Q3 2023 Clearway Energy Inc Earnings Call

November 2, 2023

Operator: Thank you for standing by, and welcome to Clearway Energy, Inc.'s Q3 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the question queue, you may press star one one again. I would now like to hand the call over to President and CEO of Clearway Energy, Inc., Chris Sotos. Please go ahead.

Yeah.

Speaker 1: Thank you for standing by and welcome to Clearway Energy Inc's third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session.

Thank you for standing by and welcome to Clearway Energy, Inc. Third quarter 2023 earnings Conference call. At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you will need to press star 1 1 on your telephone. To remove yourself from the question queue, you may press star 1 1 again.

To ask a question during the session you will need to press star one one on your telephone to remove yourself from the question queue. You May Press Star one one again.

Speaker 1: I would now like to hand the call over to President and CEO of Clearway Energy Inc., Chris Sotos. Please, go ahead. I'm Chris Sotos, and I'm here to tell you about the

I would now like to hand, the call over to President and CEO of Clearway Energy, Inc. Chris Sotos. Please go ahead.

Chris Sotos: Good morning. Let me first thank you for taking the time to join Clearway Energy, Inc.'s Third Quarter Call. Joining me this morning are Akil Marsh, Director of Investor Relations, Sarah Rubenstein, CFO, and Craig Cornelius, President and CEO of Clearway Energy, our sponsor. Craig will be available for the Q&A portion of our presentation.... Before we begin, I'd like to quickly take note that today's discussion will contain forward-looking statements, which are based on the 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'll refer to both GAAP and non-GAAP financial measures. 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 4.

Speaker 2: Good morning. It is first thank you for taking the time to like Clearway Energy in third quarter fall. Joining you this morning are Akule Marsh, Director of Investor Relations, Sarah Routenstein, CFO , and Craig Crony-Lins, President and CEO of Clearway Energy, our sponsor. Craig will be available for the Q. Thank you.

Good morning, Thank you for taking the time to Clearway Energy, Inc. Third quarter call joining.

Joining me. This morning are actual marsh director of Investor Relations, Sir Rubenstein, CFO, and Greg Cornelius President and CEO of Clearway energy our sponsor.

It would be available for the Q&A portion of our presentation.

Speaker 2: Before we begin, I'd like to quickly take note that today's discussion will contain forward-looking statements, which are based on the assumptions believed to be feasible as a person.

Before we begin I'd like to quickly take note that today's discussion will contain forward looking statements, which are based on assumptions that easily.

Reasonable state.

Speaker 2: 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'll refer to both GAAP and non-GAAP financial...

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'll refer to both GAAP and non-GAAP financial measures and.

Speaker 2: information regarding our non-GAAP financial measures and reconciliation to the most directly comparable GAAP measures . Please refer to the latest presentation.

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.

Chris Sotos: Given recent market volatility, we wanted to change our customer and investor call format, take a step back to reinforce the strength of our platform, what sets us apart from competitors, and the opportunities ahead of us. As such, first and foremost, critical to the YieldCo model is the difference of the YieldCo's cost of capital compared to that of a development company. This difference has oscillated over time, and despite the current market volatility, our sponsor's historic return targets and recently disclosed development IRR targets by other market participants demonstrate that CEG's cost of capital remains well below the target returns of a pure development, preserving this relationship and benefits for both parties. In addition, the sponsors hold approximately $1.8 billion of CEG shares, ensuring alignment of sponsor interests, the long-term interest of CEG.

Speaker 2: Given recent market volatility, we wanted to change our customer and investor call form and take a step back to reinforce the strength of our platform, which sets us apart from competitors and the opportunities ahead of us.

Given recent market volatility we wanted to change our customary investor call format take a step back to reinforce the strength of our platform.

Apart from competitors and the opportunities ahead of us.

Speaker 2: As such, first and foremost, critical to the yield co-model. If the difference of the yield cost is capital compared to that of a development.

As such first and foremost critical to the Yieldco model is the difference of the Yieldco its cost of capital compared to that of a development.

Speaker 2: differences oscillate over time and despite the current market volatility, our sponsor's historic return targets and recently disclosed development IRR targets by other market participants demonstrate that Siulun's cost of capital remains well below the target returns of a peer development, preserving this relationship and benefits for both parties. In addition, the sponsor's hold of approximately $1.8 billion of Siulun shares, ensuring alignment of sponsor interest, the long-term interest of Siulun.

This difference is oscillate over time and despite the current market volatility our sponsors historic return targets and recently disclosed development IRR targets by other market participants demonstrate that <unk> cost of capital remains well below the target returns of a pure development.

Preserving this relationship and benefits for both parties.

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Positive hold approximately one $8 billion of C. One shares ensuring alignment of sponsor interest of long term interest of Seaway.

Chris Sotos: The second ingredient for a successful YieldCo is a strong supply of assets with long-term contracts. While the current volatile capital markets have created some dislocation in the near term, the fundamental strength of renewable assets in terms of transitioning the US away from fossil fuels to green, lower-cost energy has not changed. The demand to transition our grid away from fossil fuels has not diminished. Climate change, a continual challenge for the globe shared by companies, governments' goals of reducing their carbon footprint, while the benefits of the IRA are also still intact. Most importantly, competitively priced renewable generation, when compared to the current grid cost of energy, all drive a compelling long-term growth story for CEG.

Speaker 2: The second ingredient for a successful yield sale is a strong supply of assets with long-term costs.

The second ingredient for successful you'll show the strong supply of assets with long term contracts.

Speaker 2: While the current volatile capital markets have raised some dislocation in the near term, the fundamental strength of renewable assets in terms of transitioning the US away from possible fuels to green or cost energy has not

While the current volatile capital markets create some dislocation in the near term.

The strength of our global assets in terms of transitioning the U S away from fossil fuels to clean or cost energy has not changed.

Speaker 2: The demand transition our brittle wave from fossil fuels is not diminished. Climate change, a continual challenge for the globe, geared by companies, government goals, of boosting their carbon footprint, while the benefits of the IRA are also still intact.

The demand to transition our grid away from fossil fuels is not diminished.

<unk> change a continual challenge for the globe.

By companies governments tolls.

Their carbon footprint, while the benefits of the IRR also still intact.

Speaker 2: Most importantly, competitively priced Google generation when compared to the current grid cost of energy all drive a compelling long-term post story.

Most importantly, competitively priced well generation when compared with the current <unk> cost of energy all drive a compelling long term growth story.

Chris Sotos: As part of these ingredients, we at Clearway work to optimize these larger macro elements in combination with a very straightforward corporate financing model that has underpinned no complex convertible or contingent equity financings in CEG's capital structure, and no need for external capital to meet our DPS objectives through 2026. Pulling many of these elements together, CEG and, working with the sponsors, has negotiated an increased CAFD yield to 10% on Drop-Down assets of approximately $230 million of corporate capital deployment that we will discuss later. Importantly, we reaffirm our continued line of sight for $2.15 of CAFD yield per share, with no need for external corporate capital, and our consistent message over the past several years of visibility achieved a high range of our 5% to 8% long-term target.

Speaker 2: Part of these ingredients, we have clearly worked to optimize these larger macro elements in combination with a very straightforward corporate financing model that has underpinned no complex convertible or contingent equity financing and C1's capital structure and no need for external capital to compete our DPS objectives to 2020.

As part of these ingredients. We actually are we have worked to optimize these larger macro elements in combination with a very straightforward corporate financing model that has underpinned the complex to portable our contingent equity financings and <unk> capital structure.

And no need for external capital to meet our Dts objectives through 2026.

Speaker 2: pulling many of these elements together, CUN, and working with the sponsors as the GioShin increased Caffe yield to 10% on drop-down assets of approximately $230 million of corporate capital deployment that we will discuss later.

Pulling many of these elements together.

And working with the sponsors as negotiated increased Kathy yields of 10%.

<unk> assets approximately $230 million of corporate capital deployment, we will discuss later.

Speaker 2: Fortunately, the reaffirm our continued flight on site for $2.15 of CASTY for share with no need for external corporate capital and our consistent message over the past several years of visibility received a high range of our 5-8% long-term part.

Accordingly, we reaffirm our continued fight a site or $2.15 of Kathy for sure.

No need for external corporate capital and our consistent message over the past several years of visibility.

The high range of our 5% to 8% long term target.

Chris Sotos: Looking beyond 2026, in addition to the strong long-term global development demand we described earlier, CEG also benefits from having strategic natural gas assets in California that are critical to assisting that state in transitioning away from fossil fuels. As evidence of this value, we have recently been awarded an additional approximate 1.5 years of contracted RA value at strong pricing on a portion of our fleet. This pricing provides a strong foundation for CEG to continue its growth trajectory in 2027 and beyond, in line with its long-term targets. In summary, despite challenging market conditions, the key elements that underpin a strong YieldCo still exist: significant cost of capital differences between the YieldCo and the sponsor, strong development spend, and demand for renewable assets, long-term contracts, combined with a straightforward capital structure that translates into transparent growth. Turning to slide 5.

Speaker 2: in looking beyond 2026, in addition to the strong long-term global development demand we described earlier, UN also benefits and strategic natural gas assets in California that are critical to assisting pet state and transitioning away from fossil.

And looking beyond 2026 in addition to the strong long term.

And we described earlier.

So benefits patent strategic natural gas assets in California that are critical to assistant that state and transitioning away from fossil fuels.

Speaker 2: as evidence of this value. He'll recently been awarded an additional approximate year and a half of contracted RA value a strong pricing and a portion of our fleet.

As evidence of this value recently been awarded an additional approximate year and a half are contracted or a value a strong pricing on a portion of our fleet.

Speaker 2: pricing provides a strong foundation for Siouen to continue its drill trajectory in 2027 and beyond in line with long-term target.

Is pricing provides a strong foundation pursuant to continue its growth trajectory in 2027 and beyond in line with long term targets.

Speaker 2: and summary. By challenging market conditions, the key elements that underpin a strong yield post village.

In summary, despite challenging market conditions, the key elements that underpin our strong yield coast still exists cigna.

Speaker 2: significant cost of capital differences between the Ocon the sponsor Strong development spend and demand for renewable assets long term contracts combined with the straightforward capital structure that translates into transparent broke

Significant cost of capital differences between the Oklahoma sponsor.

Strong development spend the demand for renewable assets long term contracts combined with a straightforward capital structure that translates into transparent growth.

Turning to slide five.

Chris Sotos: Critical, critical to the success of the YieldCo model is a strong sponsorship relationship. One key element of this is a cost of capital difference between the YieldCo and development company. Given the return requirements of GIP and TotalEnergies, as well as other recent examples of publicly disclosed development returns, that relationship continues to hold between Clearway Group and CEG, even in the increased cost of capital environment they're operating in. Clearway Group, which owns 85 million total shares of CEG, representing approximately $1.8 billion of value, also receives approximately $130 million of dividends per year. It helps fund the entity's development activities to ensure a strong, strong supply of drop-down assets in the future. Importantly, Clearway Group and our sponsors do not have any IDR or other special arrangements to derive value from the relationship with CEG.

Speaker 2: Real cool, real cool to the success of the YoastCo model is a strong sponsorship relation.

Critical to the success of the Yieldco model is a strong sponsorship relationship.

Speaker 2: One key element of this is a cost of capital difference between the hotel and development.

One key element of this.

As a cost of capital difference between the hotel and development.

Speaker 2: Given the return requirements of GIP and total energies, as well as other recent examples of publicly disclosed development returns, that relationship continues to hold between clear rate, group, and C-win, even in the increased cost of capital environment drop.

Given the return requirements with GIC and total energies as well as other recent examples are publicly disclosed development returns that relationship continues to hold between clear rate frequency, even in the increased cost of capital environment, They're operating in.

Speaker 2: Fairway Group, which owns 85 million total shares of C1, representing approximately $1.8 billion of value. Also receives approximately $130 million of dividends per year. It helps fund entities development activities to ensure a strong supply of drop down assets in the future.

Clearway group, which owns 85 million total shares and see one representing approximately $1 $8 billion of value.

So receives approximately a $130 million of dividends per year helps fund entities development activities to ensure a strong supply of dropdown assets in the future.

Speaker 2: importantly, it's where we're grouping our sponsors and I have any IDR or other special arrangements to derive value from the relationship with C1. There's the Increasing C1's FOC price, dividends paid, and margin development assets that aligns value of the position for all

Importantly, clearway group and our sponsors.

Any idea or other special arrangements to derive value from their relationship with C. One is the increase in human stock price.

Chris Sotos: As the increase in CEG stock price, dividends paid, and margin on development assets that aligns value optimization for all entities. As evidence of this relationship, Clearway Group has agreed to boost the targeted yields on over $230 million of CEG investments from approximately 9 to 9.5% cap yield to 10%, providing additional accretion on our redeployed thermal capital and reaffirming our line of sight growth through 2026. Clearway Group continues to invest heavily in development, in line with line of sight drop-down growth through 2026, as well as flexibility for timing of drop-downs thereafter. Slide 6 provides an overview of CEG's 29-gigawatt development pipeline, which has grown substantially in previous years.

<unk> paid and margin development assets at Alliance Valley up the patient for all entities.

Speaker 2: as evidence and relationship. So a group has agreed to prove the targeted yields on over $230 million of C1 investments from a approximately nine to nine and a half percent capital to 10.

As evidence of this relationship.

So a group has agreed to move the targeted yields on over $230 million you on investments for approximately 9% to nine 5% cap deal to 10%.

Speaker 2: fighting additional accretion on our redeployed thermal capital and reaffirming our line of sight growth through 2020.

Finding additional accretion on our redeployed thermal capital and reaffirming our line of sight growth through 2026.

Speaker 2: The Clearway Group continues to invest heavily in the Golanin and line with line-up site drop-down growth through 2026 as well as flexibility for timing of drop-downs there at.

So a group continues to invest heavily in development in line with line of sight Dropdowns through 2026, as well as flexibility for timing of Dropdowns thereafter.

Speaker 2: Flight 6 provides an overview of CEG's 29 gig-lotted-align pipeline, which has grown substantially in previous years. This pipeline, which is an important source of growth for C1, continues to receive strong sponsor capital deployment to advance development projects that are well diversified among technology types and compatible with C1's growth and diversification objectives.

Slide six provides an overview of Ctg's 29, gigawatts at all and pipeline, which has grown substantially in previous years. This pipeline.

