Q2 2020 Clearway Energy Inc Earnings Call

August 6, 2020

Operator: Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by, and thank you for your patience. Ladies and gentlemen, thank you for standing by, and welcome to the Clearway Energy, Inc. Q2 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Christopher Sotos. Thank you. Please go ahead, sir.

Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to stand by and thank you for your patience.

[music].

Second quarter 2020 earnings conference call at this time, all participant lines in listen only mode.

So to speak his presentation, there will be a question and answer session. That's the question. During this session you need to press star one on your telephone.

If you acquire any further assistance. Please press star Zero I would now like Dan The conference over to your Speaker today, Chris Sotos. Thank you. Please go ahead Sir.

Good morning.

Christopher Sotos: Good morning. Let me first thank you for taking the time to join today's call. Joining me this morning is Chad Plotkin, our Chief Financial Officer, Akil Marsh, our Investor Relations Manager, and Craig Cornelius, President and CEO of Clearway Energy Group. Craig will be available for the Q&A portion of our presentation. Before we begin, I'd like to quickly note that today's discussion will contain forward-looking statements, which are based on assumptions that we believe to be reasonable as of this date. Actual results may differ materially. Please review the safe harbor in today's presentation as well as the risk factors in our SEC filings. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation. Turning to page four.

Let me first thank you for taking the time to join todays call.

Joining me this morning, as Chad Plotkin, our Chief Financial Officer kill Mark, Our Investor Relations manager and Craig Cornelius President and CEO fairly energy group.

Craig will be available for the Q and a portion of our presentation.

Before we begin I'd like to quickly note that today's discussion will contain forward looking statements, which are based on assumptions that we believed to be reasonable as of this day actual results may differ materially.

Please review the safe Harbor in todays presentation, as one risk factors and our SEC filings.

In addition, we will refer to both GAAP and non-GAAP financial measures for information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. Please refer today's presentation.

Turning to page four.

Christopher Sotos: For Q2 2020, Clearway achieved CAFD of $86 million, for a total of $94 million in the first half of 2020. These results are within our expected sensitivity ranges. To date, the effects of COVID remain immaterial, with our teams maintaining safe and reliable operations through this difficult time. As previously announced, we closed on the sale of our residential solar portfolio for $75 million and immediately recycled that capital to close the first project in the April drop-down for the remaining interest that C-one did not already own in Repowering 1.0 for $70 million. After a year and a half, I am happy to note that PG&E has emerged from bankruptcy, and consistent with our commitments, we are recalibrating the dividend in line with our long-term financial objectives.

For the second quarter of 2020, clear, which Youve Kathy of 86 million for a total of 94 million in the first half of 2020.

These results are within our expected sensitivity ranges to date the effects of Tobin remain a material with our teams maintaining safe and reliable operations through this difficult time.

As previously announced we closed on the sale of our residential solar portfolio for 75 million.

And really recycle that capital to close the first project in the April dropdown.

For the remaining interest that fuel and did not already own and retiring 1.0 for 70 million.

After a year and a half I'm happy to note that PGT has emerged from bankruptcy and consistent with our commitments. We are lead calibrating the dividend inline with our long term financial objectives. So today, we are announcing a 49% increase to the company's dividend to $1.25 a share annualized which is inline with our payout ratio objectives relative to two.

Christopher Sotos: Today, we are announcing a 49% increase to the company's dividend to $1.25 a share annualized, which is in line with our payout ratio objectives relative to 2020 CAFD guidance. As of the end of June, there was $168 million in project-level cash at the PG&E-related projects, and as we've indicated previously, we will allocate this to committed growth investments. Through this capital deployment, and with the binding agreements in place we already have, Clearway Energy, Inc. anticipates being able to increase the dividend at the upper end of our 5% to 8% long-term growth rate for 2021. In addition, during the quarter, we raised $278 million in corporate capital, with $250 million issued as a tack on to the 2028 Green Bond and $28 million under the ATM program.

25 to guidance.

As of the end of June there was 168 million and predictable cash at the PGT related projects and as we've indicated previously we will allocate this to committed growth investments.

Through this capital deployment and with the binding agreements in place we already have clearly energy inc. anticipates being able to increase the dividend at the upper end over 5% to 8% long term growth rate for 2021.

In addition, during the quarter, we raised 278 million in corporate capital with 250 million issues as a tack onto the Twentytwenty eight green bond and 28 million under the ATM program.

Christopher Sotos: The Clearway Energy Board has also authorized a new $150 million ATM program to fund growth within our balance sheet objectives. With the constraints from PG&E now behind us, during the quarter, we were also able to advance new growth. First, we agreed to acquire an interest in the 419 MW Mesquite Star Wind Project, with C1 obtaining 50% of the cash flows through the middle of 2031, while the project is predominantly contracted, then retaining 22.5% of the cash flows thereafter, while it's predominantly merchant. As you will recall, as a result of the PG&E bankruptcy, we initially had to forego any investment in Mesquite Star. We have been fortunate through this period to continue working with our colleagues at Clearway Group to find a solution to allow C1 to retain an interest in the project.

Clearly energy Board as also authorized a new 150 million dollar ATM program to fund growth within our balance sheet objectives.

With the constraints from PGT now behind us during the quarter. We're also able to advanced new growth first we agreed to acquire an interest in the 419 megawatt must keep star wind project with see went obtaining 50% of the cash flows through the middle of 2031, while the project is predominately contractor.

And then retaining 22.5% of the cash flows thereafter was predominantly merchant.

As you will recall as result of the PGT bankruptcy, we initially had to forgo any investment in Miscued star.

We have been fortunate through this period to continue working with our colleagues are clearly group to find a solution to allow C to maintain an interest in the project.

Christopher Sotos: Our ability to structure an innovative approach for this project that minimizes our capital exposure in the merchant period is a testament to the strength in our sponsor relationship and provides growth outside of the ROFO pipeline. In addition, Clearway reached agreement with all parties regarding black start services at Marsh Landing, with an anticipated COD in 2021. During the 5-year pendency of the contract, C-one will re-receive a return of and on its capital, resulting in an exceptionally strong CAFD yield. While the duration of the contract is not long, this important investment continues to highlight the importance of our gas assets in the California electricity market. We continue to work with CEG on the closing of additional investments announced last quarter, with both Rattlesnake Wind and Pinnacle Repowering remaining on track.

Our ability to structure and innovative approach for this project that minimize our capital exposure in the merchant period is a testament to the strengthen our sponsor relationship and provides growth outside of the ruble pipeline.

In addition, clearly reached agreement with all parties regarding Black start services at March landing with an anticipated cod in 2021.

During the five year pendency of the contract seasonal was received a return of and its capital, resulting an exceptionally strong caf deal.

