Eversource Energy (2.4%) (ES – $50.62 – NYSE) is New England’s largest electric and gas distribution utility and delivery system. ES, formerly known as Northeast Utilities (NU), is the product of the April 2012 merger between Northeast Utilities, headquartered in Hartford, Connecticut, and NSTAR, headquartered in Boston, Massachusetts, creating a premier New England distribution utility. ES serves 3.6 million customers in Connecticut, New Hampshire, and Massachusetts. We consider ES to be one of the better long term growth stories, driven by transmission investment, cost cutting opportunities, and oil-to-gas heat conversions in the Northeast. The company targets a 6%–8% long term earnings growth rate. ES formed a JV with Spectra Energy to construct a $3 billion gas pipeline to supply the region’s electric generators with natural gas. Construction is expected to begin in 2017, with an in service date by the winter of 2018. In addition, ES expects its 180 mile, $1.4 billion Northern Pass electric transmission line to be completed in mid-2019, with construction to begin following a final environmental impact statement in early 2016 and New Hampshire siting approval. The company expects further transmission development as aging nuclear and coal facilities are replaced.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Industrials Fund shareholder commentary for third quarter 2015.
