Eversource Energy has reported impairment charges in its fourth-quarter 2023 earnings, stemming from its interests in joint ventures with Orsted involved in the development of the South Fork, Revolution, and Sunrise offshore wind farms in the United States.
The company anticipates an after-tax impairment charge ranging between $1.4 billion and $1.6 billion. This includes $800 million to $900 million across all three projects, along with an additional charge of up to $700 million for Sunrise after local regulators rejected a request for higher rates.
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Eversource's Chairman, President, and CEO, Joe Nolan, attributed the impairment to ongoing challenges in the offshore wind sector, citing supply chain disruptions and inflationary pressures. Nolan remarked, “Offshore wind projects continue to experience major supply chain disruption and inflationary challenges in the early stage of this growing industry in the US, and this impairment is an unfortunate reflection of the current market conditions we are facing.”
In response to these financial challenges, Eversource has entered into negotiations with a global private infrastructure investor for the potential sale of its ownership interest in the two joint ventures associated with the South Fork Wind, Revolution Wind, and Sunrise Wind projects.
Nolan expressed appreciation for the collaboration with Orsted, stating, “We are pleased to advance the sale of our offshore wind interests and are appreciative of the support and collaboration we continue to receive from Orsted on this very complex transaction.”
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The impairment was prompted by revised construction cost projections due to supply chain constraints affecting installation vessels and foundation fabrication. Eversource noted uncertainties related to the Sunrise Wind rebid process in New York, which further impacted the potential sales price.
The New York State Public Service Commission's denial of Sunrise Wind's petition to amend its OREC contract on October 12, 2023, also contributed to the challenges. Eversource is currently working with Orsted to evaluate the possibility of submitting a new bid for Sunrise Wind, considering the bid price and the likelihood of success in the new bidding process.
