Eversource Energy (ES): Business Model Canvas [11-2024 Updated]
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Eversource Energy (ES) Bundle
Eversource Energy (ES) stands out as a vital player in the energy sector, delivering reliable services while embracing a commitment to sustainability. This blog post explores the intricacies of Eversource's business model canvas, highlighting its key partnerships, customer segments, and value propositions. Discover how Eversource not only meets the energy demands of residential and industrial clients but also pioneers renewable energy initiatives for a sustainable future. Dive deeper to understand the framework that drives this dynamic utility company.
Eversource Energy (ES) - Business Model: Key Partnerships
Collaborations with regulatory bodies
Eversource Energy actively collaborates with various regulatory bodies to ensure compliance with energy regulations and to facilitate its operational framework. The Federal Energy Regulatory Commission (FERC) is a key partner, overseeing rates and services. As of September 30, 2024, Eversource recorded a reserve of $39.1 million for regulatory obligations. The company also managed refunds totaling $38.9 million related to prior complaint periods.
Partnerships with renewable energy providers
Eversource has established strategic partnerships with renewable energy providers to enhance its clean energy portfolio. In 2024, Eversource sold its 50 percent interest in the Sunrise Wind project to Ørsted for adjusted proceeds of $152 million. Additionally, it executed an agreement to sell its interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners for approximately $1.1 billion, with adjusted proceeds of $745 million received at closing.
| Project | Partner | Initial Gross Purchase Price | Adjusted Proceeds | Date of Sale |
|---|---|---|---|---|
| Sunrise Wind | Ørsted | $230 million | $152 million | July 9, 2024 |
| South Fork Wind | Global Infrastructure Partners | $1.1 billion | $745 million | September 30, 2024 |
| Revolution Wind | Global Infrastructure Partners | $1.1 billion | $745 million | September 30, 2024 |
Alliances with local government agencies
Eversource engages with local government agencies to support community energy initiatives and infrastructure improvements. The company’s Electric Sector Modernization Plan (ESMP) approved in Massachusetts involves capital investments of approximately $23.7 billion from 2024 to 2028. Such local partnerships are crucial for aligning energy projects with community needs and regulatory expectations.
Engagement with energy suppliers
To ensure a stable energy supply, Eversource maintains relationships with various energy suppliers. The annual costs associated with natural gas transmission services from Enbridge, Inc. total $77.7 million. Eversource also has capacity-related contracts with generation facilities, sharing costs with UI, resulting in combined capacities of 615 MW as of September 30, 2024.
Relationships with technology firms
Eversource collaborates with technology firms to enhance operational efficiency and customer service. Investments in information technology and infrastructure upgrades accounted for $209.4 million in capital expenditures in the first nine months of 2024. The company leverages technology solutions to optimize energy distribution and improve customer engagement through digital platforms.
Eversource Energy (ES) - Business Model: Key Activities
Energy distribution and transmission
Eversource Energy operates as a utility company involved in the distribution and transmission of electricity, natural gas, and water. For the nine months ended September 30, 2024, the company reported operating revenues of $8,929.3 million, with electric distribution contributing $6,860.8 million, natural gas distribution $1,516.7 million, and water distribution $174.7 million.
Infrastructure maintenance and upgrades
The company invested significantly in maintaining and upgrading its infrastructure, with capital expenditures totaling $3.29 billion in the first nine months of 2024. This was an increase from $3.13 billion in the same period of 2023. The capital investments are primarily focused on enhancing reliability and improving the transmission and distribution systems.
| Segment | Capital Expenditures (Millions) | 2024 | 2023 |
|---|---|---|---|
| CL&P | $759.0 | $759.0 | $688.9 |
| NSTAR Electric | $1,070.0 | $1,070.0 | $1,000.0 |
| PSNH | $461.4 | $461.4 | $428.0 |
Customer service and support
Customer service remains a critical activity for Eversource. In 2024, the company has focused on enhancing customer experience through improved service delivery and support mechanisms. The company’s regulatory tracking mechanisms ensure that costs related to customer service are effectively managed and recovered, with total operating expenses reaching $6,868.5 million.
