Q4 2023 Emera Incorporated Earnings Call

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Operator: Good morning, ladies and gentlemen, and welcome to the Emera Q4 2023 Earnings Conference Call. At this time, all lines are in a listen-only mode.

Speaker Change: Good morning, ladies and gentlemen, and welcome to the Amira Q4, 2023 earnings conference call.

Speaker Change: At this time all lines are in a listen only mode. Following the presentation. We will conduct a question and answer session. If at any time during this call Unifi immediate assistance. Please press star zero for the operator.

Operator: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press Star 0 for the operator. This call is being recorded on Monday, February 26th, 2024. I would now like to turn the conference over to Dave Bezanson. Please do so.

This call is being recorded on Monday February 26th 24, I would now like to turn the conference over to David Vinson. Please go ahead Sir.

David Peters: Thank you, Lara, and thank you all for joining us this morning for Emera's fourth quarter 2023 conference call and live webcast. Emera's fourth quarter earnings release was distributed this morning by Newswire, and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at emera.com. Joining me for this morning's call are Scott Belfort, Emera's President and Chief Executive Officer, Greg London, Emera's Chief Financial Officer, and other members of Emera's management. Before we begin, I'd like to advise you that this morning's discussion will include forward-looking information which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include references to non-GAAP financial measures You should refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. Now, I'll turn things over to Scott. Thank you, Dave, and good morning, everyone.

David Vinson: Thank you Laura and thank you all for joining US. This morning for <unk> fourth quarter 2023 conference call and live webcast. The merits fourth quarter earnings release was distributed this morning via newswire and the financial statements management's discussion and analysis and the presentation being referenced on this call are available on our web site at a mirror dotcom.

David Vinson: Com joining.

David Vinson: Joining me for this morning's call are Scott Balfour, <unk>, President and Chief Executive Officer, Greg Blunden, <unk>, Chief Financial Officer, and other members of the <unk> management team.

David Vinson: Before we begin I'd like to advise you that this morning's discussion will include forward looking information, which is subject to the cautionary statement contained in the supporting slide.

Scott Balfour: Today's discussion and presentation will also include references to non-GAAP financial measures you should refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure and now I'll turn things over to Scott.

Scott Balfour: Thank you, Dave and good morning, everyone.

Scott Belfort: This morning we reported annual adjusted earnings of $809 million and adjusted earnings per share of $2.96. Adjusted EPS in 2023 was down approximately 2% over 2022, which was a record earnings year for Emera even when you adjust for the $45 million after-tax earnings impact of a litigation settlement received in the fourth quarter of 2022. Our fourth-quarter adjusted earnings were $175 million, and adjusted EPS was $0.63. We saw softer earnings results than we expected in the fourth quarter, largely driven by the impacts of higher interest rates and unfavorable weather in Florida.

Scott Balfour: This morning, we reported annual adjusted earnings of $809 million and adjusted earnings per share of $2 96.

Scott Balfour: Adjusted EPS in 2023 was down approximately 2% over 2022, which was a record earnings year for merit, even when you adjust for the $45 million after tax earnings impact of a litigation settlement received in the fourth quarter of 2022.

Scott Balfour: Our fourth quarter adjusted earnings were $175 million and adjusted EPS was <unk> 63.

Scott Balfour: We saw softer earnings results than we expected in the fourth quarter.

Scott Balfour: Largely driven by the impacts of higher interest rates and unfavorable weather in Florida.

Scott Belfort: And so, while our full-year results for 2023 were down year over year, we have nonetheless still delivered a 5.3% average annual increase in adjusted earnings per share over the last three years. Florida continues to drive our recent earnings growth and our expected forward group. Tampa Electric's U.S. dollar earnings have increased an average of nearly 8% per year since 2020, and earnings of People's Gas have increased on average 15% year-over-year over the same period. Looking ahead, we see many reasons for optimism.

Scott Balfour: And so while our full year results for 2023 were down year over year, we have nonetheless still delivered a five 3% average annual increase in adjusted earnings per share over the last three years.

Florida continues to drive our recent earnings growth.

Scott Balfour: And our expected forward growth.

Scott Balfour: Tampa Electric's U S. Dollar earnings have increased an average of nearly 8% per year since 2020 and.

Scott Balfour: And earnings at peoples gas have increased on average 15% year over year over the same period.

Scott Balfour: Looking ahead, we see many reasons for optimism.

Scott Belfort: We have new base rates effective January 1st at two of our utilities. We're executing well on our nearly $9 billion three-year capital plan focused on clean energy and reliability investments, and we are continuing our disciplined approach to capital allocation and cost management. Plus, we see strong customer and load growth in nearly all our service territories. All of these elements together reinforce solid growth in the business and underscore our continued confidence.

Scott Balfour: We have new base rates effective January one of two of our utilities, we're executing well on our night nearly $9 billion three year capital plan focused on cleaning and clean energy and reliability investments.

Scott Balfour: And we are continuing our disciplined approach to capital allocation and cost management.

Scott Balfour: Plus we see strong customer and load growth in nearly all our service territories.

Scott Balfour: All of these elements together reinforce solid growth in the business and underscore our continued confidence.

Scott Belfort: We continue to make progress on our capital plan, which is focused on delivering cleaner and even more reliable energy, and we're making meaningful progress on our decarbonization goals. In fact, we're pleased to note that the percentage of coal in our generation mix in 2023 was 77% lower than it was in 2005. Thanks to increased solar and natural gas generation, coal made up less than 4% of the generation last year at Tampa Electric and is down more than a third over 2022. In 2023, Nova Scotia Power's generation from coal and petroleum coke was nearly 25% less year over year, and notably is down more than 60% since 2005. This is due in large part to the strong energy flows across the Maritime Link, which made up 13% of the supplied energy for the year and helped bring the total to over 40% renewable energy at Nova Scotia Power for 2023. By all measures, the Maritime Link is performing well.

We continue to make progress on our capital plan, which is focused on delivering cleaner and even more reliable energy and we're making meaningful progress on our de carbonization goals.

Scott Balfour: In fact, we're pleased to note that the percentage of coal in our generation mix in 2023 was 77% lower than it was in 2005.

Scott Balfour: Thanks to increased solar and natural gas generation coal made up less than 4% of the generation last year at Tampa Electric and is down more than a third over 2022.

Scott Balfour: In 2023, Nova Scotia, Power's generation from coal and petroleum Coke was nearly 25% less year over year, and notably is down more than 60% since 2005.

Scott Balfour: This is due in large part to the strong energy flows across the maritime link, which made up 13% of the supply of energy for the year and helps bring the total to over 40% renewables at Nova Scotia power for 2023.

By all measures the maritime link is performing well it.

Scott Belfort: It delivered 1.6 million megawatt hours of the Nova Scotia block. That is 130% of contractual requirements. And since commissioning of the Labrador-Island Link in April, it has delivered more than double the energy requirement established for the Nova Scotia block. The Maritime Link also achieved availability of 99.9% for 2023. This puts the Maritime Link in the top 10% of high-voltage DC links globally in terms of availability.

Scott Balfour: It delivered one 6 million megawatt hours of the Nova Scotia block.

Scott Balfour: That is 130% of contractual requirements.

Scott Balfour: And since commissioning of the Labrador Island link in April It has delivered more than double the energy requirement established for the Nova Scotia block.

Scott Balfour: The Maritime link also achieved availability of 99, 9% for 2023.

Scott Balfour: This puts the maritime link and the top 10% of high voltage DC links globally in terms of availability.

Scott Belfort: We're proud that it's among the best in the world and pleased that it's doing the job of delivering cleaner energy to Nova Scotia. We remain focused on improving reliability for customers right across the business. In 2023, Tampa Electric experienced its best reliability year ever, setting all-time records in four out of their five main reliability metrics. It's worth mentioning that the average duration of customer outages has decreased by 56 percent since 2018. Nova Scotia Power continues to be focused on a five-year plan to improve the overall system reliability experience for customers. 2023 was certainly an extremely tough weather year for Nova Scotia.

We're proud it's among the best in the World and pleased that is doing the job of delivering cleaner energy to Nova Scotia.

Scott Balfour: We remain focused on improving reliability for customers right across the business in.

Scott Balfour: In 2023, Tampa electric experienced its best reliability year ever.

Scott Balfour: Setting all time records in for their five main reliability metrics.

Scott Balfour: It's worth mentioning that the average duration of customer outages has decreased by 56% since 2018.

Scott Balfour: Nova Scotia power continues to be focused on our five year plan to improve the overall system reliability experience for customers.

Scott Balfour: 2023 was certainly an extremely tough weather year for Nova Scotia.

Scott Belfort: But we're pleased to see that the team still managed to deliver year-over-year improvements in the metrics that measure both the frequency and duration of outages. Our utilities continue to see strong growth. Tampa Electric increased its customer base by 1.8% year-over-year as the local economy remains strong. The customer growth at People's Gas also continues to be very strong, with 4.7% growth in 2023. Nova Scotia is also growing.

Scott Balfour: But we're pleased to see that the teams still managed to deliver a year over year improvements in the metrics that measure both the frequency and duration of outages.

Scott Balfour: Our utilities continued to see strong growth.

Scott Balfour: Tampa electric increase their customer base by one 8% year over year as the local economy remains strong the.

Scott Balfour: The customer growth at peoples gas also continues to be very strong with four 7% growth in 2023.

Scott Balfour: Nova Scotia is also growing nova's.

Scott Belfort: Nova Scotia Power's new service connection requests have increased by 28% in the past two years. Of course, safety remains our top priority, and in 2023, the team will continue to do what they do best, safely delivering the energy our customers count on every day. Last year, we continued to improve our overall safety performance. Our lost time injury rate improved by 24% compared to the average of the last five years, achieving the best ever level of safety performance.

Scott Balfour: Nova Scotia Power's New service connection requests have increased by 28% in the past two years.

Scott Balfour: Of course safety remains our top priority and in 2023. The team continued to do what they do best safely delivering the energy our customers count on every day.

Scott Balfour: Last year, we continue to improve upon our overall safety performance.

Scott Balfour: Our lost time injury rate improved by 24% compared to the average of the last five years, achieving the best ever level of safety performance.

