Q1 2024 Hydro One Limited Earnings Call

Yeah.

Operator: Good morning, ladies and gentlemen, and welcome to Hydro One Limited's first quarter 2024 Analysts' Teleconference. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: Good morning, ladies and gentlemen, and welcome to the Hydro one limited's first quarter 'twenty 'twenty four analyst teleconference.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question. During this session you will need to press star one wanted to get a telephone.

Speaker Change: You will then hear an automated message advising your hand is raised.

Speaker Change: So draw your question. Please press star one again as.

Speaker Change: As a reminder, this call is being recorded.

Operator: To withdraw your question, please press star 11 again. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Omar Javed, Vice President, Investor Relations at Hydro One. Please go ahead.

Omar Javed: I would now like to introduce your host for today's conference Mr. Omar job at Vice President Investor Relations at Hydro one. Please go ahead.

Omar Job: Yeah.

Omar Javed: Good morning, and thank you for joining us on Hydro One's quarterly earnings call. Joining us today are our President and CEO, David Lebeter, and our Chief Financial and Regulatory Officer, Chris Lopez. In today's call, we will provide an overview of our quarterly results, and then we will take some time answering questions as time permits. There are also several slides that illustrate some of the points we'll address in a moment. They should be up on the webcast now, or if you're dialed into the call, you can find them on Hydro One's website in the Investor Relations section under Events and Presentations.

Omar Javed: Good morning, and thank you for joining us and hydro one's quarterly earnings call.

Omar: Joining us today are our president and CEO, David <unk>, and our Chief financial and regulatory Officer, Chris Lopez.

On the call today, we will provide an overview of our quarterly results and then we will take some time answering your questions as time permits.

Omar: There are also several slides that illustrate some of the points, we will address in a moment.

Omar: Should be up on the webcast now or if you're dialed into the call you can find them in hydro one's website in the Investor Relations section under events and presentations.

Today's discussions will likely touch on estimates and other forward looking information.

Omar Javed: Today's discussions will likely touch on estimates and other forward-looking information. You should review the cautionary language in today's earnings release and our MD&A, which we filed this morning regarding the various factors, assumptions, and risks that could cause our actual results to differ as they all apply to this call. With that, I'll turn the call over to our President and CEO, David Lebeter. Thank you, Omar.

Omar: You should review the cautionary language in today's earnings release, and our MD&A, which we filed this morning regarding the various factors assumptions and risks that could cause our actual results to differ as they all apply to this call.

David: With that I'll turn the call over to our President and CEO David leader.

David Lebeter: Good morning, and thank you for joining us for our first quarter 2024 earnings call. Before we start, I'll touch on safety. It's at the core of our business and among the first of our corporate values. Sadly, this quarter, two employees were seriously injured while at work. While we won't discuss the specifics as the investigations are ongoing, it will take a long time for our teammates to heal physically and emotionally. These injuries are a stark reminder of the unforgiving nature of our daily jobs.

David Leader: Thank you Omar good morning, and thank you for joining us for our first quarter 2024 earnings call.

David Leader: Before we start I will touch on safety is at the core of our business and then among the first of our corporate values. Sadly this quarter two employees were seriously injured while at work.

David Leader: While we won't discuss the specifics of the investigations are ongoing it will take a long time for our teammates to heal physically and emotionally these.

David Leader: These injuries are a stark reminder of the unforgiving nature of our daily jobs at Hydro one safety goes beyond policies and procedures and must remain firmly ingrained in our culture.

David Lebeter: At Hydro One, safety goes beyond policies and procedures and must remain firmly ingrained within our culture. We are committed to zero life-altering injuries and that every employee returns home safely at the end of each day. With continued focus, eliminating all serious injuries is achievable.

David Leader: We are committed to zero life altering injuries and that every employee returns home safely at the end of each state continued focus eliminating all serious injuries is achievable.

David Lebeter: Moving on to our update, on today's call, I'm excited to share a refreshed corporate strategy and highlight some key accomplishments that occurred during our first quarter. Chris will then dive deeper into the financial results of the quarter. Delivering on our existing strategy has created exceptional value for Ontarians, our customers, shareholders, and partners. We have made critical strategic investments in our system to build a more modern, intelligent grid, which enables evolving technologies and the increased integration of distributed energy resources.