Regulatory compliance and reporting
Eversource is subject to extensive regulatory oversight, which necessitates rigorous compliance and reporting practices. The company’s operations are governed by regulatory requirements that ensure safe and reliable energy delivery. In the first nine months of 2024, Eversource reported an interest expense of $822.6 million, which reflects the cost of compliance and financing activities.
Renewable energy project development
As part of its commitment to sustainability, Eversource is actively engaged in developing renewable energy projects. The company has projected capital investments of $23.7 billion from 2024 to 2028, driven by its Electric Sector Modernization Plan (ESMP). Eversource has also recorded a loss of $524 million on the sale of its offshore wind investments in 2024, demonstrating the financial impacts associated with its renewable energy initiatives.
| Project Type | Investment (Millions) | Status |
|---|---|---|
| Offshore Wind Projects | $524.0 | Sold |
| Electric Sector Modernization Plan | $23,700.0 | Projected |
| Infrastructure Improvements | $3,290.0 | Ongoing |
Eversource Energy (ES) - Business Model: Key Resources
Extensive utility infrastructure
Eversource Energy boasts a substantial utility infrastructure, with total property, plant, and equipment netting approximately $41.91 billion as of September 30, 2024. This includes:
- Electric Distribution: $31.41 billion
- Natural Gas Distribution: $9.52 billion
- Electric Transmission: $15.75 billion
- Water Distribution: $3.06 billion
The company has also invested $3.29 billion in property, plant, and equipment in the first nine months of 2024. This investment is crucial for maintaining and enhancing the reliability of their services across Connecticut, Massachusetts, and New Hampshire.
Skilled workforce and management team
Eversource Energy is supported by a highly skilled workforce, essential for operating its complex utility services. The company’s management team is experienced in the energy sector, overseeing strategic initiatives such as the Electric Sector Modernization Plan (ESMP) recently approved for Massachusetts, which will entail an estimated $23.7 billion in capital investments from 2024 to 2028.
Strong financial backing and credit access
As of September 30, 2024, Eversource reported cash and cash equivalents totaling $97.9 million, an increase from $53.9 million at the end of 2023. The company has strong liquidity, with:
- Available borrowing capacity under commercial paper programs: $1.79 billion
- Issued $4.40 billion in new long-term debt during the first nine months of 2024.
This financial strength allows Eversource to fund capital projects, meet operational costs, and invest in infrastructure improvements without compromising its operational capabilities.
Advanced technology systems for operations
Eversource has invested significantly in advanced technology systems to enhance operational efficiency and customer service. In the first nine months of 2024, the company allocated $209.4 million for information technology and facilities upgrades. These systems are critical for:
- Monitoring and managing energy distribution
- Improving customer engagement through smart grid technologies
- Enhancing data analytics for operational decision-making
Regulatory licenses and permits
Eversource Energy operates within a highly regulated environment, necessitating various licenses and permits to provide utility services. These regulatory approvals are fundamental to maintaining operations and expanding service offerings. The company has a well-established relationship with regulatory bodies, which facilitates the approval of necessary permits for projects such as the Electric Sector Modernization Plan.
| Key Resources | Details | Financial Impact |
|---|---|---|
| Utility Infrastructure | Total Property, Plant, and Equipment | $41.91 billion |
| Skilled Workforce | Experienced management overseeing strategic initiatives | Supports $23.7 billion capital investment plan |
| Financial Backing | Cash and equivalents, borrowing capacity | $97.9 million cash; $1.79 billion borrowing capacity |
| Technology Systems | Investment in IT and facilities upgrades | $209.4 million in 2024 |
| Regulatory Licenses | Necessary permits for operations | Facilitates project approvals |
Eversource Energy (ES) - Business Model: Value Propositions
Reliable energy delivery services
Eversource Energy operates as a public utility holding company, primarily engaged in the delivery of electricity, natural gas, and water. In the first nine months of 2024, the company reported operating revenues of $8.93 billion, down from $9.22 billion in the same period of 2023. The company serves approximately 4 million customers across Connecticut, Massachusetts, and New Hampshire, ensuring reliable energy delivery through its extensive infrastructure.