Scott Belfort: While we are proud of this achievement, we remain vigilant and never lose sight of the work required each and every day to keep each other safe. This safety performance is particularly noteworthy given all the projects the team is advancing. Last year, we successfully executed on nearly $3 billion of our capital program, which is the largest annual capital program in our history. We are investing for the future with a focus on projects that support a balanced clean energy transition. Last year, Tampa Electric added an additional 230 megawatts of solar generation to their system, increasing the total solar generation to 1,255 megawatts now in service.

Scott Balfour: While we're proud of this achievement, we remain vigilant and never lose sight of the work required each and every day to keep each other safe.

Scott Balfour: The safety performance is particularly noteworthy given all the projects the team is advancing.

Scott Balfour: Last year, we successfully executed on nearly $3 billion.

Scott Balfour: And if our capital program, which is the largest annual capital program in our history.

Scott Balfour: We are investing for the future with a focus on projects that support a balanced clean energy transition.

Scott Balfour: Last year Tampa Electric added an additional 230 megawatts of solar generation to their system, increasing the total solar generation to 1255 megawatts now in service.

Scott Belfort: Together with advancements at Bayside and the Big Ben modernization, our generating fleet efficiency improved by almost 500 BTU per kilowatt hour in 2023 compared to 2022, reducing the cost for customers. Our investments in solar alone have already saved customers more than $200 million in fuel costs. In November, Tampa Electric was advised that the Polk Carbon Capture and Sequestration Project was successfully awarded a third U.S. Department of Energy award, providing 80 percent co-funding, up to $110 million for site characterization and permitting, including installation of two new wells and a full-site seismic survey. We remain optimistic and excited about the opportunity that this project presents, and we'll keep you informed as it advances. At Nova Scotia Power, we continue to support the government's ambitious climate goals.

Scott Balfour: Together with advancements at Bayside, and the Big Bend modernization, our generating fleet efficiency improved by almost 500.

Scott Balfour: Btu per kilowatt hour in 2023, compared to 2020 to reducing the cost for customers.

Scott Balfour: Our investments in solar alone have already saved customers more than $200 million in fuel costs.

Scott Balfour: In November Tampa Electric was advised that the poke carbon capture and sequestration project was successfully awarded a third U S Department of Energy Award, providing 80% co funding up to $110 million for site characterization.

Scott Balfour: And permitting including installation of two new wells and full site seismic survey.

Scott Balfour: We remain optimistic and excited about the opportunity that this project presents and we will keep you informed as it advances.

Scott Balfour: And Nova Scotia power, we continue to support the government's ambitious climate goals. We recently received provincial cabinet approval to build 350 megawatt grid scale battery projects, which will help support the provinces procurement of new wind energy resources, and Nova Scotia as clean energy transition.

Scott Belfort: We recently received provincial cabinet approval to build three 50-megawatt grid-scale battery projects, which will help support the province's procurement of new wind energy resources and Nova Scotia's clean energy transition. The project received a $110 million grant from the federal government through NRCan's Smart Renewables and Electrification Pathways Program and a $138 million low-interest financing loan from the Canada Infrastructure Bank, which will help reduce project costs and rate pressures for customers of Nova Scotia Power. We're also proudly partnered with an entity owned by Nova Scotia's 13 Mi'kmaq First Nations, which will be an equity investor in these projects. Another Nova Scotia project that supports the province's clean energy plan is the Nova Scotia New Brunswick Reliability Test, a 345 kV transmission line upgrade between the two provinces.

Scott Balfour: The project received a $110 million grant from the federal government through <unk> Smart renewables in electrification pathways program and a $138 million low interest financing loan from the Canada infrastructure Bank, which will help reduce project cost and rate pressures for customers of Nova Scotia power.

Scott Balfour: We're also proudly partner with an entity owned by Nova Scotia, 13, Big My first nations, which will be an equity investor in these projects.

Scott Balfour: Another Nova Scotia project that supports the provinces clean energy plan is the Nova Scotia, New Brunswick reliability time.

At 345 kv transmission line upgrade between the two provinces.

Scott Belfort: This critical new infrastructure, which is expected to be in service in 2028, was developed in conjunction with Nova Scotia Power and First Nations in the region, and we recently received environmental assessment approval for the Nova Scotia Power part of the line. At People's Gas, the New River, Brightmark, and Alliance Renewable Natural Gas Projects were completed in the fourth quarter of 2023 and are now online and functioning well. Additionally, a new renewable natural gas pipeline was approved and is now in early development stages. However, not all projects have advanced the way we expected, as last week the New Mexico Public Regulation Commission's Hearing Examiner issued a recommendation against New Mexico Gas Company's application for a proposed new LNG facility.

Scott Balfour: This critical new infrastructure, which is expected to be in service in 2028 was developed in conjunction with Nova Scotia power and first nations in the region and we recently received environmental assessment approval for the Nova Scotia power part of the line.

Scott Balfour: At peoples gas the New River break March and alliance renewable natural gas projects were completed in the fourth quarter of 2024, sorry 2023 and.

Scott Balfour: And are now online and functioning well.

Scott Balfour: Additionally, a new renewable natural gas pipeline was approved and is now in early development stages.

Scott Balfour: Not all of projects have advanced the way, we expected as last week, the new Mexico public regulation commissions hearing examiner issued a recommendation against new Mexico gas company's application for a proposed new LNG facility.

Scott Belfort: Given that the PRC requested that we look at storage options, and because of the clear customer benefits that were highlighted in the application, we're surprised by the recommendation, which we're continuing to review. Whether it's investing to meet the growth in our customer base, decarbonizing our generation mix, increasing reliability, or modernizing the grid, Emera is investing to grow its business and deliver for its customers. 2023 was also a very busy year on the regulatory front. In January of this year, Nova Scotia Power filed a proposal with the UARB to support the acquisition of $117 million of the FAM balance by the province of Nova Scotia to help ease the financial burden on customers and allow Nova Scotia Power timely recovery of prudently incurred fuel costs. And on Friday, the Nova Scotia Clean Electricity Solutions Task Force, which was formed by the government in April of last year, issued its final report.

Scott Balfour: Given that the PRC requested that we look at store storage options and because of the clear customer benefits that were highlighted in the application. We're surprised by the recommendation, which we're continuing to review.

Scott Balfour: Whether it's investing to meet the growth in our customer base Decarbonising, our generation mix, increasing reliability or modernizing the grid amira is investing to grow our business and deliver for our customers.

Scott Balfour: 2023 was also a very busy year on the regulatory front in.

Scott Balfour: In January of this year, Nova Scotia power filed a proposal with the <unk> to support the acquisition of $117 million of the fine balance.

Scott Balfour: By the province of Nova Scotia to help ease the financial burden on customers and allow Nova Scotia power timely recovery of prudently incurred fuel costs.

Scott Balfour: And on Friday, the Nova Scotia Clean electricity solutions Task Force issued its final report.

Scott Balfour: The task force was formed by government in April of last year the.

Scott Belfort: The report included 12 recommendations to government, including the introduction of the new Energy Modernization Act that would create a new independent non-profit system operator, an ISO, and establish a new distinct energy regulator in the province. The team at Nova Scotia Power worked closely with the task force throughout the process. We'll be working with government on the next steps. Our goal is, and will continue to be, to ensure that affordability and reliability for customers remain the focus throughout the energy transition in the province. While the team continues to assess the recommendations, let me say that we believe the creation of a new dedicated energy regulator and the development of an independent system operator in Nova Scotia is a positive step in the path to 2030. Nova Scotia's coal-fired plants will be phased out by 2020-30, and the energy will be replaced in large part by wind.

Scott Balfour: The report included 12 recommendations to government, including the introduction of the New Energy Modernization Act that would create a new independent nonprofit system, operator and ISO.

Scott Balfour: And establish a new distinct energy regulator in the province.

Scott Balfour: The team at Nova Scotia power. It worked closely with the task force throughout the process will be working with government on the next steps.

Scott Balfour: Our goal is and will continue to be to ensure that affordability and reliability for customers remains the focus throughout the energy transition in the province.

Scott Balfour: While the team continues to assess the recommendations let me say that we believe the creation of a new dedicated energy regulator and the development of an independent system operator in Nova Scotia is a positive step in the path to 2030.

Scott Balfour: Nova Scotia is coal fired plants will be phased out by 2000 2030, and the energy replaced in large part by wind.

Scott Belfort: The wind projects are already being procured by the province and will be executed with the independent power producers, or IPPs, in the province. Since the procurement of new energy resources already resides with the government today, it makes sense that they would assume overall responsibility for generation planning and dispatch, including execution of those wind projects and managing system capacity requirements and renewable energy standards targets. Government has confirmed that the new independent system operator will oversee open competition for new generation and storage infrastructure but not for transmission and distribution, which remains under the service obligations of Nova Scotia Power. This would allow Nova Scotia Power to continue to focus on providing reliable service to customers through the clean energy transition and to focus increasingly on the important role the utility plays in transmission and distribution in the province. At People's Gas, we completed a fully litigated rate case in early November, and rates went into effect on January 1st of this year. In September, New Mexico Gas filed for new rates to take effect on October 1st of this year.

Scott Balfour: The wind projects are already being procured by the province, and will be executed with the independent power producers for IPP in the province.

Scott Balfour: Since the procurement of new energy resources already resides with the government today. It makes sense that they would assume overall responsibility for generation planning and dispatch, including execution of those wind projects and managing system capacity requirements and renewable energy standards targets.

Scott Balfour: Government have confirmed that the new independent system, operator will oversee open competition for new generation and storage infrastructure, but not for transmission and distribution, which remains under the service obligations of Nova Scotia power.

This would allow Nova Scotia power to continue to focus on providing reliable service to customers through that clean energy transition and to focus increasingly upon the important role the utility plays on transmission and distribution in the province.

Scott Balfour: At peoples gas, we completed the fully litigated rate case in early November and rates came into effect on January one of this year.

Scott Balfour: In September New Mexico gas filed for new rates to take effect on October one of this year that rate case is progressing well with the hearing expected in April and.

