Q4 2023 Algonquin Power & Utilities Corp Earnings Call

Operator: The Ultimate Parody Site! All rights reserved. Hello, and welcome to the Algonquin Power & Utilities Corp. fourth quarter and full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise.

Hello, and welcome to the Algonquin power and utilities Corp, fourth quarter and full year 2023 earnings conference call.

All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star 1 on your telephone keypad. I will now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations.

After the Speakers' remarks, there will be a question and answer session.

If he would like to ask a question during that time simply press star one on your telephone keypad.

I'll now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations. Please go ahead.

Brian Chin: Thanks, Operator. Good morning, everyone, and thank you for joining us for our fourth quarter and full year 2023 earnings conference. Speaking on the call today will be Chris Huskilson, Interim Chief Executive Officer, and Darren Myers, Chief Financial Officer. Also joining us this morning for the question and answer portion of the call are Jeff Norman, Chief Development Officer, and Johnny Johnston, Chief Operating Officer. To accompany today's earnings call, we have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and management discussion and analysis are also available on the website, as well as on CDER Plus and EDGAR.

Brian Chin: Thanks, operator, good morning, everyone and thank you for joining us for our fourth quarter and full year 2023 earnings call Conference call.

Brian Chin: Speaking on the call today will be Chris Husk, Wilson interim Chief Executive Officer, and Darren Myers, Chief Financial Officer.

Speaker Change: Also joining us this morning for the question and answer portion of the call is Jeff Norman Chief Development Officer, and Johnny Johnston, Chief operating Officer.

To accompany today's earnings call, we have a supplemental webcast presentation available on our website Algonquin power Dot com, our financial statements and management discussion and analysis are also available on the website as well as on SEDAR plus and Edgar.

Operator: We'd like to remind you that our discussion during the call will include certain forward-looking and non-GAAP measures. Please note and review the related disclaimers located on slide two of our earnings call presentation in the investor relations section of our website at algonquinpower.com. Please also refer to our most recent MD&A filed on Theta Plus and EDGAR and available on our website for additional important information on these items. On the call this morning, Chris will provide a business update, including key highlights pertaining to our regulated and renewables business groups, as well as brief comments on our strategic plan process and CEO. Then, Darren will review our fourth quarter and full year financial results. We will then open the lines for the question and answer period. We ask that you kindly restrict your questions to two and then refrain if you have any additional questions to allow others the opportunity to partake.

Speaker Change: We'd like to remind you that our discussion during the call will include certain forward looking and non-GAAP measures. Please note and review the related disclaimers located on slide two of our earnings call presentation at the Investor Relations section of our website at Algonquin power Dot com.

Speaker Change: Please also refer to our most recent MD&A filed on SEDAR and Edgar and available on our website for additional important information on these items.

Speaker Change: On the call. This morning, Chris will provide a business update including key highlights pertaining to our regulated and renewables business groups as well as brief comments on our strategic plan process and CEO search and Darryn will review, our fourth quarter and full year financial results. We will then open the lines for the question and answer period, we ask that you kindly.

Speaker Change: Strict your questions to two and then re queue. If you have any additional questions to allow others the opportunity to participate.

Christopher G. H. Huskilson: With that, I'll turn it over to you. Thank you, Brian, and good morning, everyone. 2023 was a decisive year for Algonquin Power & Utilities Corp. We made several strategic decisions and are focused on becoming a pure-play regulated utility. Simplifying the Company and Achieving Greater Operational Efficiency We're excited about the opportunities ahead, and will shape our regulated business into a leading utility platform. When I started at Algonquin...

Speaker Change: With that I'll turn it over to Chris.

Christopher G. H. Huskilson: Thank you, Brian and good morning, everyone.

123 was a decisive year for Algonquin.

Chris Husk: We made several strategic decisions.

Christopher G. H. Huskilson: We're focused on becoming a pure play regulated utility.

Christopher G. H. Huskilson: Simplifying the company and achieving greater operational efficiency.

Christopher G. H. Huskilson: We're excited about the opportunities ahead.

Christopher G. H. Huskilson: And we will shape, our regulated business into a leading utility platform.

When I started in August.

Christopher G. H. Huskilson: I focused on four things. Our people. The Renewable Sale. Optimizing the value of AY.

Christopher G. H. Huskilson: I focused on four things.

Christopher G. H. Huskilson: Our people.

Christopher G. H. Huskilson: The renewable sale.

Christopher G. H. Huskilson: Optimizing the value of a y.

Christopher G. H. Huskilson: I'm getting the regulated business set up. Although there's still lots of work to be done, we're making progress. We've retained our people, and they are engaged in the... We have been simplifying the business and making it more transparent to investors. The renewable sale is proceeding as planned, and we continue to expect to close a transaction this year. We're actively working with AWOC.

Christopher G. H. Huskilson: And getting the regulated business set up as a standalone.

Christopher G. H. Huskilson: Although there is still lots of work to be done we're making progress.

Christopher G. H. Huskilson: We've retained our people and they are engaged in the change.

Christopher G. H. Huskilson: We have been simplifying the business and making it more transparent to investors.

Christopher G. H. Huskilson: The renewable sale is proceeding as planned and we continue to expect to close a transaction this year.

Christopher G. H. Huskilson: We're actively working with a y to support them.

Christopher G. H. Huskilson: 2014 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services. And we've begun making changes to the way the regulated business is organized and the way it runs while making use of our new SAP. From a business segment performance point of view, Both full year 2023 and fourth quarter saw double-digit divisional operating profit growth for our regulated services, due primarily to a number of new great 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Department of Agriculture new great 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Department of Agriculture new wind and solar. Yeah, generation for 2023. Despite a weather-challenged year, our renewables business ended the period with fourth-quarter divisional operating profits.

Christopher G. H. Huskilson: And we have begun making changes to the way the regulated business is organized and the way it runs while making use of our new SAP system.

Christopher G. H. Huskilson: For our business segment performance standpoint.

Christopher G. H. Huskilson: Both full year 2023, and fourth quarter saw a double digit divisional operating profit growth for our regulated services group due.

Christopher G. H. Huskilson: Due primarily to a number of new rate and implementations.

Christopher G. H. Huskilson: Across our utility portfolio.

Christopher G. H. Huskilson: Our renewable business placed in service 453 megawatts of new wind and solar.

Christopher G. H. Huskilson: Generation for 2023.

Christopher G. H. Huskilson: <unk> a weather challenged year, our renewables business ended the period with fourth quarter divisional operating profit.

Darren G. Myers: 15 16 14 15 14 0 5 0 5 0 4 0 2 0 1 1 0 1 0 0 0 2 3 4 4 5 6 7 8 9, These results demonstrate that despite 2023 headwinds and the strategic transition currently underway, these two solid businesses. Our solid business is with significant long-term growth; Darren will provide more color on the 2023 financial. Thank you. Our regulated services group grew at a healthy pace in 2023. Regulated divisional operating profit grew 10% year-over-year, primarily driven by interest income on regulatory asset accounts and new rates implemented at several of our utilities. Most notably are CalPICO, Empire, and Belco Electric.

Christopher G. H. Huskilson: Up by 6%.

These results demonstrate that despite 2023 headwinds and the strategic transition currently underway.

