Q1 2024 AltaGas Ltd Earnings Call

May 2, 2024

Okay.

Operator: Good morning, ladies and gentlemen. Thank you for standing by.

Good morning, ladies and gentlemen, thank you for standing by and welcome to the Altra gas first quarter 2024 financial results Conference call. My name is Sylvie and I will be your conference operator for today's call all lines.

Sylvie: Welcome to the AltaGas first quarter 2024 financial results conference call. My name is Sylvie, and I will be your conference operator for today's call. All lines have been placed on mute to prevent any background noise.

Sylvie: I have been placed on mute to prevent any background noise.

Sylvie: If you have any difficulties hearing the conference, please press star then zero for operator assistance at any time. After the speaker's remarks, there will be a question and answer session. As a reminder, this conference call is being broadcast live on the Internet and recorded. I would now like to turn the conference call over to Adam McKnight, Director of Investor Relations. Please go ahead, Mr. McKnight.

Sylvie: If you have any difficulties hearing the conference. Please press Star then zero for operator assistance at any time after the Speakers' remarks, there will be a question and answer session.

Adam Mcknight: This conference call is being broadcast live on the Internet and recorded I would now like to turn the conference call over to Adam Mcknight Director of Investor Relations. Please go ahead Mr. Mcknight.

Adam Mcknight: Thanks, and good morning, everyone. Thank you for joining us today for AltaGas's first quarter 2024 financial results conference call. Speaking on the call this morning will be Vern Yu, President and Chief Executive Officer, and James Harbalis, Executive Vice President and Chief Financial Officer. We're also joined here this morning by Randy Toone, Executive Vice President and President of our Midstream Business, Luke Jenkins, Executive Vice President and President of our Utilities Business, and Jon Morrison, Senior Vice President, Corporate Development and Investor Relations.

Adam Mcknight: Thanks, and good morning, everyone. Thank you for joining us today for Alta Gasses first quarter 2024 financial results Conference call.

Adam Mcknight: We'll proceed on the basis that everyone has taken the opportunity to review the press release and our first quarter results. This call is webcast, and we encourage those of you listening on the phone lines to follow along with the supporting slides that can be found on our website. As always, today's prepared remarks will be followed by an analyst question and answer period. As for the structure of the call, we'll start with Vern Yu providing a few of the first quarter highlights.

Vern D. Yu: Speaking on the call. This morning will be burned new President and Chief Executive Officer, and James <unk> Executive Vice President and Chief Financial Officer.

Vern D. Yu: We're also joined here this morning by Randy Toone Executive Vice President and President of our midstream business Blue Jenkins Executive Vice President and President of our utilities business and John Morrison Senior Vice President corporate development and Investor Relations.

Adam Mcknight: Well preceding the basis that everyone is taking the opportunity to review the press release and our first quarter results.

Adam Mcknight: This call is webcast and we encourage those of you listening on the phone lines to follow along with the supporting slides that can be found on our website.

Vern D. Yu: As always today's prepared remarks will be followed by an analyst question and answer period.

Vern D. Yu: As for the structure of the call will start with Vern you, providing a few of the first quarter highlights.

Vern D. Yu: And he'll discuss the macro outlook for the business and provide an update on our reef project.

Vern D. Yu: This will be followed by James Herbalists discussing our 2024 priorities and our first quarter operating performance in more detail then I'll provide an update on MVP and close with our 2024 outlook and guidance.

Vern D. Yu: And then we'll leave plenty of time at the end for Q&A.

Adam Mcknight: Then he'll discuss the macro outlook for the business and provide an update on our reef project. This will be followed by James Harbillis discussing our 2024 priorities and our first quarter operating performance in more detail. Then he'll provide an update on MVP and close with our 2024 outlook and guidance. And then we'll leave plenty of time at the end for Q&A. Before we begin, I'll remind everyone that we will refer to forward-looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure on slide two. And with that, I'll now turn the call over to Vern Yu.

Speaker Change: Before we begin I'll remind everyone that we will refer to forward looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward looking information disclosure on slide two.

Adam Mcknight: And with that I'll now turn the call over to Vern Yu.

Vern D. Yu: Thanks, Adam. Good morning, everyone.

Vern D. Yu: Thanks, Adam Good morning, everyone. It's great to be here today to discuss our strong first quarter results.

Vern D. Yu: It's great to be here today to discuss our strong first quarter results. I'll talk about the highlights from the quarter, then touch on the macroeconomic outlook, and provide an update on our reef project before turning it over to James. Let's start on slide four.

Vern D. Yu: I'll talk about the highlights from the quarter, then touch on the macroeconomic outlook and provide an update on our reef project before turning it over to James.

Vern D. Yu: Our diversified platform continues to deliver strong results as we execute on our strategic plan. This quarter, we delivered normalized EPS of $1.14 and normalized EBITDA of $660 million, an increase of 15% and 13% year-over-year, respectively. We saw results in line with our expectations for our utilities business and stronger than expected performance in midstream, which included record first-quarter global export volumes and contributions from the newly acquired Pipestone assets. We exported over 115,000 barrels of propane and butane a day to demand markets in Asia, with 12 ships departing from Rippitt and 7 from Fernville. Ripit had a record quarter with 77,000 barrels of oil a day of exports due to great operating performance by the team and growing Western Canadian LPG supply.

Vern D. Yu: Let's start on slide four our diversified platform continues to deliver strong results as we executed on our strategic plan. This.

Vern D. Yu: This quarter, we delivered normalized EPS of $1 14, and normalized EBITDA of $660 million, an increase of 15% and 13% year over year, respectively.

Vern D. Yu: We saw results in line with our expectations for our utilities business and stronger than expected performance in midstream, which included record first quarter global export volumes and contributions from the newly acquired Pipestone assets, we export it over 115000 barrels a day of propane and butane to dim.

Vern D. Yu: Man markets in Asia, with 12 ships departing from Rip it and seven from farmed out.

Vern D. Yu: Rip it had a record quarter with 77000 barrels a day of exports due to great operating performance by the team and growing Western Canadian LPG supply.

Vern D. Yu: We completed a very successful NGL recontracting season on April 1st, where we'll have 56% of our 2024 export volumes under tolling agreements. This is ahead of our near-term targets and part of our strategy to grow the take-or-pay or cost-of-service portion of our business to about 90% of our total EBITDA. We also commissioned our third VLGC time charter and extended the term of a previous time charter

Vern D. Yu: We completed a very successful NGL re contracting season on April 1st or will have 56% of our 2020 for export volumes under tolling agreements.

Vern D. Yu: This is ahead of our near term targets and part of our strategy to grow the take or pay or cost of service portion of our business to about 90% of our total EBITDA.

Vern D. Yu: We also commissioned our third V. L. G C time charter and extended the term of a previous time charter agreement.

Vern D. Yu: In utilities, our number one priority is to safely and reliably deliver affordable energy to our customers. In the quarter, we invested $179 million in our network to make it safer and more reliable while lowering our emissions. On April 1, we filed an application in Michigan to extend SEMCO's modernization programs by an incremental $114 million, which will extend the programs out to 2027. This will be used to improve the safety and reliability of our system while reducing long-term operating costs and lowering emissions. Although the weather was warmer than usual in Michigan and D.C., financial performance was in line with our expectations due to a better-than-expected rate case decision in D.C., strong retail performance, and continued cost management.

Vern D. Yu: In the utilities, our number one priority is to safely and reliably deliver affordable energy to our customers.

Vern D. Yu: In the quarter, we invested a 179 million into our network to make it safer and more alive, all while lowering our emissions.

Vern D. Yu: On April one we filed an application in Michigan to extend Semco is modernization programs by an incremental $114 million, which will extend the program out to 2027.

Vern D. Yu: This will be used to improve the safety and reliability of our system, while reducing long term operating costs and lowering emissions.

Vern D. Yu: Although weather was warmer than usual in Michigan in D. C financial performance was in line with our expectations due to a better than expected rate case decision in D. C. Strong retail performance and continued cost management enhanced efficiency will continue to be a focus for the balance of 'twenty.

Vern D. Yu: Enhanced efficiency will continue to be a focus for the balance of 2024. Turning to slide five, we remain very positive on the fundamentals for natural gas and NGLs and the outlook for both of our businesses. Natural gas is affordable, reliable, and the fastest-growing form of energy in the United States. Moving from coal to natural gas has been the largest driver of reducing emissions globally over the last decade. And the average natural gas-powered home in the U.S. uses 42% less energy and produces 20% less CO2 than an electric-powered home.

Vern D. Yu: 24th.

Vern D. Yu: Turning to slide five.

Vern D. Yu: We remain very positive on the fundamentals for natural gas Ngls and the outlook for both of our businesses.

Vern D. Yu: Natural gas is affordable reliable and the fastest growing form of energy in the United States.

Vern D. Yu: Moving from coal to natural gas has been the largest driver in reducing emissions globally over the last decade.

Vern D. Yu: And the average natural gas powered home in the U S use is 42% less energy and produces 20% last year or two that had an electric powered halls.

Vern D. Yu: Last week, we saw the U.S. federal government take further steps to crack down on emissions from coal-fired power generation. These new rules will force the shutdown of many of the U.S.'s coal power plants, further increasing the need for natural gas. All of this demonstrates why natural gas is critical across our jurisdictions. Slide six highlights why we believe we are at a unique inflection point and highlights the importance of natural gas and the longevity of our utilities. A big part of this is the rising energy demand for AI and data centers within WGL service areas.

Vern D. Yu: Last week, we saw the U S. Federal government take further steps to crack down on emissions from coal fired power generation.

Vern D. Yu: These new rules will forced the shutdown of many of the U S. As coal power plants further increasing the need for natural gas.

Vern D. Yu: All of this demonstrates why natural gas is critical across our jurisdictions.

Vern D. Yu: Slide six highlights why we believe we are in a unique inflection points and highlights the importance of natural gas and the longevity of our utilities are big part of this is rising energy demand for AI and data centers within WJ All service area.