Scott Belfort: That rate case is progressing well, with a hearing expected in April. And finally, Tampa Electric has started the regulatory process to seek new rates by filing its test year letter earlier this month. The test of your letter indicates they anticipate seeking incremental base rate revenues of $290 million to $230 million in 2025, with $100 million and $70 million increases related to specific investments in each of 2026 and 2027, respectively. We plan to file a request for new rates in early April with the expectation that any new rates would be effective on January 1st next year. Overall, we continue to safely advance a balanced energy transition while improving system reliability, supporting strong customer growth, and steadily improving our safety performance. While 2023 didn't deliver the earnings results we hoped for, we remain confident in our path ahead with the steps we're taking to continue to strengthen our business and with our eight to nine percent rate-based growth profile driving continued earnings and cash flow growth over time. And with that, I'll turn it over to Greg to take you through our financial... Thank you, Scott, and thank you all for joining us.

Scott Balfour: And finally, Tampa Electric has started the regulatory process to seek new rates by filing its test year letter earlier this month.

Scott Balfour: The test year letter indicates the anticipate seeking incremental base rate revenues of 290 million to $230 million in 2025.

Scott Balfour: With $100 million and $70 million increases related to specific investments in each of 2026 and 2027, respectively.

Scott Balfour: We plan to file a request for new rates in early April with the expectation that any new rates would be effective on January one next year.

Scott Balfour: Overall, we continue to safely advance a balanced energy transition, while improving system reliability supporting strong customer growth and steadily improving our safety performance.

Scott Balfour: While 2023 didn't deliver the earnings results. We hoped for we remain confident in our path ahead with the steps, we're taking to continue to strengthen our business and with our 8% to 9% rate base growth profile driving continued earnings and cash flow growth over time.

Scott Balfour: And with that I'll turn it over to Greg to take you through our financial results.

Greg Blunden: Thank you Scott and thank you all for joining us.

Greg London: This morning, we reported fourth-quarter adjusted earnings of $175 million and adjusted earnings per share of $0.63. This compares to $249 million and adjusted earnings per share of $0.93 in the fourth quarter of 2022. As a reminder, our 2022 fourth-quarter results included the recognition of a $45 million Canadian after-tax settlement related to a litigation award, which represents 17 cents of adjusted earnings per share. Excluding the impact of the settlement, adjusted earnings were $204 million for the fourth quarter of last year, and adjusted earnings per share was $0.76.

Greg Blunden: This morning, we reported fourth quarter adjusted earnings of $175 million and adjusted earnings per share of <unk> 63.

This compares to $249 million and adjusted earnings per share of <unk> 93 in the fourth quarter of 2022.

Greg Blunden: As a reminder, our 2022 fourth quarter results included the recognition of a $45 million Canadian after tax settlement related to a litigation award, which represents 17 of adjusted earnings per share.

Greg Blunden: Excluding the impact of the settlement adjusted earnings were $204 million for the fourth quarter of last year and adjusted earnings per share was <unk> 76.

Greg London: For the year, adjusted earnings were $809 million, and adjusted earnings per share were $2.96, as compared to $805 million and $3.03 per share for 2022 when adjusted for the settlement I just mentioned. Our fourth quarter results were not what we had planned, due in large part to increased financing costs across the business and unfavorable weather in Florida. The impact of weather reduced Tampa Electric's contribution to EPS by 2 to 3 cents compared to the fourth quarter of last year.

Greg Blunden: For the year adjusted earnings were $809 million and adjusted earnings per share was $2 96, as compared to $805 million and $3 <unk> per share for 2022, when adjusted for the settlement I just mentioned.

Greg Blunden: Our fourth quarter results were not what we had planned due in large part to increased financing cross costs across the business and unfavorable weather in Florida the.

Greg Blunden: The impact of weather reduced Tampa Electric's contribution to EPS by 2% <unk> compared to the fourth quarter of last year How's.

Greg London: However, we remain confident in the health and stability of our business and our ability to deliver earnings per share growth in 2024 and beyond, supported by our strong rate-based growth. With the constructive People's Gas Rate Case result now behind us, and both the Tampa Electric and New Mexico Gas Rate Cases occurring in 2024, I expect the business will continue to strengthen over the next couple of years. Now turning to the details of the quarter, when you adjust for the impact of the legal settlement mentioned earlier, adjusted earnings per share decreased 13 cents, or 17 percent, over Q4 2022. However, Cane Utilities earnings were higher, driven by new base rates and growth in the business. Emera Energy's earnings decreased $16 million quarter over quarter.

Greg Blunden: However, we remain confident in the health and stability of our business and our ability to deliver earnings per share growth in 2024 and beyond supported by our strong rate base growth.

Greg Blunden: With the constructive peoples gas rate case results now behind us and both Tampa Electric and new Mexico gas rate cases occurring in 2024, I expect the business will continue to strengthen over the next couple of years.

Greg Blunden: Now turning to the details of the quarter when you adjust for the impact of the legal settlement mentioned earlier adjusted earnings per share decreased 13, or 17% over 20 Q4 2022.

Greg Blunden: Utilities earnings were higher driven by new base rates and growth in the business.

Greg Blunden: <unk> Energy's earnings decreased $16 million quarter over quarter.

Greg Blunden: Our energy trading business had a strong quarter, but lower than the fourth quarter of 2022, which was our strongest on record.

Greg Blunden: Our gas utilities were down for the quarter, largely driven by lower earnings in new Mexico gas due to lower asset optimization revenues.

Greg Blunden: Tampa Electric's earnings were down due to increased interest expense depreciation taxes, and unfavourable weather, partially offset by new base rates and customer growth of approximately one 8%.

Greg London: Emera Energy's trading business had a strong quarter, but lower than the fourth quarter of 2022, which was their strongest on record. Our gas utilities were down for the quarter, largely driven by lower earnings in New Mexico gas due to lower asset optimization revenue. Tampa Electric's earnings were down due to increased interest expense, depreciation, taxes, and unfavorable weather, partially offset by new base rates and customer growth of approximately 1.8 percent. Excluding the litigation settlement, corporate costs increased $9 million this quarter, largely driven by higher financing costs offset by the timing impacts of share-based compensation expense and related hedging.

Greg Blunden: Excluding the litigation settlement corporate costs increased $9 million this quarter, largely driven by higher financing costs offset by the timing impacts of share based compensation expense and related hedges and.

Greg Blunden: And finally higher share higher share count decrease quarterly adjusted EPS by <unk> <unk> in the quarter.

Greg Blunden: Excluding the impact of the legal settlement annual adjusted earnings per share decreased by <unk> or 2% driven by higher interest rates interest expense across the business offset by increased base rates at Tampa Electric and Nova Scotia power and the impact of a weaker Canadian dollar.

Foreign exchange worked in our favor this year, adding <unk> <unk> to EPS. The weighted average exchange rate on adjusted earnings was $1 31 in 2022 compared to $1 35 in 2023.

Greg London: And finally, higher share count decreased quarterly adjusted EPS by 2 cents in the quarter. Excluding the impact of the legal settlement, annual adjusted earnings per share decreased by 7 cents, or 2%, driven by higher interest expense across the business, offset by increased base rates at Tampa Electric and Nova Scotia Power and the impact of a weaker Canadian dollar. Foreign exchange worked in our favor this year, adding 11 cents to EPS. The weighted average exchange rate on adjusted earnings was $1.31 in 2022, compared to $1.35 in 2023.

Greg Blunden: Canadian utilities contributed <unk> <unk> in EPS growth benefiting from both increased rates and increased sales volumes in Nova Scotia power as well as higher earnings for our Maritime link and Labrador Island link investments.

Greg Blunden: Tampa Electric U S. Dollar earnings contributed <unk> <unk> in EPS growth due to higher base rates and load growth, partially offset by higher costs.

Greg Blunden: Corporate reduced EPS by 15 cents, largely driven by higher interest expense, which was partially offset by the timing impacts of share based compensation expense and related hedges.

Greg Blunden: Lower earnings from our gas utilities and infrastructure segment were driven in large part by higher interest expense across the segment offset by the strong asset management agreement results recorded in new Mexico gas in the first quarter of this year.

Greg London: Our Canadian utilities contributed $0.09 in EPS growth, benefiting from both increased rates and increased sales volumes in Nova Scotia Power, as well as higher earnings from our Maritime Link and Labrador Island Link investors. Tampa Electric's U.S. dollar earnings contributed three cents in EPS growth due to higher base rates and load growth partially offset by higher costs. Corporate reduced EPS by 15 cents, largely driven by higher interest expense, which was partially offset by the timing impacts of share-based compensation expense and related hedging.

Greg Blunden: Murray energy had a solid year, but lower than the exceptionally strong 2022 earnings for the mirror marketing Emera energy marketing business were above our guidance range, but $22 million lower than 2022, which was the businesses second best on record.

Greg Blunden: And finally, the higher share count decreased adjusted EPS by <unk> <unk> for the year as we continue to issue equity through both our ATM and dividend reinvestment programs.

Greg Blunden: As expected operating cash flow before working capital rebounded this year, increasing 104% over 2022, making it the companys highest ever cash flow growth was supported by the recovery of the 2022 fuel and storm costs at Tampa Electric and increase cash flow contributions from our regulated utilities.

Greg London: Lower earnings from our gas utilities and infrastructure segment were driven in large part by higher interest expense across the segment, offset by the strong asset management agreement results recorded in New Mexico Gas in the first quarter of this year. Emera Energy had a solid year, but lower than the exceptionally strong 2022. Earnings for the Emera Energy marketing business were above our guidance range, but $22 million lower than 2022, which was the business's second best on record. And finally, the higher share count decreased adjusted EPS by 9 cents for the year as we continue to issue equity through both our ATM and dividend reinvestment programs.

Greg Blunden: This growth was partially offset by the under collection of fuel and storm costs in Nova Scotia power and higher financing costs.

Greg Blunden: At Tampa Electric we have reduced our total under recovery under recovered fuel and storm costs by nearly 90% collecting almost $700 million Canadian dollars. This year. The remaining 2022 deferral balances will be collected by the end of this year.

Greg Blunden: In Nova Scotia fuel and storm related under collections increased our deferral balances, however, incremental fuel revenues of approximately $115 million and $117 million of fuel cost relief from the province of Nova Scotia or expected to stabilize deferrals for 2024.

Greg Blunden: And as we've done in the past, we will continue to work with stakeholders to further manage the impact of collections and customer rates.

