ES · 10-Q · 2026Q3 · Full report

Transmission ROE Refund

EVERSOURCE ENERGY · 2026-11-06 · Importance 53 · Surprise 60 · In source text

FERC’s March 19, 2026 Opinion No. 594 set the first-complaint-period replacement base return on equity (ROE) at 9.57%, down from the previously billed 10.57%, and directed refunds with interest. Eversource estimated a pre-tax refund range of $63.0 million to approximately $965 million as of September 30, 2026; the high end includes $902 million for the retroactive period from October 16, 2014 through March 19, 2026. The company recorded a $63.0 million current regulatory liability for the first complaint period, including interest, while the refund calculation methodology remains under review. Eversource’s appeal was granted a briefing schedule running from November 13, 2026 through April 2, 2027, but refunds are currently due by May 2027; separately, FERC suspended the proposed prospective 11.39% base ROE increase until November 30, 2026, subject to refund.

Key facts

• FERC's March 19, 2026 decision set a 9.57 percent replacement base ROE and a 12.09 percent incentive cap for the first complaint period and applied the same ROE prospectively from October 16, 2014.
• The NETOs proposed a prospective base ROE of 11.39 percent and incentive cap of 12.89 percent, effective June 30, 2026; FERC suspended the proposed increase until November 30, 2026, subject to refund, and initiated paper hearings.
• FERC directed refunds with interest for applicable periods; it did not direct refunds for the second, third or fourth complaint periods.
• The deadline for FERC refund issuance was extended to May 20, 2027; the D.C. Circuit denied a stay of the retroactive refund period on August 28, 2026.
• Eversource and other NETOs appealed Opinion No. 594 and its rehearing denial; the D.C. Circuit set briefing from November 13, 2026 through April 2, 2027, while refunds were required by May 2027 before a court ruling.
• Electric transmission earnings decreased $3.5 million in Q3 2026, primarily reflecting FERC's March 19, 2026 decision reducing the allowed ROE from 10.57 percent to 9.57 percent and higher interest expense.
• The reduction in base ROE from 10.57% to 9.57% is expected to lower Eversource’s future annual after-tax earnings by approximately $70 million, using 2025 rate base and excluding the new 11.39% base ROE expected to take effect November 30, 2026, subject to a FERC paper hearing.
• A March 19, 2026 FERC decision on base ROE complaints lowered the allowed ROE from 10.57% to 9.57%.

Impact estimates