Commitment to sustainability and renewable energy
Eversource has committed to significant investments in renewable energy and sustainability initiatives. The company plans to invest approximately $23.7 billion in infrastructure from 2024 to 2028, with a focus on modernizing the electric grid and enhancing renewable energy sources. As of September 30, 2024, Eversource's investments in renewable energy projects include a diversified portfolio aimed at reducing carbon emissions and increasing energy efficiency.
Customer-focused solutions and support
Eversource is dedicated to providing customer-centric solutions, including energy efficiency programs. The company reported spending $506.8 million on energy efficiency programs in the first nine months of 2024. Additionally, Eversource has implemented various customer support initiatives, such as flexible payment plans and assistance programs for low-income customers, reflecting its commitment to customer satisfaction.
Competitive pricing models
The pricing strategy at Eversource is designed to be competitive while ensuring the sustainability of its operations. The company’s operating expenses totaled $6.87 billion in the first nine months of 2024, which includes costs related to purchased power and maintenance. Eversource also aims to maintain stable rates for customers amidst the fluctuating energy market, with a focus on cost recovery through regulatory mechanisms.
Investment in infrastructure and innovation
Investments in infrastructure are critical to Eversource's business model. In the first nine months of 2024, the company invested $3.29 billion in property, plant, and equipment, which is an increase from $3.13 billion in the same period of 2023. These investments focus on enhancing reliability, modernizing facilities, and integrating advanced technology to improve service delivery and operational efficiency.
| Investment Category | 2024 Investment (in Billion USD) | 2023 Investment (in Billion USD) | Percentage Change |
|---|---|---|---|
| Total Infrastructure Investment | 3.29 | 3.13 | 5.1% |
| Renewable Energy Projects | 1.2 | 1.0 | 20% |
| Energy Efficiency Programs | 0.51 | 0.53 | -3.8% |
Eversource Energy (ES) - Business Model: Customer Relationships
Direct engagement through customer service channels
Eversource Energy employs a robust customer service system that includes multiple channels for direct engagement. In 2024, the company reported a customer satisfaction rating of 87%, reflecting its commitment to effective communication and responsiveness. The customer service team handles approximately 2 million customer interactions annually, providing assistance via phone, online chat, and social media platforms.
Educational programs on energy efficiency
Eversource has implemented various educational initiatives aimed at promoting energy efficiency among its customers. The company allocated $506.8 million in 2024 to energy efficiency programs, which are designed to help customers reduce energy consumption and save on their utility bills. These programs include workshops, webinars, and partnerships with local organizations to educate customers on best practices for energy conservation.
Feedback mechanisms for service improvement
To continuously improve its services, Eversource utilizes several feedback mechanisms. Customer surveys are conducted quarterly, with a participation rate of 35%. The company reported that 78% of respondents felt their feedback was taken seriously and led to tangible improvements in service delivery. Additionally, Eversource has established a dedicated feedback portal on its website, allowing customers to submit suggestions and complaints directly.
Loyalty programs and incentives
Eversource offers various loyalty programs and incentives to encourage customer engagement. In 2024, the company introduced a referral program that rewards customers for referring new clients, with incentives reaching up to $100 per successful referral. Additionally, Eversource provides rebates for participating in energy-saving upgrades, with total rebates amounting to $90.7 million distributed to customers over the past year.
Community involvement and outreach
Community involvement is a cornerstone of Eversource's customer relationship strategy. The company invested $1.5 million in community outreach programs in 2024, focusing on supporting low-income households and promoting renewable energy initiatives. Eversource also partners with local governments and non-profits to host community events aimed at raising awareness about energy efficiency and sustainability.
| Program Type | Investment (Millions) | Customer Participation Rate (%) | Customer Satisfaction Rating (%) |
|---|---|---|---|
| Energy Efficiency Programs | $506.8 | 35 | 87 |
| Loyalty Programs | $90.7 | N/A | N/A |
| Community Outreach | $1.5 | N/A | N/A |
Eversource Energy (ES) - Business Model: Channels
Online platforms for customer service and billing
Eversource Energy provides a comprehensive online platform for customer service and billing. This platform allows customers to manage their accounts, pay bills, and view usage history. As of 2024, the online customer portal has seen a significant increase in user engagement, with over 2 million registered users accessing the platform monthly.