Greg London: As expected, operating cash flow before working capital rebounded this year, increasing 104% over 2022, making it the company's highest ever. Cash flow growth was supported by the recovery of the 2022 fuel and storm costs at Tampa Electric and increased cash flow contributions from a regulated utility. This growth was partially offset by the under-collection of fuel and storm costs at Nova Scotia Power and higher financing costs. At Tampa Electric, we have reduced our total under-recovered fuel and storm costs by nearly 90 percent, collecting almost $700 million Canadian dollars this year. The remaining $2,022 deferral balance will be collected by the end of this year.

Greg Blunden: Lastly in 2023, we collected the final outstanding fuel balances in new Mexico related to 2021 to winter storm area.

Greg Blunden: Recovering deferral balances was a major focus of management this year, even in the extreme circumstances of 2022, the effective regulated fuel and storm cost recovery mechanisms in Florida in Nova Scotia are working and gives us confidence that we will fully recover any remaining balances and future prudently incurred costs in a timely manner.

Greg Blunden: We also remain focused on reducing our exposure to variable rate debt over the last few months, we have reduced our exposure to variable rate debt by approximately $2 3 billion.

Greg Blunden: And we will continue to work to further mitigate our interest rate exposure.

Greg London: In Nova Scotia, fuel and storm-related under-collections increased our referral balance. However, incremental fuel revenues of approximately $150 million and $117 million of fuel cost relief from the province of Nova Scotia are expected to stabilize deferrals for 2024. And as we've done in the past, we will continue to work with stakeholders to further manage the impact of collections and customer rates. Lastly, in 2023, we collected the final outstanding fuel balances in New Mexico related to 2021's winter storm Yuri.

Greg Blunden: In addition to the ATM issuances in the quarter, we issued $925 million of long term debt of peoples gas and in early January $500 million U S dollars at Tampa Electric.

Greg Blunden: These higher interest costs have been or will be fully reflected in customer rates by January one of 2025.

Greg Blunden: While interest rates remained persistently high our actions to date have reduced our exposure to this macro headwind.

Greg Blunden: Looking forward to 2020 for operating cash flow absent changes in fuel and storm cost deferrals will growth supported by new rates at peoples gas that includes the recovery of the higher interest cost increased dividends from the Labrador Island link incremental base rates at Tampa electric and ongoing growth in the business.

Please note these known driver support the positive trajectory of our cash flow and beyond 2024, new rates at Tampa Electric and New Mexico gas and continued growth in the business will continue to contribute positively to predictable cash flow and earnings growth.

Greg London: Recovering deferral balances was a major focus of management this year. Even in the extreme circumstances of 2022, the effective regulated fuel and storm cost recovery mechanisms in Florida and Nova Scotia are working and give us confidence that we will fully recover any remaining balances and future prudently incurred costs in a timely manner. We also remain focused on reducing our exposure to variable rate debt. Over the last few months, we have reduced our exposure to variable rate debt by approximately $2.3 billion, and we will continue to work to further mitigate our interest rate exposure. In addition to the ATM issuances in the quarter, we issued $925 million U.S. dollars of long-term debt of people's gas and, in early January, $500 million U.S. dollars at Tampa Electric. These higher interest costs have been or will be fully reflected in customer rates by January 1st, 2025. While interest rates remain persistently high, our actions to date have reduced our exposure to this macro headwind.

In 2022 fuel and storm cost deferral significantly impacted our credit metrics over the past year, we have been focused on three key areas with the objective of returning to stable and predictable credit metrics. The first of these I discussed a moment ago. We were focused on the collection of 2022 deferrals the.

Greg Blunden: The other two areas of focus are prudent investment in our regulated utilities and management actions to reduce our holding company debt.

Greg Blunden: As always we are committed to making prudent rate base investments to support growth and provide our customers with reliable energy.

Greg Blunden: In our sector. There is a lead and lag to the recovery of these investments as capital is deployed and recover from customers in future rate cases.

Greg Blunden: <unk> rate cases, we manage our capital program to ensure we continue to meet our customer needs while minimizing this lag.

Greg Blunden: In 2023 debt increase at several of our utilities and support our capital investment for the benefit of customers.

Greg Blunden: However, the implementation of new rates at peoples gas and new Mexico gas in 2024, and Tampa Electric in 2025 will allow us to recover on our capital investments, reducing this regulatory lag.

Greg London: Looking forward to 2024 operating cash flow, as some changes in fuel and storm cost deferrals will grow, supported by new rates at People's Gas that include the recovery of the higher interest costs, increased dividends from the Labrador Island Link, incremental base rates at Tampa Electric, and ongoing growth in the business. These known drivers support the positive trajectory of our cash flow. And beyond 2024, new rates from Tampa Electric and New Mexico Gas and continued growth in the business will contribute positively to predictable cash flow and earnings growth. In 2022, fuel and storm cost referrals significantly impacted our credit metric.

Greg Blunden: In addition, as Scott mentioned, we have taken advantage of various incentives in both Canada and the United States to further maintenance capital investment and lower cost to customers.

Greg Blunden: We have been granted $88 million of federal government support for our pulp Ccs project and here in Canada $111 million in federal government support for our battery investments in Nova Scotia.

Greg Blunden: Our capital program relies on reinvested cash flow cash flow operating company debt and equity and as we guided on our last call. We caught up on our ATM issuances in the fourth quarter and raised approximately $670 million of equity in total last year through both our ATM and drip programs.

Greg Blunden: On the management action front, we have reduced our ratio of holding company debt to total debt to 37% at the end of 2023 firm about 40% last year. This represents a reduction in holding company debt of approximately $350 million.

Greg London: Over the past year, we have been focused on three key areas with the objective of returning to stable and predictable credit metrics. The first of these, I discussed a moment ago. We are focused on the collection of 2022 deferrals. The other two areas of focus are prudent investment in our regulated utilities and management actions to reduce the holding company debt. As always, we are committed to making prudent rate-based investments to support growth and provide our customers with reliable energy. In our sector, there is a lead and a leg to the recovery of these investments as capital is deployed and recovered from customers in future rate cases. Between these two cases, we manage our capital program to ensure we continue to meet our customer needs while minimizing this lag. In 2023, debt increases on several of our utilities and supports a capital investment for the benefit of customers.

Greg Blunden: And using the anticipated proceeds from targeted asset sales to reduce corporate debt will allow us to further improve our ratio of holding company debt to total debt and strengthen our overall credit standing.

Greg Blunden: Depending on the adjustments made to normalize for deferrals, we estimate that our ratio of cash flow to debt was relatively flat to 2022.

Greg Blunden: As a result of higher interest expense and less favorable weather in Q4, the improvements we expected did not materialize.

Greg Blunden: However, we believe we have provided the market with four far more confidence in the recovery of these deferrals and exhibited through our commitment to investment grade ratings and our previously community communicated targeted asset sales and reduction in holding company debt.

Greg Blunden: These activities are further supported by our ongoing rate base investment in regulatory filings that will drive predictable cash flow growth over time executing in these areas will allow us to get to stable investment grade metrics in the near future.

Greg Blunden: And with that I'll turn the call back over to Dave.

Dave: Thank you Greg. This concludes the presentation, we would now like to open the call for questions from analysts.

Dave: Yes.

Speaker Change: Thank you, Sir ladies and gentlemen, we will now begin the question Seth.

Greg London: However, the implementation of new rates for People's Gas and New Mexico Gas in 2024 and Tampa Electric in 2025 will allow us to recover on our capital investments, reducing this regulatory lag. In addition, as Scott mentioned, we have taken advantage of various incentives in both Canada and the United States to further manage capital investments and lower costs to customers. We've been granted $88 million U.S. dollars of federal government support for our Polk CCS project, and here in Canada, $111 million in federal government support for our battery investments in Nova Scotia. Our capital program relies on reinvested cash flow, operating company debt, and equity. And as we got in on our last call, we caught up on our ATM issuances in the fourth quarter and raised approximately $670 million of equity in total last year through both our ATM and DRIP programs.

Speaker Change: So do you have a question. Please press star followed by the number one on your Touchtone.

Speaker Change: Following you will hear today, Tom Tom acknowledging your request.

Speaker Change: We're still declines on the polling process. Please press star followed by the number Tim.

Speaker Change: If you're using a speaker phone please lift your handset before passing on of course.

Speaker Change: One moment please.

Speaker Change: Awesome.

Speaker Change: Our first question comes from the line of David <unk> from Raymond James. Please go ahead.

David Vinson: Thanks, Good morning, everyone, maybe just starting with the <unk>.

David Vinson: The clean energy solutions Task force.

David Vinson: Power I'm, just wondering like how if there's any.

David Vinson: Additional color you can provide on just how you see clean energy opportunities shaping up in the province with the establishment of an ISO.

David Vinson: Do you think it changes the magnitude of the opportunity you see there at all.

David Vinson: It's a good question, David and Peter Greg by the way from Nova Scotia power.

Greg London: On the management action front, we have reduced our ratio of holding company debt to total debt to 37% at the end of 2023 from about 40% last year. This represents a reduction in holding company debt of approximately $350 million, and using the anticipated proceeds from targeted asset sales to reduce corporate debt will allow us to further improve our ratio of holding company debt to total debt and strengthen our overall credit standing. Depending on the adjustments made to normalize for deferrals, we estimate that our ratio of cash flow to debt was relatively flat in 2022. As a result of higher interest expense and less favorable weather in Q4, the improvements we expected did not materialize.

Peter Greg: So obviously early days. The report was just made public on on Friday as Scott indicated in his comments, we are supportive of the two broad recommendations thats the standalone energy regulator in Nova Scotia that to get to positive development in support of also of a standup.

Peter Greg: The ISO.

Peter Greg: So here in Nova Scotia, you'll you'll know that the transition to 2030.

Peter Greg: <unk> Decarbonization agenda, the province has his ambitions.

Peter Greg: And will require a lot of focus the province also established this past year. The clean power plan, which is all of the projects that we will get to the province to 80% renewable and off coal by 2030, we're very supportive of that plan and I think having a independent system operator to do the long range planning and over.

Greg London: However, we believe we have provided the market with far more confidence in the recovery of these deferrals, as exemplified by our commitment to investment grade ratings and our previously communicated targeted asset sales and reduction in holding company debt. These activities are further supported by our ongoing rate-based investment and regulatory filings that will drive predictable cash flow growth over time. And with that, I'll turn the call back over to Dave.

Peter Greg: Seeds that transition is a natural.