While the duration of the contract is not long. This important investment continues to highlight the importance of or gas assets and the California electricity market.

We continue to work with CTG on the closing additional investments announced last quarter with both rattlesnake win and Pinnacle Repowering remaining on track.

Christopher Sotos: Finally, we are acutely focused on driving growth for 2021 and beyond, especially in partnership with Clearway Group. We have received the drop-down offer from Clearway Group for 100% of the ownership interest in Langford, following us repowering, and the remaining interest in Hawaii Solar Phase One. The Hawaii assets are already well known to you, given CEOne's previous investments into those projects in 2019, while Langford Repowering provides another opportunity for CEOne to diversify its portfolio by participating in an asset with a hedge structure similar to Elbow Creek and ERCOT. In addition, we are engaged in structuring a co-investment in a 1.2 gigawatt portfolio of renewable assets under development by Clearway Group, with expected commercial operation dates from 2021 to 2022.

Finally, we are acutely focused on driving growth for 2021 and beyond especially in partnership with clearly group.

We have received the dropped on offer from clearly group for 100% of the ownership interest in lankford finest repowering and the remaining interest in Hawaii solar phase one.

The Hawaii assets already well known to you given Q1's previous investments into those projects and 29 team while Lankford Repowering provides another opportunity for see went to diversified portfolio are participating on asset with a hedge structure similar to enable preqin our Khan.

In addition, we are engaged in structuring a co investment and a 1.2 gigawatt portfolio of renewable assets under development by clearly group with expected commercial operation date.

From 2021 to 2022.

Christopher Sotos: While we are in the early stages of this process, this sizable portfolio will provide additional growth on a longer-term basis, with an estimated 15-year weight average life for Clearway Energy, Inc.'s CAFD per share, which will support sustained dividend growth in the future. Turning to page 5. I want to take a moment to reaffirm our long-term financial objectives, which you will see are consistent with what we have articulated historically, including after the GIP deal closed in the fall of 2018. We are still targeting a 5% to 8% long-term dividend growth rate, with achievement at the high end of the range by the end of 2021.

While we are in the early stages of this process. The sizable portfolio will provide additional growth on a longer term basis with an estimate 15 year weighted average life for clearly energy inc. after per share, which will support sustained dividend growth in the future.

Turning to page five.

I want to take a moment to reaffirm a long term financial objectives, which you will see are consistent with what we articulated historically, including after the JP deal close in the fall 2018.

We're still targeting a 5% to 8% long term dividend growth rate with achievement at the high end of the range by the end of 2021.

Christopher Sotos: This CAFD per share is then distributed at an 80% to 85% payout ratio, which we believe creates a good balance between return of capital to shareholders, maintaining a cushion to operate within the company's sensitivity range, as well as keeping some cash in the business for self-funded growth and credit rating stability. From a leverage perspective, we continue to amortize on average over $350 million of project-level, non-recourse debt annually, thereby reducing the risk to the portfolio when the current projects come off contract. In total, this financial strategy allows Clearway Energy, Inc. to target BB, Ba2 ratings, which have most recently been affirmed at stable by the agencies. Consistent with our messaging over the years, we believe that the combination of these financial policies provides flexibility for our long-term growth objectives on a sustainable basis.

This captive for shares and distributed and 80% to 85% payout ratio, which we believe creates a good balance between return of capital to shareholders, maintaining a cushion to operate within the company sensitivity range as well as keeping some cash in the business for self funded growth and credit rating stability.

From a leverage perspective, we continue to amortize on average over 350 million of project level nonrecourse debt annually, thereby reducing the risk to the portfolio when the current projects come off contract.

In total this financial strategy allows clearly energy inc. to target double B B two ratings, which is most recently been affirmed its stable by vacancies.

Consistent with our messaging over the years, we believe that the combination of these financial policies provides flexibility for long term growth objectives on a sustainable basis.

Turning to page six for an overview of our Miscued Star investment.

Christopher Sotos: Turning to page 6 for an overview of our Mesquite Star investment. As discussed earlier, this was an asset that we had to forego due to the PG&E situation. We're excited to be able to agree on an innovative structure with Clearway Group that aligns well with our investment criteria. The structure provides CEOne with 50% of the economics during the predominantly contracted period through the middle of 2031, then dropping to 22.5% during the predominantly uncontracted period. This allows Clearway to benefit most from the contracted period of Mesquite's life cycle, which is contracted to high-quality corporates, who are a major source of renewable power procurement, while reducing the proportion of our economic return exposed to the merchant energy period.

As discussed earlier this was an asset that we had the forgo due to PGT situation. So we're excited to be able to agree on an innovative structure with clearly group that aligns well with our investment criteria.

The structure provides C with 50% the economics during the predominantly contracted period through the middle of 2031, and dropping a 22 and half during the predominately uncontracted period.

This allows clearly to benefit most from the contracted period of skewed slice cycle, which is contracted high quality corporates, who are major source of renewable power procurement or reducing the proportion of our economic return expose the merchant energy period.

Christopher Sotos: When the acquisition closes, anticipated in Q3, this will further diversify our cash flows outside of California, with an estimated five-year average asset CAFD amount of approximately $8.3 million, resulting in a CAFD yield of 10.5%. In conclusion, this asset will be a strong contracted, accretive contributor to CEOne's CAFD profile through 2031, while reducing exposure during the merchant period. Turning to page 7. This slide illustrates our growth from 2020 to 2021, with additional color beyond. For 2020, we have a $1.54 of CAFD per share that we will use to reestablish our dividend at a $1.25 a share on an annualized basis for 2020.

When the acquisition closes and to spin the third quarter. This will further diversify our cash flows outside of California with an estimated five year average asset test the amount of approximately 8.3 million, resulting in a CAFTA yield of 10.5%.

In conclusion, this asset will be a strong contracted accretive contributor to cat sealants, Kathy profile through 2031, while reducing exposure during the merchant period.

Turning to page seven.

This slide illustrates our growth from 2020 to 2021 with additional color beyond.

For 2020, we have $1.54 of Caf two pressure that we will use to reestablish our dividend at $1.25 a share on annualized basis for 2020.

Christopher Sotos: Looking forward, with what we have already executed or committed to invest, we see the ability to grow our dividend at the high end of our 5% to 8% target for 2021, given the $1.70 CAFD per share, resulting anticipated dividend by the end of 2021 in a range of $1.34 to $1.36 per share. As Clearway works to maintain momentum in our CAFD per share, and therefore dividend per share growth, we've also been offered the Langford Repowering investment and Clearway Energy Group's residual interest in the Hawaii Phase One, which, subject to negotiation and approval by our independent directors, we would target closing these transactions by the end of 2020.