David Leader: Moving on to our update and today's call I'm excited to share our refreshed corporate strategy and highlight some key accomplishments that occurred during our first quarter. Chris will then dive deeper into the financial results for the quarter.

David Leader: Delivering on our existing strategy has created exceptional value from Terry our customers shareholders and partners made critical strategic investments in our system to build a more modern intelligent grid, which enables evolving technology and the increasing integration of distributed energy resources.

David Lebeter: Through these investments, we play a critical role in supporting long-term sustainable economic growth. Not only have we built a reputation for keeping the lights on and restoring power quickly, but we are also delivering major transmission projects on time and on budget. These are some of the reasons why we are now entrusted to build 9 transmission projects in the province. We build strong relationships and trust with many of our partners, including Indigenous communities, municipalities, residents, and the government.

David Leader: Through these investments we play a critical role in supporting long term sustainable economic growth.

David Leader: Not only did we build a reputation for keeping our lifeblood and restoring power quickly but are also delivering major transmission project on time and on budget and these are some of the reasons why we are known trusted to build nine transmission project in the province.

David Leader: We built strong relationships and trust with many of our partners, including indigenous communities municipalities residents and the government, we invest economic reconciliation with indigenous communities through the development of our industry, leading 50, 51st Nations equity model for major projects and true economic benefits flow back to indigenous communities.

David Lebeter: We advance economic reconciliation with Indigenous communities through the development of our industry-leading 50-50 First Nations equity model for major projects, ensuring economic benefits flow back to Indigenous communities. We implemented programs and tools for our customers that make it easier to do business with us and show them that we care. This resulted in the highest customer satisfaction and overall favorable impression score since the IPO.

David Leader: Yes.

David Leader: We implemented programs and tools for our customers that make it easier to do business with us and show them that we care. This resulted in the highest customer satisfaction and overhaul overall favorable impression score since the IPO in summary, our existing strategy laid a strong foundation to prepare us as we entered a period of change within the industry.

David Lebeter: In summary, our existing strategy laid a strong foundation to prepare us as we enter into a period of change within the industry. If the previous strategy yielded such significant success, you might wonder why we would now change course. In fact, we are not fundamentally changing our direction.

David Leader: If the previous strategy has yielded some significant success you might wonder why we would now changed course.

David Leader: In fact, we are not fundamentally changing our direction.

David Lebeter: We are delivering a refreshed corporate strategy that builds on what we have done well and sets out the priorities that will meet the pace of changes in our industry and the evolving expectations of our customers. Emerging technologies are shaping how, when, and where our customers use electricity. From the cars they buy, how they monitor electricity consumption, to participating in the energy market, our customers are making energy-related decisions and have evolving expectations of the services they are provided. Not too long ago, visionary people used to talk about sustainable, clean energy.

David Leader: We are delivering our refreshed corporate strategy that builds on what we have done well and set the priorities that will meet the pace of change within our industry and the evolving expectations of our customers.

David Leader: Emerging technologies are shaping how when and where our customers use electricity from the cars they buy how they monitor electricity consumption.

David Leader: Dissipated in the energy market, our customers are making energy related decision and have evolving expectations of the services they are providing.

David Leader: Not too long ago. This narrowed people used to talk about sustainable clean energy.

David Lebeter: Today, enabling it is a business imperative. We need to remain agile and flexible to meet the changing demand and the changing landscape. Our priorities set the foundation of a refreshed strategy. They are, one, to enrich our customers' experience. 2. Enhance grid value needed for sustainable economic growth. 3.

David Leader: Today, enabling it is a business imperative, we need to remain agile and flexible to meet these changing demand and the changing landscape.

David Leader: Or priority set the foundation of our refresh strategy.

David Leader: Our one and Richard our customers experience.

David Leader: To enhance grid value needed for sustainable economic growth.

David Lebeter: Create new solutions for an electrified future, and 4. Win with partners. At the heart of this strategy is a focus on our customers. Our customers expect more proactive services and solutions and information to make informed decisions. We will ensure we understand and meet our customers' evolving needs, all the while delivering an easy and exceptional customer experience. We've already made strides in this area, but there's more work to do across each different customer segment and throughout each customer's journey.