Chris Sotos: This pipeline, which is an important source of growth for CEG, continues to receive strong sponsor capital deployment to advance development projects that are well diversified among technology types and compatible with CEG's growth and diversification objectives. The significant sponsor support has been demonstrated in allowing the platform to grow by over 2 gigawatts in the last 12 months, and to nearly double in the last 2 years. The continued importance of scale in this industry is critical to managing through volatile periods, being able to leverage a large development and operational platform to weather these storms. To this point, Clearway Group has been able to procure cost-effective supply agreements, which should enable domestic content qualification and/or reduce interconnection timeline risk for the 2025 to 2027 pipeline....

Source of broke pursue one continues to receive strong sponsor capital deployment to advanced development projects that are well diversified amongst technology types and compatible with <unk> growth and diversification objectives.

Speaker 2: significant sponsor support has been demonstrated in allowing the platform to grow by over two gigawatts. The last 12 months and to get doubled the last two

The significant sponsor support has been demonstrated in a lot of the platform to grow by over two gigawatts in the last 12 months engineered doubled the last two years.

Speaker 2: It continues important to scale in this industry. It's critical to managing to follow all periods and being able to leverage a large development operational platform to whether it be storm.

The continued importance of scale in this industry. It is critical to managing through volatile periods being able to leverage a large development operational platform to weather the storms.

Speaker 2: To this point, clearly, group has been able to procure cost-effective supply agreements to enable domestic content qualification and or reduce interconnection timeline risk for their 2025 to 2027 pipe.

At this point clearly group has been able to procure cost effective supply agreements should enable domestic content qualification and or reduce interconnection timeline risk for 2025 to 2027 pipeline.

Chris Sotos: In conclusion, the Clearway Group development platform has the benefit of leading scale in its class, as being sponsors to ensure a supply of drop-down assets for CWEN in the future. Turning to page 7. During this period of market dislocation, there have been a number of questions around long-term challenges, development of renewable assets, and contracts. While the rapid increase in interest rates since May has created some headwinds in the near term, and as all stakeholders have had to adjust to the capital cost conditions, we do not see this as a long-term impediment to the growth of renewables in the US. As a backdrop, renewable industry benefits from a variety of supportive federal and state policies, as well as corporate ESG goals, which drive long-term demand for renewable assets that are not as sensitive to price increases.

Speaker 2: In conclusion, the Clearway Group Development Platform has the benefit of leading scale in its class being sponsors to ensure us apply a drop down assets for C1 in the future.

Conclusion.

Clearway Group development platform has the benefit of leading scale in its class as being sponsors to ensure supply of dropdown assets for <unk> in the future.

Turning to page seven.

Speaker 2: During this period of market dislocation, there have been a number of questions around long-term challenges the development of renewable assets for contracts.

During this period of market dislocation there've been a number of questions around long term challenges development of renewable assets contracts.

Speaker 2: Although rapid increase in interest rates in its may has created some headwinds in the near term and as all stakeholders have had to adjust to keep capital cost going.

While the rapid increase in interest rates since may has created some headwinds in the near term and as all stakeholders that had but just a capital cost conditions.

Speaker 2: He's not seeing this as a long-term impediment to the close of removals of the US.

Not see this as a long term impediment to the growth of renewables with U S.

Speaker 2: as a backdrop. The global industry benefits from a variety of supportive federal and state policies, as well as corporate ESG goals. It drives long-term demand for renewable assets that are not essentially the price

As a backdrop.

Industry benefits from a variety of support of federal and state policies as well as corporate ESG goals to drive long term demand for renewable assets that are not as sensitive to the price increases.

Chris Sotos: In addition, renewable PPAs are still competitively priced versus non-renewable power options. It is not as though an increased cost of capital only impacts renewable assets. It impacts all electricity-generating assets. Importantly, regardless of ESG or RPS standards, renewable assets produce electricity at prices that are competitive with other forms of generation, so are an attractive source of energy in economic terms as well. That being said, all of us within the Clearway enterprise are cognizant of the increased capital costs that impacts all stakeholders during this period of readjustment in PPA pricing. Long-term asset owners like CWEN, tax equity, non-recourse debt providers, OEM suppliers, developers, and PPA offtakers alike.

Speaker 2: In addition, when global PPAs are still competitively priced versus non-reduable power options, it is not as though an increased cost of capital only impacts renewable assets and impacts all electricity generated assets.

In addition, renewable ppas are still competitively priced versus non renewable power options.

As though an increased cost of capital only impacts renewable assets and impacts all electricity generating assets.

Speaker 2: Importantly, regardless of the USG or RPS standards, renewable assets produce electricity at price of their competitive with other forms of generation. So I'll earn attractive source of energy in economic terms as well.

Importantly, regardless of ESG or Rps standards renewable assets produce electricity at prices are competitive with other forms of generation. So are an attractive source of energy and economic terms as well.

Speaker 2: That thing said, all of us have been the clearly enterprise of cognizant of the increased capital costs that impacts all stakeholders, the areas of adjustment and GDP prices.

That being said.

All of us within the clear way enterprise are cognizant of the increased capital costs that impacts all stakeholders.

Readjustment in <unk> pricing.

Speaker 2: long-term asset owners like C1, tax equity, not recourse debt providers, but we have suppliers, developers, and TPA off-takers alike.

Long term asset like <unk> tax equity nonrecourse debt providers, OEM suppliers developers and PPA off takers.

Chris Sotos: While we cannot forecast precisely how long it may take PPA prices to increase, we can say the scale becomes ever more important during this period, as it is critical to be able to develop quality, cost-effective projects, and we at CWEN take significant comfort in having Clearway Energy Group as one of the largest developers in the US, backed by GIP and TotalEnergies, two of the largest companies in their respective industries, to manage through this period. Simply stated, all of us within the Clearway enterprise recognize that we are in a period that require adjustments by all stakeholders, but we are in a more competitively advanced position than most to manage this. Turning to slide 8. An additional ingredient for success in the long term is a straightforward capital allocation and financing strategy. As we've discussed through the years, we have a simple capital structure.

Speaker 2: or it cannot forecast precisely how long it may take EPA prices to increase. We can say the scale becomes ever more important during this period as it is critical to be able to develop quality cost effective projects. And we have seen when it takes an if-it-can comfort in having clear-way energy grew as one of the largest developers in the US, backed by GIP and total energies to the largest companies in the respective industries to manage this period.

We cannot forecast precisely how long it may take PPA prices increase we can say the scale becomes ever more important during this period as it is critical to be able to develop quality cost effective projects and we have seen when it takes a significant comfort having clearway energy group is one of the largest developers in the U S backed by <unk>.

IP and so tall energies towards the largest companies in their respective industries to match this period.

Speaker 2: Simply stated, all of us with a McSurray enterprise recognize that we are in a period that require adjustments by all states. tomatoaaaaaaaaaareaaaaaaaaaaaveaaaaaaaaaaand ... I gave you a Intces if you would say.

Simply stated all of us within Mcsorley enterprise recognize that we are in a period that require adjustments by all stakeholders.

Speaker 2: but we are in a more competitively advanced position than most to manage them.

In a more competitively advantaged position than most to manage through.

Turning to slide eight.

Speaker 2: And Dichland Green, of course, success, the long term is a straightforward capital allocation of financing strategy. As we've discussed through the years, they have a simple capital structure. No complex financing requires a C1 Common Equity Conversion or contingent issuance. No need for external capital, either to meet our DPS growth through 2021.

Additional ingredient for success long term is a straightforward capital allocation and financing strategy as we've discussed through the years, we have a simple capital structure with no complex financings require SD Wan common equity conversion are contingent on issuance.

Chris Sotos: With no complex financings requiring a CWEN common equity conversion or contingent issuance, no need for external capital either to meet our DPS growth through 2026. We are also insulated from current interest rate volatility, with 99% of our consolidated debt fixed through the utilization of interest rate swaps and no corporate maturities through 2028. CWEN also naturally amortizes over $350 million of non-recourse debt per year, as our debt amortization schedule is designed to limit risk around PPA renewal in different energy market environments, as was recently demonstrated with our three natural gas assets that became merchant in 2023. All of this leads to an overall conservative capital structure that correlates to a Baa2 rating, has been maintained since 2016 through a variety of challenges and market headwinds.

For external capital either to meet our Dps growth through 2026.

Speaker 2: We are also enslaved from current interest rate volatility, with 99% of our consolidated debt fixed through utilization of interest rate slops, and no corporate maturity is due to 2020.

So insulated from current interest rate volatility.

99% of our consolidated debt fixed realizations of interest rate swaps and no corporate maturities through 2028.

Speaker 2: Zewin also naturally amortizes over $350 billion of down-request debt per year. As our debt amortization schedule is designed to limit risk around TPA rental in different energy market environments. As was recently demonstrated, there are three natural gas assets that became merchant in 2023.

So you want to also naturally amortize over $350 million of non recourse debt per year as our debt amortization schedule is designed to limit risk around PPA renewal and different energy market environments. As was recently demonstrated our three natural gas assets that became merchant in 2023.

Speaker 2: All of this leads to an overall conservative capital structure that correlates to a double BBA2 rating that has been maintained since 2016 through a variety of challenges and market headway.

All of this leads to an overall conservative capital structure that correlates to a double EPA. Two rating has been maintained since 2016 for a variety of challenges and market headwinds.

Chris Sotos: CWEN's disciplined financial management has provided a strong foundation for sustainable growth through a variety of market conditions. To provide further disclosure around our sponsor support on our latest drop-down offers, please turn to page 9. We are excited to announce that we have a commitment to purchase Texas Solar Nova for approximately $40 million of capital on a 10% CAFD. These projects consist of over 450MW of solar located in Kent County, Texas, and are underpinned by power contracts that are 18 years in duration with creditworthy counterparties.

Speaker 2: The C1's discipline-facial management is provide a strong foundation to sustainable growth through a variety of market conditions.

<unk> disciplined financial management is provide a strong foundation for sustainable growth through a variety of market conditions.

Speaker 2: To provide further disclosure around our sponsor support and our latest dropdown offers, please turn to page nine.

To provide further disclosure around our sponsor support on our latest dropdown offers please turn to page nine.

Speaker 2: We're excited to announce that we have a commitment to purchase Texas SolarNova for approximately $40 million of capital and a 10% cap.

We are excited to announce that we have a commitment to purchase Texas solar Nova for approximately $40 million of capital and a 10% cap.

Speaker 2: These projects consist of over 450 megawatts of solar located in Kent County, Texas, and are underpinned by power contracts that are 18 years in duration with creditworthy counterparty.

This project consists of over 450 megawatts of solar located in <unk> County, Texas and are underpinned by a power contracts that are 18 years in duration with credit worthy counterparties.

Chris Sotos: In addition, discussions with Clearway Energy Group, we've been able to come to agreement to modify Dans Mountain's CAFD yield to approximately 10% from approximately 9%, benefit from the new Drop-Down 25 offer of three solar assets and our approximate CAFD yield of 10%, compared to the 9.5% that was targeted previously. These high-quality assets are significantly weighted towards solar and storage generation, with fully contracted node settle unit contingent contracts to reduce volatility from the CEWN fleet. These drop-downs complete the allocation of the excess proceeds from the thermal sale close in May of 2022, and most recently, an increased CAFD yields, demonstrating a long-term alignment of interest between CEWN and sponsors to continue to drive value for shareholders. Turning to page 10. This is a graph that should be familiar to you.

Speaker 2: In addition, discussions with Clearway Energy Group have been able to come to agreement to modify Dan's Mountain's CAFD yield to approximately 10 percent for approximately 9 percent, benefit from a new drop-down 25 offer of three solar assets and our approximate CAFD yield of 10 percent compared to the 9.5 percent that was targeted previously.

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Discussions with Clearway Energy group.

We're able to come to agreement to modify Dan's mountains cap to yield approximately 10% for approximately 9% benefit from a new dropdown twenty-five offer of three solar assets in our approximate cash yield of 10% compared to the 95% of targeted previously.

Speaker 2: These high-quality assets are significantly weighted towards solar and storage generation with fully contracted, node-settled, unit-contingent contracts to reduce volatility from the C1 fleet.

These high quality assets are significantly weighted towards solar and storage generation, we're fully contracted nodes subtle unit contingent contracts to reduce volatility from the C. One fleet.

Speaker 2: These dropdowns complete the allocation of the excess proceeds from the thermal sale close in May of 2022, and most recently an increased cap yields, demonstrating a long-term alignment of interest between CON and sponsors to continue to drive value for shareholders.

These dropdowns complete the allocation of the excess proceeds from the thermal sale closed in May of 2022, and most recently an increased cap yields demonstrating long term alignment of interest between COF as sponsors to continue to drive value for shareholders.

Speaker 2: Turning to page 10, this is a graph that should be familiar to you. It's a lock of heart growth visibility for 2026.

Turning to page 10. This is a graph that should be familiar to you.

Chris Sotos: It's a walk of our growth visibility through 2026. Starting on the left side of the page is our prior $420 million CAFD outlook that CWEN will achieve when the majority of the Drop-Down 24 assets are operational on a full year basis. The second column is a reduction in CAFD of $10 million dollars; we're updating to reflect a variety of factors: revisions to our P50, given weak wind resources in 2023, increased insurance costs, inflation, as well as other factors. The third column represents a $5 million CAFD increase for our investments in TSN, as well as the incremental contribution of the Cedro Hill repowering prior to 2026, summing up to our updated pro forma CAFD outlook of $450 million.

Lock of our growth visibility through 2026 start on the left side of the page is our prior $420 million outlook at you enroll achieved when the majority of the dropdown 24 assets are operational on a full year basis.

Speaker 2: To start on the left side of the page is our prior $420 million CAFD outlook that you and Will achieve when the majority of the drop-down 24 assets are operational on a full-year basis.

Speaker 2: The second column is a reduction in cash. You have $10 million for updating to reflect the variety of factors.

The second column is the reduction in cash you have $10 million or update to reflect a variety of factors.

Speaker 2: Revisions to our P50 given weak wind resources in 2023, increased insurance costs, inflation, as well as other factors.

Patients who are <unk> 50, given weak wind resources in 2023 increased insurance cost inflation as well as other factors.

Speaker 2: The third column represents a $5 million CAFDI increase for investments in TSN, as well as the incremental contribution to Cedro Hill repowering prior to 2026, summing up to our updated pro forma CAFDI outlook of $415 million.

