Avangrid Stock

Avangrid, Inc. (Avangrid) operates as a sustainable energy company in the United States. The company is a subsidiary of Iberdrola S.A. (Iberdrola).

Avangrid has operations in 24 states concentrated in the company’s two primary lines of business - Avangrid Networks and Avangrid Renewables. Avangrid Networks owns eight electric and natural gas utilities, serving approximately 3.3 million customers in New York and New England. Avangrid Renewables owns and operates 9.3 gigawatts of electricity capacity, primarily through wind and solar power, with a presence in 22 states across the United States.

The company’s direct, wholly-owned subsidiaries include Avangrid Networks, Inc., or Networks, and Avangrid Renewables Holdings, Inc., or ARHI. ARHI in turn holds subsidiaries, including Avangrid Renewables, LLC, or Renewables. Networks owns and operates the company’s regulated utility businesses through its subsidiaries, including electric transmission and distribution and natural gas distribution, transportation and sales. Renewables operates a portfolio of renewable energy generation facilities primarily using onshore wind power and also solar, biomass and thermal power.

Through Networks, the company owns electric distribution, transmission and generation companies and natural gas distribution, transportation and sales companies in New York, Maine, Connecticut and Massachusetts, delivering electricity to approximately 2.3 million electric utility customers and delivering natural gas to approximately 1.0 million natural gas utility customers as of December 31, 2023. The interstate transmission and wholesale sale of electricity by these regulated utilities is regulated by the Federal Energy Regulatory Commission, or FERC, under the Federal Power Act, or FPA, including with respect to transmission rates. Further, Networks’ electric and gas distribution utilities in New York, Maine, Connecticut and Massachusetts are subject to regulation by the New York State Public Service Commission, or NYPSC; the Maine Public Utilities Commission, or MPUC; the Connecticut Public Utilities Regulatory Authority, or PURA; and the Massachusetts Department of Public Utilities, or DPU, respectively. Networks strives to be a leader in safety, reliability and quality of service to its utility customers.

Through Renewables, the company has a combined wind, solar and thermal installed capacity of 9,338 megawatts, or MW, as of December 31, 2023, including Renewables’ share of joint projects, of which 8,045 MW was installed onshore wind capacity and 39 MW of offshore wind capacity. Renewables targets to contract or hedge above 80% of its capacity under long-term power purchase agreements, or PPAs, and hedges to limit market volatility. As of December 31, 2023, approximately 78% of the capacity was contracted with PPAs, for an average period of approximately 9 years, and an additional 11% of production was hedged. Avangrid is one of the three largest wind operators in the United States based on installed capacity as of December 31, 2023. As of December 31, 2023, Renewables installed capacity includes 68 onshore wind farms and six solar facilities operational in 21 states across the United States.

Networks

Networks, a Maine corporation, holds the company’s regulated utility businesses, including electric distribution, transmission and generation and natural gas distribution, transportation and sales. Networks serves as a super-regional energy services and delivery company through the eight regulated utilities it owns indirectly:

New York State Electric & Gas Corporation, or NYSEG, which serves electric and natural gas customers across more than 40% of the upstate New York geographic area;

Rochester Gas and Electric Corporation, or RG&E, which serves electric and natural gas customers within a nine-county region in western New York, centered around Rochester;

The United Illuminating Company, or UI, which serves electric customers in southwestern Connecticut;

Central Maine Power Company, or CMP, which serves electric customers in central and southern Maine;

The Southern Connecticut Gas Company, or SCG, which serves natural gas customers in Connecticut;

Connecticut Natural Gas Corporation, or CNG, which serves natural gas customers in Connecticut;

The Berkshire Gas Company, or BGC, which serves natural gas customers in western Massachusetts; and

Maine Natural Gas Corporation, or MNG, which serves natural gas customers in several communities in central and southern Maine.

Demand for electricity in each of the states in which Networks operates tends to increase during the summer months to meet cooling load or in winter months for heating load while demand for natural gas tends to increase during the winter to meet heating load.

New York

In 2023, the nine hydroelectric plants owned and operated by NYSEG and RG&E generated approximately 233,300 megawatt-hours, or MWh of clean hydropower, which is enough energy to power approximately 32,400 homes across New York State, assuming an average electricity consumption of 600 kilowatt-hours, or kWh, per month per customer.