Christopher G. H. Huskilson: These two solid businesses.

Christopher G. H. Huskilson: Our solid businesses with significant long term opportunity.

Christopher G. H. Huskilson: Darren will provide more color on the 2023 financial metrics later in the call.

Christopher G. H. Huskilson: Our regulated services group grew at a healthy pace in 2023.

Christopher G. H. Huskilson: Regulated divisional operating profit grew 10% year over year, primarily driven by interest income on regulatory asset accounts.

Christopher G. H. Huskilson: And new rates implemented at several of our utilities.

Christopher G. H. Huskilson: Most notably our Cal Pico Empire, and Balco electric systems.

Darren G. Myers: This growth reflects a tremendous opportunity to invest in our systems for the benefit of our customers. These are not new rates for the sake of new rates, but rather a recovery of and on already invested capital in our systems to provide safe and reliable service to our customers. With that said, we have plenty of work and opportunity ahead of us. Our objective is to earn our allowed cost of capital while serving our customers. Our gap today reflects timing from investments we have made and under-earning at New York Water as a result of our stay-out from the acquisition.

Christopher G. H. Huskilson: This growth reflects tremendous opportunity to invest in our systems for the benefit of our customers.

Christopher G. H. Huskilson: There are not these are not new rates for the sake of new rates, but rather a recovery of and on already invested capital and our systems to provide safe and reliable service to our customers.

Speaker Change: With that said.

We have plenty of work and opportunity ahead of us.

Speaker Change: Our objective is to earn our allowed cost of capital while serving our customers.

Speaker Change: Our GAAP today reflects timing from investments, we have made and under earning at New York water as a result of our stay out from the acquisition.

Darren G. Myers: We're working to improve our returns, and we have a number of active ratepayers. We also see an opportunity to improve our performance and maximize our operational efficiency, including through initiatives such as the rollout of our Customer First SAP program, improving our processes, and leveraging this significant technology foundation that we've put in place. In 2024, we expect to have our Canadian and U.S. regulated utilities transition to the standard software platform, which is a key step to our multi-year journey. We're pleased to report that during the course of 2023, a regulated services group received final rate case orders at eight of our utilities and one additional order subsequent to year end on January 24, with authorized revenue increases totaling $44.1 million, representing over 70% of our rate requests. We believe this is reflective of our constructive partnerships with our regulators in the communities we serve. I'm pleased with these continued partnerships.

Speaker Change: We're working to improve our returns and.

Speaker Change: And have a number of active rate cases.

Speaker Change: We also see an opportunity to improve our performance and maximize our operational efficiency and.

Speaker Change: Including through initiatives, such as the rollout of our customer first.

Speaker Change: Program at.

And improving our processes and leveraging this significant technology foundation that we've put in place.

Speaker Change: In 2024, we expect to have our Canadian and U S regulated utilities transitioned to this standard software platform.

Speaker Change: As a key step to our multiyear journey.

Speaker Change: We're pleased to report that during the course of 2023, our regulated services group received final rate case orders at eight of our utilities.

Speaker Change: And one additional order subsequent to year end and January 24.

Speaker Change: With authorized revenue increases totaling $44 $1 million rep.

Speaker Change: Representing over 70% of our rate request.

Speaker Change: We believe this is reflective of our constructive partnerships.

Speaker Change: And with our regulators and the communities we serve.

Speaker Change: We're pleased with these continued advancements as our core growth strategy of the regulated services group is to responsibly invest in our utility systems on behalf of our customers and target a constructive return on our rate base.

Darren G. Myers: As a core growth strategy of the Regulated Services Group is to responsibly invest in our utility systems on behalf of our customers and target a constructive return. In total, the Regulated Services Group had at year-end pending rate reviews totaling $93.4 million across six, »» Thanks, everybody. Bye-bye. »» Thank you. »» Bye-bye.

Speaker Change: In total the regulated services group had a had at year end pending rate reviews totaling $93 $4 million across six of its utility systems.

Darren G. Myers: »» Bye-bye, with an additional $12.4 million at two of the water systems filed in January, bringing the total for the year to $105.8 million. All right. These rate cases reflect our continued commitment to invest in our utilities for the benefit of our customers. 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Communications, Well, we see these advances as success. We are not satisfied with some of our regulatory positions.

Speaker Change: With an additional $12 $4 million at two of the water systems filed in January.

Speaker Change: Bringing the total for the year to $105 8 million currently pending.

Speaker Change: These rate cases reflect our continued commitment to invest in our utilities for the benefit of our customers and shareholders alike.

Speaker Change: While we see these advances a success.

Speaker Change: We are not satisfied with some of our regulatory positions.

Christopher G. H. Huskilson: And we are committed to change. Turning now to an update on the projects of our Renewable Energy business, Along with the 453 megawatts delivered in 2023, in the fourth quarter, we completed construction of our Hayhurst, Texas solar facility. Site preparations continue at the 150-megawatt Kerbis Creek and 144-megawatt Clearview Solar Project.

Speaker Change: And we are committed to changing this and making this better.

Speaker Change: Turning now to an update on the projects of our renewable energy group.

Speaker Change: Along with the 453 megawatts delivered in 2023 in the fourth quarter, we completed construction of our Hayhurst, Texas solar facility.

Speaker Change: Site preparations continue at the 150 megawatt <unk> Creek, and 144 megawatt clear view solar projects.

Christopher G. H. Huskilson: And panel installation has commenced. In total, we now have approximately 300 megawatts of solar projects in various stages of construction. As well, we have added 1,660 megawatts to the development pipeline. All in all, the renewables business had lower generation due to unfavorable weather, but it made solid progress growing generational capacity in the development pipeline. As of year-end, our net generating capacity is 2.7 gigawatts, which excludes our partner's in our construction joint.

Speaker Change: And panel installation has commenced.

Speaker Change: In total we now have approximately 300 megawatts of solar projects in various stages of construction.

Speaker Change: As well we have added 660 megawatts to the development pipeline in 2023.

Speaker Change: All in all the renewables business and lower generation due to unfavorable weather.

Speaker Change: But made solid progress growing generation capacity and the development pipeline.

Speaker Change: As of year end, our net generating capacity is two seven gigawatts, which excludes our partners interests in our construction joint ventures.

Christopher G. H. Huskilson: Subsequent to year end, we've also chosen to take further steps to simplify our renewable energy business. In January, we consolidated our Renewables Development Joint Venture and Monetize II Small Renewable Development Project. This will have the effect of simplifying and consolidating our development expenses without impacting our investment in development or our projected capital.

Speaker Change: Subsequent to year end, we've also chosen to take further steps to simplify our renewable energy business in.

Speaker Change: In January we consolidated our renewables development joint venture.

Speaker Change: And monetize too small renewable development projects in Spain.

Speaker Change: This will have the effect of simplifying and consolidating our development expenses without impacting our investment and development.

Speaker Change: Our projected cash flows.

Christopher G. H. Huskilson: And finally, before I turn things over to Darren, a few comments on the strategic plan for the company and the CEO search. We launched the sale process with potential buyers in the fourth quarter and are pleased with the level of buyer interest that we've seen in our renewables platform. We continue to target a potential transaction announcement around mid-24, although closing later. We are also making progress in our search for a permanent CEO and have been pleased with the slate of candidates reviewed thus far.

