,000 zero emission vehicles on the road by the end of 2025. The order is described on Slide 4.
We appreciate a number of the changes that PURA made to the draft decision to enhance the program's expected success. We will submit an implementation plan based on the PURA order by October 15. Also on that slide, is a description of a proposal that Massachusetts utilities submitted on July 14, to further develop the infrastructure that is needed to support rapid conversion of the state's vehicles to zero emissions.
As you can see on the slide, by the end of this year, we will have invested $55 million in our Massachusetts electric vehicle program, helping to connect about 4,000 charge ports. However, since transportation is responsible for more than 40% of the state's greenhouse gas emissions, significantly more support is needed to help the state meet its targets of reducing greenhouse gas emissions by 50% by 2030, and 75% by 2014.
Massachusetts had only 36,000 electric vehicles registered as of January 1, 2021. In 2020, only 3% of the light duty vehicles sold in the state were EV's. While that percentage is above average for the country as a whole, it needs to be enhanced significantly going forward. Since at the current pace, we will have fewer than 500,000 EV's in Massachusetts as of 2030. We need more than 1 million EV's by then for the state to reach its targets.
We have proposed spending more than $190 million on EV support from 2022 to 2025, including 68 million of capital investments. These investments are described on the slide and included expanded charger infrastructure investment, some rate incentives in new opportunities to add EV infrastructure in environmental justice communities.
Our support for our state's greenhouse gas reduction efforts is discussed at length in our 2020 sustainability report, which was posted on our website earlier this month. A link to the new report is included on Slide 5. The revamped report has incorporated a number of enhancements to provide you with more visibility into our environmental, social, and governance efforts.
We're also pleased to share updates on our 2030 carbon neutrality goal, including our first third-party verification of our 2020 greenhouse gas footprint. We have a number of teams within Eversource cast with making our 2030 goal a reality. They include a team focusing on reducing admissions in five principal areas, another team working on developing a strategy to offset emissions that cannot be eliminated by 2030, and another team that is encouraging all 9,300 Eversource employees to contribute to their best ideas on how we can achieve our 2030 goal. They've already developed some truly innovative proposals that we are evaluating. They're enthusiasm is just more evidence on why I am so confident about Eversource’s future.
Now, I will turn the call over to Phil Lembo.
Thank you, Joe. This morning I'm going to cover three areas: our second quarter results, the status on several of the regulatory dockets pending, and some exciting opportunities ahead for us in terms of Grid Modernization and AMI that Joe alluded to.
I’ll start with our results for the quarter in Slide 6. We earned $0.77 per share for the quarter, including $0.02 per share of cost, primarily relating to the transitioning of Eversource Gas Company of Massachusetts into the Eversource Systems. Excluding these costs, we earned $0.79 per share in the second quarter, and $1.87 per share in the first half of 2021.
So, let's take a look at each of the segments performance in the quarter. Our electric transmission business earned $0.40 per share in the second quarter of 2021, compared with earnings of $0.39 cents per share in the second quarter of 2020. A higher level of necessary investment in our transmission facilities was partially offset by higher share counts there. Our electric distribution business earned $0.35 per share in the second quarter of 2021, compared with earnings of $0.34 per share in the second quarter of 2020.
Higher distribution revenues were partially offset by higher O&M, depreciation, and property taxes. The higher O&M was largely driven by increased storm activity in the second quarter of 2021 in higher employee medical expenses. The higher medical expenses was mostly due to the fact that in the second quarter of 2020, in the midst of the worst COVID in New England, the worst COVID in New England, many routine medical appointments were being canceled, but this is largely returned to normal now in our area.
Our natural gas distribution business earned $0.01 per share in the second quarter of both 2021 and 2020. As you know, natural gas utilities in New England tend to have relatively neutral results in the second quarter. Our water distribution business, Aquarion, earned $0.03 per share in the second quarters of both 2021 and 2020. Beginning next year, we expect Aquarion revenues to be bolstered by previously announced acquisition of New England Service Company or NESC. NESC owns a number of small water utilities that serve approximately 10,000 customers in Connecticut, Massachusetts, and New Hampshire.