David Leader: Three create new solutions for an electrified future and four win with partners.

David Leader: At the heart of our strategy to focus on our customers our customers expect more proactive services and solutions and information to make informed decision. We will ensure we understand and meet our customers' evolving needs all the while delivery easy an exceptional customer experience. We've already made strides in the area, but there's more work to do across each different customer segment.

David Leader: And throughout each customer's journey.

David Lebeter: With the increasing electrification of transportation, buildings, and industry, combined with population growth, we anticipate the need to deliver more for our customers in the coming years. We will find innovative and sustainable ways to accommodate this growth outside of the traditional solution.

David Leader: With the increasing electrification of transportation buildings and industry combined with population growth, we anticipate the need to deliver more for our customers in the upcoming year, we will find innovative and sustainable ways to accommodate this growth outside of the traditional solutions. In addition to optimizing our existing assets to create more value we will.

David Lebeter: In addition to optimizing our existing assets to create more value, we will look at both regulated and unregulated opportunities to meet this challenge. We also acknowledge that partners are core to this priority. Together, we will deliver sustainable growth and ensure we meet the needs of their communities now and for future generations. We have a vital role to play in enabling Ontario's transition towards the shared goal of decarbonization, whether it's connecting green steel or EV battery manufacturing or simply enabling the bidirectional movement of electrons arising from increased battery storage and EV adoption. As technology advances for both us and our customers, it's necessary that we stay ahead of the curve by anticipating, adapting, and evolving alongside these changes. Central to this will be ensuring that we make informed, data-driven decisions.

David Leader: At both regulated and unregulated opportunities to meet this challenge.

David Leader: We also acknowledge the partners are core to this priority together, we will deliver sustainable growth and ensure we meet the needs of their communities now and for future generations.

David Leader: We have a vital role to play in enabling Ontario's transition towards a shared goal of de carbonization, whether it's connecting greenfield or EV battery manufacturing or simply enabling bi directional movement of electrons arising from increased battery storage EV adoption.

David Leader: Technology advances for both us and our customers.

David Leader: We stay ahead of the curve by anticipating adapting and evolving alongside these changes.

David Leader: Central to this will be ensuring we make informed data driven decisions.

David Lebeter: As such, we plan to expand our advanced analytics and digital capabilities to manage this electrified future. This also means we will collaborate with others within our sector and beyond to foster innovation and accelerate the development of new solutions to shape the future. Powerful alliances between Hydro One, Indigenous communities, all levels of government, regulatory bodies, associations, vendors, and industry partners have been essential to provide stable, reliable, and affordable electricity to Ontarians.

David Leader: As such we plan to expand our advanced analytics and digital capabilities to manage this electrified future <unk>.

David Leader: This also means we will collaborate with others within our sector and beyond to foster innovation and accelerate the development of new solutions to shape the future.

David Leader: Powerful alliances between hydro one indigenous communities all levels of government regulatory bodies associations vendors and industry partners have been essential to provide stable and reliable and affordable electricity to Ontario.

David Lebeter: Looking ahead, we must continue to collaborate. As an industry, we are much stronger when we work together and create mutually beneficial solutions. We all have a part to play to enable a net zero future. Combining our strengths and resources, we can leverage each other's unique perspectives and capabilities to drive innovation and achieve our shared goals. Of course, the successful execution of our strategy relies on our skilled employees.

David Leader: Looking ahead, we must continue to collaborate as an industry. We are much stronger when we work together.

David Leader: Mutually beneficial solutions.

David Leader: We all have a part to play to enable a net zero future combining our strengths and resources, we can leverage each other's unique perspective and capabilities to drive innovation and achieve our shared goals.

David Leader: Of course, the successful execution of our strategy relies on our skilled employees, we have a robust pool of talent with deep expertise matches unwavering dedication to our customers. This is an exciting time and our people will undoubtedly be a point of strength for us as we develop new capabilities to meet the evolving energy landscape and deliver on our plans.

