Eversource Energy Announces Pathway to Fully Exit its Offshore Wind Investments Pursuant to Agreement with Global Infrastructure Partners to Sell Revolution Wind and South Fork Wind Projects

Eversource Energy (NYSE: ES) (“Eversource”) today announced it has executed a definitive agreement to sell its 50 percent ownership share in South Fork Wind and Revolution Wind to Global Infrastructure Partners (GIP). The transaction allows Eversource to realize approximately $1.1 billion of cash proceeds upon closing and to exit these projects while retaining certain cost sharing obligations for the construction of Revolution Wind. These cost sharing obligations provide that Eversource would share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred, after which GIP’s obligations for any additional capital expenditure overruns would be borne by Eversource consistent with the existing joint venture terms. In addition, around the time of commercial operation of Revolution Wind and closing for South Fork Wind, Eversource’s financial exposure will be adjusted after taking into account the updated project economics. Commercial operation of Revolution Wind is expected in 2025. Since South Fork Wind is expected to enter service before the transaction closes, Eversource’s financial ties to South Fork Wind, other than as a tax equity partner, are expected to largely be resolved at closing. Eversource plans to use the proceeds from this sale to repay parent debt.

The agreement covers Eversource’s 50 percent share in the 132-megawatt South Fork Wind project and the 704-megawatt Revolution Wind project. Ørsted’s 50 percent ownership interests are not affected by today’s announcement. Eversource is expected to enter into a separate construction management agreement as a contractor to Revolution Wind to complete the onshore work that is currently underway. Eversource will maintain its previously announced tax equity investment in South Fork Wind.

On January 24, 2024, Eversource announced that it had reached agreement to sell its 50 percent interest in the 924-megawatt Sunrise Wind project to Ørsted, contingent on the successful award of the NY04 NYSERDA Offshore Wind Renewable Energy Credits Agreement request for proposal and other conditions.

The sale to GIP includes the following key provisions:

• Eversource expects to receive approximately $1.1 billion from GIP upon the closing of the transaction, which is expected to occur in mid-2024.
• Proceeds may be adjusted as a result of final construction costs and updated project economics following the commercial operation date of Revolution Wind and following closing for the South Fork project.
• Factors that could cause Eversource’s total net proceeds to be higher or lower include the following:
  • Revolution Wind’s eligibility for federal investment tax credits at other than the anticipated 40 percent level. Decreased tax credit eligibility would decrease proceeds to Eversource and increased tax credits would increase proceeds to Eversource;
  • The ultimate cost of construction for Revolution Wind. Under the purchase and sale agreement, Eversource and GIP will share the difference between a base construction forecast and the aggregate cost of the two projects up to an effective cap of approximately $240 million. Eversource will have responsibility for GIP’s obligations for any additional costs in excess of the cap amount consistent with the existing joint venture terms;
  • Eversource and Ørsted anticipate that South Fork Wind will be fully operational prior to the close of this transaction with GIP. Eversource does not expect any material differences in the cost of construction for South Fork Wind relative to the base forecast noted above;
  • Delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment;
  • Lower operation costs or higher availability of the projects. Eversource can benefit, but not be harmed, from lower costs of operations and/or higher availability as compared to a base level assumed in the projects’ financial models through the period that is four years following commercial operation date of the Revolution Wind project.

Under the agreement, Eversource’s existing credit support obligations are expected to roll off for each project around the time that each project completes its expected capital spend.