We continue to expect to close the transaction before the end of this year. State regulators are currently reviewing the acquisition and its benefits to customers. Our parent and other companies segment had modest second quarter losses in both years.
Turning to Slide 7, you can see that we have reiterated our amended earnings guidance that we issued in May. We continue to expect ongoing earnings towards the lower end of our $3.81 to $3.93 per share guidance. This incorporates a $28.6 million pre-tax charge relating to our performance in Connecticut following the devastating impact of Tropical Storm Isaias, last summer. We recorded the charge in the first quarter of this year.
We also continue to project long-term EPS growth in the upper half of the range of the 5% to 7% through 2025, excluding the impact of our new offshore wind projects.
From our financial results, I'll turn to the status of various regulatory initiatives and I'll start – in Connecticut. We've updated a summary of various proceedings in the appendix of our slides. I mentioned earlier that the public utilities regulatory authority or PURA had finalized the $28.6 million civil penalty associated with our storm performance last summer that follow the April 28 release of a final storm performance decision that we discussed on our first quarter call.
As you know, we have appealed at April 28 decision in Connecticut Superior Court. You now have a full schedule for those court proceedings, but expect the case to take many months before the court renders a decision. A scheduling conference will be held later next month. The April 28 storm border also required a 90 basis point reduction in Connecticut Light and Powers distribution ROE on top of the $28.6 million penalty.
That pancaking of penalty forms one of the principal basis of our appeal, since we believe it violates the state law that was in effect at the time of the storm. Additionally, hearings in the temporary rate reduction docket commenced in May will continue next month. A supplemental hearing is scheduled for August 9, at which time additional testimonial evidence may be presented on certain issues, including the applicability in term of the 90 basis point penalty.
PURA just this week, notified parties that written testimony on the applicability in term of that penalty may be filed in advance of the August 9 hearing, no later than August 4. CL&P’s distribution ROE for the 12 months ended March 31, 2021 was 8.86% and its authorized distribution return was 9.25%. The schedule for this proceeding currently indicates a decision date of October 13. We will continue to update you as this docket proceeds.
Regardless of the status of this rate review, we and our regulators share a common goal of providing nearly 1.3 million Connecticut electric customers with safe, reliable service and to help the state meet its aggressive carbon reduction and clean energy goals. Turning to Massachusetts, Joe mentioned our electric vehicle initiative earlier. On July 1, we submitted two other proposals to the Department of Public Utilities.
As you can see on Slide 8, the first was an extension of the grid modernization plan that we began implementing with initial DPU approval back in 2018. The investments we've made on this first phase have allowed us to reduce the scope of outages, monitor power conditions much more closely, and assist in the installation of distributed energy resources throughout the Massachusetts service territory.
The program we submitted to the Massachusetts DPU earlier this month, call for the investment of another $200 million from 2022 through 2025 to further improve substation automation, wireless communications, and expand other programs that would have a number of other benefits, including reducing peak demand and line losses. Reducing line loss is an important element in achieving our 2030 carbon neutrality goal.
In the same docket, we're asking the DPU to take the first steps to allow us to embark on a six year effort to implement advanced metering infrastructure for our nearly 1.5 million Massachusetts electric customers, along with a new communications network, media data management system, and customer information system. We project capital investment associated with the full program to be in the $500 million to $600 million range over the period of 2023 through 2028.
These technologies are critical enabling investments that support the state's 2050 clean energy goals. And as I mentioned previously, Connecticut is looking at how AMI should be introduced for CL&P customers. Although PURA has acknowledged the potential for substantial benefits that AMI can deliver, currently, there is no full schedule for the docket at this time.
