Company: CNLHP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050033
Chunk: 144

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 144
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 costs.  The revised cost projections reflected known and quantifiable cost increases, including those associated with the impacts of damage to the wind turbine installation vessel, insurance costs, tariff impacts, and costs incurred as a result of the stop-work order for Revolution Wind received on August 22, 2025 from the Bureau of Ocean Energy Management that halted all offshore wind construction activities through September 22, 2025.  Based on these developments and information currently available, in the third quarter of 2025 Eversource recognized a pre-tax charge of $284 million as a result of the aggregate impact of these items, to increase the liability for purchase price adjustments associated with the offshore wind projects.  As of September 30, 2025 and December 31, 2024, the contingent liability totaled $507.7 million and $365 million, respectively.

Eversource relies on information that it receives from the project owners for both the final completed cost of South Fork Wind and construction-related costs of Revolution Wind.  Eversource uses its judgment to adjust, as needed, its expected obligations to GIP while construction of Revolution Wind is completed, which continues to be expected in the second half of 2026.

New information or future developments that arise as the construction of Revolution Wind progresses will necessitate a reassessment of the estimated liability related to the obligations to GIP.  The Company reviews available projections of total construction costs, including the latest cost estimates and project timeline, to determine if any changes to this liability are warranted.

It is reasonably possible that as additional updated cost estimates become available, and if additional cost overruns materialize or other adverse changes in facts, regulations and circumstances occur, it could result in additional losses and increases to the offshore wind contingent liability, which could be material.  The Company will continue to monitor developments and evaluate potential exposures related to this contingency and will revise its estimated liability as additional information becomes available.  

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 obligation 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