The third column represents a $5 million capacity increase our investments in CSN as well as the incremental contribution of Cedar Hill Repowering prior to 2026 summing up to our updated pro forma Kathy outlook of $415 million.

Chris Sotos: This, when added to the approximate $20 million of CAFD, Drop-Down 25, discussed previously, ends at our updated line of sight CAFD of approximately $435 million. Importantly, we are maintaining the $2.15 CAFD per share guidance through 2026 that we've discussed previously. We believe the ability to maintain our long-term CAFD line of sight and our growth trajectory speaks to the strengths of the CWEN four platform. Turning to slide 11. Slide 11 provides a summary of CWEN's contracted and open positions in the resource adequacy market through the next four years. We currently have the benefit of approximately 100% of our capacity contracted through 2025, 87% contracted through 2026, and now with 42% contracted in 2027.

Speaker 2: this to add to the approximate $20 million of CAFTI, dropped down 25 discussed previously, and to update line of site CAFTI approximately $435 million.

This one added approximate $20 million of Kathy dropdown twenty-five discussed previously.

And that our updated line of sight, Kathy approximately $435 million.

Speaker 2: Importantly, we are maintaining the $2.15 Cathy Persher guidance through 2026 that we've discussed.

Importantly, we are maintaining the $2.15 per share guidance through 2026, and we have discussed previously.

Speaker 2: I believe the ability to maintain our long-term cap-to-line of sight and our growth trajectory speaks to the strengths of the C1-4 platform.

We believe the ability to maintain our long term capital your line of sight and our growth trajectory speaks to the strengths of the <unk> platform.

Turning to slide 11.

Speaker 2: Slide 11 provides a summary of C1's contracted and open positions in the resource adequacy market through the next four years.

Slide 11 provides a summary of <unk> contracted and open positions in the resource adequacy market through the next four years.

Speaker 2: We currently have the benefit of approximately 100% of our capacity contracted through 2025, 87% contracted through 2026, and now with 42% contracted in 2027.

We currently have the benefit of approximately 100% of our capacity contracted through 2025, 87% contracted through 2026, and now with 42% contracted in 2027.

Chris Sotos: As discussed throughout the year, CWEN participated in several RFP auctions and bilateral discussions. As a result, was able to secure 2 contracts for approximately an additional year and a half at strong pricing compared to previous contracts. While we cannot disclose the pricing of these contracts due to confidentiality provisions, we can say that the pricing achieved in these contracts, if we extrapolate the current uncontracted megawatts in 2027 and beyond, that would drive growth in 2027 for the low end of our 5 to 8 long-term CAFD per share growth target, without requiring any other drop-downs for external capital.

Speaker 2: As discussed throughout the year, Suman participated in several RFP auctions and bilateral discussions. As a result, it was able to secure two contracts for approximately an additional year and a half at strong pricing compared to previous contracts.

As discussed throughout the year human participate in several RFP auctions in bilateral discussions as a result was able to secure two contracts for approximately additional year to have a strong pricing compare to previous contracts.

Speaker 2: But we cannot disclose the pricing of these contracts due to confidentiality issues.

We cannot disclose the pricing on these contracts due to confidentiality provisions, we can say that the pricing achieved on these contracts extrapolate current unconstructive megawatts and 27 and beyond.

Speaker 2: can say that the pricing achievement of these contracts with the extrapolated current uncontracted megawatts in 2027 and beyond, that would drive growth in 2027 with a low end of our five to eight long-term cafty per share growth target without requiring any other dropdowns or external.

That would drive growth in 2027 for the low end of our five to eight long term cap your per share growth target without requiring any other dropdowns are external count.

Chris Sotos: This is an important source of potential CAFD growth in the future, and while we view the extension of our RA contracts as strong pricing, as an excellent signal of this growth in the future, we feel it is too early to declare victory and incorporate this higher pricing into our 2027 and beyond view. Now I'll turn it over to Sarah. Sarah?

Speaker 2: is an important source of potential capital growth in the future. And while we view the extension of our RA contract as strong pricing, as an excellent signal of this growth in the future, we feel it is too early to declare victory and incorporate this higher pricing into our 2027 and beyond yield. Now I'll turn it over to Sarah. Sarah?

This is an important source of potential path to growth in the future and while we do the extension of our <unk> contracts strong pricing is an excellent signal of the future.

It is too early to declare victory and incorporate this higher pricing into our 2027 and beyond.

Now I'll turn it over to Sir Sir.

Sarah Rubenstein: Thanks, Chris. On slide 13, we provide an overview of our financial update, which includes CAFD of $156 million for Q3 2023. Based on results incurred to date, as well as forecasted activity through the balance of 2023, we are reiterating our 2023 full-year CAFD guidance range of $330 to $360 million. We are also introducing guidance for 2024 of $395 million in full-year CAFD, reflecting certain one-time maintenance costs, along with timing of growth investments whose run rate CAFD contributions are achieved after 2024. We will provide further detail in a moment. Our dividend per share growth outlook for 2024 remains aligned with our long-term growth objectives. For Q4, we are announcing a dividend increase of 2%, $0.3964 per share.

Speaker 3: On slide 13, we provide an overview of our financial update, which included CAFI of $156 million for the third quarter of 2023. Based on results occurred to date, as well as forecasted activities through the balance for 2023, we are reiterating our 2023 full-year CAFI guidance range of $330 to $360 million.

Thanks, Greg.

All right.

To provide an overview of our financial update.

Kathy.

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For the third quarter 2023 based on results to date and solid forecast.

Great.

Iterating, our 323 full year Kathy guidance range.

$360 million.

Speaker 3: We are also introducing guidance for 2024 of $395 million of full-year tax fees, reflecting certain one-time maintenance costs, along with timing of gross investment to run rate tax contributions are achieved after 2024.

Speaker 3: they're repeatedly probed to the

Speaker 3: For the fourth quarter, we are announcing a dividend increase to 2%, 39.6% per share.

Sarah Rubenstein: A decrease to $1.5856 dividend per share on an annualized basis. For 2023, this reflects full-year dividend growth as compared to 2022 of 8%, which is consistent with our long-term growth target. In addition, we are announcing a dividend per share growth target for 2024 of 7%, in line with our growth target in the upper part of the 5% to 8% range for 2026. Turning to slide 14, we highlight CAFD of $156 million and Adjusted EBITDA of $323 million for Q3 2023. Compared to our expectations, conventional energy gross margin was approximately $11 million lower due to milder September temperatures in California. Despite lower energy margins, the conventional facilities had strong availability and provided resource adequacy as expected.

Alright.

Compared to your expectations.

Speaker 3: Compared to our expectations, conventional energy growth margins was approximately 11 billion lower due to milder temperatures in California.

And then <unk> Eleventh's, Lillian flower 60 miles or temporary temperatures, California.

Speaker 3: Despite lower energy margins, the conventional facilities had strong availability and provided resource adequacy as expected.

Despite lower energy.

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Sarah Rubenstein: Solar generation was also in line with internal expectations for Q3, while wind generation for the overall sector industry was lower than anticipated in August and September. Q3 CAFD was also, to a lesser degree, affected by increased seasonal expenses for ... Year-to-date CAFD of $289 million third quarter of 2023 continues to reflect the previously reported historically low wind production and lower-than-expected merchant energy margins with conventional facilities through Q2 of 2023. The company continues to maintain its full-year CAFD guidance range of $330 to $360 million. However, we anticipate that 2023 full-year results will fall within the lower end of the guidance range.

Speaker 3: Solar generation is also in line with internal expectations for the third quarter, while wind generation for the overall C-West wind speed is lower than anticipated in August .

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Speaker 3: The third quarter casting was also to a left or three affected by H3C.

Order Cathy with all due to a lesser degree affected by it.

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Speaker 3: Year-to-date capacity of 289 million per quarter of 2023 continues to reflect.

<unk> 280, 333rd quarter at 333 continues to reflect the previous record.

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Speaker 3: low-waste production and lower than expected merchant energy margins with expansional facilities through the second quarter of 2021.

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Speaker 3: continues to maintain a full-year capacity-guided screen with the 30

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Speaker 3: However, we anticipate that 2023 full year results will fall within those lower ends of the guidance.

Can you tell me again how.

Are we anticipate at 323 pull your results will fall, but there's no blood work and stuff the guidance Street.

Sarah Rubenstein: The full-year CAFD guidance range reflects potential wind and solar variability for the second half of 2023, and sensitivity for conventional growth margins, the majority of which was reflected in the third quarter results, since the fourth quarter represents a smaller portion of projected results as noted in our seasonality forecast for 2023. Despite the challenges impacting 2023 CAFD, the company remains well positioned for growth, with a strong balance sheet and pro forma credit metrics in line with target ratings. 99% of the consolidated long-term debt has a fixed interest cost, either through fixed-rate debt or through fixed-rate swaps. Due to the proceeds from the sale of Thermal, there continues to be no external capital need to fund the line of sight growth to meet our dividends per share growth objective through 2026.

Speaker 3: Full-year CAFI guidance range reflects potential wind and solar variability for the second half of 2023.

The full year Kathy guidance <unk>.

Ordinary ability for the second half.

Great and sensitivity for Essentials first Sergeant majority of which was reflected in the third quarter results.

Speaker 3: essential growth margins, the majority of which was reflected in the third quarter results.

Speaker 3: since the fourth quarter represents a smaller portion of the objective results as noted in our seasonality forecast by 2020.

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23.

Speaker 3: Despite the challenges impacting 2023 Cassidy, the company remains well positioned for growth with a strong balance sheet and pro forma credit.

Despite the challenges impacting twenty-three Kasey the company remains well positioned froze.

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Speaker 3: 99% of the consolidated long-term debt has a fixed interest cost, either through fixed rate debt or through...

99 per cent ticket validated longterm that has an extra sauce.

263426 right spot.

Speaker 3: Due to the proceeds from the sale of Thermal, there continues to be no external capital need to fund the line of sight growth fee or dividend for shared growth objectives for 2020.

Due to the proceeds from the sale thermal author continues to be no external happening fees.

Line of sight for the <unk> for shared objectives 20th.

Sarah Rubenstein: Moving to slide 15, we are establishing our 2024 CAFD guidance at $395 million. As we walk our 2024 CAFD guidance to our updated pro forma CAFD outlook, we note that we have deferred the timing of the Capistrano debt refinancing until after 2024. Given our sizable cash balance and liquidity position, we have the flexibility to be prudent on the timing of this refinancing, and the incremental principal and interest payments are not in our 2024 CAFD guidance. However, they are reflected in the updated pro forma CAFD outlook. In addition, the $395 million of CAFD anticipated for 2024 reflects one-time maintenance costs and related outage time for required maintenance upgrades at specific legacy wind sites.

Speaker 3: Living to slide 15, we are establishing our 2024 or CASTY guidance at 395.

Moving to 515.

<unk> 2024, Kathy guidance at 395 Nguyen.

Speaker 3: As we walk our 2024 CAFI guidance to our updated pro forma CAFI outlook, we note that we have deferred the timing of the Capistrano's debt refinancing until after 2024.

As we walk our 20th 24, Cassie guidance to our updated Oh for my Kathy outlets.

That we have to offer the timing of the cap is rhonda that refinancing until after 2024.

Speaker 3: Giving our sizable cash balance and liquidity positions, we have flexibility to keep students on the timing of this refining.

Giving her a sizable cash balance <unk> physician behalf flexibility.

On the timing of the three financing.

Speaker 3: and the incremental principal and interest payments are not in our 2024 CAFTI guidance.

<unk> principal and interest payments or not a 2024 Cassie guidance. However.

Speaker 3: However, they are reflected in the updated Proforma CASSI Outlook.

However, they are reflected in the updated my caffeine.

Speaker 3: In addition, the $395 billion of CAPTI anticipated for 2024 reflects one-time maintenance costs and related outage time, or requires basis of rate of specific legacy length sites.

In addition to the 395 million is Kasey anticipated for 2024 reflects one time maintenance costs related outage time.

Required state this upgrade that specific legacy waste site.

Sarah Rubenstein: These maintenance upgrades are required to return certain facilities to normal availability levels and are expected to have a one-time impact to 2024 CAFD of $15 million. In addition, our pro forma CAFD outlook of $416 million reflects full-year CAFD for all committed growth investments, including Cedar Creek, Victory Pass, Erika, Rosamond, and Texas Solar Nova. The full-year contribution of these growth investments is expected to be approximately $15 million of incremental CAFD as compared to the portion of CAFD realized by these investments in 2024. This is based on the anticipated timing of investments or project COD, the majority of which are anticipated in late 2024.

Speaker 3: agents upgrade are required to return certain facilities to normal availability levels and are expected to have a one-time impact to 2024 CAFE of $15 million.

<unk> upgrades are required to return <unk> facilities to normal availability levels and are expected to have a one time impact the 20th 24, Kathy a $53.

Speaker 3: In addition, our pro forma CAFD outlook of $416 million reflects full year CAFD for all fitted firms acceptance, including

Indigestion or pro forma Kathy outlook of 415.

Perfect all year, Kathy for all <unk>, including Peter Freak victory path, Erika Rosey path of Texas <unk>, the full year contribution of the broken Dustin is expected to be approximately.

Speaker 3: Theater Creek Victory Pass, Error General Rosie Beth and Texas Fuller Nova, the full year contribution of the growth investments is expected to be approximately.

Speaker 3: 15 million of incremental CAFI as compared to the portion of CAFI realized by these investors in 2024.

<unk> incremental Cassie as compared to the portion of Kathy realized <unk> 24 is based on the anticipated timing of bleach or projects U D. The majority of which are anticipated.

Speaker 3: This is based on the anticipated timing of a sub-surgical project, Judy.

Speaker 3: The majority of whichitare anticipated it did the because.

824.

Sarah Rubenstein: Also reflected is the $395 million of 2024 full-year CAFD guidance, along with the updated pro forma CAFD outlook, our updated P50 renewable production estimates, as well as certain cost increases primarily driven by inflation. These amounts are individually immaterial, and therefore we have not quantified them in detail. In addition, merchant energy margins for the conventional facilities are assumed to be materially in line with long-term assumptions previously provided, and no material change has been noted either in the full-year CAFD guidance for 2024 or in the updated pro forma CAFD outlook. We continue to estimate long-term merchant energy margin is $1 to $1.50 per kW-month, $3 limited sensitivity at $20 billion of CAFD per $1 per kilowatt-month increase or decrease.