Peter Greg: Stepped in that transition to 2030.

Okay excellent. Thank you appreciate that color.

Speaker Change: And then maybe just one more for me just generally on the topic of asset sales I'm curious if there's any colleague by just on what youre seeing in the market for their or whatever.

Speaker Change: Proceedings, you have going on with respect to that and any kind of like relevant activity. Your comments on what youre seeing from a valuation perspective today.

David Peters: Thank you, Greg. This concludes the presentation. We would now like to open the call for questions from anyone. Thank you. Thank you. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone.

Scott Balfour: Yes, David it's Scott.

Scott Balfour: David.

We mentioned in our Q3 call last year that asset sales are.

Scott Balfour: Part of our.

Scott Balfour: Financing program for our capital investment plans were well advanced in exploring options.

Operator: You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift your handset before pressing any key.

Scott Balfour: We're encouraged.

Scott Balfour: Don't see any sort of market dynamics.

Scott Balfour: Would would discourage us from from from the path that we're on but we're still a place where no decisions have been.

Scott Balfour: Have been made and of course, when they have will provide provide a further update but but in the meantime, we're encouraged with our progress so far.

Operator: One moment, please, for your first question. Our first question comes from the line of David Quezada from Raymond James. Please go ahead. Thanks. Good morning, everyone.

Scott Balfour: Excellent thanks for that Scott I'll turn it over.

Scott Balfour: Our next question comes from the line of Robert Hope from Scotiabank. Please go ahead.

Robert Hope: Good morning, everyone. First question is on credit metrics previously you've talked about getting to 12% how did that in 2024. When you take a look at the headwinds and tailwind in front of you right now what needs to happen to get to 12% in 2024 and would that include kind of a false slug of ATM bar potential lots of tenants.

David Quezada: Maybe just starting with the Clean Energy Solutions Task Force at Nova Scotia Power. I'm just wondering, like, if there's any additional color you could provide on just how you see clean energy opportunities shaping up in the province with the establishment of an ISO. You know, do you think it changes the magnitude of the opportunity you see there at all? Good question, David.

Robert Hope: Yeah, Good morning, Robert It's Greg.

Peter Gregg: And it's Peter Gregg, by the way, from Nova Scotia Power. So, obviously, it's early days. The report was just made public on Friday, and Scott indicated in his comments that we are supportive of the two broad recommendations. That's the stand-alone energy regulator in Nova Scotia. We think that's a positive development and supportive also of the establishment of an IESO here in Nova Scotia. You'll know that the transition to 2030, the broad decarbonization agenda the province has is ambitious and will require a lot of focus. The province also established this past year the Clean Power Plan, which is all of the projects that will get the province to 80% renewable and off coal by 2030.

Greg Blunden: We really experienced I think in 'twenty three doesn't really have much of a reflection on our confidence in where we're going into 'twenty four.

Greg Blunden: Certainly.

Greg Blunden: Mitigating the exposure to interest rates is helpful.

Greg Blunden: The execution of our regulatory.

Greg Blunden: <unk>.

Greg Blunden: Our regulatory filings, whether it was peoples gas last year resolution on some of the outstanding fuel in Nova Scotia.

And finally at Tampa Electric I think is gives us some confidence we said all along that the execution of asset sales would derisk our path to 12%.

Greg Blunden: And we still feel confident in both the organic path as well as de risk. It is through the execution of asset sales. So so still we're still very confident in the targets that we set for ourselves for this year.

Peter Gregg: We're very supportive of that plan. I think having an independent system operator to do the long-range planning and oversee that transition is a natural next step in that transition. Okay, excellent. Thank you. I appreciate that color.

Speaker Change: Good to hear.

Speaker Change: And then moving back over to the clean energy task for us and I realize that the government only adopted.

David Quezada: And then, maybe just one more for me, just generally on the topic of asset sales. I'm curious if there are any colleagues by just on, you know, what you're seeing in the market for or whatever, you know, proceedings you have going on with respect to that. And, you know, any kind of relevant activity or comments on what you're seeing from an evaluation perspective today? Yeah, David, it's Scott. I just wanted to say that, you know, we mentioned in our Q3 call last year that Asset Tales is part of our financing program for our capital investment plans. We're well advanced in exploring options, we're, you know, encouraged. We don't see any, you know, sort of market dynamics that would discourage us from the path that we're on, but, you know, we're still in Excellent Thanks for that, Scott. I'll turn it over to you. Our next question comes from the line of Robert Hope from Scotiabank. Please go ahead. Good morning, everyone.

Speaker Change: Our first recommendation, but if we go through the full list recommendation five include some commentary on open competition for additional upgrades to the transmission grid.

Speaker Change: Can you maybe speak to.

Speaker Change: What the communication has been with the government or other stakeholders for potentially opening up.

Speaker Change: Other investments to competition not just power.

Speaker Change: Sure Rob It's Peter again.

Speaker Change: Yes.

Point, you to the Minister of natural resources Renewables issued a statement on Friday. He did a number of interviews following that too and made it clear that while recommendation five does talk about transmission resources being competitively procured under the new ISO that he will not accept that recommendation. So our understanding is that.

Speaker Change: The role of the new ISO will be to procure competitively procured generation and storage not transmission.

Speaker Change: I appreciate the clarity thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Maurice Choy from RBC. Please go ahead.

Maurice Choy: Thanks, and good morning, everyone, maybe just follow up on the cash flow metrics here for a moment what was the cash flow to debt metric at the end.

Robert Hope: The first question is on credit metrics. Previously, you've talked about getting to 12% of that in 2024. When you take a look at the headwinds and tailwinds in front of you right now, what needs to happen to get to 12% in 2024? And would that include kind of a full slug of ATMs or potential assets? Good morning, Robert. It's Greg.

Maurice Choy: 2023, recognizing that the goal was to reach 11, 5%.

Maurice Choy: Yes.

Maurice Choy: I indicated Maurice we would expect it to be relatively flat at around 11% compared to what we were last year.

Maurice Choy: Got it so I guess within this year are you anticipating that 11% to jump to 12, just to confirm that but a quick follow up to that when I think about your asset sales the size of it which is 50% of the Capex plan.

Greg London: What we really experienced, I think, in 2023 doesn't really have much of a reflection on our confidence in where we're going in 2024. Certainly, mitigating the exposure to interest rates is helpful. The execution of our regulatory filings, whether it was People's Gas last year, resolution on some of the outstanding fuel in Nova Scotia, and the filing of Tampa Electric, I think, gives us some confidence. We said all along that the execution of asset sales would de-risk our path to 12%, and we still feel confident in both the organic path as well as de-risking it through the execution of asset sales. So, still very confident in the targets that we set for ourselves for this year. Good to hear.

Maurice Choy: Are you willing to sell more than that in order to achieve.

Maurice Choy: Mike its a 12, but also a certain cushion above the 12%.

Mike: Yes, Maurice we've as part of this we've identified.

Mike: Couple of assets that we think might make sense from a capital recycling perspective.

Mike: To the extent that we see favorable market conditions on on more than one asset that wouldn't preclude us from moving ahead with that even if it was more than me made us initially set as a.

Mike: Target.

Mike: Uh huh.

Speaker Change: Yes, when you when you highlight interest and marrying dismiss.

Peter Gregg: And then moving back over to the Clean Energy Task Force, I realized that the government only adopted the first recommendation, but if we go through the full list, your recommendation 5 includes some commentary on open competition for additional upgrades to the transmission grid. Can you maybe speak to what the communication has been with the government or other stakeholders about potentially opening up the other investments to competition, not just power? Sure, Rob. It's Peter again.

Speaker Change: Scott's earlier comments about the interest level is it fair to say that the interest level that you've seen so far.

Speaker Change: Somewhat justified the potential of selling these couple of assets.

Speaker Change: Let's say the interest level, we've seen so far is as expected.

Speaker Change: Got it.

Speaker Change: If I could just shift over to.

Speaker Change: The dividend for a moment I think you've disclosed in your MD&A.

Speaker Change: MD&A that the dividend payout ratio is at 94% for 2023.

Peter Gregg: I'd point you to the Minister of Natural Resources and Renewables issued a statement on Friday, and he did a number of interviews following that too, and made it clear that while Recommendation 5 does talk about transmission resources being competitively procured under the new ISO, he will not accept that recommendation. So our understanding is that the role of the new ISO will be to procure, competitively procure generation and storage, not transmission. I appreciate the clarity. Thank you. Our next question comes from the line of Maurice Choi from RBC. Please go ahead. Thanks and good morning, everyone.

Speaker Change: And there is obviously potential debt asset sales might bring this number higher if theres any EPS dilution.

Speaker Change: We're seeing quite a number of dividend actions in Canada, and globally and infrastructure land and I Wonder if you could refresh us as to how you approach your policy on dividends, including the potential for changes to negotiate it.

Speaker Change: How does that size and even potential for any dividend cuts.

Speaker Change: Yes.

Scott Balfour: It's Scott so.

Scott Balfour: I would not want anybody to think that there is any any suggestion or inclination of a dividend.

Scott Balfour: If you use those words.

Maurice Choi: Maybe just follow up on the cash flow and debt metrics here for a moment. What was the cash flow to debt metric as of the end of 2023, recognizing that the goal was to reach 11.5%? Yeah, like, as I indicated, Maurice, we would expect it to be relatively flat at around 11% compared to what we were last year. So I guess within this year, you're anticipating that 11% to jump to 12. Confirm that.

Scott Balfour: That is not something that we would consider and our need to consider and to your to your broader question.

Scott Balfour: Our dividend policy is obviously something that it is a.

Scott Balfour: Our board determined.

Scott Balfour: Matter and something that we engage with and discussed with the board on a regular basis and typically as you know we would we would announce our our annual dividend approach.

Scott Balfour: Coming out of <unk>.

Scott Balfour: Meeting that we hold every year in September and.

Greg London: But a quick follow-up to that: when I think about your asset sales, the size of them, which is 15% of the CapEx plan, are you willing to sell more than that in order to achieve not just a 12, but also a certain cushion above the 12%? Yeah, Maurice. We've, as part of this, identified a couple of assets that we think might make sense from a capital recycling perspective. And to the extent that we see favorable market conditions on more than one asset, that wouldn't preclude us from moving ahead with that, even if it was more than we may have initially set as a target. I guess when you highlight interest, and marry this with Scott's earlier comments about the interest level, is it fair to say that the interest level that you've seen so far would somewhat justify the potential sale of these couple of assets? The interest level we've seen so far is as expected. Thank you. I got it.