David Lebeter: We have a robust pool of talent with deep expertise, matched with unwavering dedication to our customers. This is an exciting time, and our people will undoubtedly be a point of strength for us as we develop new capabilities to meet the evolving energy landscape and deliver on our plans. On this note, I am pleased to announce the addition of some new talent to our executive team to help us deliver on our strategic objectives.

Speaker Change: On this note I am pleased to announce the addition of some new talent to our executive team to help us deliver on our strategic objectives and March Rene Mckenzie joined Us as our executive Vice President of digital and Technology solutions. Rene is an experienced technology executive with more than 24 years of delivering engaging application.

David Lebeter: In March, Renee McKenzie joined us as our Executive Vice President of Digital and Technology Solutions. She is an experienced technology executive with more than 24 years of delivering engaging applications, modern infrastructure, and personalized experiences to employees and customers.

Speaker Change: Infrastructure and personalized experiences to employees and customers based on her background and experience you can see how she is the right person to implement our data driven corporate strategy in the coming years.

David Lebeter: Based on her background and experience, you can see how she is the right person to implement our data-driven corporate strategy in the coming year. I'm also delighted to announce that Lisa Pearson has joined Hydro One as our Senior Vice President, Corporate Affairs. Lisa is a transformational executive with extensive experience advising boards and executive teams. She will apply her broad, private, public, and not-for-profit sector knowledge to continue to strengthen our reputation and deepen our relationships with customers, government, and stakeholders. In addition to Rene and Lisa's updates, I am pleased to announce that, after an extensive internal and external search process, we are in the final stages of filling the CFO position.

Speaker Change: I'm also delighted to announce that Lisa Pearson joined <unk> as our senior Vice President Corporate Affairs.

Lisa Pearson: This is a transformational executive with extensive experience advising boards and executive teams. She will apply her broad private public and not for profit sector knowledge to continue to strengthen our reputation and deepen our relationship with customers government and stakeholders.

Lisa Pearson: In addition to Renee and leases up eight I am pleased to announce that after an extensive internal and external search process. We are in the final stages of filling the CFO position, we expect to make an announcement of the very near future.

David Lebeter: We expect to make an announcement in the very near future. Turning to the quarterly update, there are several important developments I'd like to share with you. First, I acknowledge the efforts of our Hydro One employees, who were once again called upon to help our customers. In February and March, our teams quickly mobilized to restore power to approximately 190,000 customers impacted by damaging high winds in parts of Central, Southern, and Eastern Ontario.

Lisa Pearson: Turning to the quarterly update there are several important developments I'd like to share with you.

Lisa Pearson: <unk> acknowledged the efforts of our hydro one employees for once again called upon to help our customers in February and March our teams quickly mobilized to restore power to approximately 190000 customers impacted by damaging high winds and parts of central Southern and Eastern Ontario.

David Lebeter: Thank you for your outstanding efforts in assessing the damage, prioritizing work, and making repairs to restore power. Second, we are pleased to have received approval from the OAB for our Section 92, or Leave to Construct, filing for our Washington Transmission Line project. The $1.2 billion line, which spans approximately 360 kilometers, will be built in cooperation with First Nations partners to support economic growth in northwestern Ontario. As a reminder, Phase 1 is a double-circuit 230 kV line that will run from Thunder Bay to Atikokan, and Phase 2 is a single-circuit 230 kV line between Atikokan and Dryden.

Lisa Pearson: Thank you for your outstanding efforts in assessing damage prioritizing work and making repairs to restore power.

Second word.

Lisa Pearson: We're pleased to have received approval from the <unk> for our section 92 or leave to construct filing for our Washington transmission line project.

Lisa Pearson: The $1 $2 billion line, which spent approximately 360 kilometers with built in cooperation with first nations partners to support economic growth in northwestern Ontario.

Lisa Pearson: As a reminder, phase one of the double circuit 230 kv line that will run from Thunder Bay to Attic open in phase II. The single Circuit 230 kv line between <unk> and Dragon.

David Lebeter: Third, we received OEB approval for the acquisition of Shaft Flow Hydro, which was announced in November of 2023. We're now working on closing and integrating the acquisition by the end of this year and are excited to join their community. We look forward to sharing best practice between us so we can be efficient in our delivery of services to the community. We are confident that this will be a positive experience for SHPLO's customers and employees and will be an example for other communities who wish to do the same.