Vern D. Yu: Coal plant retirements and data center growth are expected to boost U.S. natural gas demand by 5 to 10 BCF per day by 2030. Turning to the Canadian midstream on slide seven, the outlook is equally robust. Gas development activity in Canada is healthy as producers look beyond current near-term headwinds and are focused on LNG Canada coming online. Gas drilling, is it at a three-year high? In total, Canadian gas production is set to rise 40% through 2030, and Canadian NGL production is expected to increase by more than 35% over the same period. With limited growth and domestic demand, all of this product needs to be exported globally. Let's move to slide eight.

Vern D. Yu: Coal plant retirements and datacenter growth are expected to boost U S natural gas demand by five to 10 Bcf per day by 2030.

Vern D. Yu: Turning to Canadian midstream on slide seven the outlook is equally robust.

Vern D. Yu: Gas development activity in Canada is healthy.

Vern D. Yu: As producers look beyond current near term headwinds and are focused on LNG, Canada coming online.

Vern D. Yu: Gas drilling is it a three year high.

Vern D. Yu: In total Canadian gas production is set to rise, 40% through 2030, and Canadian NGL production is expected to increase by more than 35% over the same period.

Vern D. Yu: With limited growth in domestic demand all of this product needs to be export it globally.

Vern D. Yu: Let's move to slide eight.

Vern D. Yu: I'm pleased to provide an update on our reef project, where we continue to move towards reaching an FID by the end of Q2. REEF is planned to be developed and constructed in phases. This approach allows for the most capital-efficient build out of the project and matches export supply with reefs export capacity. The first phase of the project will include the LPG export facility, which will have an initial export capacity of 55,000 barrels per day. 600,000 barrels of LPG storage, rail offloading and logistics infrastructure, and the new jetty, which is shown in blue on the slide. However, the first phase of REIF will only use 10% of the dock's capacity.

Vern D. Yu: I'm pleased to provide an update on our reef project, where we continue to move towards reaching an F. D by the end of Q2.

Vern D. Yu: Subsequent phases are shown in yellow and orange on the diagram and will provide long-term expansion opportunities for years to come. Slide 9 shows the location of REEF relative to RIPPIT and the surrounding area. Just like RIPPIT, REEF has geographic and logistical advantages, and these are highlighted on slide 10. It will benefit from Prince Rupert's deepwater ice-free harbor and its proximity to Asian markets.

Vern D. Yu: Brief is planned to be developed and constructed in phases.

Vern D. Yu: This approach allows for the most capital efficient buildout or the project and matches exports supply with reefs export capacity there.

Vern D. Yu: The first phase of the project will include the LPG export facility, which I will have an initial export capacity of 55000 barrels per day 600000 barrels of LPG storage rail off loading and logistics infrastructure and the new jetty, which is shown in blue on the slide.

Vern D. Yu: The first phase of reef will only use 10% of the dock capacity.

Vern D. Yu: Subsequent phases are shown in yellow and orange on the diagram and will provide long term expansion opportunities for years to come.

Vern D. Yu: Slide nine shows the location of reef relative to rip it and the surrounding area just like Rip. It reef has geographic and logistical advantages and these are highlighted on slide 10.

Vern D. Yu: It will benefit from Prince Rupert deep water ice free harbor, and its proximity to Asian markets.

Vern D. Yu: And the dock will have multi-vessel loading capability. At start-up, REEF will have 10 dual-sided rail Offloading slots and 25 kilometers of rail track, which will eliminate rail congestion and provide enhanced storage options if there are logistical disruptions. As seen on slide 11, progress on Reef continues to be on track with 85% of the site preparation now complete. On slide 12, we update the key gating items to reach FID.

Vern D. Yu: And the Dol will have multi vessel loading capabilities.

Vern D. Yu: At startup reef will have 10 dual sided rail offloading slots and 25 kilometers of rail track, which will eliminate rail congestion and provide enhanced storage options. If there are logistical disruptions.

Vern D. Yu: As seen on slide 11 progress on reef continues to be on track with 85% of the site preparation are complete.

Vern D. Yu: On slide 12, we update the key gating items to reach <unk>.

Vern D. Yu: Front-end engineering and design is more than 95% complete, and we are ready to commence earthworks and in-water piling, as well as award other major work streams. REEF benefits from being on a single site, having all of its key regulatory approvals in hand, and from our previous experience in building RIPIT. We plan to minimize on-site work to reduce capital costs.

Vern D. Yu: Front end engineering and design is more than 95% complete.

Vern D. Yu: And we are ready to commence earthworks and in water pilot as well as award other major work streams.

Vern D. Yu: Reef benefits from being on a single site, having all of its key regulatory approvals in hand and up from our previous experience in building rip it.

Vern D. Yu: We plan to minimize onsite work to reduce capital cost risk with 90% of the equipment packaging and pipes being pre fabricated offsite limiting our exposure.

Vern D. Yu: With 90% of the equipment, packaging, and pipes being prefabricated offsite, limiting our exposure, and we expect to have more than 60% of the project's costs fixed before we move into the construction of each workstream. On the commercial side, we now have 56% of our global export volumes under total integration, with a diversified mix of over 30 customers, including producers, aggregators, and downstream offtakers. Demand for REEF's initial capacity has been very strong. We are now in negotiations with multiple counterparties for more than 100% of REEF's phase one capacity.

Vern D. Yu: And we expect to have more than 60% of the project's cost fixed before we move into construction of each work stream.

Vern D. Yu: On the commercial side, we now have 56% of our global export volumes under tolling agreements with a diversified mix of over 30 customers, including producers Aggregators and downstream off takers dimmed.

Vern D. Yu: Demand for reefs initial capacity has been very strong we are now in negotiations with multiple counterparties for more than 100% of reefs phase one capacity.

Vern D. Yu: Based on the contracts in hand and the status of our negotiations, commercial is no longer considered a gating item to a positive HUP ID. We're proud of AltaGas's performance in the first quarter, and we're very excited about the road ahead. With that, I'm going to turn it over to James to get into the details on the quarter, review our 2024 priorities, and provide an outlook for the balance of the year.

Vern D. Yu: Based on the contracts in hand, and the status of our negotiations commercials no longer considered a gating item to a positive I D.

James: We're proud about the gas's performance in the first quarter and we're very excited about the road ahead.

Vern D. Yu: With that I'm going to turn it over to James to get into the details on the quarter review, our 'twenty 'twenty four priorities and provide an outlook for the balance of the year.

James Harbalis: Thank you, Vern, and good morning, everyone. We are pleased with our first quarter performance, the strong execution from our operations teams, and the ongoing advancement of our strategic plan. I'll start by reiterating our 2024 priorities; we'll provide a more detailed review of operating performance across the platform, then discuss recent positive developments on the Mountain Valley pipeline, and close with an update on our 2024 outlook. Turning to our near-term priorities on slide 13.

James: Thank you Vern and good morning, everyone.

James Harbalis: We are pleased with our first quarter performance with strong execution from our operations teams and the ongoing advancement of our strategic plan.

James Harbalis: I'll start by reiterating our 2024 priorities will provide a more detailed review of operating performance across the platform. Then discuss recent positive developments on the mountain Valley pipeline and close with an update on our 2020 for outlook.

James Harbalis: Turning to our near term priorities on slide 13.

James Harbalis: We remain committed to an equity self-funding model, continued improvements in our balance sheet by moving towards our four and a half times leverage target, and operating with strong capital discipline by ensuring the best projects continue to be funded. Within our utilities business, we continue to focus on driving returns and closing the remaining ROE gap at WGL. As such, look for us to continue our focus on maintaining capital, cost, and regulatory flexibility.

James Harbalis: We remain committed to an equity self funding model continued improvements in our balance sheet by moving towards our four five times leverage target and operating with strong capital discipline by ensuring the best projects continue to be funded.

James Harbalis: Within our utilities business, we continue to focus on driving returns and closing the remaining ROE gap at WGN.

James Harbalis: As such look for us to continue our focus on maintaining capital cost and regulatory discipline.

James Harbalis: On the regulatory front, we are actively preparing a DC rate case to be filed in the third quarter this year, and WGL is considering whether we need to file a rate case in Maryland in the latter part of 2024 to ensure our rates reflect the investments we have made in that jurisdiction for the safe and reliable operation of our assets that serve our customers.

James Harbalis: On the regulatory front, we are actively preparing a D. C rate case to be filed in the third quarter. This year and W. G. O is considering whether we need to file a rate case in Maryland in the latter part of 2024 to ensure our rates reflect the investments we have made in that jurisdiction for the safe and reliable operation of our assets that serve our.

James Harbalis: Customers.

James Harbalis: Within the midstream business, we are advancing Reef and Pipestone 2, which are key growth projects for this segment. We continue to use our strategic infrastructure to progress our global exports, tolling, and commercial de-risking targets. We remain on track to deliver these priorities.

James Harbalis: Within the midstream business, we are advancing reef and pipestone too which are key growth projects for this segment.

James Harbalis: We continue to use our strategic infrastructure to progress our global exports tolling and commercial derisking targets.

James Harbalis: We remain on track to deliver these priorities.

James Harbalis: Moving to our midstream segment, which is shown on slide 14, normalized EBITDA was $247 million for the first quarter, representing a 35% increase year over year. The segment benefited from record first quarter volumes within our global export business, the addition of the newly acquired Pipestone assets, AFUDC being recorded on MVP, and strong cost management. We exported over 115,000 barrels per day of propane and butane across 19 VLGCs in the quarter. This included an all-time record of more than 77,000 barrels per day at Rippitt and approximately 38,000 barrels per day at Ferndale.

James Harbalis: Moving to our midstream segment, which is shown on slide 14, normalized EBITDA was $247 million for the first quarter, representing a 35% increase year over year.

James Harbalis: The segment benefited from record first quarter volumes within our global export business. The addition of the newly acquired Pipestone assets.

James Harbalis: A few D C being recorded on MVP and strong cost management.

