Company: CNLHP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0000072741-25-000011
Chunk: 86

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 8
Chunk 86
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 upon the completion of the Revolution Wind project.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 the ultimate completed cost of construction for South Fork Wind, 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 is currently aware that the construction of the offshore foundations, offshore substation, and turbine tower installations may lead to future cost overruns. The Company reviews available projection of total construction costs, including the latest cost estimates and project timeline.  Management has determined that the information currently available does not necessitate a change to the Company’s existing liability estimate of $365 million. The Company will continue to monitor developments, evaluate potential exposures, and revise its estimates as additional information becomes available.It is possible that as additional updated cost estimates become available, or other adverse changes in facts, regulations and circumstances occur, it could result in additional losses and increases to this liability, which could be material.  The Company believes it is reasonably possible that there is an additional loss in excess of the liability recorded, but management cannot reasonably estimate a range of loss beyond the $365 million recorded at this time.  Total net proceeds could also be adjusted for a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation of Revolution Wind.  E.    LeasesIn the first quarter of 2025, EGMA entered into a land and building finance lease that is expected to commence 2026.  The lease contains a purchase option that the Company has determined is probable of being executed.  In accordance with ASC 842, Leases, the Company will recognize the right-of-use asset and corresponding lease liability