By PAULA TRACY, InDepthNH.org

CONCORD – On Monday, S&P Global Ratings lowered the long-term issuer credit rating of the state’s largest utility, Eversource, from A- to BBB+.

While the utility that serves more than half a million people and businesses in more than 200 communities and also serves other New England states blamed Connecticut regulators, New Hampshire’s consumer advocate warned against buying the company’s line it may have been a spin intended for public consumption by the state’s Utilities Commission.

Eversource criticized and blamed Connecticut regulators for the downgrade in a news release issued Tuesday.

“By specifically criticizing and blaming Connecticut regulators, Eversource is clearly attempting to send a message to the New Hampshire Public Utilities Commission – given that Eversource is currently asking our regulators to approve a whopping 48 percent increase in distribution fees. “I am confident that none of the region’s regulators, including those in New Hampshire, will be intimidated by such tactics,” Donald M. Kreis, consumer advocate with the New Hampshire State Office of the Consumer Advocate, said Tuesday.

Just like a person’s creditworthiness, ratings are used to assess investor risk.

S&P Global Ratings issued a press release Monday saying the Connecticut Public Utilities Regulatory Authority (PURA) will issue final rate orders for Connecticut Natural Gas Corp. on Nov. 18. and Southern Connecticut Gas Co., which included significant reductions in base rates for both utilities.

“These tariff orders follow a recent pattern of adverse regulatory developments for investor-owned utilities operating in Connecticut, which we believe has increased business risk for Eversource Energy and its Connecticut-based subsidiaries.

“In addition, Eversource’s financial metrics for the current rating have remained weak, including funds from operations (FFO) to leverage of 11.1% for the 12 months ended September 2024. Given these developments and even after factoring in the potential sale of Aquarion Co. and Due to the credit-promoting use of proceeds, we do not expect Eversource’s consolidated FFO-to-debt ratio to exceed 14% on a sustained basis,” S&P wrote.

Kreis said: “The public – particularly ratepayers – should not be misled by Eversource’s self-serving statements about the erosion of its credit rating. How convenient that both Eversource and S&P, as the ratings agency, blame vigilant regulators in Connecticut.

“In reality, our region’s largest utility company is solely responsible for its failure to provide safe, reliable service at the lowest possible cost. Eversource’s press release conveniently does not mention this statement from S&P Global.”

Kreis cites the following quote from S&P: “Our downgrade of Eversource also takes into account the company’s weak historical financial performance and our view that financial performance will not improve sufficiently over the next three years.”

Asked whether this will impact New Hampshire consumers, Kreis said in an email: “Well, my expectation is that this will likely have a minor impact on Eversource’s customers in New Hampshire, as S&P downgraded not only Eversource’s operating subsidiaries in Connecticut, but also its distribution company in New Hampshire.” (PSNH), also on a guilt by association basis.

“But I think the potential benefits outweigh any likely costs. Eversource has relentlessly criticized its Connecticut regulator for daring to impose rate cuts when Eversource demonstrably deserves them. In fact, this becomes an example for regulators in the other states where Eversource operates – New Hampshire and Massachusetts – to follow.

It’s clear that investors and lenders will be happier if regulators approve rate hikes demanded by utilities like Eversource, he said.

“Anything more vigilant makes utility operations riskier for both investors and lenders, and Eversource’s statement today must be evaluated with that in mind,” Kreis said.

Kreis said it makes sense for Eversource and S&P Global to complain about developments in Connecticut instead of asking, “What can we do to make this company more efficient, more responsive and more innovative?”