James Harbalis: We exported over 115000 barrels per day of propane and butane across 19 vlccs in the quarter.

James Harbalis: This included an all time record of more than 77000 barrels per day at Rupert and approximately 38000 barrels per day at Ferndale.

James Harbalis: Export volumes were higher than we originally expected, principally due to favorable ship timing, which was supported by strong logistical execution at the terminals and along the entire value chain, increased LPG supply, and robust demand in Asia. As we highlighted last quarter, the first quarter of 2024 was set to benefit from one delayed ship in December 2023 that was loaded at the start of January 2024. In addition, we also benefited from one additional ship that was loaded in late March that was previously expected to be loaded in early April. This latter timing had the impact of shifting profits previously expected in the second quarter to the first quarter, with no net change to our full-year volume expectation.

James Harbalis: Export volumes were higher than we originally expected principally due to favorable ship timing, which was supported by strong logistical execution at the terminals and along the entire value chain increased LPG supply and robust demand in Asia.

James Harbalis: As we highlighted last quarter. The first quarter 2024 was set to benefit from one delayed ship in December 2023 that was loaded at the start of January 2024.

James Harbalis: In addition, we also benefited from one additional ship that was loaded in late March that was previously expected to be loaded in early April.

James Harbalis: This latter timing had the impact of shifting profit previously expected in the second quarter to the first quarter with no net change to our full year volume expectations.

James Harbalis: We continue to progress our commercial de-risking initiatives during the quarter. This included completing a successful NGL recontracting season on April 1st, with AltaGas realizing strong LPG supply commitments for the coming year, while also making considerable progress on medium-term tolling targets in recent months, including moving to 56% tolling starting in the second quarter of 2024.

James Harbalis: We continued to progress our commercial derisking initiatives during the quarter.

James Harbalis: This included completing a successful NGL re contracting season on April 1st with ultra gas realizing strong LPG supply commitments for the coming year, while also making considerable progress on medium term tolling targets in recent months.

James Harbalis: This includes moving to 56% totaling starting in the second quarter of 2024.

James Harbalis: These agreements will provide our customers with direct market access to superior netbacks in Asia while providing AltaGas the benefit of stable and predictable contracted cash flow. As part of this tolling success, AltaGas elected to crystallize certain financial hedges to avoid an imbalance of the financial and physical merchant barrels in the coming quarters. This resulted in a gain on settlements recorded in the first quarter of 2024. This has the effect of shifting profits associated with future quarters into the first quarter.

James Harbalis: These agreements will provide our customers with direct market access to superior net backs in Asia, while providing ultra gas the benefit of stable and predictable contracted cash flows.

James Harbalis: As part of this tolling success ultra gas elected to crystallize certain financial hedges to avoid an imbalance of the financial and physical merchant barrels in the coming quarters.

James Harbalis: This resulted in a gain on settlements recorded in the first quarter of 2024.

James Harbalis: This has the effect of shifting profits associated with future quarters into the first quarter.

James Harbalis: We also commissioned the Boreal Voyager under a seven-year contract during the first quarter and extended an existing time charter for one VLGC with ASTIMO. These follow our commissioning of the Boreal Pioneer in December 2023, which is also operating under a seven-year agreement. These time charters reduce our shipping costs and, when combined with tolling volumes and our financial hedges, we have eliminated our Baltic freight exposure for 2024.

James Harbalis: We also commissioned the boreal Voyager under seven year contract during the first quarter and extended an existing time charter for one VLCC with asked the most.

James Harbalis: These follow our commissioning of the boreal pioneer in December 2023, which is also operating under seven year agreement.

James Harbalis: These time charters derisk reduce our shipping costs and when combined with tolling volumes and our financial hedges, we have eliminated our Baltic freight exposure for 2024.

James Harbalis: Outside of global exports, midstream performance was also strong during the first quarter. Performance across the balance of the midstream platform remains strong and benefited from the addition of the newly acquired Pipestone assets. However, gas processing volumes during the quarter were curtailed slightly versus our expectations due to cold weather and maintenance-related outages at certain facilities. These volumes have since recovered. During the first quarter of 2024, AltaGas realized FRAC spread averaged approximately $25 per barrel, with most of the company's fracked exposed volumes hedged.

James Harbalis: Outside of global exports, midstream performance was also strong during the first quarter. Performance across the balance of the midstream platform remains strong and benefited from the addition of the newly acquired Pipestone assets. However, gas processing volumes during the quarter were curtailed slightly versus our expectations due to cold weather and maintenance-related outages at certain facilities. However, these volumes have since recovered. During the first quarter of 2024, AltaGas' realized FRAC spread averaged approximately $25 per barrel, with most of the company's fracked exposed volumes hedged.

James Harbalis: Outside of global exports Midstream performance was also strong during the first quarter.

James Harbalis: Performance across the balance of the midstream platform remained strong and benefited from the addition of the newly acquired Pipestone assets. However, gas processing volumes during the quarter were curtailed slightly versus our expectations due to cold weather and maintenance related outages at certain facilities.

James Harbalis: These volumes have since recovered.

James Harbalis: During the first quarter of 2024 ultra gas realized frac spread averaged approximately.

James Harbalis: $25 per barrel.

James Harbalis: With most of the companies Frac exposed volumes hedged.

James Harbalis: This was approximately $2 per barrel below realized frack spreads in the first quarter of 2022. Canadian natural gas prices are very soft given the combination of strong production growth that we have seen over the past year and weak winter demand that has been realized across North America for much of the winter heating season.

James Harbalis: This is approximately $2 per barrel below realized frack spreads in the first quarter of 2022. Canadian natural gas prices are very soft given the combination of strong production growth that we have seen over the past year and weak winter demand that has been realized across North America for much of the winter heating season.

James Harbalis: This was approximately $2 per barrel below realized frac spreads in the first quarter of 2023.

James Harbalis: Canadian natural gas prices are very soft given the combination of strong production growth that we've seen over the past year and weak winter demand that has been realized across North America for much of the winter heating season.

James Harbalis: With that said, we are not expecting this to have a material impact on AltaGas's throughput volumes or EBITDA in the coming quarters. Moving on to the utilities, on slide 15, we reported first quarter normalized EBITDA of $437 million. This represents a 9% year-over-year increase despite the lost EBITDA and gain on debt deficiencies that were recorded with the sale of Elasti Utilities in March 2023, which combined had contributed $29 million in the same quarter last year. Although we saw 15% fewer heating degree days than normal in our two weather-exposed jurisdictions of Michigan and D.C., utilities results were largely in line with our expectations given strong retail performance.

Speaker Change: With that said we are not expecting this to have a material impact on ultra gas as throughput volumes or EBITDA in the coming quarters.

James Harbalis: Moving on to the utilities on Slide 15, we reported first quarter normalized EBITDA of $437 million. This.

James Harbalis: This represents a 9% year over year increase despite the lost EBITDA and gain on debt.

James Harbalis: That was recorded with the sale of the Alaska utilities in March 2023, which combined had contributed $29 million in the same quarter last year.

James Harbalis: Although we saw 15% fewer heating degree days than normal and our two weather exposed jurisdictions of Michigan in D C.

James Harbalis: Utilities results were largely in line with our expectations given strong retail performance.

James Harbalis: Contribution from ARP Investments across our network, the positive impact of the DC rate case, new customer additions, and strong cost management across the platform. During the quarter, we deployed $179 million of invested capital in the utilities on behalf of our customers. This included $85 million across our various asset modernization programs in the DMV and Michigan. These modernization programs improve the safety and reliability of our system, reduce leaks, and provide long-term productivity improvements. Within the corporate and other segment, Normalized EBITDA was a loss of $24 million, compared to a $2 million loss in the same quarter last year.

James Harbalis: Contribution from ERP investments across our network the positive impact of the D. C rate case, new customer additions and strong cost management across the platform.

James Harbalis: During the quarter, we deployed $179 million of invested capital in the utilities on behalf of our customers.

James Harbalis: This included $85 million across our various asset modernization programs and the DMV in Michigan.

James Harbalis: These modernization programs improve the safety and reliability of our system reduce leaks and provide long term productivity improvements.

James Harbalis: Within the corporate and other segment normalized EBITDA was a loss of $24 million compared to a $2 million loss in the same quarter last year.

James Harbalis: This performance was driven by a planned turnaround at Blythe that was extended by 22 days as we elected to do some additional preventative maintenance while the facility was down. Flight's resumed operations towards the end of the first quarter and is expected to deliver results in line with our expectations for the balance of the year. Results in the corporate and other segment were also impacted by higher G&A related to employee incentive plans due to AltaGas' rising stock price.

James Harbalis: This performance was driven by a planned turnaround at place that was extended by 22 days as we elected to do some additional preventative maintenance, while the facility was down.

James Harbalis: Flights resumed operations towards the end of the first quarter and is expected to deliver results in line with our expectations for the balance of the year.

James Harbalis: Results in the corporate and other segment were also impacted by higher G&A related to employee incentive plans due to alter gasses rising stock price.

James Harbalis: Turning to slide 16, we are pleased with the progress that has been made on the Mountain Valley Pipeline. All water body and wetland crossings are now complete, and there is one mile of pipe left to install.

James Harbalis: Turning to slide 16, we are pleased with the progress that has been made on the mountain Valley pipeline.

James Harbalis: All water body and wetland crossings are now complete and there is one mile of pipe left to install.

James Harbalis: We expect to see construction completed and final commissioning activities in the coming weeks. The project has made a FERC application to be placed into service shortly thereafter. Although we have had to be patient with the asset given the various setbacks over the years, we believe our patience will be rewarded. As a reminder, MVP is an interstate natural gas pipeline that spans more than 300 miles from northern West Virginia to southern Virginia, connecting to Transco.

James Harbalis: We expect to see construction completed and final commissioning activities in the coming weeks.

James Harbalis: The project has made a FERC application to be placed into service shortly thereafter.

James Harbalis: Although we have had to be patient with the asset given the various setbacks over the years, we believe our patience will be rewarded.