Lisa Pearson: Third we received OCC approval for the acquisition of chef will hydro, which was announced in November of 2023.

Lisa Pearson: We're now working on closing and integrating the acquisition by the end of this year and are excited to join their community.

We look forward to sharing best practice between us. So we can be efficient in our delivery of services to the community. We are confident that this will be a positive experience for <unk> customers and employees and will be an example for other communities who wished to do the same more broadly we continue to engage with other local electricity distribution companies and look for additional opportunities to facilitate <unk>.

David Lebeter: More broadly, we continue to engage with other local electricity distribution companies and look for additional opportunities to facilitate further consolidation within the sector. In addition to these updates, we continue to support businesses through our critical investments. We are happy to welcome Volkswagen and Stellantis as customers and support the construction of their EV battery plant.

Lisa Pearson: Further consolidation within the sector.

Lisa Pearson: In addition to these updates we continued support businesses through our critical investments.

Lisa Pearson: We're happy to welcome Volkswagen has collapsed as customers and support the construction of their EV battery plants. In addition, we welcome the recent announcement by Honda for the creation of Canada's first comprehensive electric vehicle supply chain.

David Lebeter: In addition, we welcome the recent announcement by Honda of Canada on the creation of Canada's first comprehensive electric vehicle supply chain. As the largest transmitter of electricity in the province, Hydro One is ready to support Honda and other large manufacturers as we enable economic growth in Ontario. Moving on to broadband, I have some additional clarity today that I'd like to share. Hydro One continues to work with telcos and internet service providers, or ISPs, to advance the delivery of high-speed internet to some 700,000 Ontarians.

Lisa Pearson: As the largest transmit of electricity in the province Hydro one is ready to support Honda and other large manufacturers as we enable economic growth in Ontario.

Lisa Pearson: Moving on to broadband I have some additional clarity today, but I'd like to share Hydro one continues to work with the telco and Internet service providers or ISP to advance the delivery of high speed Internet Some 700000, Ontario.

David Lebeter: We have been ready for a while. At this stage, the existence of alternative solutions for the telcos and ISPs and the pace of orders we have received would suggest the previous expectations of approximately half a billion to one billion dollars in revenue are unrealistic. While we don't have enough orders yet to put forward a solid forecast, our expectation is that these factors will result in $300 million to $700 million worth of work being completed. This work will take place in our distribution segment and will be additive to revenue. It is worth noting these values are not factored into our earnings guidance and represent a potential growth opportunity.

Lisa Pearson: We have been ready for a while at this stage the existence of alternative solutions to the telcos and Isps and the pace of orders. We have received which suggests the previous expectation of approximately half a $1 billion to $1 billion of work is unrealistic.

Lisa Pearson: While we don't have enough orders yet to put forward a solid forecast our expectation is that these factors will result in $300 million to $700 million worth of work being completed.

Lisa Pearson: This work will take place in our distribution segment will be additive to rate base. It.

Lisa Pearson: It is worth noting these values are not factored into our earnings guidance and represent a potential growth opportunity that said, we continue to gain with the telcos and Isps and will provide an update when appropriate.

David Lebeter: That said, we continue to engage with the Telco's NISPs and will provide an update to this amount when appropriate. As I conclude my remarks, I'll highlight a few key awards that we have received recently. A key to our success has been our ability to build trusted relationships with Indigenous partners and communities. This is why Hydro One was once again proud to be a sponsor of the Little Native Hockey League, the LNHL, honoring a partnership that first began in 2003. In recognition of this historic alliance, we were humbled recently to have been inducted into the LNHL Hall of Fame as a friend of the little NHL.

Lisa Pearson: As I conclude my remarks, I will highlight a few key awards that we received recently.

Lisa Pearson: A key to our success has been our ability to build trusted relationships to indigenous partners and communities. This is why hydro one was once again proud to be a sponsor put little native Hockey League.

Lisa Pearson: Or the <unk> NHL alternative partnership that first began in 2003 and recognition of the Historic Alliance. We're humbled recently have been inducted into the NHL Hall of Fame is a friend of the little NHL, who is a great honor for us and we're very touched by the significant gesture.

