| 01 | | THE FAILURE MODE |
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| The mechanism is regulatory rather than physical. Utility capital enters rate base, and the customer pays its depreciation plus an allowed return over the life of the asset. Nothing about that process is a judgment on whether the individual household wanted the asset built. |
| The scale per customer is visible in the accounts. Eversource invested $2.02 billion in property, plant and equipment in the first half of 2026, against $2.05 billion in the same period of 2025 [3], across a system serving more than 4 million electric and gas customers in three states [4]. That is on the order of $1,000 per customer per year entering the base. |
| The household has no position in the decision. Consumption is close to inelastic over a winter, rate cases are decided by commissions, and the capital is committed years before it appears on a bill. What the household can change is how many kilowatt-hours it buys at the resulting price [2]. |
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| 02 | | YOUR END / THEIR END |
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YOUR END HOUSEHOLD The response is owning generation rather than renting it. DOE's cost benchmark models a representative residential system of 8 kilowatts dc and puts the Q1 2025 modeled market price for a PV-only installation at $2.95 per watt dc in 2024 dollars, roughly $23,600 for that system, with operation and maintenance of $34 per kilowatt dc per year [5]. The benchmark excludes any tax credit realised by the owner, so that is the gross figure before subsidy [5]. What it does not do is detach the house from the grid. The same benchmark prices the PV-plus-storage configuration, 8 kilowatts with a 13.5 kilowatt-hour battery, at $4.59 per watt dc, about 56 percent more per watt than the panels alone [5]. Without that addition the system reduces purchased kilowatt-hours, not exposure to an outage, and fixed delivery charges continue regardless. COST / FUNCTION / LIMITS |
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THEIR END COMPANY-REPORTED Eversource Energy (NYSE: ES) operates New England's largest energy delivery system, serving more than 4 million electric and natural gas customers in Connecticut, Massachusetts and New Hampshire [4]. Its electric distribution segment earned $170.4 million in the second quarter of 2026 against $161.5 million a year earlier, driven primarily by higher revenues from base distribution rates [4]. The capital behind that sits in the $2.02 billion of plant investment made in the first half of the year [3]. The counterweight is that the allowed return is granted, not earned in a market, and it moves both ways. Transmission segment earnings, excluding a FERC return-on-equity refund charge identified in the same release, were $183.7 million in the quarter against $208.0 million a year earlier [4]. A regulator that can approve the spending can also reprice the return on it. POSITION / CAPACITY / RISK |
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| 03 | | THE FILING |
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| Eversource's Form 10-Q for the quarter ended 30 June 2026 describes a proposed rate plan for Connecticut Light & Power built on a revenue-cap formula adjusted for inflation, a supplemental capital adjustment formula to support planned capital infrastructure improvements, and a proposed revenue requirement using a regulatory return on equity of 10.25 percent with a 53.86 percent common equity ratio [3]. That is the price of the capital, stated in advance of the spending. |
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| 04 | | THE TWO DECISIONS |
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| The household decision is roughly $23,600 before subsidy to own 8 kilowatts of generation outright, which lowers the kilowatt-hours bought at a rising rate and does nothing about delivery charges or outages unless the battery is added. The exposure decision is a regulated owner of the capital the rate is recovering, where the return is set by commissions rather than by demand. The premise weakens materially if allowed returns are cut or capital is disallowed in pending rate cases, or if the projected spending is spread across enough new sales volume that residential rates flatten rather than climb, which would remove the reason to buy generation at $2.95 a watt. |
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| 05 | | SOURCES |
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| [1] | Electric Perspectives (Edison Electric Institute). "EEI Data: Electric Companies to Invest $1.4T to Support Customers, Power Growth," May 2026. Industry annual capital expenditures hit a record $204.1 billion in 2025, a fourteenth consecutive year of record-high investment; 2026 capital expenditures projected to rise 17 percent to $238.8 billion; $1.4 trillion projected between 2026 and 2030, an increase from the previous projection of $1.1 trillion between 2025 and 2029. Link |
| [2] | U.S. Energy Information Administration. "U.S. electricity prices continue steady increase," Today in Energy. Retail electricity prices have increased faster than the rate of inflation since 2022 and are expected to continue increasing through 2026 based on Short-Term Energy Outlook forecasts; parts of the country with relatively high electricity prices may experience greater price increases than those with relatively low prices. Link |
| [3] | Eversource Energy (company-reported). Form 10-Q for the quarterly period ended June 30, 2026. Investments in property, plant and equipment totaled $2.02 billion in the first half of 2026 compared with $2.05 billion in the first half of 2025; second quarter 2026 GAAP earnings of $53.7 million, or $0.14 per share, and non-GAAP earnings of $329.1 million, or $0.87 per share; the proposed Connecticut Light & Power rate plan includes a revenue-cap formula adjusted for inflation, a supplemental capital adjustment formula to support planned capital infrastructure improvements, an exogenous events recovery mechanism, performance metrics and an earnings sharing mechanism, with a proposed revenue requirement using a regulatory return on equity of 10.25 percent and a 53.86 percent common equity ratio. Link |
| [4] | Eversource Energy (company-reported). "Eversource Energy Reports Second Quarter 2026 Results," July 30, 2026. Serves more than 4 million electric and natural gas customers in Connecticut, Massachusetts and New Hampshire and operates New England's largest energy delivery system; electric distribution segment earned $170.4 million in the second quarter of 2026 against $161.5 million in the second quarter of 2025, primarily on higher revenues from base distribution rates; transmission segment, excluding the FERC return-on-equity refund charge noted in the release, earned $183.7 million against $208.0 million a year earlier. Link |
| [5] | U.S. Department of Energy, Integrated Energy Systems Office. "Solar Photovoltaic System Cost Benchmarks," updated September 2, 2026. The representative residential PV system for 2025 is rated 8 kWdc; Q1 2025 residential PV-only benchmarks are $2.78/Wdc minimum sustainable price and $2.95/Wdc modeled market price, with O&M of $34/kWdc-yr; the residential PV plus 13.5 kWh storage benchmark is $4.33/Wdc MSP and $4.59/Wdc MMP, with O&M of $64/kWdc-yr; all values in 2024 U.S. dollars, and benchmark costs exclude subsidies payable to the system owner. Link |
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| Positioning and market data only. Not investment advice or a recommendation. |
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