James Harbalis: As a reminder, MVP is an interstate natural gas pipeline that spans more than 300 miles from northern West Virginia to southern Virginia connecting to Transco, there will be a critical infrastructure asset that will connect upstream production in the Marcellus and Utica shale to growing downstream markets in the eastern U S.

James Harbalis: It will be a critical infrastructure asset that will connect upstream production in the Marcellus and Utica Shale to growing downstream markets in the eastern U.S. The pipeline has 2 BCF per day of capacity and is fully subscribed under a 20-year firm contract. We are excited about the long-term demand for additional capacity on the line. The partnership has the ability to expand the pipeline by an additional 500 million cubic feet per day through additional compression, which was also highlighted by EQT on their earnings call last week.

James Harbalis: The pipeline has two bcf per day of capacity and is fully subscribed under 20 year firm contracts.

James Harbalis: We're excited about the long term demand for additional capacity on the line.

James Harbalis: The partnership has the ability to expand the pipeline by an additional 500 million cubic feet per day through additional compression, which was also highlighted by EQT on their earnings call last week.

James Harbalis: This is something the partners are considering progressing once the pipeline goes into service, given the strong long-term demand associated with power requirements from data centers, growing gas utility customers, and LNG exports. We have always been transparent with regards to MVP being a non-core asset for AltaGas' long-term strategy.

James Harbalis: Is this something that partners are considering progressing once the pipeline goes into service given the strong long term demand associated with power requirements from data centers growing gas utility customers and LNG exports.

James Harbalis: We have always been transparent with regards to MVP being a noncore asset for all to gas his long term strategy and once the project is operational we would pursue value maximizing opportunities.

James Harbalis: And once the project is operational, we would pursue value-maximizing opportunities. As we have said in the past, maximizing the value of our investment in MVP offers AltaGas the most immediate path to achieving our long-term leverage target. On slide 17, we share our 2024 outlook. Following a strong first quarter, we are well positioned to achieve our 2024 guidance ranges of normalized EPS of $205 to $225 and normalized EBITDA of $1.675 billion to $1.775 billion. And when we look at the headwinds and tailwinds that we have seen unfold so far, it is a relatively balanced picture.

James Harbalis: As we have said in the past crystallizing the value of our investment in MVP offers alter guests the most immediate path to achieving our long term leverage targets.

James Harbalis: On slide 17, we share our 2020 for outlook.

James Harbalis: Following a strong first quarter, we are well positioned to achieve our 2024 guidance ranges of normalized EPS of 205 to $2 25, and normalized EBITDA of $1 67, 5 billion to $1 775 billion.

James Harbalis: And when we look at the headwinds and tailwind that we have seen unfold. So far it has a relatively balanced picture.

James Harbalis: As I mentioned earlier, there were two major timing events that benefited the first quarter results. The first was ship timing global exports moving from April to March. And the second was the crystallization of certain financial hedges on expected merchant barrels that have been replaced with long-term tolls.

James Harbalis: As I mentioned earlier, there were two major timing events that benefited the first quarter results. The first was the ship timing global exports moving from April to March and the second was the crystallization of certain financial hedges unexpected merchant barrels that have been replaced with long term tolls.

James Harbalis: The aggregate impact of these two events drove approximately $26 million higher normalized EBITDA in the first quarter of 2024 than would otherwise have taken place, with a corresponding decrease expected in the balance of the year. As a result, we have reshaped our quarterly expectations, which are shown on slide 18, including slightly reduced Q2 and Q4 expectations and a modestly higher Q3 contribution. In closing, we are extremely pleased with our first quarter results.

James Harbalis: The aggregate impact of these two events drove approximately $26 million higher normalized EBITDA in the first quarter of 2024 than would have otherwise taken place with a corresponding decrease expected in the balance of the year.

James Harbalis: As a result, we have reshaped our quarterly expectations, which are shown on slide 18, including slightly reduced Q2, and Q4 expectations and a modestly higher Q3 contribution.

James Harbalis: In closing we are extremely pleased with our first quarter results.

James Harbalis: We also believe we offer a compelling forward value proposition, as outlined on slide 19. We are a low-risk energy infrastructure platform that is positioned to provide stable and growing earnings and cash flows, which should support industry-leading dividend growth. We have visible and industry-leading growth in both our businesses, and we will remain disciplined allocators of capital as we have shown over the past five years. We believe the execution of our long-term strategic plan should continue to drive outsized shareholder returns in the years ahead. And with that, I will turn it over to the operator for the Q&A session.

James Harbalis: We also believe we offer a compelling forward value proposition as outlined on slide 19.

James Harbalis: We are a low risk energy infrastructure platform that is positioned to provide stable and growing earnings and cash flows which should support industry leading dividend growth.

James Harbalis: We have visible and industry leading growth in both our businesses and we will remain disciplined allocators of capital as we have shown over the past five years.

James Harbalis: We believe the execution of our long term strategic plan should continue to drive outsized shareholder returns in the years ahead.

Speaker Change: And with that I will turn it over to the operator for the Q&A session.

Speaker Change: Thank you Sir.

Sylvie: Ladies and gentlemen, as stated, we will now conduct a question and answer session with questions from analysts.

Speaker Change: Ladies and gentlemen, as stated we will now conduct a question and answer session.

Speaker Change: Question from analysts.

Sylvie: If you would like to ask a question, please press star, then number 1 on your telephone keypad. And if you would like to withdraw your questions from the queue, press star followed by 2. There will be a brief pause while we compile the Q&A roster. And your first question will be from Rob Hope at Scotiabank. Please go ahead.

Speaker Change: If you would like to ask a question. Please press Star then the number one on your telephone keypad and if you would like to withdraw your question from the queue Press Star followed by two.

Sylvie: There will be a brief pause while we compose the Q&A roster.

Sylvie: And your first question will be from Rob Hope at Scotiabank. Please go ahead.

Robert Hope: Good morning, everyone. The first question, as you probably expect, would be on Reef. With the success that we're seeing on the tolling for the existing assets, can you just talk about how that is going to mesh with the potential expansion with Reef? Are you moving up tolls in anticipation of a Reef sanctioning so that the volumes will be fungible? And then, more broadly, any updates on cost and returns on Reef?

Robert Hope: Good morning, everyone.

Robert Hope: First question as he probably effect would be on the reef.

Robert Hope: With the success that we're seeing on the tolling for the existing assets can you just talk about how that is going to mesh with the potential expansion with reef are you moving up tolls in anticipation of a reef sanctioning. So thats the volumes will be fungible, and then I guess more broadly any updates on kind of cost.

Robert Hope: Returns on rate as well.

Vern D. Yu: Okay, thanks for the question, Rob. Obviously, we're very positive about the success we've had this year in increasing tolling as a percentage of our total export volumes. But I think nothing's changed.

Speaker Change: Okay. Thanks for the question Rob.

Vern D. Yu: Obviously, we're very.

Vern D. Yu: Positive on the success, we've had this year on increasing tolling as a percentage of our <unk>.

Vern D. Yu: Total export volumes I think nothing's changed where you want the portfolio to get to about 60% toll.

Vern D. Yu: We want the portfolio to get to about 60% tolled when we bring REIF on board in the 2027 NGL year. That really helps us drive towards one of our strategic priorities of reducing the overall risk in the business. So today, about 80% of our EBITDA is take or pay, cost of service, or fixed fee. Going forward, if we reach that 60% tolling framework for enhanced volume with REIF, we'll get to about 90% of our EBITDA under fixed fee, take or pay, or fixed fee.

Vern D. Yu: When we bring reform and not the 2027 NGL year.

Vern D. Yu: That really helps us drive towards one of our strategic priorities have reducing the overall risk in the business. So today about 80% of our EBITDA is take or pay cost of service or fixed fee going forward. If we reach that 60% tolling framework for enhanced.

Vern D. Yu: Volume was three if we'll get to about 90% of our EBITDA under fixed fee take or pay or.

Vern D. Yu: So it's very exciting for us. I think the commercial interest that we've seen, obviously, as we talked about in the prepared remarks, has been extremely strong. The value that we're providing the customer was very good through the last year, and people are seeing that value. So that's why I think you've seen the uptick in tolling. We're still very bullish on the returns on the project. We think it's going to be a very healthy investment for us.

Vern D. Yu: Our fixed fee. So it's it said, it's very exciting for us.

Vern D. Yu: I think the commercial interest that we've seen obviously as we've talked about in the prepared remarks has been extremely strong.

Vern D. Yu: The value that we're providing the customer.

Vern D. Yu: It was very good through the last year and people are seeing that value. So that's why I think you've seen the uptick in the tolling.

Vern D. Yu: We're still very bullish on the returns on the project, we think it's going to be very healthy project for us and the subsequent phases are obviously going to be even more profitable as we're pre building a bunch of the infrastructure in phase one so our expectation is that the first phase is still a six to eight times build.

Vern D. Yu: And the subsequent phases are obviously going to be even more profitable as we're pre-building a bunch of the infrastructure in phase one. So our expectation is that the first phase is still a six to eight times build multiple, which will be very healthy. And then we will, once reef is up, have the optionality to move barrels around between rippet and reef. So again, that just enhances our operational flexibility.

Vern D. Yu: Multiple which will be <unk>.

Vern D. Yu: Very healthy and then where we will once reef is up have the optionality to move barrels around between <unk> and <unk>. So again that just enhances our operational flexibility.

Vern D. Yu: I appreciate that. And then, maybe.

Speaker Change: Okay I appreciate that.

Vern D. Yu: With LMG Canada around the corner, despite the fact that gas pricing is relatively weak now, volumes seem to be trending in the right direction. Can you remind us how much white space you have in your assets there, and of the portfolio of expansion projects that you've previously highlighted, which ones are progressing the quickest?

Vern D. Yu: And then maybe lets just move over to northeast BC with LNG, Canada around the around the corner.

Vern D. Yu: Despite the fact that gas pricing is relatively weak now if volumes seem to be trending in the right direction. So can you remind us how.