And finally before I turn things over to Darren a few comments on the strategic plan for the company and the CEO search.

Speaker Change: We launched the sale process with potential buyers in the fourth quarter.

Darren G. Myers: And are pleased with the level of buyer interest as we've seen in our renewables platform.

Darren G. Myers: We continue to target a potential transaction announcements around mid 24 and.

Darren G. Myers: In closing later in the year.

Darren G. Myers: We also are making progress in our search for a permanent CEO and have been pleased with the slate of candidates reviewed thus far I remain.

Christopher G. H. Huskilson: I remain dedicated to this role of Interim CEO for as long as required and as the Board works to find it, in keeping with my transparency objectives. I'm again focused on four things for 24. First, growing our people and their capabilities. Second, Completion of the Renewable Sale and Optimizing the Value of AY. Third, meeting our financial objectives as a team. 4.

Darren G. Myers: Dedicated to this role of interim CEO for as long as required and as the board works to find the right candidate.

Darren G. Myers: In keeping with my transparency objective.

Darren G. Myers: Im again focused on four things for 24.

Darren G. Myers: First growing our people and their capabilities.

Darren G. Myers: Second completion of renewable sale and optimizing the value of a y.

Darren G. Myers: Third meeting our financial objectives as a team.

Darren G. Myers: Getting the regulated business running as one optimized business, including fully utilizing our SAP. With that, I'll turn things over to Darren. We'll speak about our fourth quarter and full year. Thank you, Chris, and good morning, everyone.

Darren G. Myers: And fourth getting the regulated business running as one optimized business <unk>.

Darren G. Myers: Including fully utilizing our SAP platform.

Darren G. Myers: With that I'll turn things over to Darin, who will speak about our fourth quarter and full year financial results. Darren. Thank you, Chris and good morning, everyone as Chris touched on briefly 2023 was a Europe decision, making we believe that the decisions. We've made the right actions to simplify the business and better position the company for long term profitable growth and focus.

Darren G. Myers: As Chris touched on briefly, 2023 was a year of decision-making. We believe that the decisions we've made are the right actions to simplify the business and better position the company for long-term profitable growth and focused value creation for shareholders. Overall, we're pleased with our fourth quarter results in the backdrop of a challenging 2023. Q4 consolidated adjusted EBITDA was $334.3M, up 13% from the same period last year, while full-year consolidated adjusted EBITDA was approximately $1.24B, an increase of 4% over 2022. Fourth quarter adjusted net earnings were $115.5 million compared to $97.6 million reported last year, an 18% increase. Full year adjusted net earnings were $372 million, down 11% from last year.

Darin: Value creation for shareholders.

Darin: Overall, we're pleased with our fourth quarter results and the backdrop of E challenging 2023.

Darin: Q4, consolidated adjusted EBITDA was $334 3 million.

Darin: Up 13% from the same period last year, while full year consolidated adjusted EBITDA was approximately $1 two 4 billion an increase of 4% over 2022.

Darin: Fourth quarter adjusted net earnings were $115 5 million compared to $97 6 million reported last year and 18% increase full year adjusted net earnings were $372 million down 11% from last year.

Darren G. Myers: On a per share basis, our fourth-quarter adjusted net earnings per share was $0.16, a $0.14 improvement year-over-year, primarily attributable to organic regulated growth and higher tax credit recoveries from our renewables business. This was partially offset by higher interest expense. For the full year, adjusted net earnings per share came in at $0.53, a decline of 13% year-over-year.

Darin: On a per share basis, our fourth quarter adjusted net earnings per share was <unk> 16.

Darin: The 14th improvement year over year, primarily attributable to organic regulated growth and higher tax credit recoveries from our regular our renewables business.

Darin: This was partially offset by higher interest expense.

For the full year adjusted net earnings per share came in at 53 <unk>.

Darin: The decline of 13% year over year.

Darren G. Myers: This is consistent with our third quarter update, where we stated that we expected full-year guidance to come in at or below our 2023 guidance range of 55 to 61 cents. While full-year adjusted net earnings per share were boosted by organic growth in our regulated business and higher than typical tax credit recoveries, these positive items were more than offset by higher interest expense and five cents from unfavorable weather, as well as higher minority interest expense related to our fourth quarter 2022 asset recycling transact. Looking now, it results in on a segmented basis.

Darin: This is consistent with our third quarter update where we stated that we expected full year guidance to come in at or below our 2023 guidance range of 55 to 61.

Darin: While full year adjusted net earnings per share were boosted by organic growth in our regulated business and higher than typical tax credit where credit recoveries. These positive items were more than offset by higher interest expense and <unk> <unk> from unfavorable weather as well as higher minority interest expense related to our fourth quarter 2022 asset recycling transfer.

Darin: <unk>.

Darin: Looking now at results on a segmented basis the.

Darren G. Myers: The regulated service group delivered $238.3 million in divisional operating profit in the fourth quarter and $954.1 million for the full year, up 11% and 10%, respectively, year-over-year. The increases were primarily due to new rate implementations on several of the company's electric and water utilities, the previously disclosed one-time CalPICO true-up, and higher interest income on regulatory asset accounts. These were partially offset by unfavorable mid-year weather conditions at the Empire Electric System.

Darin: The regulated service group delivered $238 3 million and divisional operating profit in the fourth quarter and $954 1 million for the full year up 11% and 10% respectfully respectively year over year.

Darin: The increases were primarily due to new rate implementations at several of the company's electric and water utilities. The previously disclosed one time Cal Pico true up and higher interest income on regulatory asset accounts.

Darin: These were partially offset by unfavorable midyear, whether at the Empire electric system.

Darren G. Myers: The Renewable Energy Group posted a fourth quarter divisional operating profit of $107.6 million, an increase of 6 percent, primarily due to improved equity income from the Texas coastal wind facilities, more favorable capacity revenues for the majority of solar facilities, and slightly higher HLBV income. On a full-year basis, operating profit was $371.8 million, a 9% decrease year-over-year, which was driven primarily due to an expected drop in HLBV income from certain 2012 vintage assets reaching end-of-PTC eligibility and unfavorable weather across Canadian and U.S. wind facilities. These impacts were partially offset by higher equity income from the Texas coastal wind assets and contributions from new facilities and investors.

Darin: The renewable energy group posted a fourth quarter divisional operating profit of $107 6 million, an increase of 6% primarily due to improved equity income from the Texas coastal wind facilities more favorable capacity revenues for the majority of solar facilities and slightly higher <unk> income.

Darin: On a full year basis operating profit was $371 8 million a.

Darin: A 9% decrease year over year, which was driven primarily due to an expected drop in <unk> income from certain 2012 vintage assets, reaching end of PTC eligibility and unfavorable weather across Canadian and U S wind facilities.

Darin: These impacts were partially offset by higher equity income from the Texas coastal wind assets and contributions from new facilities that investments.

Darren G. Myers: Let me now touch on CAPEX and the balance sheet. We ended 2023 with regulated capital expenditures of approximately $700 million and renewable CapEx of approximately $300 million, rounding up in total to $1.1 billion. As of the year 2023, our long-term debt was $8.5 billion, which included $1.1 billion of equity units and $1.4 billion of subordinated unsecured notes. Subsequent to year-end, we successfully raised $850 million of Liberty Utilities' senior unsecured notes and an additional $306 million of securitized utility tariff bonds at Empire. Proceeds were used to repay short-term and floating rate debt.