Finally, I just want to cover recent financings and rating agency actions. In recent months, both Moody's and Standard & Poor's have changed CL&P’s outlook to negative. Moody's changed Eversource Parent outlook to negative as well. We're not happy with these developments. We understand these changes are primarily related to the ongoing regulatory proceedings in Connecticut, such as the temporary rate reduction docket and the hourly penalty stemming from the Isaias report.
We were pleased that Moody's recently affirmed PSNH, Public Service in New Hampshire’s rating and outlook, recognizing the constructive outcome of last year's distribution rate proceeding in New Hampshire. Also, we recently filed an application to issue up to $725 million of long-term debt at Eversource Gas Company in Massachusetts. Since we purchased the former Columbia Gas assets last year, Eversource Gas of Massachusetts has been borrowing long-term exclusively through the Eversource Parent.
We believe that borrowing at the subsidiary level ultimately will be less costly for customers and we expect a DPU decision on this application later this year. Like NSTAR Gas and Yankee Gas, we would expect Eversource Gas of Massachusetts to borrow in the private markets. Thank you very much for joining us this morning.
And I'll turn the call over to Jeff for Q&A.
Thank you, Phil. And I'm going to turn the call back to Brandon just to remind you how to enter your questions.
Thank you. [Operator Instructions]
Thank you, Brandon. Our first question this morning is from Shahriar Pourreza from Guggenheim. Good morning, Shahriar.
Good morning, Jeff. Good morning, team.
Good morning.
Good morning, Shah.
Just starting with the PURA and sort of the 90 basis points RE reduction, it sounds like, you know one of the more recent notices open the door for parties to petition for a defined penalty period versus something more perpetual. You know, how should we, sort of think about, kind of this opening, if you will, to a you know, a fixed length reduction versus indefinite. And then just remind us again, what we should be watching for here going forward?
Sure, Shah. This is Phil. As I mentioned, the docket is open and recently PURA did notify the parties that they could submit testimony on the applicability of the term of the penalty. So, to me that indicates there is a consideration of what a term would be as you know, the initial language was using the word indefinite. So, I think that's positive development in terms of setting a specific, you know, a term for the penalty. So, in the docket, the information that came out last week, sort of indicates the file information there.
So, you know, what we should be looking for the areas there is a, you know, there is a process that will continue on that docket. There's an expectation that an order would be issued in October with any changes out of there, effective November 1 is the current timeline.
Got it. Thank you for that. And then, just lastly, and maybe just shifting to offshore wind and starting with the logistics side, you know, redevelopment of the Connecticut State peer and New London has had some cost increases, right, from 93 million to roughly 235 million, obviously paid by the state. But it sounds like everything else is, kind of proceeding, is there kind of any supply chain issues you're kind of keeping an eye on or logistics that remain, kind of unknowns?
Yeah, thanks, Shah. This is Joe. I'll take that. So, water work is underway at the New London Port. We were just out there for some inspections. We do have all our onshore permits, it’s going very, very well. Last week the state finalized the funding. Any of those increases, the state is absorbing. So, we feel very, very good about that. And now with regard to supply chain, there are no issues that are impacting any of our three projects. All of the projects have everything locked down. So, we feel good about that.
Okay, perfect. That's all I had. Pretty clear cut quarter. Thanks, guys.
Thank you.
Thanks Shah. Next question is from Jeremy Tonet from JP Morgan. Good morning, Jeremy.
Hi, good morning, guys. It's actually [Ryan] on the Jeremy.
Hey, Ryan.
Just wanted to start on the offshore and maybe on some of the deciding process you guys have kind of talked about during the script and thinking about the progress you guys have been making with some of the fishermen, I know, this is kind of an issue with South Fork in Rhode Island specifically, we kind of want to, kind of, just get a latest on the, kind of the progress you're making in terms of, you know, other stakeholders, kind of agreements and kind of the process you are making with those relationships?