Scott Balfour: And typically then for the dividend application to the dividend in the November <unk>.

Scott Balfour: November dividend cycles. So so.

Scott Balfour: So ultimately.

Scott Balfour: As I say, that's something that we generally look to and provide market guidance too.

Scott Balfour: In in the fall.

Scott Balfour: And the dividend growth rate itself is that usually size towards at a minimum.

Scott Balfour: Number that you try to achieve flat inflation, how should we think about that right.

Scott Balfour: Well.

Scott Balfour: Yeah.

Scott Balfour: As you know when we.

Scott Balfour: Reduced the dividend growth guidance that we had prior to 2000.

Scott Balfour: Prior to 2018.

Scott Balfour: We worked to set our dividend growth guidance at a level that that we believe over the long term.

Scott Balfour: Our earnings per share growth would outpace our dividend growth and.

Scott Balfour: That continues to be true today that continues to be.

Scott Belfort: If I could just shift over to the dividends for a moment. I think you disclosed in your MD&A that the dividend payout ratio is at 94% for 2023. And there is obviously potential that asset sales might bring this number higher if there's any EPS dilution. We've seen quite a number of dividend actions of late in Canada and globally, and in infrastructure land. And I wonder if you could refresh us as to how you approach your policy on dividends, including the potential for changes in the growth rate, how that size, and even the potential for any dividend cut. Yeah, Maurice, it's Scott.

Scott Balfour: True and.

Scott Balfour: And that's that's the primary measure that we look at is is ensuring that our dividend growth rate is.

Scott Balfour: At a level that makes sense relative to our earnings per share growth rate and.

Scott Balfour: And we continue to have confidence that that dividend payout ratio will reduce over time as our earnings growth continues to outpace our our dividend growth of course, we continue to look at that are.

Scott Balfour: The payout ratio, obviously negatively impacted this year by.

Scott Balfour: The unexpected.

Scott Balfour: Fourth quarter results, but but overall, we've been continuing to track a reduction and continue to target a reduction in our dividend payout ratio over time, and that's something that Greg and I and the board are all very engaged.

Scott Belfort: So, you know, I would not want anybody to think that there is any suggestion or inclination of a dividend cut. Since you used those words, that is not something that we would consider or need to consider. And to your broader question, our dividend policy is obviously something that is a board-determined matter and something that we engage with and discuss with the board on a regular basis. And typically, as you know, we would announce our annual dividend approach at a meeting that we hold every year in September. And typically then for the application of the dividend in the November dividend cycle. So ultimately, as I say, that's something that we generally look at and provide market guidance on in the fall. And the dividend growth rate itself, is that usually sized, or is that a minimum number that you try to key for inflation? How should we think about that rate?

Scott Balfour: In and ensuring and that won't change.

Speaker Change: Thanks for that color.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Linda <unk>.

Linda: From Macquarie. Please go ahead.

Linda: I'm just wondering in addition to reassessing maybe that the merits of upsizing your.

Linda: Hale program and relative contribution to your funding plan.

Linda: Is there any ability maybe cam.

Speaker Change: <unk> re SaaS or have you.

Speaker Change: Can the relative attractiveness.

Speaker Change: Your capacity for hybrid instruments.

Speaker Change: Whether a discrete common equity offering might be.

Speaker Change: And option this year and also what ability you might you have if any to consider deferring any sort of discretionary capital at this point.

Scott Belfort: Well, as you know, when we reduced the dividend growth guidance that we had prior to 2018, we worked to set our dividend growth guidance at a level that we believe, over the long-term, our earnings per share growth would outpace our dividend growth, and that continues to be true today. It continues to be true, and that's the primary measure that we look at is ensuring that our dividend growth rate is at a level that makes sense relative to our earnings per share growth rate, and we continue to have confidence that that dividend payout ratio will reduce over time as our earnings growth continues to outpace our dividend growth. Of course, we continue to look at that; our payout ratio was obviously negatively impacted this year by the unexpected fourth quarter results, but overall, we've been continuing to track a reduction and continue to target a reduction in our dividend payout ratio over time, and that's something that Greg and I and the Board are all very engaged in and ensuring, and that won't change. Thanks so much.

Speaker Change: Yes, hi, good morning, Linda it's Greg.

Greg Blunden: As you can imagine we look at all options available to us from a funding perspective, we.

Greg Blunden: We do have as you noted some capacity on our balance sheet to do something either with a Canadian preferred share offering or maybe a hybrid offering, albeit from a cost of capital perspective, that's an overly attractive in this market we.

Speaker Change: We are not contemplating it.

Speaker Change: Discrete equity offering nor do we believe we need one at this point in time, we're happy with the path. We're on which is contained lead to utilize our aftermarket equity program as well as our drip.

Speaker Change: And to complement that financing plan with asset sales. So that that is in fact, the path that we're on.

Speaker Change: Okay. Thank you.

Speaker Change: Just as a follow up.

Speaker Change: In your discussions with the debt rating agencies.

Speaker Change: You mentioned like are there any kind of changes in tone or what sort of forbearance do you expect in terms of.

Greg London: Our next question comes from the line of Linda Ezergailis from TD Cowen. Please go ahead. Thank you. I'm just wondering, in addition to reassessing maybe the merits of upsizing your asset sale program and relative contribution to your funding plan, is there any ability maybe to reassess or have you thought about the relative attractiveness of your capacity for hybrid instruments, whether a discrete common equity offering might be an option this year, and also what ability you might have, if any, to consider deferring any sort of discretionary capital at this point Good morning, Linda. It's Greg.

Speaker Change: The timeline to achieve on your credit metrics.

Speaker Change: And.

Maybe as part of that was there any discussion about the dividend and maybe pausing growth if not cutting it.

Yeah, I think the as they always have been I think the conversations with the credit rating agencies have been constructive.

Speaker Change: I think they're supportive of the path, we're on but I want to be clear the.

Speaker Change: The delivery of that plan is on us.

And I'm confident that as we execute our plan over the course of 2024, whether that'd be asset sales continuing to utilize the at the market equity program.

Greg London: As you can imagine, we look at all options available to us from a funding perspective. We do have, as you noted, some capacity on our balance sheet to do something either with a Canadian preferred share offering or maybe a hybrid offering, albeit from a cost of capital perspective, that's not overly attractive in this market. We are not contemplating a discrete equity offering, nor do we believe we need one at this point in time.

Speaker Change: Focus on recovering fuel and storm cost deferrals as well as executing our regulatory strategy.

Speaker Change: I think we're all confident both internally and I think the rating agencies.

Speaker Change: Have some degree of confidence as well.

Speaker Change: I would suggest if you look at the S&P report that came out on Friday. If you look at the Moody's report that came out late December and kind of I think reinforces that that I think the time for us to execute in.

Greg London: We're happy with the path we're on, which is continually to utilize our at-the-market equity program as well as our DRIP and complement that financing plan with asset sales. So that is, in fact, the path that we are on. Thank you.

Speaker Change: Is there and once we do that I think will be where we where we need to be.

Greg London: And just as a follow-up, in your discussions with the debt rating agencies, you mentioned, like, are there any kind of changes in tone or what sort of forbearance do you expect in terms of the timeline to achieving your credit metrics? And maybe, as part of that, was there any discussion about the dividend and maybe pausing growth if not cutting it? Yeah, you know, I think, as they always have been, I think the conversations with the credit rating agencies have been constructive. I think they're supportive of the path we're on, but I want to be clear, the delivery of that plan is on us. And I'm confident that as we execute our plan over the course of 2024, whether that be asset sales, continuing to utilize the at-the-market equity program, focus on recovering fuel and storm cost deferrals, as well as executing a regulatory strategy.

Speaker Change: In terms of any discussions around dividend growth.

Speaker Change: There have been none.

Speaker Change: Although it may be from a credit perspective.

Speaker Change: There might be some positive optics related to that the reality is it has no meaningful impact on credit metrics at all.

Speaker Change: And given that the focus with the rating agencies.

Speaker Change: That would not at all be.

Speaker Change: Not surprisingly that's under discussion item it with them.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Youre welcome.

Speaker Change: Ladies and gentlemen, just a reminder, so do you have a question. Please press star followed by the number one on your Touchtone phone.

Speaker Change: Question comes from the line of Mark Hardy from RBC capital markets go ahead. Please.

Mark Hardy: Thanks, a couple of questions around Nova Scotia, one city on on the province picking up the tab on some of the fuel costs.

Greg London: I think we're all confident both internally, and I think the rating agencies have some degree of confidence as well. You know, I would suggest if you look at the S&P report that came out on Friday, or if you look at the Moody's report that came out late December, it kind of reinforces that. I think, you know, the time for us to execute is there. And once we do that, I think we'll be where we need to be. In terms of any discussions around dividend growth, there have been none, although maybe from a credit perspective, there might be some positive optics related to that. The reality is that it has no meaningful impact on credit metrics at all.

Mark Hardy: Elaborate how that came to be and we're not that signal is something around the evolving relationship with potential government.

Mark Hardy: Thanks, Mark it's Peter again.

Speaker Change: Ron evolving of that.

Peter Greg: Really it's as simple as like a constructive working relationship we have with the provincial government.

Peter Greg: So discussions happened over the.

Peter Greg: Bladder half of last year around.

Peter Greg: The outstanding fuel amount and the impact on rates.

Peter Greg: And so we had discussions on that.

Peter Greg: A range of potential alternatives for managing that amount and ended up with what I think is very.

Structured approach that allows for the recovery of that fuel amount, but it does so in a more affordable manner for customers.

Greg London: And given that that's the focus with the rating agencies, you know, that would not at all be – not surprisingly, that's not a discussion item with them. You're welcome. Ladies and gentlemen, just a reminder, should you have a question, please press star followed by the number 1 on your touchstone phone. Our next question comes from the line of Mark Harvey from CIBC Capital Markets. Thanks. A couple of questions about Nova Scotia.

Peter Greg: Back to your point I think there is a constructive working relationship and that is some evidence of it.

Peter Greg: The other evidence.