Vern D. Yu: How much white space you have in your assets there and of the portfolio of expansion projects that you've previously highlighted which ones are progressing at a quick test.

Vern D. Yu: Yeah, I'll just start and then Randy can answer the rest. I think obviously we have a white space at Townsend, and Randy can fill you in on what we have there. We also obviously have fractionation at North Pine, which is in high demand right now, and we're quite bullish about our prospects there.

Speaker Change: Yeah, I'll just start and then Randy can answer the rest I think obviously, we have a <unk>.

Vern D. Yu: White space of towns and then Randy can fill you in on what we have there. We also obviously have fractionation at north Pine, which is in high demand right now and we're quite bullish about our prospects here go ahead Ryan.

Vern D. Yu: Okay.

Randy W. Toone: Well, yeah, so up in Townsend, we have about $500M a day of both shallow cut and deep cut processing capacity, and we're roughly about 50% to 60% utilized right now. So we do have white space, but we are progressing discussions with producers in the area that need that infrastructure. And at North Pine, we just did a low-cost e-bottleneck, and we feel we have about 25,000 barrels a day of capacity at North Pine, which gives us a little bit of breathing room before we do a larger expansion. But those discussions with customers are progressing, and we would hope to make an FID on an North Pine expansion closer to the end of the year.

Randy: Well, yeah. So Townsend, we have about 500 million a day of both shallow cut in deep cut processing capacity and we're roughly about 50%, 56% utilized right now so we do have white space.

Randy W. Toone: We are progressing discussions with with producers in the area that need a need that infrastructure.

Randy W. Toone: And north Pine, we just did a low cost debottleneck and we feel we have about 25000 barrels a day of capacity at north Pine, which gives us a little bit of breathing room before we do a larger expansion.

Randy W. Toone: As those discussions with customers are progressing and we would hope to make a Friday on our north plant expansion closer to the end of the year.

Vern D. Yu: I appreciate that. Thank you.

Speaker Change: Alright, I appreciate that thank you.

Speaker Change: Thank you.

Sylvie: The next question will be from Jeremy Tonet at J.P. Morgan. Please go ahead.

Vern D. Yu: Next question will be from Jeremy Tonet at J P. Morgan. Please go ahead.

Eli: Hey, good morning. This is Eli on behalf of Jeremy.

Sylvie: Hey, Good morning, this is eli on for Jeremy.

Vern D. Yu: Maybe you want to start on just a little bit further capital allocation prioritization. You just touched on some of the opportunities, but maybe more broadly thinking past an MVP divestment and balance sheet de-risking. How is the team kind of weighing additional growth projects versus other capital deployment options? If midstream growth was the first call on capital, what types of projects might we see? Yeah, just general thoughts there.

Eli: Maybe you wanted to start on just a little bit further capital allocation prioritization, you just touched a little bit on kind of some of the opportunities but.

Vern D. Yu: Maybe more broadly thinking past, an MVP divestment and balance sheet de risking.

Vern D. Yu: How is the team kind of weighing additional growth projects versus other capital deployment options.

Vern D. Yu: Midstream growth what is the first call on capital what types of projects might we see or.

Vern D. Yu: Yeah, just just general thoughts there.

Vern D. Yu: Okay, Eli, I thought that was a great question. So when we get our balance sheet to four and a half times debt to EBITDA, we'll have about a billion and a half dollars per year, which we call investment capacity. So it's the amount of capital that we can reinvest in the business or do other things while maintaining our debt metrics. So the calls on that will be about $400 million per year of maintenance capital and capital that will be used at the utility to offset depreciation. Then we have probably about $400 million per year of accelerated pipe replacement capital. So those two together come up to about $800 million.

Speaker Change: Okay Yeah.

Speaker Change: That's a great question.

Vern D. Yu: So when we get our balance sheet to four times debt to EBITDA.

Vern D. Yu: We'll have about $1 billion $5 per year of what I call, what we call. It investment capacity. So that's the amount of capital that we can reinvest in the business or do other things too and while maintaining our GAAP metrics. So.

Vern D. Yu: The calls on that will be about $400 million per year of maintenance capital and capital that'll be used at the utility to offset depreciation.

Vern D. Yu: Then we have probably about $400 million per year of accelerated pipe replacement capital. So those two combined come up to about $800 million that on a run rate basis leaves us about $700 million a year of what we call discretionary capital or discretionary investment.

Vern D. Yu: That, on a run rate basis, leaves us about $700 million a year of what we call discretionary capital or discretionary investment capacity. Right now, based on where projects are coming in, we would reinvest that capital in organic growth because that capital would be highly accretive and continue to grow our cash flow streams into the future. So when we do look at that, then we will look at the projects we have in the hopper, whether they're midstream or utility, and we'd allocate capital to the projects that provide the biggest spread over their risk-adjusted hurdle rates.

Vern D. Yu: City.

Vern D. Yu: Right now based on where our projects are coming in we would.

Vern D. Yu: Reinvest that capital in organic growth because that.

Vern D. Yu: That capital it would be highly accretive and continue to grow our cash flow streams into the future. So when we do look at that then we will look at the projects we have in the hopper, whether their midstream or utility and we'd stream capital to the projects that provide the biggest.

Vern D. Yu: Spread over their risk adjusted hurdle rate. So right now, we're seeing lots of highly accretive transactions in midstream and <unk>.

Vern D. Yu: So right now, we're seeing lots of highly accretive transactions in midstream, and you've seen us in 2024 increase our allocation towards that part of the business. But the good news is that if we defer some capital at the utility, we'll have the opportunity to spend that capital in subsequent years as the amount of modernization and customer growth embedded in the utility continues to look very strong. In other circumstances, if we don't have great organic projects, we do also have the ability to pay down more debt, to create more dry powder, or even buy back shares. But at this point, with our current valuation, organic capital is a much superior investment for us.

Vern D. Yu: <unk> seen us in 2024 increase our allocation towards that part of the business, but the good news is if we defer some capital at the utility will have that opportunity to spend that capital in subsequent years as the amount of modernization and customer growth.

Vern D. Yu: Embedded in the utility continues to look very strong.

Vern D. Yu: Now there are circumstances, if we don't have great organic projects. We do also have the ability to pay down more debt to create more dry powder or even buy back shares but at this point with our current valuation and organic capital.

Vern D. Yu: Is that much superior investment for us.

Speaker Change: Got it that's that's great color and you talked a little bit about the modernization program, there and maybe just kind of sticking with the utilities business.

Vern D. Yu: Got it. That's great, Culler. And, you know, you talked a little bit about the modernization program there, and maybe just kind of sticking with the utilities business. We obviously saw the positive rate outcome in D.C., which you touched on as well in the opening remarks. Maybe looking forward, where does the team still see ROE gaps? What jurisdictions are the top priorities there, and, you know, what kind of upside might we expect in that utilities business in the near or medium term?

Vern D. Yu: We obviously saw the positive rate great outcome.

Vern D. Yu: D C, which you touched on as well in the opening remarks, maybe looking forward where does the team still see.

Vern D. Yu: ROE gaps what jurisdictions are the top priorities there and.

Vern D. Yu: What kind of upside might we expect in that.

Vern D. Yu: Utilities business in the near or medium term.

Vern D. Yu: Yeah, that's a good question. We obviously have some ROE gaps still. I think the Maryland decision we got in December was a little less than we had hoped for and really on the timing of putting capital under rate base. So we, I think in James's remarks, we talked about how we were looking at another rate case in Maryland to continue to narrow that gap. We're obviously also doing things on our own to manage our own efficiencies and capital to make sure we narrow that down. But maybe, James, you could talk about the financial levers, and then Blue, you can talk about the timing of when we're going to get after these things.

Vern D. Yu: Yeah. That's a good question, we do obviously have tomorrow gaps still I think the the Maryland decision. We got in December was a little.

Vern D. Yu: Less than we had hoped for and really on the timing of putting capital under rate base.

Vern D. Yu: So we I think in James's remarks, we talked about.

Vern D. Yu: How we were looking at another rate case in Maryland to continue to narrow that gap. We're obviously also doing things on our front to manage our own efficiencies and.

Speaker Change: And capital to make sure we narrow that up but maybe James you could talk about the financial levers in Blue you can talk about the timing of when we're going to get after these things.

James Harbalis: I'll just add to what Vern said in terms of some of the other financial levers, the two jurisdictions, Vern touched on one of them where we're anticipating a rate case, that's Maryland. D.C. has always been a jurisdiction that we've said is going to be a multi-year journey in terms of closing that gap, just given some of the rate lag associated with the length of the decision-making process of And obviously, some of the other financial levers that we've been pulling are just strong cost management to make sure that our cost structure is what's reflected in rates so that we can also help to close that ROE gap within our utilities. So, Luke, do you want to comment on timing with respect to that? Yeah, thanks, James. Just a couple of comments.

James Harbalis: Yes, I'll just add to what Burns said in terms of some of the other financial levers. The two jurisdictions Vern touched on one of them, where we're anticipating a rate case, that's Maryland D C.

Luke: As always been a jurisdiction that we've said is going to be a multiyear journey in terms of closing that gap just given some of the rate lag associated with the length of the decision making of the regulators in D. C. So we are planning another rate case in D. C. In 2024 to help us progress to closing that gap and obviously some of the other financial levers we've been pulling is just strong core.

Luke: <unk> management to make sure that our cost structure is what's reflected in rates. So that we can also help to close that ROE gap within our utilities so flu.

Luke: Lou do you want to comment on timing with respect to the yeah. Yeah. Thanks, James just a couple of comments so in D. C. We got we.

Donald M. Jenkins: So, in D.C., we got the rate case with new rates effective this year. We will file early in Q3 for our next rate case in D.C., and we've been very open and transparent with our regulators there about our process, and so that will come. And in Maryland, as both James and Vern pointed out, the rate case decision we got was disappointing compared to our historical precedent.