Darin: Let me now touch on Capex and the balance sheet.

Darin: We ended 2023 with regulated capital expenditures of approximately 700 million a renewable capex of approximately 300 milling rounding up in total to $1 1 billion.

Darin: As of the year end 2023, our long term debt was $8 5 billion, which.

Darin: Which includes $1 1 billion of equity units and $1 4 billion of subordinated unsecured notes <unk>.

Darin: Subsequent to year end, we successfully raised $850 million of Liberty utilities senior unsecured notes and an additional $306 million of securitized utility tariff bonds at Empire. The proceeds were used to repay short term floating rate debt.

Darren G. Myers: And lastly, a few comments on our forward outlook for 2024 and beyond. We are focused on simplifying the business. As a result of the pending sale of our renewables business, we will not be providing adjusted earnings per share guidance at this time.

Darin: And lastly, a few comments on our forward outlook for 2024 and beyond.

We are focused on simplifying the business as a result of the pending sale of our renewables business, we will not be providing adjusted earnings per share guidance. At this time Directionally, we expect our regulated rate base growth to be in the mid single digits and our regulated capital intensity to be at a similar level to 2023.

Operator: Directionally, we expect our regulated rate-based growth to be in the mid-single digits and our regulated capital intensity to be at a similar level in 2023. To conclude, we are focused on executing on the Renewable Business Sale, maintaining our BBB investment grade credit rating, supporting our dividend, and generating long-term shareholder value. With that, I will now turn the call over to the operator to open the lines for questions. Operator?

Darin: To conclude we are focused on executing on the renewable business sale, maintaining our triple B investment grade credit rating supporting our dividend and generating long term shareholder value.

Speaker Change: With that I will now turn the call over to the operator to open the lines for questions operator.

Operator: Thank you. If you have a question, please press star 1 on your telephone keypad. To withdraw your question, simply press star 1 again.

Speaker Change: Thank you if you have a question. Please press star one on your telephone keypad to withdraw your question simply press Star One again. Thank you one moment. Please for your first question.

Operator: Thank you. One moment, please, for your first question. Our first question comes from Sean Steuart from TD Securities. Please go ahead, your line is open. Thanks. Good morning, everyone.

Speaker Change: Our first question comes from Sean Stewart from TD Securities. Please go ahead. Your line is open.

Sean Steuart: Thanks, Good morning, everyone.

Sean Steuart: Chris, I'm wondering if you can give us any, I suppose, directional guidance on the sales process on the renewable side. Are we at a point where all interested offers are in, and you're vetting the offers? You know, as we progress towards a decision in the middle of the year. Any additional context you can give on where we are in the, Well, it's pretty hard to give any color at this point. We are in a confidential process, and I think we were pretty clear with folks last time that we wouldn't be able to comment, but the one thing we did say was that no news is good news, and you're not hearing any news. I'll take that as a positive.

Chris wondering if you can give us any.

Sean Steuart: Suppose directional guidance on the sales process on the renewable side.

Sean Steuart: Are we at a point where.

Sean Steuart: All interested offers are in and your your vetting the offers.

Sean Steuart: As we progress towards.

Sean Steuart: Decision middle of the year.

Sean Steuart: Any additional context, you can give on where we are in that process.

Pretty hard to give any color at this point, we are in a confidential process and I think we were pretty clear with folks last time that we wouldn't be able to comment but the one thing. We did say was that no news is good news and Youre not hearing any news.

Speaker Change: I'll take that.

Speaker Change: <unk> is positive okay.

Christopher G. H. Huskilson: Okay. And appreciating this is all dependent on the renewable sales process, but you churned through some liquidity this quarter. Can you comment on the investment plan for the regulated platform and overall comfort with liquidity, absent the sale of the renewables platform at this point? Sean, it's Darren here.

Speaker Change: And I appreciate.

Speaker Change: <unk>. This is all dependent on the renewable sales process, but you churn through some liquidity. This quarter can you comment on the investment plan for the regulated platform and <unk>.

Overall comfort with liquidity absence.

Speaker Change: Sale and the renewables platform at this point.

Speaker Change: Yes.

Speaker Change: Sean It's Darin here I mean, we've got a number of steps in place. We are quite pleased with what we did in Q1 with the both.

Darren G. Myers: I mean, we've got a number of steps in place. We're quite pleased with what we did in Q1 with both the bond and the securitization. They were, you know, four times oversubscribed.

Darin: Both the bond and the securitization there were four times oversubscribed. So lots of interest there. So from a liquidity point of view we are in good shape.

Darren G. Myers: So lots of interest there. So from a liquidity point of view, we're in good shape. And, you know, we're just executing our plan with the sale of the renewables business. On the capital for the REG business, you know, we've said about the same this year as last year, where, Okay, that's all I have. Thanks very much. Our next question comes from Nelson Ng from RBC Capital Markets. Please go ahead; your line is open.

Speaker Change: We're just executing our plan with.

Speaker Change: With the sale of the renewables business.

Speaker Change: And the capital on the capital for the <unk> business.

Speaker Change: We've said that about the same this year as last year, and Thats, where we see it.

Speaker Change: Okay.

Speaker Change: Okay. That's all I had thanks very much.

Speaker Change: Our next our next question comes from Nelson Eng from RBC Capital markets. Please go ahead. Your line is open.

Nelson Ng: Great, thanks, and good morning everyone. Maybe I'll try to have another go at the renewal sales process question. So, Chris, you mentioned that you'll be making a sales announcement, or you expect to make a sales announcement, in mid-2024. So just to clarify, are you essentially saying that the renewables..., sales posts like you expect to announce the sale of the renewables division in mid-2024, or are you saying that an announcement will be made in mid-2024 regardless? whether there is a sale. Well, what you just described is our target. That's because it's a sale.

Nelson Ng: Great. Thanks, and good morning, everyone, maybe I'll try to have another go at the wholesales process question.

Nelson Ng: And so so Chris you mentioned that youll be making a.

Sales announcement.

Nelson Ng: You expect to make our sales announcement in mid 2024.

Nelson Ng: Just to clarify are you essentially saying that the renewables.

Speaker Change: Sales price I E. Do you expect to announce the sale of the renewables division in mid 2024 or are you, saying that in an announcement will be made in mid 2024 are regardless of.

Speaker Change: Whether there is a sale or whatnot.

Speaker Change: You just described is our target.

Speaker Change: And as a sale at mid 24, that's our target okay.

Christopher G. H. Huskilson: That's our target, and things are tracking well at some. No, no, this is good.

E: Okay, and things are tracking well it sounds like.

Speaker Change: No news is good news.

Okay. Thanks.

Christopher G. H. Huskilson: And then just on, just to clarify the question that Sean asked. You mentioned that the utilities' capex is the same this year compared to last year. What about on the renewable side? Can you comment on the expected capex? Yeah, Nelson.

Speaker Change: And then just on just to clarify.

Speaker Change: The question that Sean asked.

