Company: CNLHP
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001628280-25-037369
Chunk: 147

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 8
Chunk 147
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 One Big Beautiful Bill Act  or OBBBA), a budget and reconciliation package, was signed into law.  Among various items, the law includes changes to federal tax policy and modifications to clean energy tax incentives originally enacted under the Inflation Reduction Act of 2022.  One of the key provisions notable for Eversource is the restoration of bonus depreciation for its affiliates other than rate-regulated utility companies.  The deduction is for qualifying depreciable tangible property acquired and placed in service after January 19, 2025.  The phase out of bonus depreciation under the Tax Cuts and Jobs Act of 2017 has been eliminated.  The OBBBA maintains a federal corporate income tax rate of 21 percent.

The OBBBA also includes provisions that remove federal tax credits for renewable energy.  The OBBBA phases out the clean electricity production credit and the clean electricity investment tax credit for wind and solar projects that begin construction after July 4, 2026 and are not placed in service before December 31, 2027.  Projects that begin construction prior to July 4, 2026 will remain eligible for investment tax credit benefits under the Inflation Reduction Act of 2022.

The Company is currently evaluating the impacts of the OBBBA on our consolidated financial statements.  The law will not have an impact on Eversource’s tax equity investment in the South Fork Wind project or the Revolution Wind project for which Eversource has remaining financial obligations.  The ultimate impact of the law will depend on future guidance from the U.S. Department of the Treasury, the Internal Revenue Service, and state regulatory bodies. 

Connecticut:  On July 1, 2025, Connecticut enacted Public Act No. 25-173 (Senate Bill No. 4) (the Act), which aims to reduce electric rates for retail customers by up to $300 million over the next two years in the public benefits charges on electric bills for hardship protection measures and electric vehicle program costs through the issuance of state bonds that would fully fund these state-mandated program costs in lieu of collecting these amounts in electric rates.  These changes are expected to be implemented prospectively, and rate changes could be implemented as early as September 1, 2025 in CL&P’s revenue adjustment mechanism.

The Act authorizes the securitization of storm-related expenses for the period January 1, 2018 through January 1, 2025, which covers the majority of deferred storm costs on the CL