Speaker 3: Also reflected in the $395 million of 2024 full-year CAFI guidance, along with the updated pro forma CAFI outlook, are updated P50 renewable production estimates, as well as certain costs and increases primarily driven by industry.

Also reflected in the 390 538 24, a full year Cassie items.

Along with the updated from corporate Kathy outlets are updated P. K E.

Production access <unk>, primarily driven by at Felicia <unk>.

Speaker 3: amounts are individually in material and therefore we have not quantified them in detail.

These amounts are individually and material and therefore, we have not quantified detail.

Speaker 3: In addition, Fortune Energy margins for the conventional facilities are used to be materially in line with long-term assumptions previously provided. And no material change has been-

In addition to an energy emerges for the convention facilities are you keeping it materially in mind longterm assumption previously provided.

Material cheese has been noted either in the full year Cassie guidance for 2024 or in the updated so for my Kathy outlets. He continued to activate longterm Virgin energy margin is a dollar to dollar 54 G. W. Pumphrey visited.

Speaker 3: either in the full year CASTY guidance for 2024 or in the updated so former CASTY Outlook.

Speaker 3: We continue to estimate long-term virgin energy margin in the $1 to $1.50 per KW on freeze.

Speaker 3: At $20 million to Catherine for $1,itation,

<unk> at $23, a cafe for one dollar per kilowatt month increase or D. C.

Sarah Rubenstein: Based on these estimates, we arrive at our 2024 full year CAFD guidance of $395 million and our updated pro forma CAFD outlook of $416 million, which, along with anticipated growth investments using the remaining thermal sale proceeds, support our long-term CAFD and dividend per share growth targets. Now I will turn it back to Chris for closing remarks.

Speaker 3: Based on these estimates, we arrive at our 2024 full year Cafee guidance of 395 students and our updated Proforma Cafee Outlook of 416 million, which along with anticipated growth investments using the remaining thermal sale proceeds, support our long-term Cafee and dividend for shared growth targets. Now I will turn to Factor Chris for closing remarks. Thank you.

Based on these activists be arrive at our 20th 24, four year Cassie guidance of 395 convenience and are updated pro forma Kathy outlet a 400 <unk>.

Which along with anticipated Bruce <unk> sale proceeds.

<unk>, our longterm Cassie activity per share growth targets.

Now I will turn it back to Christopher closing remarks.

Chris Sotos: Thank you, Sarah. Turning to page 17. While this year has been challenging from a CAFD generation perspective, we are maintaining our revised CAFD guidance range for 2023. More importantly, during this difficult period, the strength of our platform allows us to reaffirm and continue with our consistently held near- and long-term objectives. We achieved DPS growth of 8% in 2023. We are reaffirming our DPS growth objectives at the upper end of our long-term growth target through 2026. We continue to receive support from our sponsors in enhanced CAFD yields for the next contemplated drop-downs. The additional contract strength in our natural gas remains strong, places for getting traction around visibility beyond 2026, continued growth in line with our long-term CAFD targets.

Thank you Sir.

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Speaker 2: What this has been challenging from a captive generation perspective is our maintaining our revised captive range for 20 times range for 2023.

Well the truth is some shelving for Mcafee generation prescribed for being checking a revised draft you arrange for 20th God's French for 2023.

Speaker 2: More importantly, during this difficult period, the strength of our platform allows us to reaffirm and continue with our consistently held near and long-term objectives.

<unk> strength of our platform allows us to reaffirm I continue <unk>.

Longterm darker.

Speaker 2: We achieved DPS growth of 8% in 2023. We are reaffirming our DPS growth objectives at the upper end of our long-term growth target for 2026. We continue to receive support from our sponsors in enhanced CAFDI yields over the next complicated drop-downs. And the additional contract length in our natural gas fleet is from prices. We're getting traction around visibility beyond 2026, achieved growth in line with our long-term CAFDI target.

<unk> 2023.

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Can you repeat your support our sponsors.

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Additional contra Franklin R double desk, where your phone pleasure for getting traction around the ZIP code is beyond Twenty-twenty section.

And one with a longterm child too dark.

Chris Sotos: While I had intended to be able to provide you a more precise CAFD per share growth outlook for 2027 and beyond on this call, there are certain variables we think we want more clarity on. While the resource adequacy contracting pricing environment is very constructive, we'd like to see how contracting plays out for the open positions in 2027 and beyond. Additionally, as stated before, we and our sponsor have flexibility in timing of drop-downs for growth beyond 2026. Be prudent on timing and structuring drop-downs to accelerate growth beyond 2026 and can wait for the capital market environment to stabilize. Operator, open the lines for questions, please.

Speaker 2: I had intended to be able to provide you for more precise, cafty, per-shirt goes out for 2027 and beyond on this call. There are certain variables we think want more clarity.

Adam tried it could be able to provide you a more precise Kathy fershur clothes, I'll look for 2027 and beyond on this call.

Certain variables <unk> want more clarity on while.

Speaker 2: While the resource adequacy contracting pricing environment is very constructive, we'd like to see how contracting plays out with the open positions in 2027 and beyond. Additionally, as stated before, we and our sponsor have flexibility and timing of drop downs for growth beyond 2026.

While the resource adequacy contact information environment is vertical.

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Before we our sponsor of flexibility and filing a dropdown for procyon Twenty-twenty search.

Speaker 2: prudent on timing and structuring drop downs, the factory goes beyond 20 places, and completes for the capital market's environment to save finance. Operator, open the lines for questions.

Untiring obstruction dropdown, but for true choice my search.

For the capital markets <unk>, operator old phone lines for.

Questions.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one, one on your telephone. To remove yourself from the queue, you may press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Julien Dumoulin-Smith of Bank of America.

Speaker 1: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone to remove yourself from the queue, you may press star one one again, please stand by while we compile.

Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the Jew You May Press Star one one again.

Please stand by while we compile virtue and a roster.

Mmm.

Speaker 1: Our first question and comes from the line of Julian Dumolin Smith, a Bank of America.

Our first question comes from the line of Julian <unk> Smith Bank of America.

Julien Dumoulin-Smith: Hey, good morning, team. Thank you guys very much. Appreciate the time. Can you guys hear me?

Speaker 4: Hey, good morning team. Thank you guys very much. Appreciate the time. Can you guys hear me? Yes.

Hey, good morning, and thank you guys very much appreciate the time could you guys hear me yes.

Chris Sotos: Yes. Morning.

Julien Dumoulin-Smith: Hey, excellent. Good morning. Thank you. Look, guys, nicely done on California here. Wanted to just get a little bit of a sense here. Just what are you looking for to provide an update here? I mean, just to pick up where you just left off here. I mean, what specific parameters? Is it California specifically, or is it other drop-downs? And then I have a few specific follow-ups, if you can. And maybe you can give us a little bit clearer sense of what you're seeing in California as well.

Speaker 4: more hey excellent good morning thank you uh... look guys nicely done in california here wanted to just get a little bit uh... a sense here just what are you looking for to provide enough they've been just you just to pick up where you just left left off here mean what specific parameters is it california specifically or is it other drop-downs and then i've a few specific follow-ups if you can and then you can give a little bit clearer sense of what you're seeing california as well

Yes.

Okay excellent. Good morning. Thank you Uhm look guys nicely done in California here wanted to just get a little bit of a sensor just what are you looking forward to provide an update here I mean, it just it.

Just to pick up where you just left left off Hiraman, what specific parameters visit California's specifically or is it other dropped out and then I have a few specific follow ups. If you can.

Maybe you can give us a little bit clearer sense of what you're seeing California as well.

Chris Sotos: Sure. I think in California, and once again, unfortunately, we can't disclose the price due to confidentiality, but, you know, the contracts that we had signed previously to kind of be able to give guidance through 2026, yeah, we're seeing prices stronger than that when we did those contracts back in the past. And so for us, we feel very good about the ability to extend those contracts by about a year and a half on those two assets into 2027. But as you can see from our charts and the like, we're only about 42% of that capacity hedged in 2027, which makes it difficult to say: Here's exactly how CAFD works, and here's what we're going to target.

Speaker 2: Sure, I think in California, and once again, unfortunately, we can't disclose the price due to confidentiality, but the contract that we had signed previously to kind of be able to give guidance through 26, yeah, we're seeing prices stronger than that way did those contracts back in the past.

Sure I think in California, and and once again, Unfortunately, we can't disclose the price of your account sensuality, but yoga. The contract you signed previously to kind of be able to give guidance through 26, yeah, we're seeing prices stronger than that waited those contract back in the past and so for US we feel very good about the ability to extend those <unk>.

Speaker 2: feel very good about the ability to extend those contracts by about a year and a half on those two assets into 2027, but as you can see from our charts and the like, we're only about 42% of that capacity that he had in 2027, which makes it difficult to say here's exactly how CASTY works and here's what we're going to target.

<unk> by about a year and a half on those two assets into 2027, but as you can see from our charged from the white, we're only about 42 per cent of that capacity edge than 2027, which makes it difficult to say here's exactly outcast the works and here's what we're going to target.

Chris Sotos: So I think what we tried to talk about on the call was that, you know, if you keep kind of the other variables held constant, if you were to move that 2027 contract that we were able to secure and said we were able to contract the corresponding 58% open position at those rates, we could see being able to hit the low end of the long-term CAFD guidance through 2027. With regard to drop-downs, Julien, which I think was kind of your second question, there, obviously, that's three years in the future. We're at a market that is very, you know, you know, that is very volatile currently.

Speaker 2: So I think what we tried to talk about on the call was that, you know, if you keep kind of the other variables how is constant, if you were to move that 2027 contract that we were able to secure and said we were able to contract.

So I think what we tried to talk about on the call was that <unk>. The other variable held constant if you were to move that 2027 contract or were able to secure and said we were able to contract.

Speaker 2: corresponding 58% open position at those rates.

Responding 58 per cent open physician at those rates, we could see being able to hit the low end of the longterm Kathy guys through twenty-seven.

Speaker 2: we could see being able to hit the low end of the long-term CAFD guidance through 27. With regard to drop downs, Julian, which I think was kind of yours.

With regard to Dropdowns, Julia, which I think was down to your second question.

Speaker 2: there. Obviously, that's three years in the future. We're at a market that is very volatile currently.

Obviously, that's three years in the future right a market that is very good. Thank you.

Oh that was a very volatile currently so for US we kind of looked at the strong sponsor support we've received on our most recent dropdown discussions and then we'll kind of see where the market goes over time to move those castillo for what makes sense in the future, but I think right now we're kind of very confident and happy with our ability to reaffirm twenty-fifth Jane continue or.

Chris Sotos: So for us, we've kind of looked at the strong sponsor support we've received in our most recent drop-down discussions, and then we'll kind of see where the market goes over time to move those CAFD yields to what makes sense in the future. But I think right now, we're kind of very confident and happy with our ability to reaffirm 2015, continue our, you know, guidance in terms of being able to hit the upper end of the range through 2026. And we're starting to see some good green shoots for 2027 and beyond, just not as tight as we would have liked it when we talked this time last year.

Speaker 2: So for us, we've kind of looked at the strong sponsor support we've received in our most recent dropdown discussions.

Speaker 2: and then we'll kind of see where the market goes over time to move those cap deals to what makes sense in the future. But I think right now we're kind of very confident and happy with our ability to reaffirm 2015, continue our guidance in terms of being able to hit the upper end of the range through 26.

Guidance in terms of being able to hit the upper end of the range through 26th and we're starting to see some good green shoots for 27 and beyond just not as tight as we would've liked definitely talk to this time last year.

Speaker 2: And we're starting to see some good green shoots for 27 to beyond. Just not as tight as we would have liked it when we talked to this time less.

Julien Dumoulin-Smith: Got it. All right. Fair enough. Excellent. Now, with that said, let me just nitpick a little bit here. Instead of using a greater than, now you're using a tilde on 20... on the 215. Can you explain a little bit of what you're seeing? It sounds like a slight reduction in confidence, and that seems despite the higher yield on the drop-down at 10%. So in theory, I would have thought that estimate revisions would have been higher. And then maybe related to that, you tell me if it is or not. It looks like updated pro forma CAFD here goes to $205 from $208, so down $0.03 there.

Speaker 4: got it. Alright, fair enough, excellent. Now with that said, let me just nitpick a little bit here. Instead of using a greater than, now you're using a tilde on the on the on the on.. on the on.. on the on... On??, I'll be using the sta- on the

Got it alright fair enough excellent now with that said, let me just take a little bit here instead of using a greater than now you can get <unk> on 22 on the 215 can you explain a little bit of of what you're seeing it sounds like a slight reduction in confidence and that seems despite the higher yield on the dropped it.

Speaker 4: Can you explain a little bit of what you're seeing? It sounds like a slight reduction in confidence, and that seems despite the higher yield.

Speaker 4: on the drop down at 10%. So in theory, I would have thought that estimate revisions would have been higher. And then maybe related to that, that you tell me if it is or not, it looks like updated pro forma cap to here goes to 205 from 208. So down to three pennies there. So again, I don't mean to nitpick too much here, but I'm curious from the signaling and what's driving a little bit of a reduction, if you will, despite the higher drop down yield environment.

10%. So in theory, I would've thought that estimate revisions to live in higher and then may be related to that but you can tell me if it is <unk> or not it looks like updated pro forma Cassie here goes to 205 from 208 sit down three pennies there. So I don't I again, I don't mean to nitpick too much here, but I'm curious on the signaling and what's driving a little.

Julien Dumoulin-Smith: So I don't, again, I don't mean to nitpick too much here, but I'm curious from the signaling and what's driving a little bit of a reduction, if you will, despite the, the higher drop-down yield environment.

A bit of a reduction if you will despite the the higher dropdown yield environment.

Chris Sotos: No, no concern, Julien. There's a reason we try to map it out all for you. So the question—Yeah, welcome to the question. I think to your—You know, it's not as though we have less confidence in the 215. It's just before, like, we are giving you a point estimate three years out, so we might be a cent higher or low in terms of rounding and the like. The real driver behind the reduction from what you saw before, from kind of a 440 to a 435, is really around the $10 million that we took as a result of, you know, the P50 results we saw in 2023. You know, insurance is a little bit higher and other costs. So that's the main source of that deviation that you're mentioning from what maybe you saw previously disclosed.