Peter Greg: Scott spoke to our grid scale battery projects.

Peter Greg: For us to advance on those that required a cabinet approval.

Peter Gregg: One is perhaps the province picking up the tab on some of the fuel costs. Can you elaborate on how that came to be and whether or not that signals something about the evolving relationship with the provincial government? Thanks, Mark. It's Peter again.

Peter Greg: Here in Nova Scotia, again, I think.

Peter Greg: Just lines up nicely with our support of the provinces clean power plan and their objectives to achieving the 2030 goals.

If we take those comments tier maybe green, Greg and the conversation S&P one of the big issues with regulatory risks business risk how would you say the relationship with the governments evolved.

Peter Gregg: Around the evolving of that, really, it's as simple as, I think, a constructive working relationship we have with the provincial government. So discussions happened over the latter half of last year around the outstanding fuel amount and the impact on rates. And so we had discussions on a range of potential alternatives for managing that amount and ended up with what I think is a very constructive approach that allows for the recovery of that fuel amount but does so in a more affordable manner for customers. So back to your point, I think there is a constructive working relationship, and that is some evidence of that, and there is a lot of other evidence.

Peter Greg: How does that communication with S&P has done a cost to them in terms of their perception of that and I guess just given the <unk>.

Peter Greg: Fortunately that change any of the math right I mean, the question is that.

Peter Greg: You might have around Nova Scotia power.

Peter Greg: Yeah.

Peter Greg: I'd say the S&P in particular that their response I would say or perspective on our market has been balanced.

Peter Greg: I think they clearly see it as a positive as a.

Peter Greg: A from a.

Peter Greg: Pure financial perspective, the funding of some of the fuel providing some kind of.

Greg London: Scott spoke to our grid-scale battery projects, and for us to advance on those, that required cabinet approval here in Nova Scotia, again, I think just lines up nicely with our support of the province's Clean Power Plan and their objectives for achieving the 2030 target. Can we take those comments, Peter, maybe bring Greg into the conversation? Just S&P, one of their big issues was regulatory risks, business risk. How would you say the relationship with the government has evolved?

Peter Greg: Prospective relief for customers as constructive obviously part of that was done to through a.

Peter Greg: Mission of challenges with credit metrics. So so I think that has been.

Peter Greg: Perceived as slightly positive.

Peter Greg: But at the same token I think S&P and this is something that we've seen in other jurisdictions as well, we'll be keeping an eye on the next general rate application as well and whether or not that can.

Greg London: How is that communication with S&P going to cost to them in terms of their perception of it? And I guess just, you know, the task force, does that change any of the math or any of the questions that S&P might have around Nova Scotia powers? Yeah, it's, I'd say the S&P in particular, their response, I would say, or perspective on it, Mark, has been balanced. I think they clearly see it as a positive, as a, you know, a, from a, you know, a pure financial perspective, the funding of some of the fuel, providing some kind of, you know, perspective relief for customers as constructive, obviously, part of that was done to, through a recognition of challenges with credit metrics, so I think that has been perceived as slightly positive, but at the same token, I think, you know, S&P, and this is something that, you know, we've seen in other jurisdictions as well, will be keeping an eye on the next general rate application as well, and whether or not that can, you know, go from start to finish without any kind of intervention from the government, but all to say is, I'd say it was a balanced reaction, probably slightly positive.

Peter Greg: Go from start to finish without any kind of.

Peter Greg: Intervention.

Peter Greg: From from the government, but I'll just say as I.

Peter Greg: I'd say it was a balanced reaction probably slightly positive.

Peter Greg: Okay.

Peter Greg: And the conversation raising Keith maybe comment a couple of things one would be based on where youre heading with holdco debt in February that will you be there by midyear to appease the rating agencies on those metrics and second can you comment on the magnitude EQM usage in Q4, what portion to be a bit more aggressive with it was there anything in terms of a firm deadline or came in below that.

Speaker Change: Take care.

Speaker Change: Yeah, I think the path we're on a look theres never a specific date, where the rating agency say you have to be.

Speaker Change: At a particular place, but I think all the activity that we've got underway. The steps that we've taken we're confident the negative outlooks are going to get resolved in 2024, I wish I had a perfect clarity as to the exact month that those would happen, but we have a high degree of confidence in that mark in terms of the ATM.

Speaker Change: Issuance. This was not in response to any kind of.

Greg London: Okay, and maybe just on the conversation of rating agencies, maybe comment on a couple things. One would be, based on where you're heading with hold code debt and variable rate debt, will you be there by mid-year to appease rating agencies on those metrics? And second, just maybe comment on the magnitude of the ATM usage in Q4. What force should be a bit more aggressive with it?

Direction mandate from the rating agencies Youll recall, we hadn't done anything in the fourth quarter of 2022 or the first three quarters of.

Speaker Change: 2023.

Speaker Change: Of course as you can imagine have been in a blackout since since the beginning of the year because of the timing of our release of our financial results. So really what we issued in the fourth quarter was covering six quarters. If you will and so I would say largely in line with what we would've expected. There was just a clear path in the market for us to.

Greg London: Was there anything in terms of a firm deadline or a commitment you needed to make there? Yeah, I think the path we're on, look, there's never a specific date where the rating agencies say you have to be in a particular place, but I think all the activity that we've got underway, the steps that we've taken, we're confident the negative outlooks are going to get resolved in 2024. I wish I had perfect clarity as to the exact month that that would happen, but we have a high degree of confidence in that, Mark. In terms of the ATM issuances, it was not in response to any kind of direction mandate from the rating agencies.

Speaker Change: <unk> done a reasonable amount of ATM and catch up to what we hadn't done over the previous four quarters and so we took advantage of that opportunity.

Speaker Change: Okay last one quickly for me just on.

Speaker Change: Thank you a lot of keen interest on the asset sale progress at what point would you.

Speaker Change: To provide the pizza market with more sort of the direction on the magnitude or timing is something you can provide clarity by the Q1 results in may.

Speaker Change: I'd say, we're certainly before.

Speaker Change: Before the end of the second quarter.

Mark.

Greg London: You'll recall, we didn't do anything in the fourth quarter of 2022 or the first three quarters of 2023. Of course, as you can imagine, we've been in a blackout since the beginning of the year because of the timing of our release of our financial results. So really, what we issued in the fourth quarter covered six quarters, if you will. And so I would say it was largely in line with what we would have expected. There was just a clear path in the market for us to get a reasonable amount of ATMs and catch up to what we hadn't done over the previous four quarters. And so we took advantage of that opportunity.

Speaker Change: We do have some confidence that we.

Speaker Change: We should be in a position to provide some clarity by then.

Mark Hardy: Sounds good thanks Ron.

Speaker Change: Thanks Mark.

Speaker Change: Our next question comes from the line of Ben Pham from BMO. Please go ahead.

Ben Pham: Hi, Thanks, Good morning couple of questions on asset sales in there just on that last question as well from.

Speaker Change: Martin you mentioned earlier.

Speaker Change: Around your expectations on on asset sales in and coming out and it's been in line with your expectations.

Can you add more color to that because when you announce asset sale program yields were much higher than where they were today and most of.

Speaker Change: The infrastructure companies that we can fall I have suggested that it's night and day.

Greg London: Okay, last one quickly for me, just obviously a lot of keen interest in the asset sales progress. At what point would you be in a position, you think, to provide an update to the market with more sort of either direction on the magnitude or timing? Is it something you could provide clarity on by the Q1 results in May? I'd say certainly before the end of the second quarter, Mark would have some confidence that we should be in a position to provide some clarity by then. Sounds good!

Speaker Change: Prospect to their conversations on asset sales.

Speaker Change: Yes, Ben.

Ben Pham: I guess just.

Speaker Change: Lean in again with the comment that as we are encouraged with with.

Speaker Change: Where we sit in terms of our progress and and sort of market conditions.

Speaker Change: And working working as I said to mark to be in a position to provide more clarity by by the middle of the year.

Speaker Change: Okay, and what would you say then I mean when you.

Speaker Change: When you put a figure asset sales and your expectations in <unk>.

Mark Harvey: Thanks, everyone. Thanks, Brian. Our next question comes from the line of Ben Pham from BMO. Please go ahead. Hi, thanks. Good morning.

Speaker Change: Our yields were at that time call. It high threes that you were anticipating that yields with decline in <unk>.

Speaker Change: In Europe that that ought to really an expectation that you'd get maybe better valuations and 24 versus 23 is all baked into your plan already.

Ben Pham: A couple of questions on asset sales, and just on that last question as well from Mark, and you mentioned earlier about your expectations on asset sales and incoming. It's been in line with your expectations. Can you add a bit more color to that?

Speaker Change: I'd say I'd say, we have reasonable valuation expectations would would be the way that I would say if we're in a place where.

Speaker Change: Yields yield movements work in our favor and creator.

Scott Belfort: Because when you announced the asset sale program, yields were much higher than where they are today, and most of the infrastructure companies that we've been following have suggested that it's night and day with respect to their conversations on asset sales. Yeah, Ben, I guess I'd just lean in again with a comment that is, you know, we are encouraged with where we sit in terms of our progress and market conditions and, you know, working, as I said to Mark, to be in a position to provide more clarity by the middle of the year. Okay, and would you say then, I mean, when you put in the share asset sales and your expectations and where yields were at that time, called high threes, that you were anticipating that yields would decline and that led to really an expectation that you'd get maybe better valuations and 24 versus 23 is all baked into your plan already. I'd say we have reasonable valuation expectations. That would be the way that I'd say it. If we're in a place where yield movements work in our favor and create a better valuation level, then that's great, but I'd say we have reasonable valuation expectations. Okay, good. I may just continue with that.

Speaker Change: A better valuation level, then that's that's great, but I would say we have reasonable valuation expectations.

Speaker Change: Okay got it and maybe just continuing on that.

Speaker Change: And I'm, sorry, I'm not sure you answered.

Speaker Change: This question early on.

Speaker Change: The EPS impact of asset sales and the ethical different says.

Speaker Change: I guess it depends on what assets you sell some might be quite accretive to <unk>, maybe dilutive to.

Speaker Change: The EPS and I think you mentioned last call you were not selling asset unless its at least neutral to EPS.

Speaker Change: Is that still the case today, just just couldn't wait after part of that is trending for you.

Speaker Change: Yes I.