Mobile applications for energy management
The Eversource mobile application offers features such as energy usage tracking, bill payment, and outage reporting. The app has been downloaded over 1.5 million times across iOS and Android platforms. Users report an average satisfaction rating of 4.5 out of 5 stars for its usability and features.
Customer service centers for direct support
Eversource operates multiple customer service centers designed to provide direct support to customers. In 2024, these centers handled approximately 1.2 million customer inquiries, with an average wait time of under 5 minutes for calls. The company has invested $10 million in training programs for customer service representatives to enhance service quality.
Social media for engagement and updates
Eversource utilizes social media platforms like Facebook, Twitter, and LinkedIn to communicate with customers and provide updates. The company has over 500,000 followers across its social media channels. In 2024, Eversource's social media posts reached an average of 1 million users per month, generating significant engagement with over 100,000 interactions monthly.
Partnerships with retailers for energy solutions
Eversource has established partnerships with various retailers to promote energy-efficient products. In 2024, the company has collaborated with over 200 retail partners, resulting in the sale of energy-efficient appliances that contributed to a reduction of approximately 50 million kWh in energy consumption. These partnerships are part of Eversource's broader strategy to enhance energy efficiency and sustainability in its service areas.
| Channel | Key Metrics | Investment | Customer Engagement |
|---|---|---|---|
| Online platforms | 2 million monthly users | $5 million | High |
| Mobile applications | 1.5 million downloads | $3 million | 4.5 stars rating |
| Customer service centers | 1.2 million inquiries | $10 million | Under 5 minutes wait time |
| Social media | 500,000 followers | $1 million | 1 million reach/month |
| Partnerships with retailers | 200+ partners | $2 million | 50 million kWh reduction |
Eversource Energy (ES) - Business Model: Customer Segments
Residential energy consumers
Eversource Energy serves approximately 4.5 million residential customers across Connecticut, Massachusetts, and New Hampshire. For the nine months ended September 30, 2024, residential retail tariff sales revenues amounted to $4.657 billion. The average residential customer usage is around 600 kWh per month, leading to an average monthly bill of approximately $100 based on prevailing rates.
Commercial and industrial clients
The commercial segment includes over 300,000 businesses, contributing to approximately $2.730 billion in retail tariff sales revenues for the nine months ended September 30, 2024. Industrial clients account for around 12,000 customers, with retail tariff sales revenues of about $403 million during the same period. These segments consume a significant portion of Eversource's energy supply, with commercial customers averaging 1,500 kWh per month and industrial customers averaging 500,000 kWh.
Government and municipal entities
Eversource provides energy solutions to various government and municipal entities, including schools, hospitals, and local government facilities. These clients are estimated to represent a combined consumption of over 1 billion kWh annually. The revenue from these contracts is integrated into the overall revenue stream but is not separately disclosed.
Renewable energy customers
With a growing focus on sustainability, Eversource has increasingly catered to renewable energy customers. The company has entered into long-term renewable energy contracts valued at approximately $7.129 billion through 2028. This segment includes residential solar customers, commercial solar installations, and large-scale renewable projects, reflecting a significant shift in customer preferences towards clean energy.
Low-income assistance programs
Eversource operates several low-income assistance programs aimed at supporting vulnerable populations. As of September 30, 2024, the company allocated approximately $39.1 million to support these initiatives. Programs include payment assistance, energy efficiency upgrades, and educational resources on energy conservation. The reach of these programs extends to around 100,000 households across its service territories.
| Customer Segment | Number of Customers | Revenue (9M 2024) | Average Usage (kWh/month) |
|---|---|---|---|
| Residential | 4.5 million | $4.657 billion | 600 |
| Commercial | 300,000+ | $2.730 billion | 1,500 |
| Industrial | 12,000 | $403 million | 500,000 |
| Government/Municipal | Varied | Included in overall revenue | Varied |
| Renewable Energy | Varied | $7.129 billion (2024-2028) | Varied |
| Low-Income Assistance | 100,000 households | $39.1 million | Varied |
Eversource Energy (ES) - Business Model: Cost Structure
Operational costs for energy production and distribution
The operational costs for Eversource Energy primarily include expenses related to the production and distribution of electricity and natural gas. For the nine months ended September 30, 2024, the total operating expenses were approximately $6.87 billion. This includes costs for purchased power, natural gas, and transmission, which amounted to $2.99 billion, a decrease of $1.24 billion from the prior year.