Networks also holds an approximate 20% ownership interest in the regulated New York TransCo, LLC, or New York TransCo. Through New York TransCo, Networks has formed a partnership with affiliates of Central Hudson Gas and Electric Corporation, Consolidated Edison, Inc., National Grid, plc, and Orange and Rockland Utilities, Inc. to develop a portfolio of interconnected transmission lines and substations to fulfill the objectives of the New York energy highway initiative, a proposal to install up to 3,200 MW of new electric generation and transmission capacity in order to deliver more power generated from upstate New York power plants to downstate New York.

Maine

CMP owns 78% of the Maine Electric Power Corporation, or MEPCO, a single-asset 182-mile 345kV electric transmission line from the Maine/New Brunswick border to Wiscasset, Maine.

In 2018, the New England Clean Energy Connect, or NECEC, transmission project, proposed in a joint bid by CMP and Hydro-Quebec, was selected by the Massachusetts electric distribution utilities (EDCs) and the DOER in the Commonwealth of Massachusetts’s 83D clean energy Request for Proposal. The NECEC transmission project includes a 145-mile transmission line linking the electrical grids in Quebec, Canada and New England and will add 1,200 MW of transmission capacity to supply Maine and the rest of New England with power from reliable hydroelectric generation.

Connecticut

UI is a party to a joint venture with Clearway Energy, Inc., which is an affiliate of Global Infrastructure Partners, pursuant to which UI holds 50% of the membership interests in GCE Holding LLC, whose wholly-owned subsidiary, GenConn Energy LLC, or GenConn, operates peaking generation plants in Devon, Connecticut, or GenConn Devon, and Middletown, Connecticut, or GenConn Middletown.

Renewables

The Renewables business, based in Portland, Oregon and Boston, Massachusetts, is engaged primarily in the design, development, construction, management and operation of generation plants that produce electricity using renewable resources, and with more than 70 renewable energy projects, is one of the leaders in renewable energy production in the United States based on installed capacity. Renewables’ primary business is onshore wind energy generation, which represented approximately 95% of Renewables’ combined installed capacity as of December 31, 2023. For the year ended December 31, 2023, Renewables produced 19,020,041 MWh of energy through wind power generation. Renewables had a pipeline of 25,704 MW (19,625 MW - onshore and 6,079 MW - offshore) of future renewable energy projects in various stages of development as of December 31, 2023. In addition to its wind assets, Renewables had eight solar photovoltaic facilities with an installed capacity of 618 MW as of December 31, 2023, out of which six facilities were operational with an installed capacity of 529 MW. The solar photovoltaic facilities produced over 833,186 MWh of renewable energy for the year ended December 31, 2023. Solar accounted for 4.0% of the total renewable energy generation from Renewables in 2023.

A significant part of Renewables' strategic business is offshore wind. Renewables has rights to two federal offshore wind lease areas. One is located 20 miles off the coast of Massachusetts, including 101,590 acres, which has the potential to generate up to 2,600 MW of renewable energy for one or more New England states and the other is located 27 miles off the coast of North Carolina, including 122,405 acres, which has the potential to generate up to 3,500 MW of renewable energy for Virginia and North Carolina. In addition, Renewables holds a 50% indirect ownership interest in Vineyard Wind 1 LLC (Vineyard Wind 1), a joint venture with affiliates of Copenhagen Infrastructure Partners, or CIP, a fund management company based in Denmark, which has rights to a federal offshore wind lease area located 15 miles off the coast of Massachusetts, including 65,296 acres.

Prior to a restructuring transaction that closed on January 10, 2022 (Restructuring Transaction), Vineyard Wind, LLC (Vineyard Wind) held acquired easements from the U.S. Bureau of Ocean Energy Management (BOEM) containing the rights to develop offshore wind generation. Vineyard Wind acquired two lease areas, Lease Area 501, which contained 166,886 acres and Lease Area 522 which contained 132,370 acres, both located southeast of Martha’s Vineyard. Lease Area 501 was subdivided in 2021, creating Lease Area 534. On September 15, 2021, Vineyard Wind closed on construction financing for the Vineyard Wind 1 project. Among other items, the Vineyard Wind 1 project was transferred into a separate joint venture, Vineyard Wind 1. Following the Restructuring Transaction, Vineyard Wind 1 remained a 50-50 joint venture and kept the rights to develop Lease Area 501, and Vineyard Wind was effectively dissolved where Renewables received rights to the Lease Area 534 and CIP received rights to Lease Area 522 as liquidating distributions.