Speaker Change: So you mentioned that the.

Speaker Change: Utilities Capex is the same this year compared to last year.

Speaker Change: What about on the renewable side can you comment on the expected Capex there.

Nelson Ng: No, I mean, we're just not going to make comments on renewable energy. It's obviously, you know, with everything going on, we just don't think it's the appropriate time to provide guidance on the renewable energy business. Okay, and then just, I guess one, like, since you're not providing guidance for 2024, can you just, directionally, talk about the two divisions plus the tax rate.

Speaker Change: Yes, Hi, Nelson.

Speaker Change: We're just not going to make comments on the renewables is obviously.

Speaker Change: Everything going on we still think it's an appropriate time to provide guidance on the renewables business.

Speaker Change: Okay.

And then just.

Speaker Change: One since year Youre, not providing guidance for two months before can you just directionally.

Speaker Change: Talk about the Utah.

Utilities.

Speaker Change: The two divisions plus the tax rate in terms of obviously the utilities, you're running through a number of rate cases, so that I presume it's positive directionally.

Nelson Ng: In terms of, obviously, the utilities, you're running through a number of great cases, so a number of tax credits. And then on the renewable side, 2020.

Speaker Change: Can you talk about the tax rate, where obviously you benefited from.

Speaker Change: A number of tax credits.

Speaker Change: And then on the renewable side I think 2023.

Nelson Ng: I had below-average generation, so... and also had some additional assets that were brought online. Directionally, everything looks positive. Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES, Bye.

Speaker Change: <unk> had below average generation so.

Speaker Change: And also had some additional assets that were brought online so I presume directionally everything looks positive maybe.

Speaker Change: Maybe the tax rate will move up rather than.

Speaker Change: Wow.

Speaker Change: I'll just let you.

Darren G. Myers: I'll just let you. There was a lot of that, Nelson. I mean, again, we're not providing guidance but just direction. We want to be as helpful as we can be and be as transparent as we can be. Certainly, what I would say is tax credits were higher than they normally are on the renewable side, but that's, you know, it's a lumpy business, and the tax credits can be quite lumpy. The underlying tax rate has been having those, you know, the increases that we would have expected if you take away the tax credit.

Speaker Change: If you can provide.

Speaker Change: There was a lot in that.

Speaker Change: Yes, I mean again, we're going to we're not providing guidance, but just directionally, we want to be as helpful. As we can be and be as transparent as we can be certainly what I would say is tax credits were higher than they normally are on the renewable side, but it's a lumpy business and the tax credits can be quite lumpy the underlying tax rate has.

Speaker Change: Been having those.

Speaker Change: Increases that we would have expected if you take away the tax credits and as we've previously talked about.

Robert Hope: And as we've previously talked about, you know, even when I started, we do expect the underlying to go up over a number of years as a result of some of the changing tax landscape. So, no color, I would say, again, on 2024 on the tax credits and the renewables business, because we're just not providing the guidance at this time, given the dynamics. Yeah, I think the only other thing to say is that, as part of the tax improvement you saw last year, we actually sold a couple of tax credits into the market. And so, you know, we see that as very positive for the business because the market continues to develop. Okay, thanks. Our next question comes from Rob Hope from Scotiabank. Please go ahead; your line is open. Good morning, everyone.

Speaker Change: Even with this when I started we do expect the underlying to go up over a number of years as a result of some of the changing tax landscape. So no color I would say.

Speaker Change: Again on 2024 on the tax credits in the renewables business, because we're just not providing the guidance at this time given the dynamics.

Speaker Change: I think the only other thing to say is that part of the tax improvement you saw last year is we actually sold a couple of tax credits into the market and so we see that as very positive for the business because the market continues to develop.

Speaker Change: Okay. Thanks, I'll leave it there.

Speaker Change: Thanks Nelson.

Speaker Change: Our next question comes from Rob Hope from Scotiabank. Please go ahead. Your line is open.

Robert Hope: Hi, Good morning, everyone I was hoping you could explore the concept of simplicity.

Christopher G. H. Huskilson: I was hoping you could explore the concept of simplicity a little bit more. You did simplify the business a little bit here with some of those roll-ups in Q4, but when you take a look into later this year and into 2025, how do you anticipate simplifying the business, and what key factors should we be looking for? Well, I think it goes into a couple of different things. So, first of all, one of the things that will be true is that business will become more transparent because the utilities will be more integrated into the business, and you'll be able to see more directly what the utilities are actually doing. And then when it comes to the platform that we've put in place, and we're putting the last stage of that platform in place in the spring at Empire. And so, you know, by the time we get into solidly into Q2, we'll have our SAP platform, and it will be solid across the entire business.

Robert Hope: More.

Robert Hope: You did.

We will call simplify the business a little bit here with some of those roll ups in Q4, but when you take a look into later this year and into 2025 like how do you envision simplifying the business and kind of what.

Robert Hope: Key factors should we be looking for.

Robert Hope: I think it goes into a couple of different things. So first of all one of the things that will be true is that the business will become more transparent because the utilities will be more surfaced in the business and you'll be able to see more directly what the utilities are actually doing.

Robert Hope: And then when it comes to the platform that we've put in place and we're putting the last stage of that platform in place in the spring.

Robert Hope: With at Empire, and so by the time, we get into solidly into Q2, we will have our SAP platform.

Robert Hope: Solidly across the entire business that will allow us to simplify our processes, which will allow us to simplify our reporting.

Christopher G. H. Huskilson: That will allow us to simplify our processes, which will allow us to simplify our reporting, and to speed up things like reporting, and we've already started to see that kind of improvement. We will continue to be more transparent and simplified as we report to you and to customers and others. So at the end of the day, it really is about optimizing this business, using our platform, and using the ability to bring the utilities more to the surface. All right, that's helpful. And then maybe just sticking with the utilities as well.

Robert Hope: Speed up things like reporting and we've already started to see that kind of improvement and continue to be more transparent and simple simplified as we report to you and customers.

Robert Hope: Customers in Alberta, so at the end of the day. It really is about optimizing this business using our platform.

Robert Hope: Using the ability to bring the utilities more to the surface of the business.

Speaker Change: Alright, that's helpful. And then maybe just sticking with the utilities as well.

Christopher G. H. Huskilson: You know, you did see some headwinds in 2023, as expected. Where do you think the achieved ROE came in? And as we look out into 2024, is really just normalized weather as well as getting a New York decision going to be the key factors driving it closer to the allowed level? Yeah, and in fact, you know, again, from a simplification perspective, we did take a hit on weather in our regulated business as well as our unregulated business. And, you know, fundamentally, we should not be doing that. That should not be the case.

Speaker Change: You did see some headwinds in 2023 as expected where do you think the achieved Roe.

Speaker Change: <unk> came in at and as we look out into 2024 is it really just normalized weather as well as getting in New York.

Speaker Change: On a decision going to be the key factors driving it closer to the allowance.

Speaker Change: Yes.

Speaker Change: <unk>.

Speaker Change: Again from a from a simplification perspective, we.

Speaker Change: We did take a hit on weather in our in our regulated business as well as our unregulated business this year.

Speaker Change: <unk>.

Speaker Change: Fundamentally we should not be doing that should not be the case, we should be able to manage our way through weather events of that kind of scale and so those are the some of the things that we're working on with the business. So that we don't have.