So, thank you for the question, Ryan. We've had a lot of dialogue down there. And I think we've got some, you know, a good path forward. And we've got a, obviously a positive decision we received in July from the [CRMC] down there and positive decisions in New York, as well as in Massachusetts. So, we think a lot of the concerns, or at least the path is pretty clear, and we feel good about it.
And then maybe just one on Connecticut, we saw UI kind of get their settlement over the finish line there, just kind of wandering prospects, you know, you're kind of seeing in the say, with some stakeholders in terms of maybe potentially settling some of these issues and what, kind of timeline we might be thinking about in terms of somebody coming out on that front?
Sure. So, generally speaking, you know, a broad multi-party settlement is something that's obviously attractive to us. We have a long history of settlements, whether it's the NSTAR merger in 2012 or the CL&P rate case, or the Yankee rate case. So, you know, we feel good about that. I have been spending most of my time in Connecticut. We've been out with multiple parties. And, you know, I think that the temperatures certainly has reduced and folks are in a good place.
I think, you know, we need to prove ourselves down there. We know that. I think, tropical storm, the recent one was Elsa, which passed through, was really a good exercise for us to show that, you know, a lot of things have changed for our business. So, by and large a settlement is something that's attractive to us. We were pleased to see that [indiscernible] settlement was, was approved. So, we see some possibilities there.
Got it. Makes sense. I'll stop there. Thanks for answering my question.
Thank you, Ryan.
Thank you, Ryan. Next question is from Durgesh Chopra from Evercore. Good morning, Durgesh.
Hey, good morning, Jeff. Thank you. Just going back to the Connecticut docket, the temporary rate reduction docket, [indiscernible] when you're on the [indiscernible], I’m just wondering where that stands and did you guys expect this final order not for the rate reduction effective [number there], you know, that's addressed as well, or that's finalized as well?
Durgesh, you broke up a little bit on the questions. Are you talking about the testimony from the intervener that went in?
That's correct. The equity ledger. That's exactly right.
Yes, this is Phil. During the course of that proceeding, there was testimony and certainly, you know, we provided our own input to that testimony and – as well as question the witness. So, you know, by the nature of it being part of the questioning, I would expect that somehow it could be considered in that proceeding going forward. So, there's no specific area that is to be decided there. I think it was just a testimony that was filed by the EOE. It’s a EOE witness, that's a section of the Connecticut PURA. So…
Got it. Thank you. That's helpful. And then maybe just quick clarification Phil, the AMI filing in Massachusetts, what portion of that 500 million to 600 million that you mentioned would be incremental to the current CapEx plans?
We have currently no CapEx in our five-year forecast for AMI in Connecticut or in Massachusetts. So, any spending in either state would be incremental.
Got it? And do you – do we see a final decision in mid-2022 or is that just sort of, like what are – the response means, like, is this a formal sort of yes or no, or just feedback from the Massachusetts GPU?
No, we expect a decision in 2022. You know, mid-year is as good an estimate as any at this stage. So, this has been a, you know, long standing sort of desire, I think of the Commission, you know, we certainly have a need to make a decision on our metering infrastructure. So, the timing is good. So, we fully expect a decision in mid-year 2022.
Okay, perfect. Thanks, guys. Much appreciate the time.
Thanks, Durgesh. Next question is from Julien Dumoulin-Smith from Bank of America. Good morning, Julien.
Good morning, team. Thanks for the opportunity to connect. Maybe to pick up a little bit off the last question and flip it a little bit, when you think about the various scenarios, you've a history of executing well, you talked about upper half and five to seven, there's a variety of different pieces that are moving your puts and takes. How do you think about your confidence level under various scenarios in the upper half here? And I'll let you answer that accordingly because there's a lot of, probably too many scenarios to talk about and point-out here. I'd be curious as you think about the, sort of the decision tree here or pathway potential?
Thanks, Julien. As we see our five-year, our long-term forecast, I'm very confident in our ability to achieve our growth expectations. As you mentioned, there are always puts and takes. That's what we do as a as a management team. And that's what any company would do as manage that process and address issues that don't go your way and look for other opportunities. So, there are various puts and takes that can occur over the course of any forecast period, but I am confident in our ability to achieve our targets.
