Company: CNLHP
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001628280-25-037369
Chunk: 101

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 8
Chunk 101
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 which Eversource will have responsibility for GIP’s obligations for any additional capital expenditure overruns in excess of this amount.  The purchase price is also subject to post-closing adjustments as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return through the construction period for each project as specified in the agreement.  For Revolution Wind, purchase price adjustment payments are expected to be completed no later than late 2026.  South Fork Wind has achieved commercial operation, and Eversource made the construction cost post-close purchase price adjustment payment related to this project of $69 million in June 2025.  As permitted within the terms of the agreement, Eversource has disputed a significant portion of this equalization payment related to project contingencies and expects resolution by the end of the year.Upon closing of the sale, Eversource recorded a contingent liability of $365 million, reflecting its estimate of the future obligations under the terms of the sale to GIP, which include the expected cost overrun sharing obligation, expected obligation to maintain GIP’s internal rate of return, and obligation for other future costs.  As of June 30, 2025 and December 31, 2024, the contingent liability was $296 million and $365 million, respectively, and is recorded in Other Current Liabilities and Other Long-Term Liabilities on Eversource’s balance sheets.Contingencies are evaluated using the best information available at the time the financial statements are published, and this assessment involves judgments and assumptions about future events.  Factors that could increase the post-closing adjustment payments owed to GIP include construction cost overruns for Revolution Wind as well as the extent of construction delays, which would impact the economics associated with the purchase price adjustment, and the eligibility for federal investment tax credits for Revolution Wind at a lower value than assumed and included in the purchase price.The purchase price of Revolution Wind included the sales value related to a 40 percent level of federal investment tax credits.  A change in the expected value or qualification of ITC adders could result in a significant loss in a future period.New information or future developments that arise as the construction of Revolution Wind progresses, and as cost estimates are received, reviewed and revised, as well as schedule updates, will necessitate a reassessment of the estimated liability related to post-closing adjustment payments.  The Company reviews available projections of total construction costs, including the latest cost estimates and project timeline.  As construction continues to