Looking forward and with what we have already executed or committed to invest we see the ability to grow our dividend at the high end of or 5% to 8% target for 2021.

Given the dollar 70 CAFD per share, resulting anticipate dividend by the end of 2021 in a range of $1.34 to one dollarsthirty six per share.

As clearly works to maintain momentum in our Kathy per share and therefore dividend per share growth. We've also been offered the lankford repowering investment and clearly groups residual interest in the Hawaii phase one.

Which are subject to negotiation and approval by our independent directors Retarget closing these transactions by the end of 2020.

Looking beyond 2020, we are working with our colleagues at clearly group on investing in a 1.2 gigawatt portfolio of renewable assets with fewer days in 2021, and 2022, thereby creating longer term runway for growth and Kathy per share.

Christopher Sotos: Looking beyond 2020, we are working with our colleagues at Clearway Group on investing in a 1.2 GW portfolio of renewable assets with CODs in 2021 and 2022, thereby creating longer-term runway for our growth in CAFD per share. These efforts are enhanced by our development efforts in thermal and also the potential for third-party acquisitions, the latter of which is now more attractive to the company given the resolution of the PG&E bankruptcy. With that, I'll pass the discussion over to Chad. Chad?

These efforts are enhanced by development efforts and thermal and also the potential for third party acquisitions. The letter of which is now more attractive to the company given the resolution of the PGT bankruptcy with that I'll pass the discussion over to chat Jeff.

Thank you, Chris turning to slide nine.

Chad Plotkin: Thank you, Chris. Turning to slide 9. Today, Clearway is reporting Q2 Adjusted EBITDA of $316 million, and cash available for distribution, or CAFD, of $86 million. These results bring first half 2020 Adjusted EBITDA to $541 million and CAFD to $94 million. While COVID-19 remains a key focus across the enterprise, we are pleased to say that our projects have continued to operate safely and reliably. As indicated on the Q1 earnings call, we anticipated minimal financial impacts from the pandemic. Consistent with this view, during the Q2, the primary observed business issue from the pandemic was at the thermal segment, where a reduction in volumetric sales were materially offset by lower operating costs. Though results were significantly approved year-over-year, renewable energy conditions during the Q2 were below median expectations.

Today clear way as reporting second quarter, adjusted EBITDA of $316 million and cash available for distribution or cap the $86 million.

These results bring first half 2020, adjusted EBITDA of $541 million and Kathy to $94 million.

While cobot 19 remains a key focus across the enterprise. We're pleased to say that our projects have continued to operate safely and reliably.

As indicated on the first quarter earnings call, we anticipated minimal financial impacts from a pandemic.

Consistent with this view during the second quarter. The primary observe business issue from the pandemic was at the thermal segment, where reduction in volume metric sales were materially offset by lower operating costs.

Though results were significantly improved year over year renewable energy conditions. During the second quarter were below median expectations. This was primarily due to a challenging wind environment at all time in May and June as well as higher than normal rain applications during April which impacted the solar portfolio.

Chad Plotkin: This was primarily due to a challenging wind environment at Alta in May and June, as well as higher than normal rain at locations during April, which impacted the solar portfolio. Partially offsetting these conditions was the timing of debt service payments, including the impact from the May issuance of the additional $250 million of 2028 notes, which the company benefited from due to a deferral of interest payments. Excluding these items, CAFD results in the quarter would have been at the lower end of our sensitivity range, as noted in the appendix section of the presentation.

Partially offsetting these conditions with the timing of debt service payments, including the impact from the May issuance of the additional $250 million at 2028 notes, which the company vented benefited from due to a deferral of interest payments. Excluding these items Kathy results in the quarter would have been at the lower end of our sensitivity range as noted in the.

Appendix section of the presentation.

Chad Plotkin: Overall, with results within our sensitivity range, we continue to maintain 2020 CAFD guidance of $310 million, which is now unencumbered by the PG&E projects due to its emergence from bankruptcy. In Q2, Clearway also continued its success in raising permanent corporate capital at levels supporting long-term accretion for the company. As mentioned, in May, we issued an additional $250 million of the existing 2028 Green Bonds. This financing occurred at attractive levels, as evidenced by an issuance price of 102, or a yield to worst of approximately 4.35%. The proceeds of this financing were used to repay all cash borrowings under the corporate revolver, which remains undrawn today.

Overall and with results within our sensitivity range. We continue to maintain 2020, Kathy guidance of $310 million, which is now unencumbered by the PGT projects due to its emergence from bankruptcy.

In the second quarter clear way also continued its success and raising permanent corporate capital at levels supporting long term accretion for the company.

As mentioned in May we issued an additional $250 million of the existing 2028 green bonds.

Financing occurred at attractive levels as evidenced by an issuance price of one or two or yield the worst of approximately 4.35%.

The proceeds of this financing we're used to repay all cash borrowings under the corporate revolver, which remains undrawn today.

Chad Plotkin: We also used the proceeds to retire the remaining $45 million of outstanding 2020 Convertible Notes that were due in June. During the quarter, Clearway also completed use of the existing $150 million ATM program by issuing $28 million of equity to support growth initiatives in line with our long-term balance sheet objectives. Like the tack on bond issuance, this equity was raised at attractive levels with an implied CAFD yield of just over 7%. This issuance also further demonstrated the efficacy of the ATM program to fund significant portion of Clearway's long-term equity needs at efficient prices. As such, the board has authorized the company to move forward on a new $150 million ATM program.

We also used the proceeds to retire the remaining $45 million of outstanding 2020 convertible notes that were due in June.

During the quarter clear, we also completed use of the existing $150 million ATM program by issuing $28 million of equity to support growth initiatives in line with our long term balance sheet objectives.

Like the tack on bond issuance. This equity was raised at attractive levels with an implied cap yield of just over 7%.

This issuance also further demonstrated the efficacy of the ATM program to fund a significant portion of clear way of long term equity needs at efficient prices.

As such the board has authorized the company to move forward on a new 150 million dollar ATM program.

Following these financings and with the PGT bankruptcy now resolved queries liquidity position is exceptionally strong and the company is well positioned to execute on growth within its balance sheet objectives.

Chad Plotkin: Following these financings, and with the PG&E bankruptcy now resolved, Clearway's liquidity position is exceptionally strong, and the company is well positioned to execute on growth within its balance sheet objectives. In addition to the fully undrawn revolver, Clearway has approximately $168 million of restricted cash that has been tied up at the PG&E projects. We have already received $83 million of this amount, and will receive the balance by October or through the normal distribution windows. The company is also at its target ratings level and viewed stable by both S&P and Moody's. All these factors afford Clearway significant flexibility to execute on its long-term plans. With that, I'll turn the call back to Chris for closing remarks and Q&A.