Christopher G. H. Huskilson: We should be able to manage our way through weather events of that kind of scale. And so those are some of the things that we're working on with the business so that we don't have to do so much reporting on things like variation. So there's an awful lot of that kind of work that's going on as well. I think the weather was total above 5 cents in our total.

Speaker Change: As much reporting on things like variations from weather. So there is an awful lot of that kind of work that's going on as well.

Speaker Change: I think if weather was totally about five <unk>.

Paul Andrew Zimbardo: For this year, so it was a material amount, and we have to minimize it. And I have that kind of fluctuation. Thank you. Our next question comes from Paul Zimbardo from Bank of America. Please go ahead, your line is open.

Speaker Change: Yes for this year so it was a material.

And we have to minimize that I think we cannot have that kind of fluctuation relative to whether in the future.

Speaker Change: Thank you.

Speaker Change: Thanks, Rob.

Speaker Change: Our next question comes from Paul Zimbardo from Bank of America. Please go ahead. Your line is open.

Operator: Hi. Good morning, team. Thank you. Good morning.

Paul Zimbardo: Hi, good morning team. Thank you.

Paul Zimbardo: Good morning.

Paul Andrew Zimbardo: So, I want to follow up a little bit. You mentioned the SAP rollout a few times as a driver for 2024. Just could you talk about the experience in New Hampshire where it looks like it was a little rocky with that, the 500 million plus overstatement area identified? Just if you could give some background on what happened in New Hampshire and kind of the remedy plans you have for the rest of the business, that would be helpful.

Paul Zimbardo: So I wanted to follow up a little bit you mentioned that SAP rollout a few times as a driver for 2024, just could you talk about the experience in New Hampshire, where it looks like it was a little rocky with that.

Paul Zimbardo: The 500 million plus overstatement area identify just if you could give.

Paul Zimbardo: Some background on what happened in New Hampshire, and kind of the remedy plans you have for rest of the business that'd be helpful. Thanks.

Christopher G. H. Huskilson: Yeah, so fundamentally, what happened in New Hampshire was it was an early stage, an early stage release that we were looking at, and it was primarily focused on 2022 data, and only about three months of that data was actually in SAP. So that's kind of the circumstance.

Speaker Change: Yes, so so fundamentally what happened in New Hampshire is it was it was an early stage and early.

Early stage release that we were looking at.

Speaker Change: And it's primarily focused on 2022 data.

And about only about three months of that data was actually in our SAP. So so thats kind of the circumstances very very new systems, both to the to the intervenors and also to the to the company.

Christopher G. H. Huskilson: Very, very new systems, both to the interveners and also to the company. So, you know, in large part, growing pains with respect to 2013 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services. You know, the fact that we have been able to analyze what happened there and understand it much better, the fact that we've asked for a pause and have third parties looking at the numbers so that we can prove to the regulatory authorities that the numbers are good, even though we had to make some corrections. We're learning that across the entire system. And so, you know, that's going into everything we do as it relates to, and fundamentally, what we're talking about here is the translation between our GAAP accounting and our FERC accounting. That translation, Thank you.

Speaker Change: In large part growing pains with respect to implementation of a new system.

Speaker Change: Fact that we have been able to analyze what happened there and understand it much better. The fact that we've asked for a pause and have third parties looking at the at the numbers. So that we can prove to the regulatory authorities that the numbers are good even though we had to make some corrections.

Speaker Change: We're learning that across the entire system and so.

Speaker Change: Thats going into everything we do as it relates to and fundamentally what we're talking about here is the translation between our GAAP accounting and our FERC accounting.

Speaker Change: And that.

Speaker Change: Nation needed some tweaking and it's now it's now in much better shape.

Paul Andrew Zimbardo: Thank you. OK. Great. Thank you. And then the last for me, just, I know you don't have 2024 EPS guidance, but could you give at least a directional view on where the cash flow to debt goes into 2024? It looks like it's around 8.5% in 2023, so just hoping you could help there. Let me start with, we wouldn't see 8 and a half, so we'd probably spend some time with you offline just seeing how you're calculating that. I mean, the rating agencies will publish what they see the FFO, but I'd say it's more in the mid-11s would be kind of the range.

Speaker Change: Okay.

Great. Thank you and then the last for me just I know you don't have 2024, EPS guidance, but could you give at least directional view on where <unk> goes into 2024. It looks like is around eight 5% in 2023.

Speaker Change: You could help there thanks.

Speaker Change: Let me start with we wouldn't see eight and a half so we'd probably spend some time with you offline on just seeing how are you.

Speaker Change: How youre calculating that the rating agencies will publish.

Speaker Change: Where they see the <unk>, but I'd say, it's more in the mid elevens.

Speaker Change: It'd be kind of the range and really it's the the plan is to again to make sure. We are triple B investment grade and so the sale of our renewables business and the proceeds of that will be used to.

Darren G. Myers: And really, the plan is to, you know, again, make sure we're triple B investment grade. And so the sale of our renewables business and the proceeds of that will be used to pay down debt, de-lever, and, you know, any excess would be used for buyback. That's the plan.

Speaker Change: Pay down debt.

Speaker Change: Delever and any excess would be used for buybacks.

Darren G. Myers: And that's what we've been talking about for some time now. Okay, great. Thanks a lot.

Speaker Change: The plan and that's what we've been talking about for some time now.

Speaker Change: Okay, great. Thanks, a lot.

Paul Andrew Zimbardo: Yeah, there's probably some items you're using in there that aren't, that get equity credit, most likely, but we can go through that. We did also include a little more color in our investor deck on just that on these debt components, because I know it can be confusing for people. So, that should hopefully try to get everybody on the same page. Okay, yeah, we can follow up. I was just taking your FFO divided by debt, so we can follow up. Thanks a lot.

Speaker Change: Yes, there is probably some items you are using in there that are that get equity credit and most likely we can go through that we did to also include a little more color in our investor deck on just get on these debt component because I know it can be confusing for people. So that should hopefully try to get everybody on the same page.

Speaker Change: Okay. Yes, we can follow up I was just taken <unk> divided by debt. So we can see and thanks a lot.

Paul Andrew Zimbardo: Yep, great. Our next question comes from Mark Jarvi from CIBC. Please go ahead, your line is open. Yeah, good morning, everyone.

Speaker Change: Great. Thanks, Paul.

Speaker Change: Our next question comes from Mark Jarvi from CIBC. Please go ahead. Your line is open.

Mark Thomas Jarvi: Yes, good morning, everyone, maybe Christopher and back to your comments about maximizing the value of T Y. Thank you said in your prepared remarks here actually working with them.

Mark Thomas Jarvi: Maybe, Chris, coming back to your comments about maximizing the value of AAY, and like you said, in your prepared remarks, you're actively working with them to support them. Can you elaborate on that? What does that mean? What could it mean in terms of your relationship going forward?

<unk> can you elaborate on that what that means what that could mean in terms of the relationship going forward.