Got it. Excellent. I'll leave that subject there. Maybe coming back to this offshore wind subject, as opposed to the highest level observation or question back to you after Shah’s question would be, given the more coincident construction of these projects here, any considerations around logistics that we should be focused on here, I suppose, just given that they're now increasingly lining up against each other [in parallel]?
Yeah. Thank you. Good morning, Julien, Joe Nolan. We feel we feel great about the timing, our projects are really scheduled in a perfect formation. So, we do think there's a lot of opportunity there on mobilization, demobilization to allow these projects to be able to be constructed in a very orderly fashion. And that's what really excites us. So, yeah, definitely opportunity is there. The timing is perfect for actually all three of them.
Right, excellent. And then lastly, just coming back to this question on settlement, and I know – I appreciate your comments earlier. Curious to the extent to which you can resolve perhaps in a comprehensive manner, all variety, including potential rate case and filing next year, in the context of some, sort of settlement here. Just want to push on that subject just a tad more, if you don't mind?
Yeah, you know, Julien, we've, I think you've had an opportunity to see our success in the past. We can do settlements that are quite comprehensive. We feel confident that if, you know, if we get to the table, we've got, obviously at the parties that we have great relationships with, and a comprehensive settlement is definitely possible here, and it's something that obviously will be attractive to acknowledge a loss I think to a number of the parties. It is obviously very, very busy time down at Connecticut right now. And so, you know, I'm optimistic.
All right, excellent. Well, thank you very much and best of luck on those efforts.
Thank you.
Thank you, Julien.
Thanks, Julien. Next question is from Paul Patterson from Glenrock. Good morning, Paul.
Hey, good morning, guys. How you doing?
Good. Paul, how are you?
Alright. So, just to, sort of pick up on Julien's question there on the – and Joe you said, you were optimistic about Connecticut, and the potential for settlement. Could you give us a feeling for what the key sticking points are? Because, as you know, having been did this a month ago, and I'm just wondering, how should we think about what the – what parties are the – might be the key issue or what specific issues are the ones that probably are the ones for us to focus on being resolved?
Sure. I mean, it's the same parties that we've dealt with. You’ve got the attorney general's office. You got the OCC, you have deep, I mean, these are the parties, obviously, that we've dealt with in the past. And, you know, that would be the same folks that we would see if we did enter into some settlements.
Okay. And is there any key points or key issues that are the sticking points? That are the key things that people are focused on that's causing more of an issue than others?
No, I wouldn't say, there's any sticky points. There’s no specific issues.
Okay. And in terms of timing, you guys give a very detailed, sort of rate case, you know regulatory proceeding outlook and stuff, but how should we think about, which occurred to before the hearing, or, how should we think about?
Well, you know, settlements can occur at any point, you know, as you know, on the process. So, and I, it's hard for me to say, we need to let certain things run their, kind of regulatory course.
Okay. And then on the affiliate, you called out the ratings downgrade potential, if you guys are downgraded, other than obviously, you know, I mean, obviously impacts the cost of borrowing, but other than that, is there anything else we should be thinking about? Is there any other, sort of potential trigger on covenants or anything we should be thinking about or anything else?
No, Paul, there are no other triggers that come into play here. And just for clarification, I think we all know that being on negative outlook doesn't necessarily mean that you're going to be downgraded. I think the agencies like to see certain progress in particular areas. So, you know, in the area that they, they sort of highlighted in terms of lowering the outlook was, sort of a Connecticut regulatory area. So, there are a lot of dockets going on there. And if those move in a direction that the rating agencies view as credit positive than that, that doesn't mean you're going to get the downgrade rates, they could put you back onto a stable outlook. So, but nonetheless, if something were to happen, there are no other triggers that would be in effect.