In addition to the fully Undrawn revolver clear, we have approximately $168 million of restricted cash that has been tied up at the PGT projects.

We have already received $83 million of this amount and were received a balanced by October or through the normal distribution windows.

The company is also addicts target ratings level and viewed stable by both S&P and Moody's.

All these factors afford clear way significant flexibility to execute on its long term plans.

And with that I'll turn the call back to Chris for closing remarks and QNX.

Thank you Chad turning to page 11, I wanted to close on a couple of points.

Christopher Sotos: Thank you, Chad. Turning to page 11, I want to close on a couple points. First, we are delivering on our 2020 financial commitments with CAFD and leverage in line with our goals, resulting in stable ratings from both agencies. Second, with PG&E behind us, we are resetting our dividend in line with our long-term financial policies, with the Q3 dividend now at $1.25 on an annualized basis, anticipated growth for 2021 at the upper end of our 5% to 8% long-term target growth rate. Third, we are focused on growing our long-term CAFD per share to drive sustainable dividend growth.

First we are delivering on our 2020 financial commitments with Caspian leverage in line with our goals, resulting in stable ratings from both agencies.

Second and with PGT behind US we are resetting our dividend in line with a long term financial policies with the third quarter dividend now at $1.25 on annualized basis anticipated growth for 2021 at the upper end of our 5% to 8% long term target from three.

Third we are focused on growing our long term Kathy per share to drive sustainable dividend growth with the acquisitions, we announced last quarter that new investment and the skewed star on attractive terms engaging with CTG on the repowering of the lankford asset and the residual interest in Hawaii.

Christopher Sotos: With the acquisitions we announced last quarter, the new investment in Mesquite Star on attractive terms, engaging with CEG on the repowering of the Langford asset and the residual interest in Hawaii, and continuing to further with Clearway Group to increase our CAFD per share with potential co-investment into 1.2 GW of opportunities during 2021 and with CODs in 2021 and 2022. Finally, I wanted to take the opportunity to thank our shareholders, bondholders, banks, and employees for working with us and sticking by us through the PG&E situation. The situation has challenged the organization in numerous ways, and I cannot be prouder of how the team responded to the crisis and demonstrated the resiliency that is built into the C1 platform.

In June to further with clearly group to increase our CAFD per share with potential co investment into 1.2 gigawatts of opportunities during 2021, and 2020 utilities and 2021 and 20.2.

Finally, I want to take the opportunity to thank our shareholders bondholders banks employees for working with us and sticking by us through the PGT situation.

The situation has challenged organization and numerous ways a copy prouder of harder. The team responded the crisis and demonstrated the resiliency that is built into the C. One platform I look forward to working on more growth in the future free of the constraints of the past year in half. Thank you operator, please open the line for questions.

Christopher Sotos: I look forward to working on more growth in the future, free of the constraints of the past year and a half. Thank you. Operator, please open the line for questions.

Operator: Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Once again, that is star one if you would like to ask a question. Our first question is going to come from Julien Dumoulin-Smith from Bank of America. Your line is now open.

Thank you as a reminder to ask the question you'll need to press star one on your telephone. So withdraw your question press. The pound key please standby will be compiled acuity roster and once again that is star one if you would like to ask the question.

And our first question is going to come from Julien.

Modeling Smith from Bank of America.

Your line is now open.

Julien Dumoulin-Smith: Hey, good morning, team. Congratulations on, on the dividend hike and making it through everything. Hope you guys are-

Hey, good morning team congratulations on dividend hike in making that your everything so what do you guys are jed well unsafe absolutely.

Christopher Sotos: Appreciate it.

Julien Dumoulin-Smith: Well and safe.

Christopher Sotos: Absolutely. A few different questions coming up this morning. First, conceptual one, just with respect to the gas assets versus renewables, I'm going to raise the analog of Dominion and some of the other utilities, and I know it's not necessarily direct parallel, but do you see any merits to eventually seeing a more thermal versus renewable portfolio split, whatever that means strategically? Separately and related, you talk about diversification a little bit from California here, as emphasized by your latest acquisition. Do you see the future portfolio expansion, right, ala CEG or otherwise, to be outside of California to help de-emphasize that previous issue in terms of counterparty? Sure. Thanks, Julien, and yeah, I hope you and your family are safe as well.

Christopher Sotos: Absolutely.

Julien Dumoulin-Smith: A few different questions coming up this morning. First, conceptual one, just with respect to the gas assets versus renewables, I'm going to raise the analog of Dominion and some of the other utilities, and I know it's not necessarily direct parallel, but do you see any merits to eventually seeing a more thermal versus renewable portfolio split, whatever that means strategically? Separately and related, you talk about diversification a little bit from California here, as emphasized by your latest acquisition. Do you see the future portfolio expansion, right, ala CEG or otherwise, to be outside of California to help de-emphasize that previous issue in terms of counterparty?

Due to for questions coming up this morning.

First conceptual one up.

Just with respect to gas assets versus renewables I'm going to raise the analog video.

Yes, and some of the other utilities and I know, it's not necessarily direct parallel, but do you see any merits to eventually seeing a more thermal versus renewable portfolio split.

Whatever that means strategic you strategically and then separately and related.

You talk about diversification, a little bit from California here.

As emphasize by early this acquisition do you see the future portfolio.

Expansion rate I'll ask CTG or otherwise.

Be outside of California to help deemphasize that that.

Previous issue in terms of counterparty.

Julien Dumoulin-Smith: Sure. Thanks, Julien, and yeah, I hope you and your family are safe as well.In terms of your first question, I don't think that we necessarily take a view of Dominion, that we wanna take gas out from the portfolio entirely. I think as we've talked over the years, the gas fleet provides a very good hedge against some P50 volatility that obviously we see from time to time in wind and solar. I do see, in terms of investment, much more investment going forward into renewables than gas. Obviously, Carlsbad was a large investment. If your question is, do we see a lot in the near term? Not necessarily. I'd say that natural gas would be diluted within the portfolio in terms of a CAFD contributor, as we continue to grow on average. I think that's kind of how we view gas overall.

Sure, Thanks, Julien and hope you and your founder safe as well.

Christopher Sotos: In terms of your first question, I don't think that we necessarily take a view of Dominion, that we wanna take gas out from the portfolio entirely. I think as we've talked over the years, the gas fleet provides a very good hedge against some P50 volatility that obviously we see from time to time in wind and solar. I do see, in terms of investment, much more investment going forward into renewables than gas. Obviously, Carlsbad was a large investment. If your question is, do we see a lot in the near term? Not necessarily. I'd say that natural gas would be diluted within the portfolio in terms of a CAFD contributor, as we continue to grow on average. I think that's kind of how we view gas overall.

