Company: CNLHP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050033
Chunk: 9

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 2
Chunk 9
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 the third quarter of 2024 and higher interest costs from short-term debt, partially offset by a lower effective rate resulting from the recognition of state tax benefits and certain tax credits as a result of the 2024 tax return to provision process in the third quarter of 2025.  

Offshore Wind Contingent Liability:  Eversource recorded a contingent liability relating to expected future payments to GIP as part of the September 30, 2024 sale of the South Fork Wind and Revolution Wind projects.  As part of the definitive agreement with GIP, Eversource is responsible for certain post-closing purchase price adjustments.  This obligation included an expected cost overrun sharing obligation, an expected obligation to maintain GIP’s internal rate of return, and an obligation for other future costs.

In the third quarter of 2025, Eversource received an updated report from GIP on the construction status of Revolution Wind, which included revised projections of total construction 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