David Lebeter: This is a great honor for us, and we're very touched by the significant gesture. We're also proud to have been listed in the 2024 edition of the Globe and Mail's Women Lead Year Annual Benchmark of Gender Diversity and Executive Roles in Corporate Canada, receiving this recognition as a testament to our continued efforts in building a strong and diverse executive leadership team, one that will lead us into the next phase of our corporate evolution.

Lisa Pearson: We're also proud to have been listed in the 'twenty 'twenty four edition of the Gould meals women lead here annual benchmark of gender diversity and executive roles in corporate Canada, receiving this recognition is a testament to our continued efforts in building a strong and diverse executive leadership team one that will lead us into the next phase of our corporate evolution.

David Lebeter: Lastly, in keeping with our efforts to enable decarbonization, we will recognize the corporate knights in the Global 100 list, a ranking of the world's most sustainable corporations. The Global 100 list lists the top firms that are increasing their investments in green solutions, such as renewable energy, energy efficiency, and the circular economy.

Lisa Pearson: Lastly, in keeping with our effort to enable de carbonization, we were recognized the corporate Knights in their global 100 list ranking of the world's most sustainable corporations ranking list. The top firms that are increasing their investments in green solutions, such as renewable energy energy efficiency and the circular economy. The award celebrates our relentless commitment to sustain.

David Lebeter: The award celebrates our relentless commitment to sustainability and environmental stewardship. With that, I'll turn the call over to Chris to discuss our financial results. Over to you, Chris. Thank you, David. Good morning, everyone.

Lisa Pearson: Ability and environmental stewardship.

Lisa Pearson: With that I'll turn the call over to Chris to discuss our financial results over to you Chris.

Christopher Felix Lopez: Thank you David Good morning, everyone and thank you for joining us today I am confident the refreshed corporate strategy will position <unk> for continued success in the years to come as together, we build a better future for all.

Christopher Felix Lopez: And thank you for joining us today. I am confident the refreshed corporate strategy will position Hydro One for continued success in the years to come, as together we build a better, brighter future for all. Looking at our first quarter financial results, we delivered basic earnings per share of $0.49 compared to $0.47 in the first quarter of 2023.

Christopher Felix Lopez: Looking at our third quarter financial results, we delivered basic earnings per share of 49% compared to 47 in the first quarter of 2023.

Christopher Felix Lopez: The key drivers behind the year-over-year change included higher revenues and purchase power on account of the Ontario Energy Board or OEB-approved rates for both segments, which considers the annual investment in grid or power, partially offset by higher financing charges resulting from higher weighted average interest rates on our long-term debt, as well as having a higher volume of long-term debt, and higher income tax expense when adjusted for net income neutral items, resulting from lower As a reminder, both the transmission and distribution segments had net income-neutral items in revenue, including the Deferred Tax Asset, or DTA, recovery that expired at the end of June 2023, as well as normal course regulatory adjustments. These have corresponding offsets in tax expense and OM&A, making them net income neutral.

Christopher Felix Lopez: The key drivers behind the year over year change included high revenues net of purchased power on account of Ontario Energy Board will only be approved rates for both segments, which considered the annual investment and greater power system, partially offset by higher financing charges, resulting from higher weighted average interest rate on our long term debt as well as having a high volume of long term data.

Christopher Felix Lopez: And higher income tax expense when adjusted for net income neutral items, resulting from lower deductible timing differences compared to the prior year and higher pre tax earnings.

As a reminder, both the transmission and distribution segment had net income neutral items and revenue, including the deferred tax asset or DTA recovery that expired at the end of June 2023, as well as normal course regulatory adjustments. These.

Christopher Felix Lopez: These have corresponding offsets in tax expense and eliminate making them net income neutral.

Christopher Felix Lopez: Our first quarter revenue net approaches power was high year-over-year by 0.6%. The increase is mainly due to higher revenues resulting from OEB-approved rates in both segments, coupled with higher energy consumption in the distribution segment. However, this is partially offset by the impact of lower average monthly peak demand in the transmission segment, as well as net income neutral items referenced earlier. However, revenues were lower by 0.4% compared to last year.