In terms of your first question I don't think that we initially took a view of Dominion that we want to take gas out from the portfolio entirely I think as we've talked over the years are the ghastly provides a very good hedge against some P. 50 volatility that August we see from time to time and wind and solar I do see in terms of investment much more investment going forward into renewables back.

On gas, obviously Carlsbad was large investment, but if your question is do we see a lot in the near term not necessarily so I'd say that natural gas would be diluted within the portfolio in terms of the Catholic contributor as we continue to grow on average so.

I think thats kind of how we view gas overall.

Christopher Sotos: To your second question in terms of California, it's not as though that we won't look at assets in California anymore, but I think, given what did occur for the past year and a half, we often tend to look to see if we can diversify. If we have a limited amount of capital and two assets that have the same IRRs or CAFD yields at the same risk level, we'll definitely prefer something outside of California versus inside California for that reason.

Your second question in terms of California, it's not as though that we won't look at assets in California anymore, but I think given what did occur for the past year and a half we often tend to look to see if we can diversify so if we have a limited amount of capital and two assets that have the same IR ours are CAFTA yields at the same risk level will definitely prefer something outside of California versus inside telling.

Fournier for that reason.

Excellent and then if I can follow up very briefly here, just because the cadence of dividend growth and Kathy growth here. When you talk about subs going investments. The this 1.2 gigawatt portfolio.

Julien Dumoulin-Smith: Excellent. Then if, if I can follow up, very briefly here, just in terms of the cadence of dividend growth and CAFD growth here. When you talk about subsequent investments, this 1.2 gigawatt portfolio of 2021, 2022 CODs, is it to be assumed that that would largely be an end of 2021, 2022, investment, such that that would not really be such that would backstop 2022 growth? Just to make sure I'm hearing you right. When I know you talked up the outlook on dividend growth to the higher end for 2021, it sounds like some of the growth projects are actually more into 2022, if you assume that they align with the COD for investment.

[Analyst] (Bank of America): of 2021, 2022 CODs, is it to be assumed that that would largely be an end of 2021, 2022, investment, such that that would not really be such that would backstop 2022 growth? Just to make sure I'm hearing you right. When I know you talked up the outlook on dividend growth to the higher end for 2021, it sounds like some of the growth projects are actually more into 2022, if you assume that they align with the COD for investment.

Right.

We assume that that would work.

Anyone who.

Investment growth with flat would not really.

The hook that with back back about 22 growth just make sure Im hearing your right. When you I know you talk up the outlook on dividend growth to the higher end for 21, but it sounds like some of the growth projects are actually more into 22 views to the tail end of this year.

For investment.

Christopher Sotos: Simple answer is yes. Kind of to your question, I think looking at the $1.70 that we have for 2021, that's what gives us confidence to be able to increase the dividend at the high end of our rate between 5% and 8% in 2021. To your question around the 1.2 GW that we're working with Clearway Group, those would be much more for after 2021 CAFD guidance, because obviously the projects need to come online.

The simple answer is yes kind of to your question I think looking at the $1.70 that we have for 21, that's what gives us confidence to be able to increase the dividend at the high end of our rate between five an eight in 21, but to your question around the 1.2 Gigawatts that we're working with clear way group those would be much more for after 21 crafty guidance, because obviously the price.

Correct me to come online.

Okay. So really if you were to think allowed.

[Analyst] (Bank of America): Okay, excellent. Really, if, if you were to think out loud, when you think about what you already have visibility on here for 2022, given just how large a portfolio 1.2 gigs would be, I, I don't wanna push you too much, but what kind of clarity or line of sight in terms of CAFD opportunity does that provide you, in your view?

Julien Dumoulin-Smith: Okay, excellent. Really, if, if you were to think out loud, when you think about what you already have visibility on here for 2022, given just how large a portfolio 1.2 gigs would be, I, I don't wanna push you too much, but what kind of clarity or line of sight in terms of CAFD opportunity does that provide you, in your view?

When you think about what you already have visibility on here for 22, given just how large portfolio 1.2 gigs would be I want to push you too much but what kind of clarity around a site in terms of caf the opportunity does that provide you in your view.

Christopher Sotos: Yeah, we didn't really disclose that. As we said, we're in early days with working with Craig and the CEG team to kind of work through it. Obviously, when we have a binding agreement, we'll announce that. Until then, don't wanna speculate.

Yes, we didnt really disclose that and as we said were an early days with working with Craig on the CTG team to kind of worked through it. So obviously when we have a binding agreement will announce that but until then don't want to speculate.

Fair enough. Thank you guys very much of the best again.

[Analyst] (Bank of America): Fair enough. Thank you guys very much. All the best. Again, congrats.

Julien Dumoulin-Smith: Fair enough. Thank you guys very much. All the best. Again, congrats.

Yes.

Christopher Sotos: Thank you.

Thank you.

And thank you.

Operator: Thank you. Our next question comes from Colin Rusch from Oppenheimer Company. Your line is now open.

Operator: Thank you. Our next question comes from Colin Rusch from Oppenheimer & Company. Your line is now open.

Our next question comes from Colin Rusch from Oppenheimer and company. Your line is now open.

Colin Rusch: Thanks so much, guys. Can you give us a sense of what you're seeing out at the project-level debt markets, right now in terms of cost of capital and, and terms? I mean, does the market feel liquid to you? You know, how much, you know, how much money could you raise on some of these assets? It seems like there, there might be some opportunities to, you know, be pretty proactive in, in terms of, leveraging up some of the, the newer assets in specific.

Thanks, So much guys and can you give us a sense of what you're seeing out as the project level debt markets right now in terms of cost capital and.

In terms I mean, so the market still.

Liquid to you how much.

How much money gets you range on these assets it seems like there might be some opportunities too.

Yes.

Proactive in terms of us.

James.

Specific.

Sure. So I'll hand, it to chat if there's anything to add but I mean, I think we see the project financing markets is actually pretty strong I think once again there are dollars available for good projects I would say that in terms of leverage obviously, the DST ours that most of the banks are looking at or similar to what they would look at normalized market, but obviously with the interest rate environment. The.

Christopher Sotos: Sure. I'll hand it to Chad if there's anything to add. I mean, I think we see the project financing markets is actually pretty strong. I think once again, there are dollars available for good projects. I would say that in terms of leverage, obviously the DSCRs that most of the banks are looking at are similar to what they would look at in a normalized market. Obviously, with the interest rate environment the way it is, the principal tends to be a little bit higher. I, I don't know, Chad, anything to add from a project financing perspective?

Wait is the principal tends to be little bit higher onno shut anything to add from project financing perspective, yes, no Collin I, obviously as it relates to new project I think the point that Craig or excuse me our Chris raised was with accurate I mean I think if your question is do we see other opportunities on our portfolio to perhaps refinance or do anything that can draw.