Donald M. Jenkins: We got the rate case with new rates effective this year, we will file early in Q3 for our next rate case in D. C and we've been very open and transparent with our regulators there about our process and so that will come will file in early Q3 in Maryland, as both James and burn pointed out.

Donald M. Jenkins: The rate case decision, we got was disappointing compared to our historical precedent. We now understand what that shift was and we will look to file another rate case in Maryland to bring our capital into into base rates and keep that current and we will file that sometime in the second half of this year. The other thing I would just point out that.

Donald M. Jenkins: We now understand what that shift was, and we will look to file another rate case in Maryland to bring our capital into base rates and keep that current, and we'll file that sometime in the second half of this year. The other thing I would just point out to remind you is that we did extend our accelerated pipeline replacement programs across all our jurisdictions, so that capital, the outlook on that capital is very good, and we continue to ensure that we're managing that appropriately.

Donald M. Jenkins: To remind you we did extend our accelerated pipeline replacement programs across all our jurisdictions, so that capital the outlook on that capital is very good and we continue to ensure that we're managing that appropriately and as Vern alluded to where you know pulling our cost levers. We are managing that closely we continue to execute around our targets there and made good progress in Q1 and will.

Donald M. Jenkins: And as Vern alluded to, we're pulling our cost levers, we're managing that closely. We continue to execute around our targets there and made good progress in Q1, and we'll continue in Q2 here and continue to see that progress continue through the balance of the year.

Donald M. Jenkins: Our 10-Q in Q2 here and continue to see that progress continues through the balance of the year.

Eli: Awesome. I'll leave it there. Thanks.

Speaker Change: Awesome I'll leave it there thanks.

Sylvie: Thank you. Thank you. Thank you. The next question will be from Patrick Kenny at National Bank. Please go ahead.

Speaker Change: Thank you.

Eli: Next question will be from Patrick Kenny of National Bank. Please go ahead.

Patrick Kenny: Good morning. You guys touched on the rising demand for gas in the U.S. from data centers and other industries. I know you're mainly servicing residential and commercial customers, but I'm just wondering if you could provide a bit more color on some of your more near-term opportunities on the industrial side, either within WGL or CEMCO, and maybe, perhaps, how you're thinking about positioning Blythe to take advantage of this momentum around gas-fired capacity.

Patrick Kenny: Hey, good morning.

Patrick Kenny: You guys touched on the rising demand for gas in the U S from data centers and other industries.

Patrick Kenny: I know you're mainly.

Patrick Kenny: Servicing residential and commercial customers, but just wondering if you could provide a bit more color on some of your more near term opportunities on the industrial side either.

Patrick Kenny: Either within WJ L or Simcoe.

Patrick Kenny: And maybe as well perhaps.

Patrick Kenny: Are you thinking about positioning Blythe too.

Patrick Kenny: Advantage of this momentum around gas fired capacity.

Donald M. Jenkins: Yeah, hey, Patrick, this is Blue. I'll answer the questions about the utilities here. So, as you are well aware, that demand profile continues to grow in our Washington gas service territories in that particular region. The outlook over the next several years is somewhere in the neighborhood of 5 to 10 BCF a day of potential throughput to manage some of that growth. The data centers are coming there because of access, but what they're finding is they're having trouble accessing green power, but they're also finding they're having trouble just accessing power in a time frame that makes sense for their expansion profiles. So, they have reached out to us. We've had several conversations about potential short builds to provide onsite generation, to provide gas for onsite generation for them. We have a handful of feed studies underway.

Blue: Yeah, Hey, Patrick this is blue I'll answer the questions around the utilities here. So as you are well aware that that demand profile continues to grow in our Washington gas service territories are in that particular region. The outlook over the next several years is somewhere in the neighborhood of 5% to.

Donald M. Jenkins: 10, Bcf a day of potential throughput to manage some of that growth as you're as you're well aware the data centers are coming there because of access.

Donald M. Jenkins: But what they're finding is that they are having trouble accessing green power, but they're also finding they're having trouble just accessing power in a timeframe that makes sense on their expansion profiles. So they have reached out to us we've had several conversations about potential.

Donald M. Jenkins: Short builds to provide onsite generation fried gas for onsite generation for them. We have a handful of feed studies underway. We do expect that that is an opportunity for us. It's early and we're trying to balance the opportunity set with the timing to ensure that we can also get infrastructure them at a time that matters, but it's a <unk>.

Donald M. Jenkins: We do expect that that will be an opportunity for us. It's early, and we're trying to balance the opportunity set with the timing to ensure that we can also get infrastructure to them in a time that matters. But it's a significant opportunity for us because the throughput is pretty significant. Michigan is a little bit behind based on our service territories, at least on the demand curve we're seeing, but we do have a couple of projects there underway for shorter-term, quick builds to connect gas supply with some incremental power development. So, opportunities in both areas. Primarily, the opportunity is in the Washington, D.C. region.

Donald M. Jenkins: Significant opportunity for us the throughput is is pretty significant Michigan is a little bit behind based on our service territories at least on the demand curve. We're seeing but we are we do have a couple of projects there underway for shorter term quick builds to connect gas supply with some incremental power development so opportunities in both areas.

Donald M. Jenkins: Primarily the opportunity sits in the Washington, DC region, James do you want to touch what yes. Thanks Luc So in terms of Blake, Patrick obviously with the renewal that happen Jan one 2024 for life. We've got a four year contract in place 50% of EBITDA associated with that contract has told the other 50% is obviously.

James Harbalis: Yeah, thanks. So in terms of Blythe, Patrick, obviously, with the renewal that happened on Jan 1, 2024 for Blythe, we've got a four-year contract in place. 50% of the EBITDA associated with that contract is told; the other 50% is obviously open to merchant pricing. And obviously, the summer months are where we see the strongest demand for power in California, just given the cooling season that we enter into. And if you look at where that demand has been over the last few years, the call on Blythe has been significant.

Donald M. Jenkins: James, you want to touch it? Why? Yeah, thanks.

Unknown Executive: Open to merchant pricing and obviously the summer months is where we see the strongest demand for power in California, just given the cooling season that we enter into and if you look at where that demand has been over the last few years. The call on Blake has been significant the dispatch rate has been almost twice what it has been historically so to the extent that you add.

James Harbalis: The dispatch rate has been almost twice what it has been historically. So, to the extent that you add additional demand from data centers and AI, we would expect some very, very strong pricing, and Blythe would benefit from that pricing on the merchant side of the EBITDA.

James Harbalis: Additional demand from from data centers and AI, we would expect some very very strong pricing in Blyth, who would benefit from from that pricing on the merchant side of the the EBITDA.

Patrick Kenny: Okay, that's great. Appreciate the color there. And then maybe just back on Reef. Would you have an update on where things are at here with the Trigon litigation process, just surrounding your LPG exclusivity? And curious is, you know, is this something that maybe not all, but perhaps certain customers are waiting for more clarity on before they sign on the dotted line?

Speaker Change: Okay. That's great appreciate the color there and then maybe just back on reef.

Patrick Kenny: But do you have an update on where things are out here with the Trigon litigation process.

Patrick Kenny: Just surrounding your LPG exclusivity.

Patrick Kenny: And I'm curious as you know is this something that maybe not all but perhaps certain customers are waiting for more clarity on before they sign on the dotted line.

Vern D. Yu: Well, I'll take that one, Patrick. Really, the dispute between Trigon and the Port Authority is with Trigon. The Port Authority has the right to determine what players have exclusivity to do what. Trigon's facilities are effectively permitted to do dry bulk. We, with Ripit and Reef, have the exclusive rights to do bulk liquids, so Trigon is obviously working that through in the courts with the PRPA. PRPA believes that there is very strong legal precedent for their position. In fact, there is a case in Vancouver that reiterates that.

Reef: Well I'll take that one Patrick.

Vern D. Yu: Really the dispute between Trigon is with the Port authority and try on the Port Authority has the right to determine what players have exclusivity to do what.

Vern D. Yu: Trigon facilities are.

Vern D. Yu: Actively permitted to do.

Vern D. Yu: Dry bulk.

Vern D. Yu: We with repair and reef have the exclusive rights to do bulk liquids.

Vern D. Yu: So trigon is obviously working that through in the courts with the PRP aim PRP a believes that there is very strong.

Vern D. Yu: Legal precedent for their position in fact, there's a case in Vancouver that.

Vern D. Yu: So we're just pushing ahead with our project. We see very strong demand on the customer side from all kinds of customers, producers in Northeast BC, NGL aggregators in Alberta, and then offtakers in Asia, where we in fact have active discussions underway right now for more than 100% of the capacity of the first phase of REEF. So we're excited about our prospects, and that's why we're pushing forward with the final engineering and hope to have our capital costs locked down here shortly.

Vern D. Yu: Reiterate set so.

Vern D. Yu: We're just pushing ahead with our project, we see very strong demand on the on the customer side from all kinds of customers.

Vern D. Yu: Sears in.

Vern D. Yu: Northeast B C NGL aggregators.

Vern D. Yu: In Alberta, and then off takers in Asia, where we in fact have active discussions underway right now for more than a 100%.

Vern D. Yu: The capacity of the first phase of a reef. So we're excited about our prospects and that's why we're.

Vern D. Yu: Pushing forward on the final engineering and hope to have our capital costs locked down here shortly.

Patrick Kenny: Okay, that's great, Vern. I'll turn it back on. Thanks.

Speaker Change: Okay, that's great I'll turn it back thanks.

Sylvie: Thank you. The next question will be from Robert Kwan at RBC Capital Markets. Please go ahead.

Patrick Kenny: Thank you next question will be from Robert Kwan of RBC capital markets. Please go ahead.

Robert Michael Kwan: Great, good morning. If I can just ask around, whether it's REEF or just contracting in general, so since you don't see commercial as a gating item, I guess first, how much should we expect to be locked down under tolls once you get to FID, and then what type of duration do you have under the current tolling portfolio, and if you can also give us the average duration of what you've got already locked up under REEF.

Robert Michael Kwan: Great Good morning.