Christopher Felix Lopez: Our first quarter revenue net of purchase power was high year over year by 6%.

Christopher Felix Lopez: The increase is mainly due to higher revenues, resulting from OSB approved rates in both segments, coupled with high energy consumption and distribution segments. These.

Christopher Felix Lopez: These are partially offset by the impact of lower average monthly peak demand in the transmission segment as well as net income neutral items referenced earlier.

Christopher Felix Lopez: For the transmission segments.

Christopher Felix Lopez: Revenues were lower by <unk>, 4% compared to last year. The decrease was reflected in net income neutral items, coupled with lower average monthly peak demand, which was down two 1% compared to last year.

Christopher Felix Lopez: The decrease was reflective of net income-neutral items coupled with lower average monthly peak demand, which was down 2.1% compared to last year. However, these are partially offset by higher revenues resulting from the OEB-approved rate. Looking at a distribution segment, revenues that have purchased power increased by 2%, mainly due to the OEB-approved rates and higher energy consumption, which increased by 0.8% year-over-year. However, these are partially offset by net income mutual aid. On the cost front, operating maintenance and administration expenses decreased by approximately 1.8% year-over-year.

Christopher Felix Lopez: These are partially offset by higher revenues, resulting from the ODP approved rates.

Christopher Felix Lopez: Looking at distribution segment revenues net of purchased power increased by 2%, mainly due to the OMB approved rates and higher energy consumption, which increased by eight.

Christopher Felix Lopez: <unk>, 8% year over year.

Christopher Felix Lopez: These are partially offset by net income neutral items.

Christopher Felix Lopez: On the cost front operating maintenance and administration expenses in the quarter decreased by approximately one 8% year over year.

Christopher Felix Lopez: The variance was mainly due to net income neutral items. Adjusting for these net income neutral items, OM&A was in line with last year for both segments, with marginal increases in program expenditures in transition and higher allowances for doubtful accounts in distribution. Depreciation expense for the quarter was higher year-over-year by 0.8%.

Christopher Felix Lopez: <unk> is mainly due to net income neutral items.

Christopher Felix Lopez: Adjusting for these net income neutral items <unk> was in line with last year for both segments with margin increases in programming expenditures in transition and higher allowances for doubtful accounts in distribution.

Christopher Felix Lopez: Depreciation expense for the quarter was high year over year.

Christopher Felix Lopez: 8%.

Christopher Felix Lopez: This was due to growth in capital assets, which is consistent with our state of capital investment program, partially offset by lower amortization of regulatory assets. On financing, we saw an 8.8% increase in financing charges year-over-year, mainly due to a higher weighted average interest rate on our long-term debt and a higher volume of long-term debt resulting from issuances in 2023 and the first quarter of 2024. The charges were partially offset by a lower average volume of short-term notes and higher volume of short-term investments.

Christopher Felix Lopez: This was due to growth in capital assets, which is consistent with our stated capital investment program, partially offset by lower amortization of regulatory assets.

Christopher Felix Lopez: On financing, we saw an eight 8% increase in financing charges year over year, mainly due to a higher weighted average interest rate on our long term debt and high volume of long term debt, resulting from issuances in 2023 in the first quarter of 2024.

Christopher Felix Lopez: The charges are partially offset by lower average volume of short term notes and high volume of short term investments.

Christopher Felix Lopez: During the quarter, Hydro One issued $800 million of medium-term notes. This consisted of $550 million of 4.39% notes due in 2034 and $250 million of 3.93% notes due in 2029. The issuance was completed under our Sustainable Financing Framework. We continue to be pleased with the stability of our balance sheet and robust investment grade credit rating. Our income tax expense in the quarter was $51 million, compared to $64 million in the same quarter last year. However, when we adjusted for the impact of net income-neutral items, the adjusted income tax expense was higher.

Christopher Felix Lopez: During the quarter hardware and issued 800 million of medium term notes. This consisted of $550 million of 439% notes during 2034 and $250 million of 393% notes during 2029.

Christopher Felix Lopez: Issuance was completed under our sustainable financing framework.

Christopher Felix Lopez: We continue to be pleased with the stability of our balance sheet and robust investment grade credit ratings.