Chad Plotkin: Yeah, no, Colin, you know, obviously as it relates to new projects, I think the point that Craig, or, excuse me, that Chris raised was, was accurate. I mean, I think if your question is, do we see other opportunities in our portfolio to perhaps refinance or do anything that could drive additional capital back to the corporate enterprise? I mean, I think as you've found over the years, we're always, as I say, mining the portfolio for opportunities, and we'll continue to look at that. But, I think overall, to your point, I mean, we're seeing cost of capital very attractive in the market, not just at the project level, but also at the corporate level.

Five additional capital back to the corporate enterprise I mean, we I think as Youve found over the years, we're always I'd say mining the portfolio for opportunities and we'll continue to look at back but I.

I think overall to your point I mean, we're seeing cost of capital very attractive in the market not just at the project level, but also at the corporate level.

Colin Rusch: Okay, that's helpful. Then, you know, I know there's been a lot of discussion around energy storage, but we are also seeing any number of different Volta technologies getting implemented across different portfolios. Is that something that you guys see as an opportunity in terms of, you know, selling into the ancillary services market with some incremental CapEx on existing portfolio in some sort of meaningful way?

Okay. That's helpful. And then another has been a lot, especially around energy storage, but we're also seeing any number of different bar.

Technologies given implemented.

Oh, yes is that something that you guys see as a.

Opportunity in terms of selling into the ancillary services market with something incremental capex on existing portfolio and some sort of meaningful way.

Sure I'll kind of start off and then hand, it to Craig to see if he has any additional color, but I think front from our view you. We constantly work with our colleagues at clearly energy group to say what assets that we have that may make sense to put storage on obviously you have a pretty good and wide footprint. So I think maybe call and answer your question. We look at those opportunities all the time to see what make money.

Christopher Sotos: Sure. I'll kind of start off and then hand it to Craig to see if he has any additional color. I think from, from our view, you know, we constantly work with our colleagues at Clearway Energy Group to say what assets do we have that may make sense to put storage on? Obviously, we have a pretty good and wide footprint. I think maybe, Colin, to answer your question, we look at those opportunities all the time to see what might, might make sense. Craig, I'll, I'll turn it over to you from a, what, how you're looking at on the group side.

Might make sense, but Craig ill turn it over few from what you're looking on the group side.

Craig Cornelius: Yeah, sure. Hi, Colin.

Yeah, sure Hi, calling.

Colin Rusch: Hi.

Craig Cornelius: When we look at deployment of storage technology or other technologies like you've described, in most cases, we're focused on resource adequacy, tolling-type revenue contract structures to be able to underpin an investment, because it's been our observation that ancillaries can be a market that can compress relatively rapidly, and we wanna focus on using capital both at Clearway Group and Clearway Energy, Inc. around investment opportunities that we expect will produce a reliable stream of cash flows over time, consistent with our investment objectives.

When we look at deployment is.

Storage technology or other technologies like you've described.

In most cases were focused on resource adequacy.

Totaling type revenue contract structures to be able to underpin an investment.

Because it's been our observation that ancillaries.

Can be a market that.

Can compress relatively rapidly and we want to focus on using capital both a clear a group and clearly energy inc. around investment opportunities that we expect will produce a reliable stream of cash flows over time consistent with our investment objectives, So where we've been looking or retrofit.

Craig Cornelius: Where we've been looking for retrofit opportunities for storage, and we see a number of them around the fleet, we've focused where the contracted revenue picture could actually be a pretty attractive one, and where ancillaries might be, or energy arbitrage could be a, a, a returns enhancer, but not something we're relying upon in order to underpin the investment thesis. We see chances to be able to do just that.

Great opportunities for storage and and we see a number of them around the fleet.

We focused where the contracted revenue picture could actually be a pretty attractive, one and where ancillaries might be or energy arbitrage.

Our returns enhancer, but not something we're relying upon in order to underpin the investment thesis and we see chances to be able to do just that.

Colin Rusch: All right. Can you give us a sense of how big that, that, that opportunity is with the portfolio right now?

All right.

And can you give us sense of how big that the that opportunity is with the portfolio right now.

Craig Cornelius: You know, it's a function of matching project facts and circumstances with load-serving entity appetite, as your question indicates. Right now, we are assessing an opportunity set that, you know, certainly is measured in many hundreds of megawatts. You know, as those opportunities ripen and we reach a point where there's a commercial transaction that would merit disclosure, then I think you'll certainly hear more. By virtue of the positioning of our incumbent fleet, certainly you could think of us as a company that is as well positioned as any to be able to make use of the opportunity for storage retrofit.

It's a function as.

Matching.

Project.

In circumstances with load serving entities the appetite on as you as your question indicate.

Right now we are assessing an opportunity set that.

Certainly as measured in many hundreds of megawatts.

And you know.

As those opportunities right, then and we reach a point, where there's a commercial transaction that would merritt disclosure than I think you'll certainly here more.

But by virtue of the positioning of our incumbent fleet certainly you could think of us as a company that.

Is as well positioned as any to be able to make use of the opportunity for storage.

Christopher Sotos: Okay, that's helpful, guys. Thank you so much.

Colin Rusch: Okay, that's helpful, guys. Thank you so much.

Okay. That's helpful guys. Thanks, so much.

And thank you and our next question is going to come from Stephen Byrd from Morgan Stanley. Your line is now open.

Operator: Thank you. Our next question is going to come from Stephen Byrd from Morgan Stanley. Your line is now open.

Stephen Byrd: Hey, good morning. I hope you all and your families are doing well.

Hey, Good morning, I Hope you on your families you are doing well.

Christopher Sotos: Thank you. You as well, Stephen.

Thank you usability them.

Stephen Byrd: Wanted to step back and just talk about potential election impacts, and I'm thinking about the possibility of a blue sweep, and the 3 things that I guess we often get asked about would be tax credit extension, higher corporate tax rates, and then carbon regulation. Just as a high level, as you think about your business, both your current assets as well as your growth opportunity, how do you think about those kinds of impacts to your business?

Wanted to step back and just talk about potential election impacts and I'm thinking about the possibility of the of a blue sweep and the three things that I guess, we often get asked about would be tax credit extension.

Higher corporate tax rate and then Carden regulation, just as a high level as you think about your business. Both your current assets wells your growth opportunity. How do you. How do you think about those kinds of impacts to your business.

