I-Team: Eversource lost $2.9 billion in offshore wind investments

HARTFORD, Conn. (WFSB) – Eversource reported losses of $2.4 billion in its offshore wind investments.

Some politicians, including house co-chair of the energy committee, state representative Jonathan Steinberg, believes those losses are part of the reason electric bills skyrocketed in July.

“It didn’t have to happen that way,” said Steinberg. “I think it’s a reflection of the fact that the utilities are hurting right now. They made some really bad investments, like in offshore wind, and they don’t have the wherewithal.”

Eversource’s Connecticut president, Steve Sullivan, says there’s no truth to those claims.

“There are no charges in the public benefits that have anything to do with the offshore wind business,” said Sullivan.

In May 2024, WFSB was given a tour of the South Fork Wind Project. The 12 turbines power 70,000 Long Island homes. It was one of the projects that Eversource used to partially own. Eversource has since sold off its interest in the project and others, exiting the offshore wind business completely.

Starting July 1st, the public benefits charge on Eversource bills went up 490% per kilowatt hour. That charge is partially a catch-up for electric bills not paid during the pandemic, but the majority of the rate hike is to pay for the state’s requirement to purchase power from the Millstone nuclear power plant.

By the end of April, Eversource should be paid back for all of that. The rate hike was approved by the public utilities regulatory authority, or PURA, by a vote of 2-1.

The one state regulator who voted against it, chairman Marissa Gilbert, argued the money could have been paid back over 2 to 3 years instead of only 10 months. Gilbert wrote in her dissenting opinion that Eversource’s cashflow issues due to its offshore wind business could be the real reason Eversource was pushing to get its money back within a year.

The I-Team asked Sullivan directly why Eversource wasn’t willing to wait.

“They created the problem by pushing the costs off by 2 to 4 years, and then said gee why can’t we stretch this out over a longer period of time? So you would just be compounding the problem,” said Sullivan. “None of the public benefit programs or policies have gone away, so these costs are going to continue this year and next year, and if you don’t pay off that past due balance, you just continue to pancake the cost and create additional interest costs.”

Eversource’s offshore wind team no longer exists, so the I-Team interviewed other experts in the field to try and figure out how this all happened.

Kris Ohleth is the executive director of the Special Initiative on Offshore Wind, an independent organization that advocates for offshore wind construction.

“I think it was, you know, a blip in the development cycle, and something we hope Eversource will continue to do in the future, but the projects are continuing as planned,” said Ohleth.

It’s true the projects are moving forward without Eversource, and Ohleth explained why Eversource wasn’t the only company to lose money.

She says the unexpected increase in the cost of raw materials combined with rising interest rates created a difficult environment for offshore wind projects.

“Even a half a percent of interest rate change can be a real challenge, so you can imagine seeing interest rates hit 9% at one point was a real challenge for offshore wind developers,” said Ohleth. “So these economic challenges really found offshore wind on hard times the past few years.”

Richard Sweeney is an associate professor of environmental economics at Boston College. He agrees with Ohleth that the economics of offshore wind projects unexpectedly changed during the pandemic.

“You know if you had perfect foresight, they probably wouldn’t have entered into those agreements, but they don’t have that luxury,” said Sweeney.

Sweeney believes when a company loses that kind of money, ratepayers will end up paying in the end somehow.

“That’s just the reality of having a regulated utility. If you make a bad investment, it’s actually the ratepayers who are on the hook,” said Sweeney.

Sullivan disagrees and explains that the offshore wind business has separate accounting books than the company that runs your electricity.

“There’s absolutely no crossover between the offshore wind business and the public benefits piece,” said Sulllivan.

This piece is part of a 5 part series looking into electricity prices in Connecticut.

Part 1: The future of the public benefits charge

Part 2: EV charger rebate program

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