One of the biggest investment advisers in the world downgraded its recommendation on Eversource stock this week, expressing concerns over delays in the Northern Pass hydroelectric project and possible opposition to the Access Northeast natural gas pipeline expansion.
The downgrade by UBS Financial Services, which has offices in Manchester, puts the spotlight on how important big energy projects are to a utility’s bottom line and return for shareholders. In fact, a growing chorus of critics claims that some of the capital spending by Eversource and utilities nationwide is designed more to improve shareholder return than grid reliability.
That’s because a regulated utility like Eversource doesn’t really make a profit on the sale of its product — electricity. Regulators are supposed to ensure that the price charged to consumers reflects nothing more and nothing less than the price paid by the utility to purchase the power on the wholesale market.
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