Speaker 2: No, no concern Julian, there's a reason we try to map it out all for you. So the question, yeah, welcome the question.

No no no concern Julian there's a reason we tried to map it out all for yourself. There's the question Yeah. Welcome to question I think <unk>, yeah, it's not as though we have less confidence in the 215. It's just before like we we are giving you a point estimate three years out so it might be a cent higher low in terms of rounding and the like the real driver behind the redux.

Speaker 2: I think you're, you know, it's not as though we have less confidence and the two 15 issues before like we are giving you a point estimate three years out. So we might be a cent higher low in terms of rounding in the light.

Speaker 2: The real driver behind the reduction from what you saw before, from kind of a 440 to a 435, is really around the $10 million that we took as a result of, you know, the P50 results we saw in 2023, you know, insurance is a little bit higher and other costs, that's the main source of that deviation that you're mentioning from what maybe you saw previously disclosed.

And from what you saw before from kind of a 442, a 435 is really around $10 million that we took as a result of the P. 50 results, we saw I'm 20 twenty-three.

Insurance is a little bit higher than other costs, just the main source of that deviation that you're mentioning for what maybe you saw previously disclosed obviously kind of we're not happy with that but as we talked about during this year, we incorporate actual performance into our estimates we try not to just be theoretical we actually take into account what's going on 2023, stating the obvious has not been a good year for.

Chris Sotos: Obviously, kind of we're not happy with that, but as we talked about during this year, we incorporate actual performance into our estimates. We try not to just be theoretical. We actually take into account what's going on. 2023, stating the obvious, has not been a good year from wind resource or solar resource perspective. So we've taken into account going forward to make sure we can kind of tighten down our math.

Speaker 2: Obviously, kind of, we're not happy with that, but as we talked about during this year, we incorporate actual performance into our estimates. We try not to just be theoretical. We actually take into account what's going on. 2023, stating the obvious, has not been a good year from wind resource or solar resource perspective. So, we've taken into account going forward to make sure we can kind of tighten down our map.

Wind resource for solar resource perspective, so we've taken into account going forward to make sure we can kind of tightened down our Max.

Julien Dumoulin-Smith: Okay, fair enough. It doesn't sound like there's anything too specific there, from what I can tell. And then maybe just-

Speaker 4: Okay sure enough it doesn't sound like there's anything too specific there from what I can tell and then maybe just it seems like and then the drop down here the the wind drop down do you mind talking about it it seems like there's there's a higher yield uh but um a higher valuation or sorry I think I think I said that right

Okay sure enough it doesn't sound like there's anything too specific there from what I can tell and then maybe just <unk> it seems like.

Chris Sotos: Sure.

Julien Dumoulin-Smith: It seems like, and then the Drop-Down here, the wind Drop-Down, do you mind talking about it? It seems like there's a higher yield, but a higher valuation. Or sorry, I think I said that right.

And then the dropped down here the the wind dropped down do you mind talking about it it seems like there's there's a higher yield, but a higher valuation or sorry.

Chris Sotos: Yeah. There's more capital just because of how it's structured at the end. For us, we're looking to really target the overall deployment. You know, for us, Julien, a lot of people kind of count megawatts. We're much more concerned about how much capital are we deploying at good quality projects with good accretive CAFD yields. So for us, to your point, the way it was finally structured resulted in a little bit higher capital deployment. But because it's also at a higher capital yield, CAFD yield, I'll take it.

Like I said that right.

Speaker 2: There's more capital just because of how it's structured at the end. For us, we're looking to really target the overall deployment. For us, Julian, a lot of people count megawatts. We're much more concerned about how much capital are we deploying at good quality projects with good or creative cafty yields. So for us, to your point, the way it was finally structured resulted in a little bit higher capital deployment, but because it's also at a higher capital yield, I'll take it.

There's more capital just because of how it's structured at the end for US we're looking to really target. The overall deployment Yo for for US Julian a lot of people kind of megawatts were much more concerned about how much capital R. We deploying good quality projects with good accretive Castillo so for us to your point when it was finally structured resolved.

And a little bit higher capital deployment, because it's also at a higher cap of the yield I'll I'll I'll <unk> I'll take it.

Julien Dumoulin-Smith: Okay. All right, fair enough. Excellent, guys. Well, I appreciate your patience this morning, and good luck, and hopefully next year or next quarter, we'll get an update at last, as you nail things down.

Speaker 4: Okay. All right. Fair enough. Excellent, guys. Well, I appreciate your patience this morning and good luck and hopefully next year or next quarter we'll get an update at last. Nail things down.

Okay, Alright fair enough excellent guy as well I appreciate your patience. This morning, and good luck and hopefully next year or next quarter, we'll get an update it last week thank them.

Chris Sotos: Well, I think once again, Julien, you know, those RA contracts, they take time to basically, right, we'll participate. Well, we're always engaged in bilateral discussions. The RFPs, as you know, kind of happen in June or a little bit before, during the year. We get our awards in November. So I don't think there'll necessarily be that many major updates between now and, let's say, the February call. But I think for us, as we continue to see if this market environment settles down and we can have more clarity around what drop-downs may look like, in addition to more RA megawatts being contracted, that's what will kind of give more clarity around 2027.

Well I think once again Juliet yeah. Those are a contracts they take time to basically right will participate or we're always engaged in bilateral discussions the rfps as you know what kind of happened in June or a little bit before during the year, we get our awards in November So I don't think they'll definitely be that many major updates between now and let's say the <unk>.

Speaker 2: what i think once again to in the of those are a contract they take time to basically right will participate uh... we're always engaged in bilateral discussion

Speaker 5: The RFPs, as you know, kind of happen in June or a little bit before during the year we get our awards in November . So, I don't think they'll necessarily be that many major updates between now and let's say the February call. I think for us, as we continue to see if this market environment settles down, and we can have more clarity around what dropdowns may look like, in addition to more RA megawatts being contracted, that's what kind of give more clarity around 2027. Excellent. Okay. Thank you.

For a call I think for us as we continue to see if this market environment settles down and we can help more clarity around what Dropdowns me look like an addition to more or a bag of what's being Ah Ah contracted that's all kind of give more clarity around 2027.

Julien Dumoulin-Smith: Excellent. Okay, thank you, guys. Cheers. Speak soon.

Excellent Okay. Thank you guys.

Yep.

Chris Sotos: Thank you.

Thank you.

Operator: Thank you. Our next question comes from the line of Angie Storozynski of Seaport. Please go ahead, Angie.

Our next question.

Speaker 1: comes from the line of Angie Sturzynski of Seaport. Please go ahead.

Come from the line of Angie stores Inkscape of Seaport. Please go ahead Angie.

Angie Storozynski: Thank you. I just wanted to say, you know, well played. This is how you do it, basically. You pace yourself with the dividend growth. You just lived within your means, and I'm hopeful that the stock will reflect this reality versus what we're seeing at other utilities. So, now, as far as the growth is concerned, so obviously you have a sponsor that is supportive and willing to adjust the CAFD yield for the current interest rate environment. But how about, you know, maybe organic growth, any sort of repowerings or expansions of existing sites, something that you could do on your own?

Speaker 6: Thank you. I just wanted to say, you know, well played. This is how we do it. Basically, you pace yourself with the dividend growth. You just live within your means. And I'm hopeful that the stock will will reflect this.

Thank you I just wanted to say you know.

<unk>. This is how we do it basically.

Tastes yourself with.

Gross you just live within your means and.

I'm hopeful that the stock will reflect this this reality versus what we're saying.

Speaker 6: this reality versus what we're seeing at other youth goals. So now, as far as the growth is concerned, so obviously you have a sponsor that is supportive and willing to adjust the other captive yield for the current interest rate environment, but how about maybe organic growth, any sort of repowering or expansions of existing sites, something that you could do on your own?

So now [laughter].

That that growth is concerned so I can see you have a sponsor that is supportive and willing to adjust.

<unk> for the the the current interest rate environment, but how about you know maybe organic growth any sort of retiring sore expansions of existing site something that you could do on your own.

Chris Sotos: Sure. We look at that all the time, Angie, and I think what we've talked about is, you know, Cedro Hill is a repowering, so we have some of that built already. I think for us, and a little bit further discussion about the volatile and capital market environment that you referenced, we kind of really need to see where we need to source new capital. As part of my prepared comments, we've kind of worked through all of the excess capital that we received as part of our thermal disposition. And so for us, in looking at repowerings and kind of Craig's team and looking at what PPA can you renegotiate, what are turbine prices and the like, there is some of that organic growth, but as I've commented previously, it's not like we have 2 gigawatts that can be repowered in the next two years.

Speaker 2: Sure. We look at that all the time, Angie. And I think what we've talked about is, you know, Cedro Hill is a repowering. So we have some of that built already, I think, for us and a little bit further discussion about the volatile capital market environment that you referenced.

Sure we look at that all the time and you know I think we've talked about is you know see Joe Hill is a repowering. So we have some of that built already I think for us and a little bit further discussion about the volatile.

Capital market environment that you reference, we kind of really need to see where we need to source new capital as part of my prepared comments, we've kind of worked through all of the excess capital that received as part of our thermal disposition and so for us and looking at Repowerings and kind of Craig's James I'm looking at what P. P H and your being negotiate with a turban places like there.

Speaker 2: We kind of really need to see where we need to source new capital. As part of my prepared comments, we've kind of worked through all of the excess capital that we've received as part of our thermal disposition. And so for us, looking at repowerings and kind of Craig's team and looking at what PPA can you renegotiate, what are turbine prices and the like. There is some of that organic growth, but as I've commented previously, it's not like we have two gigawatts that can be repowered in the next two years.

Is some of that organic broke but as I've come a previously it's not like we have two gigawatts that can be a repowered in the next two years. Our main source of organic growth is really isn't that are a pricing I think for us given the hedges that we did before in order to contract through twice the middle of 2020 cents, that's probably where you have your main yeah organic.

Chris Sotos: Our main source of organic growth is really in that RA pricing. I think for us, given the hedges that we did before, in order to contract through the middle of 2026, that's probably where you have your main, you know, organic CAFD generator is depending on where those RA prices go in 2027 and beyond.

Speaker 2: Our main source of organic growth is really in that RA pricing. I think for us, given the hedges that we did before in order to contract through the middle of 2026, that's probably where you have your main organic CAFD generator is depending on where those RA prices go in 2027 and beyond.

Cafferty generator is depending on where those already prices go in 2027 and beyond.

Angie Storozynski: Okay, and then changing topics. Obviously, the 2023 has been a challenging year for actually a number of assets. But, you know, the results for the thermal assets were weaker than expected. Now, how much of that weakness or lessons learned have you incorporated in your 2024 guidance for CAFD?

Speaker 6: Okay, and then changing topics. Obviously, the twenty three has been a challenging year for actually a number of assets, but the results for the thermal assets were weaker than expected. Now, how much of that weakness or lessons learned have you incorporated in your twenty four guide?

Okay, and then changing topics that'll be 623.

Has been a challenging year for actually a number of assets that you know that that the results for the several assets, where where we kind of expect it now how how much of that weakness or a lessons learned how to incorporate it in your 24 guidance caskey.

Chris Sotos: I think, you know, we intend hopefully a lot. You know, from our perspective, we're much more in line in our 2024 guidance with that, you know, the upper end of that $1 to $1.50 we talked about, long-term energy gross margin. Obviously, given when we gave guidance in November of 2022 for 2023, yeah, as you're well familiar, the markets were much stronger for what was expected spikes that, you know, didn't show up in several of the months that we were looking for. So for us, you know, we're materially kind of on the upper end of the range of that $1, $1.50, I mean, upper of the $1, $1.50 that we have for long-term EGM guidance. So to your point, we're being more conservative for full year 2024 than we were for partial year 2023.

Speaker 2: I think, you know, we intend to hopefully enlop, you know, from our perspective, we're much more in line in our 2024 guidance with that, you know, the upper end of that dollar to dollar 50 we talked about, long-term energy growth margin. Obviously given when we gave guidance in November of 22, for 2023.

I think yeah, <unk> hopefully I'll watch you know from our perspective, we are much more in line in our 2024 guidance with that you know the upper end of that dollar to dollar 50, we talked about long term energy gross margin obviously, given when we gave guidance in November of 20, 242023, yeah as you're well familiar.

Speaker 2: Yeah, as you're well familiar, the markets were much stronger for what were expected sparks that, you know, didn't show up in several of the months that we were looking for. So, for us, you know, we're materially kind of on the upper end of the range of that lower dollar, dollar fifty, upper of the dollar, dollar fifty that we have for long term EGM guidance. So, to your point, we're being more conservative for full year twenty four. I mean, we're for partially or twenty three. Awesome, thank you.

Markets were much stronger for what we're expected Sparks that you know didn't show up and several of the months that we were looking for so for US you are materially you're kind of on the upper end of the range of that lower dollar dollar 50.

Upper of the dollar dollars 50 that we have for long term E. G. M gotten so your point, we're being more conservative for full year 2004, I mean, we're for partially or 23.

Angie Storozynski: Awesome. Thank you.

Awesome. Thank you.

Chris Sotos: ... Thank you. Our next question comes from the line of Mark Jarvis of CIBC.

Operator: ... Thank you. Our next question comes from the line of Mark Jarvis of CIBC.

Okay.

Thank you.

Our next question.

Speaker 1: Councilor Alain of Mark Jarvey, UPCIB.

Comes from the line of Mark Jarvie up C. I V C.

Mark Jarvi: Yeah. Good morning, everyone. So-

Speaker 7: Good morning, everyone. As you think about expanding the time horizon for growth, you've got the final proceeds fully deployed now. Obviously, balance sheet funding clarity is really important in today's markets. How do you think about, as you extend that runway and you think about future drops, communicating the funding plan in terms of how much clarity you can give and how prescriptive you can be in terms of how you match funding with asset growth?

Yeah, good morning ones, So I Wanna come in as you'd think yeah. If you think about expanding.

Chris Sotos: Morning.

Mark Jarvi: Yeah, as you think about, you know, expanding the time horizon for growth, you've got the thermal proceeds fully deployed now. Obviously, balance sheet funding clarity is really important in today's market. So how do you think about as you extend that runway and you think about future drops, communicating the funding plan in terms of how much clarity you can give and, and I guess how prescriptive you can be in terms of how you match funding with asset growth?