Vineyard Wind 1 is constructing the Vineyard Wind 1 project, an 806 MW utility-scale offshore wind project in Lease Area 501. The Vineyard Wind 1 project is expected to generate an amount of clean energy equivalent to that used by over 400,000 households and businesses in Massachusetts and reduce carbon emissions by over 1.6 million tons per year. On January 2, 2024, Vineyard Wind 1 delivered first power to the electric grid in Massachusetts.

Renewables had been developing the Park City Wind project, an 804 MW project located on Lease Area 534, that was intended to deliver clean, reliable energy to the residents of Connecticut through contracts with the EDCs in Connecticut. The project had 20-year PPAs with the EDCs in Connecticut, including UI. On October 2, 2023, following discussions with the Connecticut EDCs, Park City Wind entered into a first amendment, termination agreement and release with each of the Connecticut EDCs. On October 13, 2023, PURA approved the termination agreements.

Typically, Renewables enters into long-term lease agreements with property owners who lease their property and other sites for onshore renewable energy projects, and with federal agencies for offshore renewables energy projects. Electricity generated at a solar or wind project is then transmitted to customers through long-term agreements with purchasers. There are a limited number of wind turbine suppliers in the market. Renewables’ largest turbine suppliers, Siemens-Gamesa and GE Wind, in the aggregate supplied turbines that accounted for 69% of Renewables’ installed wind capacity as of December 31, 2023. Iberdrola had an 8.1% ownership interest in Siemens-Gamesa until it was sold in February 2020.

Renewables owns two thermal generation facilities located in Klamath Falls, Oregon with 636MW of nameplate capacity as of December 31, 2023. The 536MW Combined Cycle Cogeneration Plant creates energy from both natural gas and steam (waste heat) produced from its gas turbines. The 100MW plant is a simple cycle, peaking plant that provides flexibility in terms of quick ramp time. Both facilities are utilized to support Renewable’s Balancing Authority in addition to providing customers with capacity in peak demand periods.

Renewables is pursuing the continued development of a large pipeline of wind and solar energy projects in various regions across the United States. Each site features a range of different atmospheric characteristics that ultimately drive the selection of technology for the proposed project. As part of Renewables’ resource assessment investigation, critical atmospheric parameters such as mean wind speed, extreme wind speed, turbulence intensity, mean air density, and solar energy availability are characterized to represent long-term conditions. The summary wind and solar characteristics are then combined with a terrain analysis, or orography, and weather pattern analysis to assess siting and placement risks in order to mitigate any future operations and maintenance concerns that may arise due to improper siting or placement.

Renewables maintains close relationships with key turbine suppliers, including Siemens-Gamesa, GE, Vestas and others in order to identify the turbine technology that safely delivers the lowest cost of energy for each candidate project in its portfolio.

Renewables focuses on ensuring solar projects deliver the lowest cost of energy safely. This requires detailed information on long term performance and reliability of project components, including solar panels, trackers and inverters – particularly as technology continues to advance. Renewables relies upon a wide network of experienced solar industry consultants to provide expert advice on project development, performance specifications, manufacturing quality assurance and equipment selection. These consultants range from Tetra Tech Inc. for environmental permitting support, to companies, such as DNV GL, Clean Energy Associates, and PI Berlin to advise on energy estimation, equipment performance expectations, and equipment quality audits.

Regulatory Environment and Principal Markets

Certain aspects of Networks’ businesses and Renewables’ competitive generation businesses are subject to regulation by the FERC.

With respect to Networks’ regulated electric utilities in Maine, New York and Connecticut, the FERC governs the return on equity, or ROE, on all transmission assets in Maine and Connecticut and certain New York TransCo assets in New York.

Several of the company’s affiliates have been granted authority to engage in sales at market-based rates and blanket authority to issue securities and have also been granted certain waivers of the FERC reporting and accounting regulations available to non-traditional public utilities.

The company is a holding company, as defined in the Public Utility Holding Company Act of 2005.

The gas distribution operations of NYSEG, RG&E, SCG, CNG and BGC are subject to the FERC regulation under the Natural Gas Act of 1938, or NGA, with respect to their gas purchases/sales and contracted transportation/storage capacity.

The FERC and the Commodity Futures Trading Commission, or CFTC, monitor certain segments of the physical and futures energy commodities market pursuant to the FPA, the Commodity Exchange Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, including the company’s businesses’ energy transactions and operations in the United States.