Okay, great. Most of the questions have been answered. Thanks so much, guys. Have a good weekend.
Thanks, Paul. You too.
Next question is from Andrew Weisel from Scotia. Good morning, Andrew.
Hey, good morning, everyone. Maybe I'll start by following up on that last question about the ratings agencies. I don't expect specific numbers, but I know there the agency's concern is the regulatory risks, not exactly the balance sheet. But if they were to downgrade, how would that affect your plans for the mix of debt versus equity in the coming years?
Well, there's a lot of hypotheticals there. I mean, it's, you know, if that happen. You know, I'd have to see what – was there something in a regulatory decision, what the impact of that would be? So, I say, we don't have any plans at this stage to make any really adjustments in our approach to our capital structure or what we're looking to do in terms of our debt financings.
As you know, we identified that we had $700 million of additional equity financing that we had identified a couple of years ago that is still out there that we plan to do over some longer-term period on a periodic ATM on something basis. And then we're issuing about $500 million, about $100 million a year is a better way of saying it, out of our dividend reinvestment plan. So, we are continuing to do some dribbling out of equity and then we're doing long-term financings, but don't have any specific changes that I would highlight at this stage, the capital structure.
Okay, then next question. Joe, you opened your prepared remarks talking about the positive feedback here, preparation toward response to the storms, can you give some specific examples of ways that you've changed your protocols and strategies [indiscernible], and if there are any additional new initiatives that you're planning to roll out to help minimize from dividend outages?
Yeah, sure. Thank you, Andrew. One of the – I think the most impactful, kind of system will rolled out as a community based portal that allows communities to put their priorities in terms of public safety, [block roads], those types of items are in the – we also have crews in each of the communities that's allowed communities to have their priorities addressed. So, those are just some of the – I would say the other piece that really goes back to what we had done prior to Isaias because of the pandemic is, you know, we have folks that are located in each of these cities and towns. That's something we were not able to do with the Isaias.
As you know, at that point time, everybody was in lockdown. It was a very complex recovery effort, because we needed double of everything. We had to have single workers in vehicles. We had to have single workers in hotel rooms. And it was a very, very challenging matter. So, you know when we had this last event, the Elsa, things were a little more back to normal. And we had a lot of kind of technology portals that we had deployed, which were very, very well received. I mean, I was out on the system. I had an opportunity to talk to several of the cities and towns and all the feedback I received was very, very positive.
Okay, great. That's helpful. Best of luck going to the [next level], hopefully you won't be tested anytime soon. But [hopefully], it won't be too bad. Thank you.
Thank you, Andrew. Next question is from Sophie Karp from KeyBanc. Good morning, Sophie.
Hey, good morning, guys. Thank you for taking my question. I wanted to take a stab at Connecticut, again, but maybe from a slightly different angle, you know, not to sound like a doomer, but you know, but the storm has become more frequent and some may even say a new normal, is there a room for a dialogue there that goes beyond just, kind of sorting through the penalties and the past performance and establishing the regulatory framework for dealing with consecutive forums as a new normal [line] and [what they've seen] in the hurricane belt where it's been around for a while? Is there room for [Technical Difficulty] on the commission level where you have securitizations or trackers for this type of stuff? Any real like mechanisms that are predictable, where you don't have to sort through each storm individually as we go forward? That's all I have.
Thanks, Sophie. Some of those items have been discussed. Securitization certainly was a topic that’s come up from time-to-time. You know, in Connecticut, in terms of storm, storm costs, but you know, usually a, in a rate proceeding, you know, where you're looking at all your costs, and what's in your cost of service, etcetera. In our last settled rate proceeding at CL&P, we spent a lot of time on storms, and what the right level of storm activity was to collect in rates and what appropriate deferral mechanisms might be there.
So, there's long been a recognition that these costs can move around, and what's the best way of making sure that customer rates, you know, remain as stable as possible, but there's still an opportunity for collecting these costs going forward. So, those kinds of discussions will continue and the dialogue will continue. There's nothing specifically on the, you know, on the table per se, in terms of, you know, storm cost recovery at this stage, but, you know, we've had discussions on various topics.
