3 Utilities at Risk
Regulatory hurdles may prevent these companies from capitalizing on Biden's infrastructure push.
As the Biden administration pushes its American Jobs Plan and clean energy agenda, utilities will be cast in a leading role. Utilities in constructive regulatory environments with timely cost recovery and attractive returns on investment have a big growth opportunity under President Joe Biden's ambitious plans. For those in less constructive regulatory environments, however, more investment could constrain cash flow and become a liability.
Eversource Energy is well positioned to benefit from the infrastructure investment that will be required as the Northeast moves toward a carbon-free energy mix. Offsetting this growth potential, however, is a challenging regulatory environment that we don't think the market appreciates. Connecticut has a long history of favoring customers over Eversource's investors. This is a key reason that Eversource is one of the few utilities we cover with no economic moat. We're hesitant to assign any incremental shareholder value to what we estimate could be $2 billion of offshore wind investment, given the regulatory, financial, and logistical hurdles that remain.
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