NYSEG and RG&E are subject to regulation by the NYPSC; CMP and MNG are subject to regulation by the MPUC; UI, SCG and CNG are subject to regulation by the PURA; and BGC is subject to regulation by the DPU. The NYPSC, MPUC and the Connecticut Siting Council, or CSC, exercise jurisdiction over the siting of electric transmission lines in their respective states, and each of the NYPSC, MPUC, PURA and DPU exercise jurisdiction over the approval of certain mergers or other business combinations involving Networks’ regulated utilities.

In New York, certain Renewables’ generation subsidiaries are electric corporations subject to ‘lightened’ regulation by the NYPSC. As such, the NYPSC exercises its jurisdictional authority over certain non-rate aspects of the facilities, including safety, retirements and the issuance of debt secured by recourse to those generation assets located in New York. In Texas, Renewables’ operations within the Electric Reliability Council of Texas, or ERCOT, footprint are not subject to regulation by FERC, as they are deemed to operate solely within the ERCOT market and not in interstate commerce. These operations are subject to regulation by the Public Utility Commission of Texas, or PUCT. In California, Renewables’ generation subsidiaries are subject to regulation by the California Public Utilities Commission with regard to certain non-rate aspects of the facilities, including health and safety, outage reporting and other aspects of the facilities’ operations.

Environmental, Health and Safety

The distribution utilities of Networks are subject to regulation by the applicable state public utility commission with respect to the siting and approval of electric transmission lines, with the exception of UI, the siting of whose transmission lines is subject to the jurisdiction of the CSC and with respect to pipeline safety regulations for intrastate gas pipeline operators.

The National Environmental Policy Act, or NEPA, requires that detailed statements of the environmental effect of Networks’ facilities be prepared in connection with the issuance of various federal permits and licenses.

Under the federal Resource Conservation and Recovery Act, or RCRA, the generation, transportation, treatment, storage and disposal of hazardous wastes are subject to regulations adopted by the EPA. All of Networks’ subsidiaries have complied with the notification and application requirements of present regulations, and the procedures by which the subsidiaries handle, store, treat and dispose of hazardous waste products comply with these regulations.

Federal agencies granting permits for Renewables’ projects consider the impact on endangered and threatened species and their habitat under the ESA, which prohibits and imposes stringent penalties for harming endangered or threatened species and their habitats. Renewables’ projects also need to consider the Migratory Bird Treaty Act, or MBTA, and the Bald and Golden Eagle Protection Act, or BGEPA, which protect migratory birds and bald and golden eagles and are administered by the U.S. Fish and Wildlife Service.

The company is subject to the requirements of the federal Occupational Safety and Health Act, as amended, or OSHA, and comparable state laws that regulate the protection of the health and safety of employees. In addition, OSHA’s hazard communication standard and standards administered by other federal as well as state agencies, including the Emergency Planning and Community Right to Know Act and the related implementing regulations require that information be maintained about hazardous materials used or produced in operations of the company’s subsidiaries and that this information be provided to employees, state and local government authorities and citizens.

Customers

Networks delivers natural gas and electricity to residential, commercial and institutional customers through its regulated utilities in New York, Maine, Connecticut and Massachusetts. Networks’ customer payment terms are regulated by the state of New York, with respect to NYSEG and RG&E; Maine, with respect to CMP and MNG; Connecticut, with respect to UI, SCG and CNG; and Massachusetts, with respect to BGC, and each of the regulated utilities must provide payment arrangements to customers for past due balances.

Renewables sells the majority of its energy output to large investor-owned utilities, public utilities and other credit-worthy entities. Additionally, Renewables generates and provides power, among other services, to federal and state agencies, institutional retail and joint action agencies. Renewables also delivers thermal output to wholesale customers in the Western United States.

Properties

Networks

UI is also party to a 50-50 joint venture with certain affiliates of Clearway Energy, Inc. in GCE Holding LLC, whose wholly-owned subsidiary, GenConn, operates two 188 MW peaking generation plants, GenConn Devon and GenConn Middletown, in Connecticut.

CNG owns and operates a LNG plant which can store up to 1.2 Bcf of natural gas and can vaporize up to 90,000 Dth per day of LNG to meet peak demand. SCG has contract rights to and operates a similar plant, which is owned by an affiliate that can also store up to 1.2 Bcf of natural gas. SCG’s LNG facilities can vaporize up to 82,000 Dth per day of LNG to meet peak demand. SCG and CNG have also contracted for 20.6 Bcf of storage with a maximum peak day delivery capability of 216,000 Dth per day.

History

Avangrid, Inc. was incorporated in 1997 as a New York corporation.