Robert Michael Kwan: If I can just ask around three if youre just contracting in general since you don't see commercial as a gating item I.

Robert Michael Kwan: I guess first.

Robert Michael Kwan: How much should we expect.

Robert Michael Kwan: To be locked down as your tolls once you get to F E.

Robert Michael Kwan: And then what type of duration do you have under the current <unk> portfolio and if you can also give us what the average duration of what you've got already locked up.

Robert Michael Kwan: <unk>.

Robert Michael Kwan: Yeah.

Vern D. Yu: So, Robert, we're obviously in sensitive commercial negotiations right now with a whole host of counterparties. What I can tell you is, [inaudible] The term of the tolling agreements we're negotiating right now for the start of the 2027 NGL year is quite long. They would be consistent with what anyone would call a long-term tolling, long-term take or pay a contract. We've obviously been quite successful in 2024 with firming up the amount of tolling we have.

Robert Michael Kwan: So Robert we're we're obviously and sensitive commercial negotiations right now with a whole host of Counterparties, what I can tell you is.

Vern D. Yu:

Vern D. Yu: The term of the tolling agreements, we're negotiating right now or.

Vern D. Yu: The start of the 2027 NGL year are quite long.

Vern D. Yu: They would be consistent with.

Vern D. Yu: What anyone would call a long term tolling long term take or pay contract.

Vern D. Yu: We've obviously been quite successful in 2024 with firming up the amount of time, we have.

Vern D. Yu: The range of terms on that is, A variable, or we do have a little bit of shorter-dated stuff and some longer-term tolling. Again, we don't want to give away too many commercial sensitivities right now as we as we're working through with a number of counterparties what we're trying to do for 2027, but Suffice it to say, when we do shorter-dated deals, we charge higher rates, and our customers are seeing the value proposition uplift when looking at longer-term. So I think it all bodes well for locking this all up, but it's a bit too early to say right now exactly when that's all gonna happen.

Vern D. Yu: The range of term on that.

Vern D. Yu: Is.

Vern D. Yu: Variable or we do have a little bit of shorter dated stuff.

Vern D. Yu: And some longer term tolling.

Vern D. Yu: Again, we don't want to give away too many commercial sensitivities right now as well.

Vern D. Yu: Working through with a number of Counterparties, what we're trying to do for 2027.

Vern D. Yu: But.

Vern D. Yu: Suffice it to say when we do shorter dated deals we charge higher rates.

Vern D. Yu: And our customers are seeing the value proposition uplift in looking at longer term. So I think it all bodes well for locking this all up.

Vern D. Yu: It's a bit too early to tell say right now exactly when that's all going to happen.

Vern D. Yu: Got it. And so I understand you don't want to say what you've got right now for REIF, but I'm just wondering, once you get to the FIDs, is there a minimum level of how much you do want to have, like, completely in hand before you kind of progress to that 60% target?

Speaker Change: Got it and so I understand you don't want to say what you got right now for reef and I'm. Just wondering once you get to the <unk>, but is there a minimum level of how much you do on a half by completely in hand before you kind of progressed, so that 60% target.

Vern D. Yu: Well, Robert, I think we've said very clearly that by 2027, when we start up the project, we want to have 100,000 barrels a day across the portfolio under tolling contracts, and we strongly believe that by doing that, we are materially reducing the risk profile of the company as a whole. We really want to get to that 90% number we talked about, where 90% of our consolidated EBITDA is under cost of service or take or pay. So believe us when we say we're highly focused on achieving

Vern D. Yu: Well,

Vern D. Yu: Well Robert I think we've said very clearly is by 2027, when we start up the project work, we want to have 100000 barrels a day across our portfolio under tolling contracts and we strongly believe.

Vern D. Yu: By doing that were reduced materially reducing the risk profile of the company as a whole we really want to get to that 90% number we've talked about where 90% of our consolidated EBITDA is under cost of service or take or pay so.

Speaker Change: Aleve Billy.

Vern D. Yu: Believe us when we say, we're highly focused on achieving that.

Speaker Change: Okay, that's great.

Vern D. Yu: Great. Just in your 2024 priorities, you're not showing equity self-funding as being What could unfold, or what are the variables that could derail your ability to achieve that?

Vern D. Yu: In your 2024 priorities.

Vern D. Yu: Not showing the equity self funding is being.

Vern D. Yu: Don notwithstanding you've done that for something like five years. So just.

Vern D. Yu: What could unfold or what are the variables that could derail your ability to achieve that.

Robert Michael Kwan: Sorry, I'm...

Speaker Change: Sorry, I'm kind of.

Robert Michael Kwan: Robert, you're just referring to the green bars on those charts; I just want to clarify. Yeah, like you guys, Integrate Pipestone is completely done, so Equity Self-Funding is largely done, but there's kind of this gap there. I'm just wondering, you know, why it's not. I think that was just a miss on our part. The way we, I think we're 100% committed to equity self-finance. Yeah, and I mean, I did.

Robert Michael Kwan: Robert you are just referring to the green bars on those charts.

Robert Michael Kwan: Like you guys integrate pipestone completely done equity self funding is largely done, but there's kind of a gap there I'm just wondering why it is not.

Robert Michael Kwan: Fully done or what.

Robert Michael Kwan: It's not 100%, yes, I think di with just a miss on our part in.

Robert Michael Kwan: In how we.

Robert Michael Kwan: I have communicated that bar I think we're 100% committed to equity self financing.

James Harbalis: Robert, I did speak to that in my prepared comments that that was a continued priority for 2024 and beyond. Just to provide a little bit more comfort along those lines, when we get to RFID in the second quarter of this year, we do expect that any capital associated with that for the balance of the year will be modest. As a reminder, we only fund 50% of that. Our JV partner, Vopac, will fund the other 50%.

Robert Michael Kwan: Yes.

Robert Michael Kwan: I did speak sorry, Robert Jan I did speak to that in my prepared comments that that was a continued priority for 2024 and beyond and just.

James Harbalis: Just to provide a little bit more comfort along those lines. So when we get to the reef.

James Harbalis: In in the second quarter of this year, we do expect that any capital associated with that for the balance of the year to be modest and as a reminder, we only fund 50% of that our JV partner Volt pack will fund. The other 50. So we feel that we can accommodate it within our investment capacity that burn alluded to earlier and we've alluded to it.

James Harbalis: So we feel that we can accommodate it within our investment capacity, which Vern alluded to earlier and we've alluded to at our investor day, within 2024. And beyond that, in 2025 and beyond, we've got a very healthy investment capacity that we can accommodate additional reef spend and other incremental growth projects and ensure that we're always directing capital to the best risk-adjusted return. So it does continue to be a

James Harbalis: At our Investor day within 24 and beyond that in 2025 and beyond we've got a very healthy investment capacity that we can accommodate additional reef spend another incremental growth projects and ensure that we're always directing capital to the best risk adjusted returns. So it does continue to be a priority.

Speaker Change: Perfect Great. Thank you very much.

Speaker Change: Thank you.

Sylvie: And our last question will be from Ben Pham at BMO Capital Markets. Please go ahead, Ben.

James Harbalis: And our last question will be from Ben Pham BMO capital markets. Please go ahead Ben.

Benjamin Pham: Hi, thanks for the morning. I know you're highly focused on REEF phase one, but can you talk about maybe, just because you laid up some maps here for a pictorial of phase 2a and b, how do you think about the sequencing of phases beyond, items are, for those two future phasers?

Benjamin Pham: Hi, Thanks, Good morning, I know you.

Benjamin Pham: Area of high focus on on reef one.

Benjamin Pham: But can you talk about maybe just cause you laid out some some maps here or a pictorial of phase II A&D, how how do you think with the sequencing.

Benjamin Pham: Phases beyond.

Benjamin Pham: Phase one and what do you think the key gating.

Benjamin Pham: Items are.

Benjamin Pham: For those those two future phases.

Vern D. Yu: Why don't I start and Randy can fill in. Ben, I think.

Speaker Change: But I'll I'll start and Randy can fill in.

Vern D. Yu: Ben I think.

Vern D. Yu: We were very excited about the prospects that REEF brings us. The initial phase is 55,000 barrels a day of LPG for propane and butane exports. Once that's up, we'll have a total of about 170,000 barrels a day of total exports that we can provide out of the western part of North America. Don't forget that today, available to export just out of Canada is about 350,000 barrels a day of propane and butane.

Speaker Change: We were very excited about the prospects reef brings us.

Vern D. Yu: The initial phase is 55000 barrels a day of LPG for propane and butane exports.

Vern D. Yu: Once that's up will have a total of about 170000 barrels a day of total exports that we can provide out of the western part of North America here.

Vern D. Yu: Don't forget that today.

Vern D. Yu: Available to export out just out of Canada is about 350000 barrels a day of propane and butane that supply is going to increase by the time reef is up and running so there and the value of going.

Vern D. Yu: That supply is going to increase by the time Reef is up and running. So there's and the value of going to Asia is much superior than trying to push those barrels into the US. So once the first phase of reef is up, and once we're in construction, I'm sure we'll be having incremental conversations with producers for more LPG export because the value proposition is very significant. And then later on, there is the ability for us to export other bulk liquids, whether it's diesel, biodiesel, or even ammonia; those are more later stage development opportunities. Is there anything you wanted to add, Randy? No, I think not.

Randy: Asia is much superior than trying to push those barrels into the U S. So once the first phase of reef is up.

Randy: And once we're up and construction I'm sure, we'll be having incremental conversations with producers for more LPG export.

Randy: Because the value proposition is very significant.

Randy: And then later on there is the ability for us to export either bulk liquids, whether it's diesel biodiesel even ammonia.

Vern D. Yu: Those are more later stage development opportunities is there anything you wanted to add Randy.

Vern D. Yu: No, I think Vern covered that. You know, the future phases are more capital efficient. And so, you know, our idea is that we'll add LPG expansions or expansions as the fundamentals show that there is an oversupply of LPG in North America, and we feel that the Asian market will demand it. And we also are looking at methanol and other clean petroleum products to export as well, including ammonia in the future.

