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Eversource (ES) Arm Issues Green Bonds to Finance Projects

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Eversource Energy’s (ES - Free Report) subsidiary NSTAR Electric Company announced that it has issued $400 million of 3.25% debentures or “Green Bonds” to fund the company’s low-carbon, clean energy initiatives. The Green Bonds will mature on May 15, 2029.

As mentioned earlier, the net proceeds from its inaugural green bond issuance will be utilized to fund various ‘green’ initiatives including new solar projects and investments to help make customers’ homes and businesses more energy efficient.

Green Bonds and Renewable Projects

It’s beyond doubt that renewable energy projects are being installed in increasing numbers in the United States and on a global scale to fight against emissions. Renewable projects come with a price and utility operators issue Green Bonds via their internal funds to finance the projects.

A green bond or the Climate Bond is a bond, the proceeds of which are specifically utilized for the development of climate and environmental projects. Green bonds come with tax incentives such as tax exemption and tax credits, making these bonds a more attractive investment option than traditional bonds.

We expect more Green Bonds to be issued in the near future in the United States as an Energy Information Administration (EIA) report indicates that all renewable sources of energy that include wind, solar and hydropower will produce 18% of U.S. electricity in 2019 and almost 20% in 2020. EIA also expects that wind generation will surpass hydropower generation for the first time to become the leading source of renewable electricity generation in 2019 and maintain that position in 2020.

Eversource’s Green Project Initiatives

Focus on renewable energy generation is expected to help the company meet renewable energy mandates by state governments, and tap the incentives offered by state and federal programs.
 
Eversource and Denmark-based Ørsted have proposed to develop the Bay State Wind project. This wind project, which will have a capacity to produce 4,000 MW of renewable energy, will be located in a 300-square-mile area, nearly 25 miles off the coast of Massachusetts. Eversource and Ørsted each hold a 50% ownership interest in Bay State Wind.

Price Performance

Shares of Eversource have outperformed its industry in the past 12 months.

 


Zacks Rank & Key Picks

Currently, Eversource has a Zacks Rank #3 (Hold). Some better-ranked stocks from the same industry are Atlantic Power Corporation , NRG Energy, Inc. (NRG - Free Report) and NorthWestern Corporation (NWE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlantic Power reported average positive surprise of 127.4% in the last four quarters.
 
NRG Energy delivered average positive surprise of 36.4% in the last two quarters.

NorthWestern Corp. came up with average positive surprise of 18.74% in the trailing four quarters.

The Zacks Consensus Estimate for Atlantic Power, NRG Energy and NorthWestern Corp. has moved up 118.2%, 2.7% and 5.6%, respectively, in the past 60 days, reflecting the confidence of analysts on these stocks.

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