Expanding the time horizon for growth you better federal proceeds fully deployed now off the balance sheet funding clarity is really important in today's market. So how how do you think about as you extend that runway and you think about future drops.

Indicating the funding plan in terms of how much clarity can give and can I get help proscriptive you can be in terms of how you might funding.

I think rose.

Chris Sotos: Sure. I, I think we've always been pretty prescriptive in how we viewed it. You know, we have an undrawn revolver currently with significant liquidity underneath it, so if we had to fund something, we could on a temporary basis. But I think, you know, how we'd fund it is in line with our long-term view, at about 4 to 4.5 times would be a corporate debt number of the corporate capital, the remaining being equity, obviously using any excess cash we have in the system first. So I don't really think we'd look to deviate from that long-term funding model that, you know, has been successful in a wide variety. We may need to warehouse some facilities depending on where the volatility is for a period of time.

Speaker 2: Sure, I think we've always been pretty prescriptive in how we viewed it. You know, we have an undrawn revolver currently with significant liquidity underneath it. So we had to fund something we could on a temporary basis.

Sure I think we've always been pretty proscriptive in how we viewed it yeah. We have a undrawn revolver currently with significant liquidy underneath it. So we had to fund something we could on a temporary basis, but I think you know how we would fund it is in line with our longterm view at about four to four and a half times would be appropriate that number of the corporate capital the remaining being.

Speaker 2: I think, you know, how we funded is in line with our long-term view. At about four to four and a half times would be a corporate debt number of the corporate capital. The remaining being equity, obviously using any excess cash we have in the system first. So, I don't really think we'd look to deviate from that long-term funding model that has been successful in a wide variety. We may need to warehouse some facilities depending on where the volatility is for a period of time. I think for us, it wouldn't deviate from a long-term funding model that has worked over a number of years.

Equity, obviously using any excess cash we have in the system first so I don't really think we'd look to deviate from that long term funding model that has been successful in a wide variety we may need a warehouse some facilities, depending on where the volatility is for a period of time, but I think for us. It it wouldn't deviate from a long term funding model that has worked over a number of years.

Chris Sotos: I think for us, we wouldn't deviate from our long-term funding model that, you know, has worked over a number of years.

Mark Jarvi: So I guess you'd be okay with, you know, if you saw, say, a $200 funding gap for equity to hit your targets and say it's sort of a bit TBD in terms of the sources, you'd be fine with sort of laying that out there? And I guess if you saw the need for external equity, would you, you know, be open to things like an ATM or something like that, as you march forward?

Speaker 7: So I guess you'd be okay with, you know, if you saw a couple of million dollar funding gap for equity to hit your targets and say it's sort of a bit TBD in terms of the sources, you'd be fine with sort of laying that out there. And I guess we saw the need for external equity, would you be open to things like an ATM or something like that, as you march forward?

So I guess, you'll be okay. With you know if you saw a favorite color in mind, our funding gap for equity to hit your targets and say it sort of a T V. In terms of the sources you'd be fine with her lane that out there and I guess he saw the need for general equity would you be open at things like an a T M or something like that as of March four.

Chris Sotos: Yeah, I mean, we've used ATMs before, which we think are a very effective equity funding mechanic. We've done smaller, you know, kind of issuances as well. So I think we'd do things very consistently with how we have in the past. I wouldn't anticipate any deviations. I just think that maybe kind of to where your question is going, given how volatile things are currently, we may seek to kind of use our revolver more, depending on size, to hold facilities, until kind of markets settle down and take a much more measured approach to getting that long-term capital deployment, given current volatility.

Speaker 2: I mean, we've used ATMs before, which we think are a very effective equity funding mechanic. We've done smaller kind of issuances as well. So I think we do things very consistently with how we have in the past. I wouldn't have just been any deviations. I just think that maybe kind of to where your question is going, given how volatile things are currently, we may seek to kind of use our revolver more depending on size to hold facilities until kind of mark that settle down and take a much more measured approach to getting that long-term capital deployment, given current vol.

Yeah, I mean, we used to atm's before which we think are very effective equity funding mechanic, we've done smaller kind of issuances as well. So I think we do things very consistently with all we have in the past I wouldn't have to spend any deviations I just think that maybe kind of sort of your question is going given how volatile things are currently we may seek to kind of use are real.

Over more depending on size to hold facilities until kind of about that settled down and take a much more measured approach to getting that long-term capital deployment given current volatility.

Mark Jarvi: Okay, that makes sense. Thanks, Chris. And then just on the conventional units, as you continue to operate them, as you see these RA processes and the contracting processes play out, sort of any updated thoughts in terms of ways to optimize them from a commercial strategy? And just curious in terms of the amount of capacity you secured into 2027, what could you have gotten more? Was it just a trade-off with price? Just kind of understanding the depth of the market and opportunities you're seeing right now in terms of contracting.

Speaker 7: Okay, that makes sense. Thanks. And then just on the conventional units, as you continue to operate them, as you see these RA processes, the contracting processes play out, sort of any updated thoughts in terms of ways to optimize them from a commercial strategy? I'm just curious in terms of the amount of capacity secured into 2027?

Okay that makes sense in Texas and then just on the conventional units as you continue to operate them. As you see these are a process as a contracting process, we player sort of any update or thoughts in terms of waste of optimize them from a commercial strategy.

And just curious in terms of the amount of capacity security into 2027.

Speaker 7: Could you have gotten more with a trade-off with price? So just going to understand the depth of the market and opportunities you're seeing right now in terms of contract.

<unk> could you got more or was it just a trade off with price just kind of understanding the depths of the marketing opportunities receiving right now in terms of contracting.

Chris Sotos: Got it. Yeah, it is very focused on price. You kind of... Yeah, and apologies if you already know all this, but you kind of bid in on an auction basis and kind of see what you get awarded. We typically give kind of, you know, 1- and 1.5-year bids and 3-year bids, a combination of different price points to kind of see what the customer wants. The customer at the end chooses what price they're looking for and tender. So to your point, it's not as though we could really optimize that conversation because it is a well-attended auction, but we provide a number of price points as part of our submission, and at the end of the day, the customer picks the price point that they thought made the most sense.

Speaker 2: Got it. Yeah, it is very focused on price, you kind of get an apologies, you already know all this, but you kind of bid in on an auction basis and kind of see what you get awarded.

Got it yeah. It it is very focused on price you kind of yeah, an apology as you already know all this but you're kind of bidding on an auction basis and kind of see what you get awarded we.

Speaker 2: We typically give kind of, you know, one and one and a half year bids and severe bids, a combination of different price points to kind of see what the customer wants. The customer at the end chooses what price they're looking for in tenor. It's not as though we could really optimize that conversation because it is a well-attended auction, but we provide a number of price points as part of our submission. And at the end of the day, the customer picks the price point that they've not made the most sense.

We typically give kind of Yale one and wanted to have your business severe beds, a combination of different price points to kind of see what the customer wants the customer at the N chooses what price they're looking for in China. So what's your point, it's not as though we could really optimize that conversation because it is a well attended auction, but we provide.

A number of price points as part of our submission and at the end of the day that the customer picks the price point that does it helped me to more sense.

Mark Jarvi: If you could do sort of a retrospective look at how you've bid most recently, do you think there was an opportunity to clear more capacity as you think forward in the next processes?

Speaker 7: If you could do sort of a retrospective look at how you've been most recently, do you think there was an opportunity to clear more to pass as you think forward in the next process?

If you could do sort of a retrospective look at how you been recently did you think there was an opportunity to clear more capacity to thank for it in the next processes.

Chris Sotos: I don't think there's the ability to clear more, just because, and not to cheat your question, what, what cleared was what's accepted. You kind of don't really-

Speaker 2: I don't think there's the ability to clear more just because they're not to cheat your question, what clear was what's accepted. You don't really know exactly what to ban. There is on the other side. So not to cheat your question. It's a little bit opaque for me to say directly what the number is.

I don't think there's the ability to clear more just because what they're not to feed your question. What what cleared was what's accepted you kind of don't really I know exactly what the band there is on the other side so not to treat your question at all but it'll take for me to say directly what the number is.

Mark Jarvi: Yeah

Chris Sotos: ... know exactly what demand there is on the other side. So not to cheat your question, that's a little bit opaque for me to say directly what the number is.

Mark Jarvi: Okay. And just last question for me, and maybe for Craig. Your view in terms of how tax equity transferability is playing out, how that sort of impacts where you think actually returns could be for projects, and ultimately, I guess, where, and maybe that comes back to Chris in terms of drop-down, CAFD yields, potential under sort of a transferability, scheme on funding.

Speaker 7: Okay, and just last question for me, it may be for Craig, you're using terms how tax equity transfer abilities point out how that sort of impacts where you think actually returns could be for projects. And ultimately I guess we're, I made that come back to Chris in terms of the drop down, CACI yields potential under sort of a transfer ability to scheme on funding.

Okay and your last question for me and Vanessa Craig.

You're using <unk> tax actually transfer abilities, Plano, how that sort of impact for anything actually returns could be for project and ultimately I guess, where I need to come back to Christian from the dropdown khaki yields potential under so I'm gonna transfer.

Scheme on funding.

Chris Sotos: I'll kind of answer the last part, and then, Craig, we'll let you answer kind of the first part of the question. So in terms of what it means for a CAF deal, I think that's really in our all-in CAF deal that we'd get. I think, Mark, if your question is, if we're doing things at a 10% CAF deal now, would that lead to a 14% CAF deal? I don't think that's the right interpretation. I think basically all of the components will needed to be required because it passes through. As we talked a little bit on the call, the PPA price is affected by the transferability of PTCs, right? They kind of all has to work together in a chain.

Speaker 2: I'll kind of answer the last part and then Craig let you answer kind of the first part of the question.

I'll I'll I'll kind of answered the last part and then Craig what let you answered kind of the first part of the question. So in terms of where it means for Castillo I think that's really in all all in Castillo that we'd get I think Mark of your question is if we're doing things that are 10 per cent Castillo now would that lead to a 14 per cent caffeine.

Speaker 2: So in terms of what it means for a CAF deal, I think that's really an all-in CAF deal that we'd get. I think, Margaret, your question is?

Speaker 2: If we're doing things at a 10% CAF yield now, would that lead to a 14% CAF yield? I don't think that's the right interpretation. I think basically all of the components will need it to be required because it passes through. As we talked a little bit on the call, the PPA price is affected by the transferability of PTCs, right? They kind of all have to work together in a chain. So it's not as though that PTC transferability will lead to an economic rent or a significantly above market CAF yield simply due to that. But Craig, I'll let you answer the first part of the question. Yeah, sure.

Think that's the right interpretation I think basically all of the components needed to be required because it passes through cause we talked a little bit on the call. The P. P. A prices affected by the transfer ability of P. T. She's ready to kind of all acts as to work together in a train so it's not as though that TTC transfer authority will lead to an economic rent or a significantly above.

Chris Sotos: So it's not as though that PTC transferability will lead to an economic rent or a significantly above-market CAFD yield simply due to that. But Craig, I'll, I'll let you answer the first part of the question.

Cap market after yield simply due to that but craig's I'll I'll, let you answer the first part of the question.

Craig Cornelius: Yeah, sure. Well, first, the market is really still taking shape and becoming organized, as you may very well know. Both the banks that traditionally provided fully integrated tax equity solutions that would both monetize tax credits and depreciation are playing roles to provide sponsors like us solutions to monetize depreciation, while also looking to serve as clearinghouses for the disposition and monetization of tax credits that projects produce. They're certainly an important part of organizing this market. There are numerous other channels that are looking to establish themselves as more direct conduits to buyers of tax credits. The market structures for how everything from indemnities to timing of payments take place are still forming and stabilizing.

Yeah sure.

Speaker 8: Well, first the market is really still taking shape and becoming organized.

Well first the market is really still taking shape and becoming organized as you may very well know both the banks that traditionally provided fully integrated tax equity solutions that with both monetize tax credits depreciation are playing roles to provide.

Speaker 8: may very well know. Both the banks that traditionally provided fully integrated tax equity solutions that would both monetize tax credits and depreciation, are playing roles to provide sponsors like us solutions to monetize depreciation while also looking to serve as clearing houses for the disposition and monetization of tax credits that projects produced there.

Sponsors like us solutions to monetize depreciation while also looking to serve as clearinghouses for the disposition and monetization of tax credits that projects produce there.

Speaker 8: They're certainly an important part of organizing this market. There are numerous other channels that are looking to establish themselves as more direct conduits to buyers of tax credit.

There are certainly an important part of organizing this market there are numerous other.

Other channels that are looking to establish themselves as more direct conduit to buyers of tax credits.

Speaker 8: And the market structures for how everything from indemnities to timing of payments take place are still forming and stabilizing. And in that environment as a sponsor that has a strong balance sheet, which we do, we want to make sure that we make smart choices about how and when we fix the structures that will employ other sponsors may not be in a position to wait. But in

And the market structures for how everything from indemnities to timing a payment to take place are still.

Still forming and stabilizing and.

Craig Cornelius: And in that environment, as a sponsor that has a strong balance sheet, which we do, we want to make sure that we make smart choices about how and when we fix the structures that we'll employ. Other sponsors may not be in a position to wait, but in the six months since guidance was first issued about how that transferability market would take shape, we've seen the structures and the depth of the market really improve in favor of projects, and, and we expect that will continue. So when I look out to the future, my hope is that this market will really do many of the things that were hoped for when transferability was incorporated into the text of the statute by deepening the range of options that projects have to monetize tax credits.

In that environment.

Sponsor that has a strong balance sheet, which we do we want to make sure that we make smart choices about how and when we fixed the structures that will employ.

Other sponsors may not be in a position to wait.

But in the six months since guidance was first issued.

Speaker 8: Guidance was first issued about how that transferability market would take shape. We've seen the structures and the depth of the market really improve in favor of projects and we expect that will.

How 'bout transfer ability market would take shape, we've seen the structures and the depth of the market really improve.

In favor of projects and and we expect that will continue.

Speaker 8: So when I look out to the future, my hope is that this market will really do many of the things that were hoped for when transfer ability was incorporated into the text of the statute. By deepening the range of options that projects have to monetize tax credits. And what we eventually as an enterprise will want to do is to try to come up with structures that we find most efficient for dispositioning the depreciation benefits that the projects we create.

