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June 19, 2024

Another Eversource subsidiary takes credit hit from ratings agency

HBJ FILE PHOTO Eversource offices in downtown Hartford.

Eversource Energy took another hit from a major credit rating agency Tuesday, as Moody’s Ratings downgraded its subsidiary, Connecticut Light and Power, to a negative outlook.

Moody’s said it made the decision to lower CL&P’s rating from stable to negative, citing a “challenging Connecticut regulatory environment.”

"Although CL&P's cash flow will improve from the recovery of certain costs associated with authorized rate adjustment mechanisms, the long-term sustainability of this improvement will largely depend on the supportiveness of future regulatory decisions…" said Jeff Cassella, vice president and senior credit officer at Moody’s.

While CL&P has historically had a relatively stable financial profile, Moody’s said the company’s financial performance began deteriorating in 2023.

An upgrade is unlikely in the near-term, the agency said, but CL&P’s outlook could be changed to stable “if the credit supportiveness of the Connecticut regulatory environment improves with future regulatory decisions that improve the timeliness of the recovery of costs and investments, including deferred storm costs, while providing sufficient allowed returns.”

The report does not mention the parent company’s divestiture from offshore wind as relating to this credit action.

CL&P is the largest operating subsidiary of Eversource with about 1.28 million customers.

In January, Moody’s downgraded Eversource’s outlook to negative, but kept CL&P’s outlook as stable.

In late May, Moody’s Ratings downgraded Eversource subsidiary Aquarion Water Co.’s credit rating, citing a weakening financial profile.

Eversource said the lower ratings are due to unpredictable and volatile regulatory policies and will result in higher costs for electricity, water and gas. 

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