And we’ve spent, you know, so before you get to storm recovery, one of the areas we do is try to not have to recover, right so that means we try to do an effective job on our vegetation management and the capital spending that we do on technologies to restore customers quickly and remotely. So, in the – we spend $200 million a year on vegetation management, just, you know, to cross our system to remove trees and open up rights away, etcetera.
So, the best the best outage to have is not to have it. I guess that's the best possibility. So, we do think, and the Commission has been receptive to our requests for additional funding. But there's still a lot of tree work that can be done in Connecticut, as in other states, but that's an area that, you know, we continue, we'd like to continue to have a dialogue on.
Thank you.
Next – thank you, Sophie. Next question is from David Arcaro from Morgan Stanley. David?
Hey, good morning. Thanks so much for taking my questions. A quick follow-up just on that last line of thinking, is there a CapEx opportunity to look for more reliability, kind of system hardening investments in Connecticut, you mentioned, vegetation management and tree trimming, which seems more on the OEM side of things, but wondering if there's more capital to deploy to lower the impact of storms going forward in Connecticut?
We do have an approved capital tracking, sort of safety reliability program that we have in Connecticut right now that we operate under. So, as we do in the other in other states, too. So, there is – that would not be new. We do spend money on technologies to, again, enhance our ability to prevent outages or in the event that you do have an outage to recover quickly. So, there is an opportunity, and we currently have a mechanism in place to do that.
Okay, got it. Thanks. Shifting to offshore wind, I was just – wanted to clarify, what gave you the comfort this quarter to put specific year’s, specific dates out there for revolution and sunrise, was it the progress that you saw on the schedule that let you, kind of crystallize those years?
Yes, I’d say that's the primary driver. We've said, you know, when we first moved off the date, we said, as soon as we get more clarification, we would go back and work with our partners with Orsted and develop, you know, a schedule. So, in the case of revolution wind, we certainly, we have that in place. For sunrise, it's soon to get in place. So, we're, I guess, cautiously optimistic on that date and we'll have to wait till we see more information out of BOEM to be more certain, but that is it. We've seen movement, and we have much more clarity now on dates than we did, you know, a year ago.
Got it. That makes sense. Let me just, kind of last quick one, just wondering if there's any thoughts you might have on the Massachusetts RFP and your competitive positioning there for the next offshore wind project? Are there advantages you might be able to bring to the table as especially as some of the infrastructure comes online for your other projects that you could potentially lean on?
Sure. You know, like all state RFPs, you know, for when we're evaluating right now, look at how it fits into our plan there. We expect other states as well to have it. So, it's under consideration.
Great. Thanks so much.
Thank you.
Thanks, David. Next question is from Steve Fleishman from Wolfe. Good morning, Steve.
Hey, good morning. Thanks. Apologize if this was asked and just there's a lot of different issues in Connecticut that you might be, you know, able to, you know, settle on, I guess, if you get to that point of a settlement, just curious, if there is a way to deal with, kind of the need to file a rate case every four years, could that be part of this or is that something that has to happen no matter what?
Yeah, Steve. Good morning, Steve. This is Joe. Absolutely. That could be part of any type of a comprehensive settlement. If that was something that was important to the parties, that's something we would definitely put on the table.
And I'll add to that, that's really more of a legislative mandate, Steve, and it requires – it appears to review the rates. So, if the settlement, if there's information there that would be deemed as a review, you know, that could take care of that requirement, but that four year sort of review is more of a – in the legislative space.
Got it. No, that's helpful color, Phil. Thank you. That was it.
Great. Thank you, Steve. Looks like we're all set. We don't have any more folks in the queue. So, we want to thank everybody for joining us today. If you've got any follow up, please give us a call or send us an email and have a wonderful weekend.
Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.