So when I look out to the future. My hope is that this market will really do many of the things that were hoped for when transfer ability was incorporated into the text of the statute by deepening.

The range of options that projects have to monetize tax credits and what we eventually as an enterprise will want to do is to try to come up with structures that we find most efficient for disposition hang the depreciation benefits that the projects we create produce.

Craig Cornelius: What we eventually, as an enterprise, will want to do, is to try to come up with structures that we find most efficient for dispositioning the depreciation benefits that the projects we create produce.

Justin Clare: Okay. Thanks for the time today, and thanks for pulling some other additional materials here in the presentation for us today. Thank you.

Mark Jarvi: Okay. Thanks for the time today, and thanks for pulling some other additional materials here in the presentation for us today. Thank you.

Speaker 7: Okay, thanks for your time today and thanks for pulling some other additional materials here in the presentation for us today. Thank you. Thank you.

Okay. Thanks for time today, and thanks for calling from other additional materials here in the presentation Firstly.

Chris Sotos: Thank you.

Thank you.

Operator: Thank you. Our next question comes from the line of Noah Kaye of Oppenheimer and Company.

Thank you.

Our next question.

Speaker 1: Comes from the line of Noah K. Up up in Imer.

Comes from the line no a K a oppenheimer and company.

Noah Kaye: All right. Good morning. Thanks for taking the questions, and appreciate all the incremental details and disclosures, and frankly, the reframing of the platform here. Points well taken. Called out the Capistrano refinancing timing. I just wanted to ask about the project-level debt in the portfolio. It does appear like there's a fair amount of debt coming due over the next few years for some of these projects at the project level. Just how are you thinking about any potential additional refinancings, or are all these basically gonna be paid off at term?

Speaker 9: All right, good morning. Thanks for taking the questions and appreciate all the incremental details and disclosures and frankly the reframing of the platform here.

Alright, good morning, Thanks for taking the questions and I appreciate all the incremental details and disclosures and frankly, the reframing of the platform here point's well taken <unk>.

Speaker 9: well taken. Called out the Capastrano refinancing timing, I just wanted to ask about the

Called out the Capistrano refinancing timing I just wanted to ask about the <unk>.

Speaker 9: project-level debt in the portfolio. It does appear like there's a fair amount of debt coming due over the next few years for some of these projects at the project level. How are you thinking about any potential additional refinancings, or are all these basically going to be paid off?

Project level that in the portfolio. It does appear like there's a fair amount of that.

Coming due over the next few years for some of these projects at the project level. How are you thinking about any potential additional refinancings are all these basically gonna be paid off a term.

Chris Sotos: Sure. It depends on the market, to be fair to your question, but I do think that we should be in good shape from a refinancing perspective. So the next two large project refinancings are what's referred to as Nim Solar in 2024, I believe Buckthorn in 25 or 26. So I think Buckthorn is backed by, you know, so it's probably about a 20-year PPA, still underneath it, so we have quite a bit of length there to be able to refinance. The Nim Solar assets, once again, that's kind of, you know, September of 2024. So from our view, that should be able to be refinanced. So we don't-- Yeah, not to minimize the question, we, we don't have a lot of concern about near-term, non-recourse, assets needing to be refinanced.

Speaker 2: Sure, it depends on the market to be fair to your question, but I do think that we should be in good shape for refinancing perspectives. So the next two large project refinancing are what's referred to as NIMS Solar in 2024. I believe Bucksorn in 25 or 26.

Sure it depends on the market to be fair to your question, but I do think that we should be in good shape for refinancing perspective. So the next two large project refinancings Elisa <unk> solar in 2024, I believed popcorn and 25 or 26. So I think <unk> is backed by you know so it was probably about 20 or a P. P. A still underneath it so we have quite a bit of <unk>.

Speaker 9: So I think hook sworn is backed by, you know, still is probably about a 20 year PPA still underneath it. So we have quite a bit of length there to be able to refinance. The NIMS solar assets once again, that's kind of, you know, September of 2024. So from our view, that should be able to be refinanced. So we don't, yeah, not to minimize the question, we don't have a lot of concern about near term, not a recourse assets need to be refinanced. That does an impact.

For there to be able to refinance the nims solar assets. Once again, that's kind of you know September of 2024, so from our view that should be able to be refinanced. So we don't yeah not to minimize the question that we don't have a lot of concern about near term non recourse assets need to be refinanced.

Noah Kaye: That doesn't impact the pro forma CAFD outlook?

But that doesn't impact the pro forma cafferty outlook.

Chris Sotos: If the interest rates are drastically different, it may move it around, but keep in mind, Nim Solar is about $148 million, if I recall correctly.

Speaker 2: If the interest rates are drastically different, it may move it around, but keep in mind, NIMS solar is about $148 million of our call correctly. So 100 to 200 basis points of overall is $3 million. Not to minimize three, but it's not a major driver.

Chris Sotos: If the interest rates are drastically different, it may move it around, but keep in mind, Nim Solar is about $148 million, if I recall correctly.

If the interest rates are drastically different it may move it around but keep in mind, Minnesota is about $148 million, if I recall correctly. So yeah, 100, or 200 basis points move overall is three.

Noah Kaye: Mm-hmm.

Chris Sotos: So, you know, 100 to 200 basis points move overall is, you know, $30 million. Not to minimize 3, but it's not a major driver.

Chris Sotos: So, you know, 100 - 200 basis points move overall is, you know, $30 million. Not to minimize 3, but it's not a major driver.

$3 million not to minimize three of us not a major driver.

Noah Kaye: Yeah. And just the key point here, right, is that your refi risk, both at the corporate level and at the project level, is very minimal for the next several years.

Speaker 9: And just the key point here is that your refy risk, both the corporate level and the project level is very...

Yeah, I mean, just the the key point here right is that your refi risk both the corporate level and at the project level is is very minimal for the next several years.

Chris Sotos: Correct. I'm not saying it's 0, but yeah. It's not 10. It's maybe 3, depending on where you go.

Speaker 2: Correct. I'm not saying it's zero, but yeah, there is not ten. It's maybe three depending on where you go

I'm not saying, it's zero, but yeah. There it's not 10, it's maybe three depending on where you go.

Noah Kaye: Okay, great. Appreciate adjusting the P50 expectations. Does that generally apply to how you look at, you know, future drop-downs or acquisitions as well? I mean, I'm, I'm sure there's a some degree of, of regional resource specificity here with the adjustments. But just talk to us a little bit about how you model in expectations for P50 going forward, and whether that's changed at all.

Speaker 9: Okay, great. Appreciate adjusting the P50 expectations.

Okay, Great I appreciate adjusting the P 50 expectations.

Speaker 9: Does that generally apply to how you look at, you know, future drop downs or acquisitions as well? I mean, I'm sure there's a some degree of regional resource specificity here to the adjustments, but

Does that generally apply to how you look at you know future dropdowns or acquisitions as well I mean, I'm I'm sure. There was some degree of of regional resource Ah specificity here with the adjustments, but just talk to us a little bit about how.

Speaker 9: Talk to us a little bit about how you model and expectations for P50 going forward and whether that's

How you model and expectations for P 50, going forward and whether that's changed at all.

Chris Sotos: Sure. Step one, just by way of background, we always ask for an additional return on wind assets versus solar to take into account that volatility. So part one, Noah, to your question, is we, we view wind as a riskier asset in general because of that P50 volatility, and we typically look for a higher IRR or cash yield or both, when we negotiate those, just for, for way of background. The other part is, we haven't seen anything that we need to change how we model our P50. Those are based upon long-term rates, but I think as we've talked about in previous calls, once you're kind of getting through five years, we try to take a much more what's actual approach on assets than kind of what a statistical model may say.

Speaker 2: Sure, step one, just for way of background, we always ask for an additional return on wind assets versus solar to take into account that volatility. So part one, no one to your question is, we view wind as a riskier asset in general because of that 50 volatility. And we typically look for higher RR or Kathy older both when we negotiate those. We just for way of backdrop.

Sure step one just for we have background, we always ask for an additional return on wind assets versus solar to take into account that volatility. So one nowhere to your question is we view windows are riskier assets in general because that'd be 50 volatility and we typically look for a higher are are Kathy older. Both wouldn't be negotiate those were just for way a backdrop.

Speaker 2: The other part is it really haven't seen anything that we need to change how we model our pieces.

The other part is really haven't seen anything that we need to change how we model RP 50, those are based upon longterm rates, but I think as we've talked about in previous calls once you're kind of getting through five years, we tried to take a much more what's actual approach an asset then kind of what Ah School model May say, we're trying to be much more empirical.

Speaker 2: Those are based upon long-term rates, but I think as we've talked about in previous calls, once you're kind of getting through five years, we try to take a much more what's actual approach on asset, than kind of what a statistical model may say. We're trying to be much more empirical and kind of use the most relevant near-term data set as we adjust and blend the two.

Chris Sotos: We're trying to be much more empirical and kind of use the most relevant near-term dataset as we adjust and blend the two. So for us, to your point, while you're looking at future drop-downs or looking at other acquisitions, we try to take into account those deviations between what might be a 30-year, let's say, fiscal model and what we're seeing in the past 5 years. Try to add on a premium for wind in certain regions that are showing more volatility. But once again, we're trying to get that as tight as we can. We take recent events into account. That's one reason you see the revision, but it really is trying to be comprehensive between, you know, not overestimating what's happened in the past 2 years either, to make decisions either.

And kind of use the most relevant near term data such as we adjustment blender too so for us to your appointment while you're looking at future Dropdowns. We're looking at other acquisitions, we try to always take into account those deviations between what might be a 30 year, let's say the school model and what we're seeing in the past five years tried to add on a premium for windows certain regions that are showing more volatility.

Speaker 2: So for us, to your point, while you're looking at future dropdowns or looking at other acquisitions, we try to take into account those deviations between what might be a 30-year, let's say, fiscal model and what we're seeing in the past five years, try to add on a premium for wind in certain regions that are showing more volatility. But once again, we're trying to get that as tight as we can. We take recent events into account. That's one reason you see the revision. But it really is trying to be comprehensive between not overestimating what's happened in the past two years either to make decisions either. Yep.

But once again, we're trying to get that as tight as we can we take recent events into account. That's one reason you see the revision, but it really is trying to be comprehensive between yeah, not overestimating, what's happened in the past two years either to make decisions either.

Noah Kaye: Yep. All right. Thanks very much.

Alright, thanks very much.

Chris Sotos: Thank you.

Thank you.

Operator: Thank you. Our next question comes from the line of Justin Clare of Roth MKM.

Thank you.

Speaker 10: Our next question.

Our next question.

Speaker 1: comes from the line of Justin Claire of Roth MK.

Comes from the line, Justin Claire of Roth M K M.

Justin Clare: Yeah, thanks for taking our questions here. So first off, I just want to ask about the 2024 guide. It looks like about a $15 million impact to the guide as a result of change in the expectation from growth investments. Was wondering if you could just provide a little bit more detail on the project timing and what led to that reduction for 2024?

Speaker 11: Thanks for taking our questions here. So first off, I just want to ask about the 2024 guide. It looks like about a $15 million impact to the guide as a result of change in the expectation from growth investments. I was wondering if you just provide a little bit more detail on the project timing and what led to that that reduction for 2020.

Thanks for taking my questions here.

<unk> I just wanted to ask about the 2024 guide it looks like about a 15 million dollar impact to the guide as a result of change in the expectation from growth investments was wondering if you could just provide a little bit more detail on the project timing and what what led to that that really.

<unk> 420 20 for.

Chris Sotos: Sure. I'll let Sarah address it, but I think, you know, for us, we took a look at our 2023 results, and obviously we're not happy with them. And part of that, as we talked about during the year, is due to P50 generation. Some of it's due to availability. So for us, we kind of took a comprehensive look at our overall portfolio, and yeah, I'll let Sarah kind of reflect anything she wants to, but that, that's really the basis of it.

Speaker 2: Sure, I'll let Sarah address it. But I think, you know, for us, we took a look at our 2023 results, and obviously, we're not happy with them. And part of that, as we talked about during the year is due to P50 generation, some of it's due to availability. So for us, we kind of took a comprehensive look at our overall portfolio. And yeah, I'll let Sarah kind of reflect anything she wants to, but that that's really the basis of it.

Sure I'll, let Sarah address it but I think you know for US we took a look at our 2023 results and obviously, we're not happy with them and and part of that as we talked about during the year is due to 250 available 50 generation some of his availability. So for US we kind of take a comprehensive look at our overall portfolio and yeah, I'll I'll, let Sarah kind of reflect anything she wants to do but that that's really the basis stomach.

Craig Cornelius: Yeah, and Justin, just to clarify, were you asking about the $15 million of timing for growth investments?

Sarah Rubenstein: Yeah, and Justin, just to clarify, were you asking about the $15 million of timing for growth investments?

Speaker 3: Yeah, and just and just to clarify, were you asking about the 15 million of timing for growth investment?

Yeah, Yeah, and just to clarify what are you asking about the 50 million of timing for grants and Datsun.

Justin Clare: Yeah, exactly. Just, just what led to that? Because it looks like it's impacting 2024, and then it's gonna be a contributor in probably 2025. So just wanted to understand-

Speaker 11: Yeah, exactly. Just what led to that, because it looks like it's impacting 2024 and then it's going to be a contributor in probably 2025. So just want to understand a bit more of that.

Yeah, exactly just just what that led to that because it looks like it's impacting 2024, and then it's gonna be a contributor in 2025. So I just wanted to understand a bit more there.

Craig Cornelius: Sure

Justin Clare: ... a bit more there.

Craig Cornelius: Sure

Justin Clare: ... a bit more there.

Sarah Rubenstein: ... Yeah, it's not a change in 2024. It's just a bridge between 2024 and our pro forma outlook, which is supposed to reflect sort of, you know, the full amount of CAFD once the, you know, the drop-downs are sort of up and running and at their full, you know, CAFD amount. So, it's really just a bridge item because we'll only be picking up a smaller portion of those in the 2024 guidance because of the timing of the drop-down or the project COD. So, we'll have sort of like a fraction of that CAFD amount, just in 2024. But by the time we get to the pro forma outlook, you know, we'll have the full amount, and that difference is the 15.

Speaker 3: Yeah, it's not a change in 2024. It's just a bridge between 2024 and our...

Yeah. It it it's not.