Christopher G. H. Huskilson: And a middle pause for that, my answer. I mean, I think just fundamentally, we're supporting the activities that they're going through right now. You know, the transaction that I noted in my comments. We sold some of our assets in Spain to them, giving them some development opportunities, and we're looking at how we can be helpful in that kind of response. But in terms of how you think about maximizing your value unit, is there anything aside from making sure that they're unencumbered and can optimize their own business, or is there something else that we should read into your comments? No, I think that that's inappropriate.

Speaker Change: I will pause for that my answer.

Yes, I mean, I think just fundamentally we're supporting the activities that they are going through right now.

Speaker Change: Sure.

Speaker Change: The transaction that I noted in my comments.

Speaker Change: We sold some of our assets in Spain to them, giving them some development opportunities.

Speaker Change: We're looking at how we can be helpful in that respect.

Speaker Change: But in terms of how you think about maximizing your valley unit is there anything new on that aside from making sure that they are unencumbered taken can optimize their own business or is there something else that we should read into your comments no I think that's appropriate the way you've described it.

Christopher G. H. Huskilson: Okay, and then coming back to Rob's question, you commented on the 2023 headwinds on earned ROEs. As you look through 2024, it's safe to assume, given the fact you've got a lot of rate requests pending, you won't get there in 2024. Is there sort of a cadence or timeline when you think of improvements in overall achieved ROE through 2024 and 2025? Is it 25 basis points each year of improvement? Is there some way to sort of gauge the talent market in terms of how you think the earnings profile earned ROEs will track over the next two years?

Okay, and then coming back to Rob's question.

Speaker Change: The 2023 headwinds on earned ROE.

Speaker Change: When you go through 'twenty four safe to assume given the fact that a lot of rate request pending you will get there in 2024 is there is there sort of a cadence or timeline. When you think of like improvements in overall achieved ROE through 'twenty four 'twenty five is it.

Speaker Change: It is 25 basis points each year of improvement is there some way to sort of gauge the talent market in terms of how you think the earnings profile earned ROE track over the next two years.

Mark Thomas Jarvi: I think, first of all, the results of our application in New York will be very important to that because New York is a substantial part of the. The other thing that you're going to see from us, especially as I said earlier, is that we get the SAP system up and running and working efficiently. We're going to be able to improve our cost of operations. And that will also help us on from a return. And so make sure that we can actually deliver the cost structures that the utilities have been approved to deliver. So in a regulatory contract construct, we're given a certain amount of operating costs and a certain amount of capital that we would put into the business.

Speaker Change: I think first of all the results.

Speaker Change: <unk>.

Speaker Change: Our application in New York will be very important to that because new York is a substantial part of the.

Speaker Change: The lack of return at this moment.

Speaker Change: The other thing that youre going to see from US is especially as I said earlier as we get the SAP system up and running and working efficiently, we're going to be able to improve our cost of operations.

Speaker Change: And that will also help us from a return perspective.

Speaker Change: We're making sure that we can actually deliver the cost structures that utilities have been approved to deliver so.

Regulatory contact construct where given the certain amount of operating costs and a certain amount of capital that we would put into the business we need to hit those numbers and if we're not hitting those numbers that were not achieving our returns and so the SAP system is going to be very helpful to making sure. We hit those numbers and so I would see improved substantial improvement in 'twenty four.

Christopher G. H. Huskilson: We need to hit those numbers. If we're not hitting those numbers, then we're not achieving our returns. And so the SAP system is going to be very helpful to making sure we hit those numbers. And so I would see substantial improvement at 24 and then continued improvement at 25.

Speaker Change: Sure and then continued improvement in 'twenty five but the biggest single step will be New York Cutwater.

Christopher G. H. Huskilson: So if we exclude New York Water and come back to the SAP comments, is the goal to be there by year-end in terms of managing down regulatory lag and making sure that you earn on your deployed capital? Is that something that you think is the target for the N24 to be accomplished? The biggest funded capital that we have out there right now is the SAP system itself, and so it's really just a matter of the timing of the recovery of that relatively large investment that is the biggest single factor we have. There's not very much regulatory lag on anything else, but it was, as you can imagine, pretty hard to get that system into rates until we had it working properly in each one of them. So that has caused quite a bit of lag in and of itself.

Speaker Change: So if we exclude in Uruguay and conduct the SEC comments.

Speaker Change: The goal will be there by year end in terms of managing down regulatory lag and making sure that you earn under deployed capital.

Speaker Change: Do you think is the target for the end of 2014, we accomplished this as the biggest funded capital that we have out there right now is the SAP system itself and so it's really just a matter of the timing of recovery of that relatively large investment.

Speaker Change: That is the biggest single factor, we have theres not very much regulatory lag on anything else, but it was as you can imagine it was pretty hard to get that system into into rates until we had a working properly in each one of the system.

Speaker Change: So that has caused quite a bit of a lag in and of itself and mark just to add to it.

Christopher G. H. Huskilson: And Mark, just to add to it, to your other part of your question there, I mean, obviously, as people know, putting in systems like this, I think we've done a lot of good things getting it to where it is today, but then utilizing the systems, the efficiency, you know, taking out waste, that's, that's a journey. It's a good thing. It's a multi-year journey with multi-year opportunities for us, so we're excited by that. But, you know, those things aren't done overnight.

Mark Thomas Jarvi: The other part of your question there I mean, obviously.

Mark Thomas Jarvi: People know putting in systems like this I think we've done a lot of good things getting it to where it is today, but then utilizing the systems the efficiency.

Speaker Change: Taking out waste that's that's.

Speaker Change: Thats a jerry.

Mark Thomas Jarvi: It's a good thing, it's a multiyear journey with multi year opportunity for us. So we're excited by that but those things are done overnight.

Darren G. Myers: Okay. So just to clarify, you don't think operating costs and interest expense are a drag on earned ROEs at the subsidiary levels, at least in 2024, by and large? No, I didn't say that. What I said was there is an opportunity for us to get closer to the cost structure that we've been granted under the rate, and so the system will help us do that in a very big way, but obviously, implementing that system was a drag on that. So now that we have it implemented, we'll be able to take advantage of it and therefore get our costs exactly where they should be so that we can make a profit. And as I said, it's a big cost in itself. You know, we spend almost half a billion dollars on that system.

Speaker Change: Understood. So just to clarify you don't think operating cost and interest expense are drag on earned ROE at the subsidiary levels at least in 'twenty 'twenty four by and large.

Speaker Change: No I didn't say that.

Speaker Change: Yeah.

Speaker Change: What I said was there is opportunity for us to get closer to the two.

Speaker Change: The cost cost structure that we have been granted under our rates and so the system will help us do that in a very big way, but obviously implementing that system was a drag on those costs and so now okay.

Speaker Change: Avid implemented we will be able to take advantage of it and therefore, we get our cost exactly where they should be so that we can make our returns and as I said, it's a big cost unto itself.

Speaker Change: We spent almost $5 billion on that system, and so getting that into rate recovery.

Mark Thomas Jarvi: And so getting that into rate recovery by itself will help on a regular basis. Okay, understood. Thanks, Chris. Thanks, Darren.

Speaker Change: <unk> itself will will help on regulatory lag.

Operator: Thank you. Again, if you would like to ask a question, press star then number one on your telephone keypad. Our next question comes from Ben Pham from BMO Capital Markets. Please go ahead, your line is open.

Speaker Change: Okay understood. Thanks, Chris Thanks, Sarah.