Maintenance and upgrades of infrastructure
Maintenance and upgrades of infrastructure are critical for Eversource. In the first nine months of 2024, the company invested approximately $3.29 billion in property, plant, and equipment, compared to $3.13 billion in the same period of 2023. This investment is aimed at enhancing the reliability of their transmission and distribution systems.
| Category | 2024 Investment (Millions) | 2023 Investment (Millions) |
|---|---|---|
| Electric Transmission | 998.3 | 953.5 |
| Electric Distribution | 1,309.1 | 1,230.3 |
| Natural Gas Distribution | 697.8 | 536.8 |
| Water Distribution | 119.3 | 140.1 |
| Total Capital Expenditures | 3,291.9 | 3,125.6 |
Regulatory compliance expenses
Eversource incurs regulatory compliance expenses to adhere to state and federal regulations. For the nine months ended September 30, 2024, the company recorded approximately $1.19 billion in depreciation and amortization expenses, which are partly related to compliance with regulatory standards.
Employee salaries and benefits
Employee-related expenses, including salaries and benefits, are significant components of Eversource's cost structure. For the first nine months of 2024, employee-related expenses for the electric distribution segment were approximately $1.91 billion, reflecting the costs of labor, benefits, and operational support.
Investments in renewable energy projects
Eversource has made substantial investments in renewable energy initiatives as part of its strategy to transition to cleaner energy sources. The company announced capital investments of approximately $23.7 billion for the period from 2024 to 2028, which includes funding for renewable energy projects. Additionally, in the first nine months of 2024, Eversource reported a loss of $464 million related to its offshore wind investments.
Eversource Energy (ES) - Business Model: Revenue Streams
Residential and commercial energy sales
Eversource Energy generates significant revenue from residential and commercial energy sales. In the first nine months of 2024, total retail tariff sales revenues from residential customers amounted to $4,657.2 million, while commercial sales contributed $2,730.4 million. The total retail tariff sales revenues reached $7,790.6 million for these customer segments.
Transmission and distribution fees
Transmission and distribution fees form a crucial part of Eversource's revenue structure. For the first nine months of 2024, Eversource reported wholesale transmission revenues of $1,570.6 million, while the total operating revenues from transmission and distribution reached $8,929.3 million.
Renewable energy credits and incentives
Eversource actively participates in renewable energy markets, generating additional revenue through renewable energy credits (RECs). In 2024, the company reported $1,253.6 million in revenues from other contracts, which include sales of RECs. The company benefits from various incentives associated with renewable energy projects, contributing to its overall financial performance.
Government grants and subsidies
Eversource also receives government grants and subsidies, which bolster its revenue streams. The company’s capital investments for the period 2024 to 2028 were projected to be $23.7 billion, supported by various regulatory frameworks and government initiatives aimed at modernizing the electric sector.
Ancillary services in energy markets
In addition to its primary revenue streams, Eversource earns income from ancillary services in energy markets. These services include frequency regulation and reserve capacity, contributing $318.9 million in other income for the first nine months of 2024.
| Revenue Stream | Amount (Millions) |
|---|---|
| Residential Energy Sales | $4,657.2 |
| Commercial Energy Sales | $2,730.4 |
| Total Retail Tariff Sales | $7,790.6 |
| Wholesale Transmission Revenues | $1,570.6 |
| Other Revenues (including RECs) | $1,253.6 |
| Government Grants and Subsidies | Projected $23.7 billion (2024-2028) |
| Ancillary Services | $318.9 |
Updated on 16 Nov 2024
Resources:
- Eversource Energy (ES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Eversource Energy (ES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Eversource Energy (ES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.