I didn't change any 2020th or it's just a bridge between 2024 and our <unk>.

Speaker 12: pro forma out, both liches, super supposed to reflect sort of, you know, the

<unk> sort of you know that.

Speaker 12: full amounts of CAST-D, once the, you know, the drop downs are sort of up and running and at their full, you know, CAST-D amount. So it's really just a bridge item because we'll only be picking up a smaller portion of those in the 2024 guidance because of the timing of the drop down or the project COD. So we'll have sort of like a fraction of that CAST-D amount.

Little amount of caffeine one the you know the dropdown startup up and running and at their fall you know like half the amount. So it's really just a bridge item because will only be picking up a smaller portion of it.

The 20th 20th for guidance because of the timing of the dropdown or that project D. V. D. Ah. So we'll have sort of like a fraction of that Cassie amount Justin 2024, but by the time, we get to the pro forma outlet you know, we'll have the full amount and that differences that's S. T.

Speaker 12: just in 2024, but by the time we get to the performance I'll let

Speaker 12: you know, we'll have the full amount and that difference is the 15.

Justin Clare: Got it. Okay. Okay, thanks for that clarification. And then, just was wondering for, for the projects that you have, committed investments for, and then for those that are identified as potential drop-down opportunities in 2024, 2025 here, can you talk about, you know, where you are in the process of securing the permits and the interconnection for these projects? Wondering if there's still risk there that, you know, those factors could cause delays, and just where you are in that process.

Speaker 11: Got it. Okay. Okay. Thanks for that clarification. And then just was wondering for for the projects that you have committed investments for and then for those that are identified as potential drop-down opportunities in 2024 to 2025 here.

Got it okay. Okay. Thanks for that clarification and then it just was wondering for for the projects that you have committed investments for and then for those that are identified as potential dropdown opportunities. In 2024 2025 here can you talk about.

Speaker 11: Can you talk about where you are in the process of securing the permits and the interconnection for these projects? I'm wondering if there's still risk there that those factors could cause delays and just where you are in that process.

There you are in the process of securing the permits and the interconnection for these projects wondering if they're still risks there that those factors could cause delays.

And just where you are in that process.

Chris Sotos: Craig, if you wouldn't mind addressing that?

Craig if you wouldn't mind addressing that.

Craig Cornelius: Yeah, sure. All of the projects that are listed on the set of committed or potential future drop-down opportunities have existing signed large generator interconnection agreements and have obtained all of the major permits that would influence their construction feasibility or schedule. So, so I think that you could consider the dates that are reflected here high confidence dates. They've also secured all of the revenue contracts that would be necessary for financial closing. We've procured all the equipment for the projects, and we are mature in the course of advancing financial structuring of the projects as well.

Speaker 8: Yeah, sure. All of the projects that are listed on the set of committed or potential future drop down opportunities have existing signed large generator interconnection agreements and have obtained all of the major permits that would influence their construction feasibility or schedule.

Yeah sure all of the project that are listed on the set of committed or potential future dropdown opportunities.

Have existing fine large generator interconnection agreements and have obtained all of the major permits that Williams women's their construction feasibility or schedule.

So so.

Speaker 8: So I think that you could consider the dates that are reflected here, high-component dates. They've also secured all of the revenue contracts that would be necessary for financial closing.

So I think that you can consider the dates that are reflected here.

Hi confidence.

Also a secure all of the revenue contracts that wouldn't be necessary from it for financial closing.

Speaker 8: We procured all the equipment for the project.

We prepared all the equipment for the project and we are mature in the course of advancing financial structuring of the projects as well.

Speaker 8: And we are maturing the course of advancing financial structuring of the project.

Craig Cornelius: Some of those projects now reflect dates that are later than the dates we would have hoped for one year ago, and those reflect observed experience from interconnecting utilities around the country and their ability to execute scope of Large Generator Interconnection Agreements, and also timetables that have been observed as being elongated for the delivery of high voltage equipment. And we've taken further actions to de-risk timelines for these projects in particular, but also other projects in our pipeline, to address what's being observed in terms of interconnection timelines as well. So we think these are pretty de-risked in terms of the execution timetable that's reflected on the page.

Speaker 8: Some of those projects now reflect dates that are later than the dates we would have hoped for 1 year ago and those reflect.

Some of those projects now reflect dates that are later than the dates we would have hoped for one year ago in those reflect observed experience from interconnecting utilities around the country and their ability to execute scope of large generator interconnection agreements and also timetables that have been observed as being.

Speaker 8: observed experience from interconnecting utilities around the country and their ability to execute scope of large generator and our connection agreement.

Speaker 8: and also timetables that have been observed as being elongated for the delivery of high voltage equipment. And we've taken further actions to de-risk timelines for these projects in particular, but also other projects in our pipeline to address what's being observed in terms of interconnection.

Elongate it for the delivery of high voltage equipment and we've taken further actions to Derisk timelines for these projects in particular, but also other projects in our pipeline to address what's being observed in terms of interconnection timeline as well. So we think these are pretty derisks in terms of the execution timetable that's reflected on.

Speaker 8: So we think these are pretty de-risk in terms of the execution timetable that's reflected on the page. We can...

The page.

Justin Clare: Okay, got it. Thanks very much.

Okay got it thank you very much.

Operator: Thank you. Our next question comes from the line of William Griffin of UBS.

Thank you.

Our next question.

Speaker 1: comes from the line of William Gryppin of UBS.

It comes from the line of William Griffin.

B S.

William Grippin: Craig, good morning, everybody. Thanks very much for the time. I guess just my first one here, just with the excess thermal proceeds now fully allocated, could you speak to how you foresee sort of the future pacing of investment announcements? And maybe should we expect a quieter, you know, next few quarters with respect to announcements?

Speaker 11: Great, good morning everybody, thanks very much for the time. I guess just my first one here, just with the excess thermal proceeds now fully allocated, could just speak to how you for see sort of the future pacing of investment announcements and maybe should we expect a quieter, next few quarters.

Greg Good morning, everybody. Thanks, very much for the time I guess, just my first one here just what the excess thermal proceeds now fully allocated Ah could you speak to how you foresee the future pacing of investment announcements and maybe you should we expect a quieter.

Next.

Few quarters with respect to announcements.

Chris Sotos: Yeah, I think, I think that question, if it's, you know, should we expect some large drop-down announcement in the next six months? I doubt it. You know, I think it's heavily conditioned upon how the capital markets settle down or not. But I think to your question, because we are, you know, in essence, you know, CEG is incredibly busy by getting the gigawatts we talked about basically online in 2024 and 2025. Obviously, they're still developing while doing that, but I think, you know, at the end of the day, if your question is, should we expect a large drop-down announcement here in the near term? It might be a little quiet for a while for the reasons we talked about.

Speaker 2: Yeah, I think I think that question if it's, you know, should we expect some large dropout announcement in the next six months?

Yeah, I think I think that question if it's yellow should we expect some large dropdown announcement in the next six months I doubt. It you know I think it's heavily conditioned upon how the capital markets settled down or not but I think to your question. Because we are in essence C. G is incredibly busy by getting the giggles.

Speaker 2: I doubt it. I think it's heavily conditioned upon how the capital markets settle down or not. But I think to your question, because we talked, in essence, C-E-G is incredibly busy by getting the giga-hust we talked about basically online in 24 and 25. Obviously, there's still developing while doing that. But I think at the end of the day, if your question is, should we expect the large drop-down announcement here in the near term, it might be a little quiet for a while for the reasons we talked about.

Talked about basically online in 2004 and twenty-five obviously, they're still developing while doing that but I think you know at the end of the day. If your question is should we expect a large dropdown announcement here in the near term it might be a little quiet for awhile for the reasons, we talked about.

William Grippin: Makes sense. And so in that light, I mean, do you continue to view the conventional assets as core to the Clearway strategy? And maybe how you're, how are you thinking about potential opportunities to recycle those assets as you continue to contract the open capacity?

Speaker 13: Makes sense and so in that light, I mean do you continue to view the conventional assets as core to the clear-way strategy and Maybe how are you thinking about potential opportunities to recycle those assets as you continue to contract the open capacity?

Mmm makes sense and so in that light I mean do you do you continue to view the conventional assets is core to the nuclear waste strategy and maybe how you. How are you thinking about potential opportunities to recycle those assets as you continue to contract the the open capacity.

Chris Sotos: Sure. I think for us, obviously, we're willing to sell assets at what we think is a strong price. So if somebody offered us, you know, a good price for those assets, we'd look at that. However, it's always been part of our core strategy because it does provide diversification versus kind of simply wind and solar, you know, resource availability. So for us, we think it's a very beneficial, and we're, you know, obviously pretty bullish on what things will look like for, let's call it, through the end of the decade in those assets. So we view them as core. That being said, if someone offered us a price that we thought made sense, we've shown we've been willing to transact on that in the past. And for us, we're pretty bullish through at least 2030.

Speaker 2: Sure, I think for us, obviously, we're willing to sell assets at what we think is a strong price. So if somebody offered us a good price for those assets, we'd look at that. However, it's always been part of our core strategy because it does provide diversification versus kind of simply wind and solar resource availability.

Sure I I think for US obviously, we're willing to sell assets of what we think is a strong price. So if somebody offered us a good price for those athletes we'd look at that however, it's always been part of our core strategy because it does provide diversification versus kind of simply wind and solar resource availability. So for US we think it's a V.

Speaker 2: So for us, we think it's a very beneficial and we're obviously pretty bullish on what things will look like for us called through the end of the decade in those assets. So we give them this core, that being said, if someone offered us a price that we thought made sense, we've shown we've been willing to transact on that in the past. And for us, we're pretty bullish through at least 2030.

Very beneficial and we're obviously pretty bullish on what things will look like for let's call through the <unk> through the end of the decade and those asset. So we give them a score that being said if someone offered us a price that we thought made sense. We've shown we've been willing to transact on that in the past and for US we're pretty bullish through at least 2030.

William Grippin: Great. And just one last one for me. Could you elaborate a little bit on the one-time maintenance items in the wind portfolio? And is that in any way related to the Siemens turbines in the fleet?

Speaker 13: great and just one last one for me could you elaborate a little bit on the the one time maintenance items in the wind portfolio and it's at any way related to the the semen's service in the fleet

Great and just one last one for me could you elaborate a little bit on the the one time maintenance items in the wind portfolio and is that in any way related to the semen Sir bonds in the fleet.

Chris Sotos: Not specifically, like, that's a variety of assets, as I, as I, incorrectly answered the last question that somebody asked. Basically, that's a result of kind of, you know, us looking at our fleet and recognizing some of the weaknesses that affected our 2023 results and saying, "Okay, how can we try to shore that up with what's a one-time maintenance push here?" Some portion of that's the Siemens assets, but some of them aren't. So it's really just looking at the overall fleet and some of the challenges we faced in 2023.

Speaker 2: Not specifically, like that's a variety of assets. Like as I incorrectly answered the last question that somebody asked. Basically that's a result of kind of us looking at our fleet and recognizing some of the weaknesses that affected our 2023 results and saying, okay, how can we try to shore that up with what's a one-time maintenance push here? Some portion of that's the Siemens assets, but some of them are. So it's really just looking at the overall fleet and some of the challenges we face in 23.

Not specifically like that's a variety of assets as I incorrectly answered. The last question that somebody has basically that as a result of kind of us looking at our fleet and recognizing some of the weaknesses that affected our 20th 20th your results and saying, Okay. How can we tried to assure that up with what's a one time maintenance push here some portion of that.

Siemens assets, but some of them aren't so it's really just looking at the overall fleet and some of the challenges we face in 23.

William Grippin: I guess, are you getting any sort of warranty reimbursements or any cost reimbursement of any kind for these efforts?

Speaker 13: I guess, are you getting any sort of warranty reimbursements or any cost reimbursement of any kind for these efforts?

I guess are are you are you getting any sort of warranty reimbursements or any cost reimbursement of any kind for for for these efforts.

Chris Sotos: That's some of it. Like, overall, these things are in negotiation, but that's the amount that we think we'll have to kind of net, net, lay out during the year.

Speaker 2: That's some of the like overall these things are negotiation, but that's the amount that we think we'll have to kind of net net, net, uh, way out during the year.

That's something that like over all these things are in negotiation, but that's the amount that we think will have to kind of net net boy out during the year.

William Grippin: ... Fair enough. All right, nice job. Thanks very much.

Fair enough.

Alright, nice job thanks very much.

Chris Sotos: Thank you.

Thank you.

Operator: Thank you. I would now like to turn the conference back to Chris Sotos for closing remarks.

Speaker 1: Thank you. I would now like to turn the conference back to Chris Sotos for closing remarks.

Thank you I would now like to turn the conference back to Chris So tough for closing remarks.

Chris Sotos: Just wanted to thank everybody for attending the call. I know this was a little bit longer than our typical calls, but really given kind of the volatility that we've seen, wanted to provide you as analysts or investors with kind of a much more comprehensive view of where we see we are and where we think we're going. And I think while obviously there's a number of challenges in the capital markets, yeah, we're able to reiterate where we are for 2024, our growth rate to 2026, and that we're seeing kind of positive things even in this volatile environment in 2027 and beyond. But more to come as we walk through 2024. Appreciate everyone's support.

Speaker 2: I just wanted to thank everybody for a tense on the call. I know this was a little bit longer than our typical calls, but really given kind of the volatility that we've seen one to provide you as analysts or investors with kind of a much more comprehensive view of what we see, we are, and what we think we're going. And I think while obviously there's a number of challenges in the capital markets, yeah, we're able to reiterate where we are for 24, our growth rate to 26.

Just wanted to thank everybody for attempts on the call I know this was a little bit longer than our typical calls, but really given kind of the policy that we've seen one to provide you as analysts are investors was kind of a much more comprehensive vehicle will receive we are and where we think we're going and I think well obviously, there's a number of challenges in the capital markets.

Able to reiterate where we are for twenty-four our growth rate to 26 and that we're seeing kind of positive things, even this volatile environment and twenty-seven beyond but or to come as we walk through 24 I appreciate everyone's support.

Speaker 2: and that we're seeing kind of positive things even in this volatile environment and 27 beyond. But for the come as we walk through 24, appreciate your own support.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now.

This concludes today's conference call. Thank you for participating you may now disconnect.

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Q3 2023 Clearway Energy Inc Earnings Call

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