Speaker Change: Thank you.

Speaker Change: Again, if you would like to ask a question Press Star then the number one on your telephone keypad.

Our next question comes from Ben Pham from BMO Capital markets. Please go ahead. Your line is open.

Benjamin Pham: Hi, Good morning, a couple of questions on the renewables.

Benjamin Pham: A couple of questions on renewable energy business. Can you comment on whether or not. And I'm sorry you broke up there on the front end. Could you try that again?

Business.

Benjamin Pham: Can you comment on weather.

Benjamin Pham: The credit rating agencies and I am sorry, you broke up there on the front end could you try that again.

Darren G. Myers: Yes, a couple of questions on the renewable power business. Thank you. Do your credit rating agency conversations drive the pace of the renewable sale process at all? No, no.

Benjamin Pham: Yes.

Benjamin Pham: Couple of questions on the renewable.

Benjamin Pham: Our business.

Benjamin Pham: Yes.

Benjamin Pham: Your credit rating agency conversations drive.

Seth: Hey, Seth.

Seth: Renewable sale process at all.

Seth: No no I mean, it's our plan, it's what we.

Darren G. Myers: I mean, it's our plan. It's what we, you know, it's our plan, and getting to simplification and maximizing value is our plan. We have kept the credit rating agencies on lockstep with us since we started, you know, since November of 2021.

Seth: It's our plan and getting to simplification and maximizing the value of our plan, we have kept the credit rating agencies.

Seth: Lock step with us.

Seth: Since we started.

Seth: Since November of 2021.

Christopher G. H. Huskilson: So, it's, yeah, I mean, it's our plan. It's what we're doing. Yeah, it's kind of the other way around.

Seth: So it's yes, I mean thats our plan Thats what were doing yes. It is kind of the other way around that fundamentally we laid out a plan.

Christopher G. H. Huskilson: Fundamentally, we laid out a plan in front of the agencies, and they endorsed that plan and said that they could support it. So I think that's really the direction. And then from a timing perspective, it's really just the practical result of how long it takes.

Seth: In front of the agencies and they endorse that plan and said that they could support it. So I think thats really the direction and then from a timing perspective, it's really just the practical.

Seth: Result of how long it takes to sell an asset base in the business as large as the renewables business is it's a very large business and.

Christopher G. H. Huskilson: We sell an asset base and business as large as the renewables business is. It's a very large business. In fact, that's why we see it as a very valuable business; it's a large and growing business.

Seth: In fact.

That's why we see it as very valuable business, it's a large and growing business.

Christopher G. H. Huskilson: Can you come and also... you mentioned in your report that around 400 megs of new capacity is being added. Are you pausing development right now? On renewables, are you just continuing the same course? And can you also update on the size of your backlog right now? Well, in my remarks, I stated that we have two fairly large solar projects on the way and that we have also added 1,660 megawatts of new development to our pipeline. 23, so 24, we'll be building those 300 megawatts, and in 23, we added that 1660 megawatts. So, so no, we're not slowing down at all.

Seth: And can you can.

Seth: Can you comment also.

Seth: You mentioned in your.

Seth: In your report.

Seth: Over 400, Max being added are you re pausing.

Seth: <unk> right now on.

Seth: On renewables or you're just continuing.

Seth: Alright, the same course and can you also update on the size of your backlog right now.

Seth: In my remarks.

Seth: <unk> stated that we had two fairly large solar projects on the way and that we also added 660 megawatts of new developments to our pipeline.

'twenty three so so 24 will be building those 300 megawatts in 2003, we added 660 megawatts. So no we're not slowing down at all.

Darren G. Myers: In fact, again, we think the momentum of that pipeline and the momentum of that business is part of what's attractive. And Ben, I just add to that. I mean, as you might recall, when we did the strategic review, the realization was that we couldn't invest as much as the opportunity is in that business. So, you know, the pursuit of selling it is so that we can spend more on the regulated business, and a buyer can spend more on the renewables business because it has such a strong platform and a lot of opportunity.

Fact, again, we think the momentum of that of that pipeline and the momentum of that business is part of what's attractive about that business.

Speaker Change: I would just add to that.

Speaker Change: You may recall, when we did the strategic review.

Speaker Change: The the realization is we can't invest as much as the opportunity is in that business. So.

Speaker Change: The pursuit of selling it is so that we can spend more on the regulated business and a buyer and spend more on the renewables business because it has such a strong platform and a lot of opportunities.

Benjamin Pham: Okay, sorry about that. I got in a little bit later in the column, but is your backlog still in that? 3 12 gigawatts, or is it? Good enough, can you share that? Sorry, Ben, you're breaking up again.

Speaker Change: Okay, I'm, sorry, but I got on a little bit later on the column, but is your backlog is still not.

Speaker Change: Three five gigawatts or is it.

Speaker Change: Different asking Shannon.

Speaker Change: Sorry, Ben Youre, breaking up again, we only got about three words.

Benjamin Pham: We only got about three words. Yeah, sorry about that. It must be my old phone.

Speaker Change: Sorry, guys.

Speaker Change: Phone.

Benjamin Pham: Are you able to share the size of your backlog? Oh, sorry, the pipeline? Yeah, so obviously we built some assets, so there's about 700 megawatts that we built, so that would come off the 8, and then we added 1.6 gigawatts. So it's kind of net up slightly from the 8. And then maybe lastly, just a detailed one on the debt there, and if you may, on the total debt, can you decompose it? That's for us in terms of like what amounts of power. What amounts to utility and what is the hold call level, which we can probably just look at in the financials?

Speaker Change: Are you able to share your the size of their <unk>.

Speaker Change: Their backlog is that Oh, sorry, the pipeline.

Speaker Change: So we so obviously, we built some some assets so theres about 700 megawatts that we've built.

Speaker Change: So that would come off the eight and then the <unk>.

Speaker Change: Then we added one six gigawatts, so it's kind of net up slightly from the eight yes.

Speaker Change: Gotcha.

Speaker Change: And then maybe lastly, just a detailed one on the debt that Darren if you may on.

Speaker Change: Net.

Speaker Change: Total debt can you decompose that for us in terms of like what what amounts power.

Speaker Change: Quite amounts utility and what is at the Holdco level, which we can probably just took a look on the financials.

Darren G. Myers: We'll probably just take that offline, just that. Let's see that go offline if that's okay. Okay. All right. Thank you. Yep, thanks. There are no further questions at this time. I will turn the call back over to Mr. Chris Huskilson for closing remarks. Okay, well, thank you everyone for attending the call today and for your interest in Algonquin, and thank you for listening to this call. Have a great day! This concludes today's conference call. You may now disconnect. Thank you for watching!

We probably just easiest is to take that offline.

Speaker Change: Okay.

Speaker Change: Let's see that one offline if that's okay.

Speaker Change: Okay.

Speaker Change: Alright, thank you.

Speaker Change: Yes, Thanks, Matt.

Speaker Change: There are no further questions at this time I will turn the call back over to Mr. Chris touched Wilson for closing remarks.

Chris Wilson: Okay well. Thank you. Thank you everyone for attending the call today and for your interest in Algonquin and.

Speaker Change: Thank you for listening to this call have a great day.

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

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].