Randy: No I think Brian covered it but the future phases are more capital efficient and so you know where are our ideas that will add LPG expand or expansions as the fundamental show that there is an oversupply of LPG in North America, and we feel that the Asian market will will demand it and we.

Vern D. Yu: So we're looking at methanol another clean petroleum products to export as well, including pneumonia in the future.

Randy W. Toone: Would you have to rework the rail? Agreement to facilitate more volumes beyond phase one.

Vern D. Yu: Would you have to.

Vern D. Yu: Reworked.

Randy W. Toone: The rail.

Randy W. Toone: Agreement to facilitate.

Randy W. Toone: More volumes beyond phase one.

Randy W. Toone: No, we work quite closely with CN, and they're confident the corridor can handle the future volumes. And also, Reef has an extensive rail length, and we have a number of different rail slots that we can add products to as we expand, so there won't be limitations there.

Randy W. Toone: No.

Speaker Change: We worked quite closely with CN and there they are confident in the corridor can handle the future volumes.

Randy W. Toone: And also a.

Randy W. Toone: Reef has extensive rail.

Randy W. Toone: Length and we.

Randy W. Toone: We have a number of different real slots that we can add products to reap as we expand so there won't be.

Randy W. Toone: Limitations there.

Benjamin Pham: Okay, thanks. And maybe switching to the question about the Virginia Data Center. Opportunity.

Speaker Change: Okay, Thanks, and maybe switching to the the question that Virginia data Center.

Benjamin Pham: Opportunity.

Benjamin Pham: I just want to confirm there, so the thought process is to potentially build gas plants on site. And then is there them, a benefit from the utility then? to build access to gas, and you'd roll into the ARP.

Benjamin Pham: I just wanted to confirm there so the thought processes is to potentially build gas plants.

Benjamin Pham: On site.

Benjamin Pham: And then is there then a burner.

Benjamin Pham: That's it from the utility than.

Benjamin Pham: To build access to gas and you grow into the ERP.

Benjamin Pham: So, Ben, maybe just to make sure we understand your question properly. So, at the utility, is there an opportunity for us to provide natural gas for on-site power generation in support of data centers and other industrial opportunities within our franchise?

Speaker Change: So maybe just to make sure we understand your question properly so you're talking about at the utility is there an opportunity for us to provide natural gas for onsite power generation.

Benjamin Pham: In support of data centers and other industrial opportunities within our franchise.

Benjamin Pham: Yeah, to check on that, but also just to confirm the earlier comment, the thought process. A lease right now is contracted, and gas plants are on site.

Benjamin Pham: Yeah.

Benjamin Pham: On that but I'll also also just to clarify or confirm that the earlier comment that the thought process.

Benjamin Pham: At least right now is contracted gas.

Benjamin Pham: Gas plants on site.

Donald M. Jenkins: Yeah, we would be doing this, obviously, all rape-based, but go ahead, Will. Yeah.

Benjamin Pham: Yeah, we would be doing this obviously all as rate base, but go headwinds yeah. Yeah. We would so just to be clear we wouldn't be doing any we wouldn't be building any other generation in what we're doing are building infrastructure to the sites to provide gas supply the conversations to date have been about.

Donald M. Jenkins: Yeah, yeah, we wouldn't. So just to be clear, we wouldn't be doing any of the generation; what we're doing is building infrastructure at the sites to provide gas supply. The conversations to date have been about, you know, can you get me x by y date? Can you then help me green that as we move that natural gas to RNG and, ultimately, perhaps to other gaseous fuels in the future.

Donald M. Jenkins: Can you get me X by Y date can you then help me green that as we move that.

Donald M. Jenkins: Natural gas to RMG, and ultimately to perhaps to other gaseous fuels in the future. So yes, the conversation we would be extending our franchise.

Donald M. Jenkins: So yes, the conversation we would be extending our franchise assets, building interconnects and pipelines to these sites where they would then build or procure, depending on the size of the site, some sort of onsite generation for power.

Donald M. Jenkins: Assets building Interconnects and pipeline to these sites, where they would then.

Donald M. Jenkins: They would then build or procure depending on the size of the site some sort of onsite generation for power.

Benjamin Pham: Okay, I got it. So it's more of the utility side of things than the actual gas power plant?

Speaker Change: Okay I got it.

Benjamin Pham: It's more of the utility side of things that dash of gas pipeline correct, Okay that makes sense okay.

Benjamin Pham: Correct. Okay, that makes sense. That's right. I understand. Thank you.

Benjamin Pham: Got it thank you.

Benjamin Pham: Thank you. The next question will be from Robert Catellier at CIBC Capital Markets. Please go ahead. Just a couple of quick follow-ups here on the...

Benjamin Pham: Thank you next question will be from Robert <unk> at CIBC capital markets. Please go ahead.

Robert Catellier: Just a couple of quick follow-ups here on the utility side. For the data center opportunity, is there any potential for optimization income? And secondly, to the extent that this is all rate-based, are you doing anything to protect yourselves against the potential for stranded assets and the risk of overbilling?

Robert Catellier: Just a couple of quick follow ups here on the utility side for the data center opportunity is there any potential for optimization income and secondly to the extent that this is all rate base oriented.

Robert Catellier: Are you doing anything to protect yourselves against that.

Robert Catellier: Potential for stranded assets and the risk of overbuild.

Donald M. Jenkins: Yeah, Robert, this is Blue. So the short answer is yes to both of those. So we are absolutely looking at what the right structure around these opportunities is. Most of these structures we would do under some sort of new contract under our existing tariff, where we would look to recover the investment profile within a window that made sense to both us and the data center developer. And yes, the opportunity to utilize those assets around our asset optimization program to then generate savings for our broader customer base would exist. But yes, we're being very, very thoughtful to ensure that the recovery of those assets lines up in a contract that makes sense, that works for both our asset needs as well as the data center.

Blue: Yeah. Robert this is blue so the short answer is yes to both of those so we are absolutely looking at what is the right structure around these opportunities most of these structures, we would do under some sort of new contract.

Donald M. Jenkins: Under our existing tariff, where we would look to recover the investment profile within a window that made sense to both us and the <unk>.

Donald M. Jenkins: Yeah.

Donald M. Jenkins: Data center developer and yes, the opportunity to utilize those assets around our asset optimization program to then generate.

Donald M. Jenkins: Savings for our broader customer base would exist, but yes were being very very thoughtful to ensure that the recovery of those assets lineup in a contract that makes sense that works for both our asset needs as well as the data center.

Donald M. Jenkins: Okay, great. And last one for me, I just wondered if there's anything in the Maryland rate case and the amended order that influences how you might approach rate case strategy in that jurisdiction.

Speaker Change: Okay, Great and last one for me I just wondered if there's anything in the Maryland rate case, and the amended order.

Donald M. Jenkins: That influences, how you might approach rate case strategy in that jurisdiction.

Donald M. Jenkins: Yeah, you know, as I mentioned early in my comments, and you've probably read that, one of the things was just the way they brought rate base into new rates, and so they had a shift on precedent. The other thing we're exploring is just ensuring that we are clear with the Commission's intent and guidance on how we communicate and bring forward. So we're looking at the pace at which we file. We have looked across all of our jurisdictions to continue to do an analysis with a multi-year structure in any particular jurisdictions, and Maryland is one of those we have considered and analyzed.

Donald M. Jenkins: Yeah.

Donald M. Jenkins: I mentioned earlier in my comments and you've probably read that one of the things was just the way they bring a rate base into new rates and so they had a shift on precedent. The other thing. We're exploring is just ensuring that we are clear with the commission's intent and guidance on how we communicate and bring forward. So we're looking at the <unk>.

Donald M. Jenkins: <unk> in which we file we have looked across all of our jurisdictions to continue to do an analysis with a multiyear structure on in any particular jurisdictions in Maryland is one of those we have considered and analyzed with our multi year program make make more sense for us and for the commission to create clarity. So we continue to analyze.

Donald M. Jenkins: Would a multi-year program make more sense for us and for the Commission to create clarity? So we continue to analyze that. So, you know, from a strategy perspective, we've been very open and transparent with the Commission. They understand what we're doing and why we're doing it, and we're trying to ensure that we make that simpler for both them and us.

Donald M. Jenkins: So from a strategy perspective, we've been very open and transparent with the commission and they understand what we're doing and why we're doing it and we're trying to ensure that we make that simpler for both them and us.

Vern D. Yu: Yeah, I think, Robert, on this uplift you saw from the Maryland uplift rate case that we booked in the quarter was really, we went back to the Commission and said to them, you made some mathematical errors in your initial order. The Commission affirmed that they had made some mistakes, and we were able to have that incremental rate. Those incremental rates add to what we've already booked.

Donald M. Jenkins: I think Robert on your this uplift you saw from the Merrell line up our rate case.

Vern D. Yu: That we booked in the quarter was really we went back to the commission and said to them you made some mathematical errors in your initial order. The commission affirmed that they had made a made some mistakes and we were able to have that incremental.

Vern D. Yu: Those incremental rates added to what we've already booked.

Robert Catellier: Okay, great. I got it.

Speaker Change: Okay, Great got it.

Speaker Change: Thank you.

Adam Mcknight: And this concludes the Q&A portion of today's call. I will turn the call back over to Mr. McKnight.

Adam Mcknight: And this concludes the Q&A portion of today's call I will turn the call back over to Mr. Mcknight.

Adam Mcknight: Thanks, Sylvia. And thank you everyone once again for joining our call today and for your interest in AltaGas. That concludes our call this morning. You may now disconnect your phone lines.

Mcknight: Thanks, Kelly and thank you everyone. Once again for joining our call today and for your interest in Ulta gas that concludes our call. This morning, you may now disconnect your phone lines.

Adam Mcknight:

Adam Mcknight: Okay.

Adam Mcknight: Yes.

Adam Mcknight: Hum.

Adam Mcknight: Yeah.

Q1 2024 AltaGas Ltd Earnings Call

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