Christopher Sotos: Sure. Well, given it's, you know, federal tax policy, I'll, I'll give a really easy answer. I think to your question, I think similarly as we think about the rate, not to minimize it, but the corporate rate, we're not as concerned about as a generalization, because of our NOL. The difference in corporate tax rate, because we're materially a minimal federal taxpayer in the near, you know, for the next 10 years under our NOL, basically from our view, the tax rate really just affects the value of the NOL. If corporate tax rates were to increase, once again, depending on how it intersects with, yeah, the convoluted nature of federal tax policy, in and of itself, the tax rate doesn't necessarily create something.

Sure well given it's a federal tax policy I'll give a really easy answer.

Thanks to your question I think similar to as we think about the rate not to minimize it but the corporate rate, we're not as concerned about as a generalization.

Because of our I know well so the difference in corporate tax rate because were materially minimal federal taxpayer in the energy out for the next 10 years under MLL basically from our view the tax rate really just affects the value of the and allow swift corporate tax rates were to increase once again, depending on how it intersects with yeah covered nature federal.

Thats policy then of itself the tax rate doesn't necessarily create something in terms of tax credits I think once again I'll lose sleep would be beneficial from that perspective, because obviously incentivizing additional renewable diesel development and tax credits on that area. I think are helpful. As well just in terms of maintaining that NFL runway at that size.

Christopher Sotos: In terms of tax credits, I think once again, a blue sweep would be beneficial from that perspective, 'cause obviously, incentivizing additional renewable development and tax credits on that area, I think are helpful as well, just in terms of maintaining that NOL runway at that size. Third, in terms of how you view, you know, the overall regulatory or carbon regulation, there it's a little bit tougher to speculate, 'cause obviously that in many ways is probably more convoluted than the corporate tax policy. I do think overall, given where the fleet is positioned, you know, a corporate tax rate and given, you know, kind of the first question that was asked, are increasing as a percentage of the overall platform on renewable assets versus natural gas, I think overall would behoove us.

A third in terms of how you view the overall regulatory.

Our carbon regulation.

Zealots, a little bit tougher to speculate because obviously that in many ways is probably more convoluted than that corporate tax policy, but I do think overall, given where the fleet is positioned a corporate tax rate and given.

The first question that was asked are increasing as a percentage of the overall platform on renewable assets versus natural gas I think overall would behoove us and I think you or the other part as well is as part of our gasoline I should have answered in the first question is our gas fleet with the Dominion analog there's a little bit different because our gas fleet is really meant to back.

Christopher Sotos: I, and I think, you know, the other part as well is, and it's part of our gas fleet, I should have answered in the first question, is our gas fleet with the Dominion analog, is a little bit different because our gas fleet is really meant to back and enable renewables in California, with the exception of the GenConn asset. It's not just as though we have a, you know, a peaker sitting out somewhere that kind of runs based upon merit. It's really there as part of helping California reach its renewable goals. I think it's a little bit different type of gas asset, depending on where our carbon legislation may come out.

I can enable renewables in California with exception of the Genconn asset. So it's not just as though we have a peter sitting out somewhere that kind of runs based upon merit, it's really there as part of helping California reach its renewable goals. So I think it's a little bit different type of gas asset depending on where our carbon legislation may come out.

Stephen Byrd: That's really helpful. Just separately, thinking about a very popular topic these days, is, you know, green hydrogen. One of the key enablers of green hydrogen, in our view, is just very cheap renewable power, and you've got some quite excellent sites. Do you see that as a long-term potential in terms of potentially siting electrolyzers at any of your sites and providing, you know, very cheap power for creation of green hydrogen? Or is that really sort of early days in terms of thinking about that?

That's really helpful and then just separately thinking about.

Very popular topic these days.

Green hydrogen one of the key enablers of Green hydrogen in our view is just very cheap renewable power and you've got some quite excellent sites do you see that as a long term potential in terms of potentially citing electrolyzers that any of your sites in providing very cheap power for.

For accretion green hydrogen or is that sort of really sort of early days in terms of thinking about that.

Christopher Sotos: I'll start and then turn it over to Craig. I think the, the one part, in when people think of those different opportunities is, you know, for good or ill, our, you know, PPA duration is pretty long. That cheap power, which I agree with, you know, a lot of it's already contracted for, so just, you know, it's kind of a negative to that question in terms of the portfolio. Craig, in terms of hydrogen and things you might be looking at?

I'll start and then turn it over to Craig I think the one port in when people think of those different opportunities is for good or ill or.

Okay duration is pretty long, so that cheap power, which I agree with you a lot of its already contracted for so just just have a negative for that question in terms of the portfolio, but Craig in terms of hydrogen and things like that with up.

Craig Cornelius: Yeah, sure. Like others, we do see this as a potential higher value end product for renewable power plants in the long run. For some time we've been evaluating the opportunity for renewable-driven electrolysis to produce hydrogen for industrial applications in Texas and for automotive applications in California. We see the long run total addressable market as higher in the former category, but see opportunity in both. It's our assessment that our sizable existing operational footprint, which you'd, which you'd touched on in both states, will provide a competitively advantaged foundation, as different required conditions in the supply chain and the market come together over time.

Yes sure.

Like others, we do see this as a potential higher value and product for renewable power plants in the long run.

For some time, we've been evaluating the opportunity for renewable driven electrolysis to produce hydrogen for industrial applications in Texas and for automotive applications in California.

We see the long run total addressable market as higher in the former category, but see opportunity of both.

It's our assessment that are sizable existing operational footprint, which you'd but you touched on in both states.

We will provide a competitively advantaged foundation.

As different required conditions in the supply chain in the market come together over time.

Craig Cornelius: I think it's our point of view that the progression of electrolyzers and the demand for hydrogen at a higher price point than it's currently sold at, will hopefully converge with the contract evolution, in particular for assets in Texas, in a way that's favorable. We spend time on this. We see an opportunity. We think others are right to see it, and in the long run, we think, you know, it, it could be favorable to the terminal value in the existing operating fleet.

And I think it's our point of view that.

The progression of Electrolyzers.

And the demand for hydrogen at a higher price point that.

Currently sold that will hopefully converge with the contract.

Evolution in particular for assets in Texas in a way that's favorable so we spend time on this we see an opportunity we think others are right to see it and in the long run we think.

It could be favorable to the terminal value in the existing operating fleet.

Stephen Byrd: That makes sense. It sounds like, you know, as you think about some of your contract expirations, that actually it could work out in the sense of the sort of confluence of the opportunity with, with contract expirations, in some cases at least. Am I understanding that correctly?

That that makes sense. So it sounds like it's you think about some of your contract expirations that actually it could work out in the sense of this sort of confluence of the opportunity with.

With contract expirations in some cases at least in my understanding that correctly, yes, you're you're sort of your ideal project configuration.