Speaker Change: I mean look every every asset would have different dynamics, depending on proceeds use of proceeds.

Speaker Change: I mean first and foremost the execution of this program is to fundamentally accelerate our deleveraging and improve our credit metrics. So so use of proceeds will be.

Speaker Change: Primarily targeted at the reduction of holding company debt.

Speaker Change: Obviously in a perfect world you'd have no impact on.

Speaker Change: On an EPS and as short term interest rates remain high.

Greg London: I'm not sure you answered the question early on, the EPS impact of asset sales and the FFO differences, and I guess it depends on what assets you sell. Some might be quite accretive to FFO, maybe dilutive to EPS. And as you mentioned last call, you would not sell an asset unless it's at least neutral to EPS. Is that still the case today? Just to get more FFO to depth? Is it trending for you?

Speaker Change: There is an opportunity to mitigate any kind of impact.

Speaker Change: But if we find ourselves in a situation where it might be have a very modest impact on EPS, but a material impact on credit metrics, that's certainly something that.

Speaker Change: No we wouldnt discard in the moment so.

Speaker Change: I'd say, it's too early to tell on all of those things and it's not just EPS.

Speaker Change: Today is what do we think the growth rate of those assets are and what are their contribution to EPS over the next couple of years as well so a lot of factors come into play.

Greg London: I mean, look, every asset would have different dynamics depending on the proceeds and the use of proceeds. I mean, first and foremost, the execution of this program is to fundamentally accelerate our deleveraging and improve our credit metrics, so the use of proceeds will be primarily targeted at the reduction of holding company debt. Obviously, in a perfect world, you'd have no impact on EPS, and as short-term interest rates remain high, there's an opportunity to mitigate any kind of impact. But if we find ourselves in a situation where it might have a very modest impact on EPS but a material impact on credit metrics, that's certainly something that, you know, we wouldn't discard at the moment. But I'd say it's too early to tell on all those things. It's not just EPS today; it's what we think the growth rate of those assets will be and what their contributions to EPS will be over the next couple of years as well, so a lot of factors come into play.

Okay. That's understood and then just lastly on your Capex program.

Speaker Change: $8 9 billion give notice noticed some other items on slide five.

Speaker Change: A lag time, you've talked about the storage maybe not happening can you talk about how some of those projects flex.

Speaker Change: Our capex as it.

Speaker Change: Is it all in there or is it leaves us an upside.

Speaker Change: Later on.

Speaker Change: Yes.

Speaker Change: That's one of the reasons when we rolled out in November.

Speaker Change: Our old Florida capital Ben is we had a number of projects in our opportunities underdeveloped development than you would have recalled I hope.

Speaker Change: That we characterize them as one of the things we need to have as regulatory certainty support and a clear path for cost recovery on some of those projects the storage facility in new Mexico would be an example of that we ended it under our opportunities under development because there was some uncertainty of whether or not there was a path for that is of course is played out kind of.

Greg London: Okay, that's understood. And I may just, just lastly, you got your CapEx program. 8.9 billion, and if you've noticed, notice some other items on slide five. Atlantic Tide, you talked about the storage maybe not happening. Can you talk about how some of those projects can flex?

Speaker Change: In real time related to that so to the extent theres other projects like batteries now we've moved those up into our core projects.

Greg London: A cap tax is a... Is it all in there, or is it Lisa from Upside later on? Yes, you know, that's one of the reasons when we rolled out in November our roll forward of capital, Ben, we had a number of projects in our opportunities under development, and you would have recalled, I hope, that we characterized them as one of the things we needed to have was regulatory certainty, support, and a clear path for cost recovery on some of those projects. The storage facility in New Mexico would be an example of that. We had it under our opportunities under development because there was some uncertainty of whether or not there was a path forward. That, of course, has played out kind of in real time related to that.

Speaker Change: So youll see a little bit of shifting as we go through time as we get certainty around some of these projects and certainty mean, not just the ability to invest and the desire to invest but also the a clear path to earn a return on enough capital.

Speaker Change: But I'd say in total there hasnt been anything meaningful on a consolidated basis that would cause the numbers or our view of the ability to invest that capital.

Speaker Change: To change materially.

Speaker Change: Okay got it thank you.

Speaker Change: Thanks Brent.

Thank you.

Speaker Change: We have our next question comes from the line of Patrick Kenny.

Patrick Kenny: <unk> from National Bank financial.

Patrick Kenny: Thank you good morning, just maybe on your gas utilities here just in the context of.

Greg London: So to the extent there are other projects like batteries now, we have moved those up into our core projects. So you'll see a little bit of shifting as we go through time, as we get certainty around some of these projects, and certainty meaning not just the ability to invest and the desire to invest, but also a clear path to earn a return on and of capital. But I'd say, in total, there hasn't been anything meaningful on a consolidated basis that would cause the numbers or our view of the ability to invest that capital to change materially.

Patrick Kenny: The depressed state of natural gas prices.

Patrick Kenny: Guess, implying a bit of a tailwind for customer demand and just overall affordability just wondering if you're experiencing any sort of outperformance either at peoples gas or new Mexico in light of the low natural gas price environment.

Patrick Kenny: Yes.

Patrick Kenny: Patrick It's Greg it's a good question I mean, obviously, what we've seen in natural gas prices has been relatively recent.

And if you think of.

Greg London: Okay, got it. Thank you. Thanks, Ben. Thank you. We have our next question coming from the line of Patrick Kenney from National Bank Financial. Go ahead, please.

Patrick Kenny: Certainly the impacts that that would have on our system weather at peoples gas or new Mexico gas.

Patrick Kenny: We don't see a lot of change in volume in the near term because of significant movements in gas prices.

Patrick Kenney: Thank you. Good morning. Just maybe on your gas utilities here, just in the context of, you know, the depressed state of natural gas prices, which I guess implies a bit of a tailwind for customer demand and just overall affordability. Just wondering if you're experiencing any sort of performance either at People's Gas or New Mexico in the Low Natural Gas Price Environment. Yeah, Patrick, it's Greg.

Patrick Kenny: People still need gas and new Mexico to heat their homes and in Florida for more of the humidity. So we don't find it as sensitive in the near term obviously if gas prices remain at these levels. We would expect that's probably provide some underpinning for some additional commercial and industrial growth, but I think it's.

Greg London: It's a good question. I mean, obviously, what we've seen in natural gas prices has been relatively recent. And if you think of, you know, certainly the impacts that that would have on our system, whether at People's Gas or New Mexico Gas, we don't see a lot of change in volume in the near term because of significant movements in gas prices. People still need gas in New Mexico to heat their homes and in Florida for more humidity.

Patrick Kenny: It's still a little bit early to tell.

Speaker Change: I'd also add in the meantime, it's also helpful on the electric side, just in and helping too.

Speaker Change: To keep the cost of energy sort of the guests.

Speaker Change: Gas generation cost of energy lower so it's certainly it's certainly helpful across.

Speaker Change: Both our gas and electric utilities.

Speaker Change: And then I guess from an affordability perspective, as well looking out more over the medium term would it help to bring any of the.

Scott Belfort: So we don't find it as sensitive in the near term. Obviously, if gas prices remain at these levels, we would expect that to probably provide some underpinning for some additional commercial and industrial growth. But I think it's still a little bit early to tell.

Speaker Change: Additional potential investments.

Speaker Change: Highlighted here over the next three years, bringing those projects forward a little bit.

Greg London: I'd also add, you know, in the meantime, it's also helpful on the electric side, just in helping to keep the cost of energy, sort of the gas generation cost of energy, lower. So it's certainly helpful across both our gas and electric sectors. And then, I guess, from an affordability perspective as well, looking out more over the medium term, would it help to bring any of the additional potential investments that you've highlighted here over the next three years bring those projects forward a little bit? Yeah, and again, it depends, Patrick, and it certainly is different by jurisdiction and the nature of capital investment.

Speaker Change: Yeah, and again, well it depends Patrick and it certainly is.

Speaker Change: It's different by jurisdiction and the nature of capital investments certainly lower gas prices.

Speaker Change: Helps from an affordability perspective, whether it's on our gas LDC or Scott mentioned from from a fuel cost perspective at Tampa Electric.

Speaker Change: Does that give you some headroom.

Speaker Change: Don't really think of our capital program.

Speaker Change: Through the necessarily through the lens of headroom, we're investing capital to support our customers.

Greg London: Certainly, lower gas prices help from an affordability perspective, whether it's on our gas LDCs or, as Scott mentioned, from a fuel cost perspective at Tampa Electric. Does that give you some headroom? You know, we don't really think of our capital program necessarily through the lens of headroom. You know, we're investing capital to support our customers, and it's capital that is ultimately required. The timing of that may change, but also, low gas prices, you know, if they're here to stay, and I think we all know that they will be volatile over time, do mean that when you look at the economics in some jurisdictions of renewable energy, those economics change as well, as gas becomes more favorable from a price perspective.

Speaker Change: It's capital that is ultimately required the timing of that May change, but also low gas prices if they're here to stay and I think we all know that they will be volatile over time.

Speaker Change: Does mean that when you look at the economics in some jurisdictions of renewable energy those economics change as well as gas becomes more favorable from a price perspective. So there's a lot of different dynamics, but I'll. Just say is the current pricing environment is certainly helpful for customers overall.

Speaker Change: On both the gas and electric side.

Speaker Change: Makes sense that's great. Thanks, guys.

Speaker Change: Thanks, Patrick.

Speaker Change: Thank you there are no further questions at this time I would now like to turn the call back over to Kenny.

Greg London: So there's a lot of different dynamics, but all to say is the current pricing environment is certainly helpful for customers overall on both gas and electric. Makes sense. That's great. Thanks, guys. Thanks, Patrick. Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Byzantin for his final closing comments. Thank you. Thank you all for joining us this morning, and thanks for your interest in Emera. Have a good day. Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.

Kenny: Final closing comments.

Kenny: Thank you. Thank you all for joining us this morning, and thanks for your interest in the mirror I have a good day.

Patrick Kenny: Thank you, Sir ladies and gentlemen. This concludes your conference call for today, Thank you for participating and ask Mr. Crane.

Patrick Kenny: Connect your lines have a lighthouse.

Patrick Kenny: Okay.

Patrick Kenny: Okay.

Patrick Kenny: [music].