Craig Cornelius: Yeah, you know, your, your sort of, your ideal project configuration probably looks like an operating wind project that has rolled off of its initial contract period, that has a well-understood resource and a very low operating cost, and a new construction solar project, with the two of them relatively close to either existing gas distribution infrastructure or hydrogen end use. You could think of our fleet, especially in a place like Texas, as being pretty well-positioned for that kind of situation in the latter half of this decade.

Probably looks like.

On the operating wind project.

That has rolled off the its initial contract period that has a well understood resource in a very low operating costs and a new construction solar project with the two of them relatively close to either.

Existing gas distribution infrastructure or hydrogen and use.

And you could think of our fleet, especially in a place like Texas as being pretty well positioned for that kind of situation in the latter half of this decade.

Stephen Byrd: Yep. That's really helpful. Thank you so much.

Yes.

Thats really helpful. Thank you so much.

And thank you and ladies and gentlemen, if you have a question that is star. One again, if you have a question that is star one and our next question comes from David Fishman Goldman Sachs. Your line is now open.

Operator: Thank you. Ladies and gentlemen, if you have a question, that is star 1. Again, if you have a question, that is star 1. Our next question comes from David Fishman from Goldman Sachs. Your line is now open.

Good morning, Congrats on a return to normal here.

David Fishman: Good morning. Congrats on a return to normal here.

Christopher Sotos: It's been a long time. Appreciate that.

It's been a longtime appreciate that.

Christopher Sotos: It's been a long time. Appreciate that.

David Fishman: Yeah. I had a question kind of on the shape of the CAFD run rates, as it relates to kind of pro forma guidance and thinking about dividends from that. It's my understanding is the pro forma is about $1.70 of CAFD per share, but it seems like the 2021 DPS guidance of $1.34 to $1.36 is about 80%, but not quite on the low end. Is that simply just due to the kind of the timing of the escalation of some of these run rates in the pro forma? Maybe the first year or two, it's a little bit lighter, and then it escalates a little bit higher over the next couple years? Just trying to think about the shape of the cash flow.

Yes.

So I had a question kind of on the shape of the captive run rates.

Relates to kind of pro forma guidance and thinking about dividends from that.

So if my understanding of the pro forma is about $1.70 of Kathy per share, but it seems like a 2021 dps guidance of.

Only 34 to $1.36 is about 80%, but but not quite on the low end is that simply just due to the kind of the timing of the escalation of some of these run rate.

Pro forma so maybe the first year or two with a little bit lighter and then.

So escalates a little bit higher over the next couple of years, just trying to think about the shape of the cash flow.

Christopher Sotos: It's also that not all the assets are necessarily fully online 1 January 2021, so that's part of it as well.

It's also that all the assets are nestle fully online one one January 21, so that's part of it as well.

David Fishman: Okay. A timing there.

Okay. So so timing there.

Christopher Sotos: Yeah. part of it.

Yes, and part of it as Youre doing.

David Fishman: ... pro forma-

Christopher Sotos: Oh, oh, so sorry. A part of it is to your point, that, you know, some of the assets are new, you know, basically will be in the first couple months of operation. The second point is, not all of them are up and running 1 January 2021.

Sorry, it part of as to your point that some of the assets or new basically will be in the first couple of months of operation and the second point is not all of them are up and running 141.

Got it okay that makes sense.

David Fishman: Got it. Okay, that makes sense. The pro forma number itself, that's doesn't include the announced Mesquite Star potential acquisition, as well as the black start announcement. Those would be, you know, potentially incremental to that run rate. Obviously, not necessarily for 1/1 2021, but in general, that'd be incremental to the $340 million of pro forma.

Then the pro forma number itself so that doesn't include.

The announced mesquite star.

Potential acquisition as well as the black start announcements of those would be.

Actually incremental.

To that that run rate, obviously not necessarily for one one.

21, but in general that the incrementals to $340 million.

Christopher Sotos: Correct.

Correct.

Okay, and we should assume that the dividend growth could be raised proportionally to or whatever you might revise our the program or guidance rate two in the future or is it more looking the target within the 5% to 8% bad.

David Fishman: Okay. We, we should assume that the dividend growth could be raised proportionally to whatever you might revise the pro forma guidance rate to in the future? Or is it more looking to target within the 5% to 8% band?

Christopher Sotos: Yep. Once again, we try to stay within our long-term objective. I think to your point, if we kind of, you know, so to speak, got a lead and kind of were able to have higher CAFD to do those investments, that would then increase the duration, which we felt comfortable increasing the dividend at that 5% to 8% rate.

Yes, I once again, weve, which we try to stay within a long term objective. So I think to your point, if we kind of doses, we got a lead and kind of we're able to have higher cap deals investments that would then increased the duration, which we felt comfortable increasing dividend at that 5% to 8% rate.

Okay got it.

David Fishman: Okay. Got it. Just the last question. On the black start at Marsh Landing, so for the completion in 2021, as you go through that process, does that accelerate any of the potential conversations with kind of recontracting for the broader asset with the counterparty? If it does or if it doesn't, when do you kind of expect for the three assets with the contracts coming due in 2023, kind of those, the dialogue there about recontracting to pick up?

Then just the last question.

On the black start at Marsh landing so the depletion 2021 as you go through that process to accelerate any that central conversations with kind of re contracting.

For the broader asset with the counterparty.

And it does or doesn't when do you kind of expect for that three assets with the contracts coming due in 2023 kind of the dialogue there very contracts.

Christopher Sotos: I think it probably changes that dynamic marginally. Obviously, those entities are focused on the black start, not necessarily the, you know, PPA or recontracting. I think just being consistent, I've always said kind of, you know, two years a little bit early with a little bit of false precision. I think those conversations will really get going in 2021.

I think you play changes that dynamic marginally obviously those entities are focused on the Blackstone necessarily the PPA. Your re contracting I think just being consistent I've always said kind of two years, a little bit early with a little bit of false precision. So I think those conversations will really good going in 2021.

Okay.

David Fishman: Okay. That makes sense. Those are my questions. Thank you, and congrats on obviously a great quarter and the return to normal. Stay safe.

That makes sense and as my questions. Thank you and congrats on obviously great quarter another agenda.

Christopher Sotos: Thank you.

Thank you and thank you and Im showing no further questions I would now like to turn the call back over to management for further remarks.

Operator: Thank you. I'm showing no further questions. I would now like to turn the call back over to management for further remarks.

Thank you once again, thank you everyone for joining our call appreciate everyone's support over the past year and a half and really look forward to growth in the future. So thank you all free time ticker.

Christopher Sotos: Thank you. Once again, thank you everyone for joining our call. Appreciate everyone's support over the past year and a half, and really look forward to growth in the future. Thank you all for your time. Take care.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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Yeah.

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Q2 2020 Clearway Energy Inc Earnings Call

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