Christopher Felix Lopez: Our income tax expense in the quarter was $51 million compared to $64 million in the same quarter last year. However, when we adjust to the impact of net income neutral items. The adjusted income tax expense was higher.

Christopher Felix Lopez: Contributing to the increase were lower deductible timing differences compared to last year and higher adjusted pre-tax earnings. The effective tax rate this quarter was 14.7% versus the effective tax rate last year of 18.4%. This rate is consistent with our tax guidance of 13-16% for the remainder of the JRAP period. Moving to our investing activities, in the first quarter, we placed $240 million of assets in service for our customers, which was an increase of 1.3% compared to the prior year.

Christopher Felix Lopez: Contributing to the increase were lower deductible timing differences compared to last year and higher adjusted pretax earnings.

Christopher Felix Lopez: Our effective tax rate this quarter was 14, 7% versus the effective tax rate last year of 18, 4%.

Christopher Felix Lopez: This rate is consistent with our tax guidance of 13% to 60% for the remainder of the <unk> period.

Christopher Felix Lopez: Moving to our investing activities in the first quarter, we placed $240 million of assets and service for our customers, which was an increase of one 3% compared to the prior year.

Christopher Felix Lopez: In the transmission segment, we saw a decrease of 44.3% year-over-year, primarily attributed to the timing of assets placed in service for station refurbishments and replacements in the prior year, partially offset by a high volume of wood pole replacements.

Christopher Felix Lopez: In the transmission segment, we saw a decrease of 44, 3% year over year, primarily attributable to the timing of assets placed in service the station Refurbishments and replacements in the prior year, partially offset by a high volume of wood pole replacements.

Christopher Felix Lopez: In the distribution segment, in-service additions increased by 41% from the prior year due to a higher spend on line refurbishments and wood pole replacements, as well as customer connections. Also contributing to the increase was a higher spend on minor fixed assets, system capability reinforcement projects, and a higher volume of storm-related asset replacements from earlier this year. In terms of our capital investments for the first quarter, we invested $673 million, which was an increase of 34.9%.

Christopher Felix Lopez: In the distribution segment in service additions increased by 41% from the prior year due to a highest spend online refurbishments and look for replacement as well as customer connections.

Christopher Felix Lopez: Also contributing to the increase was the highest spend on minus fixed assets system capability reinforcement projects and a high volume of storm related asset replacement from earlier this year.

In terms of our capital investments for the first quarter, we invested $673 million, which is an increase of 34, 9%.

Christopher Felix Lopez: The increase resulted from both the transmission and distribution segments on account of higher volumes of refurbishments and replacements, higher volumes of customer connections, as well as investments in new transmission lines and initiatives. However, these are partially offset by a lower spend on IT initiatives due to the execution of major projects in the prior year.

Christopher Felix Lopez: The increase resulted from both transmission and distribution segments on account of higher volumes of Refurbishments and replaces high volumes of customer connections as well as investments in new transmission lines and initiatives.

Christopher Felix Lopez: These are partially offset by a low spend on initiatives due to the execution of major projects in the prior year.

Christopher Felix Lopez: On guidance, we reaffirm our previous target of 5% to 7% growth for earnings per share through 2027 on the normalized 2022 EPS of $1.61. As a reminder, the EPS guidance range does not factor in growth from broadband, LDC consolidation, the transmission lines that have been previously awarded but only have preliminary estimates, or any amounts from externally driven variances. Given Watsigan's successful Section 92 approval, we have included it in our estimates, but at this stage, there is no change to the guidance range.

Christopher Felix Lopez: On guidance, we reaffirm our previous target of 5% to 7% growth for earnings per share through 2027 on the normalized 2020 to EPS of $1 61.

Christopher Felix Lopez: As a reminder, EPS guidance range does not factor in growth from broadband LDC consolidation. The transmission lines that had been previously awarded early preliminary estimates or any amounts from externally driven variance accounts.

Christopher Felix Lopez: Once again successful section 92 approval. We have included in our estimates but at this stage there is no change to the guidance range.

Christopher Felix Lopez: Finally, I am pleased to report, in line with our long-term guidance, we declared a dividend to common shareholders of $31.42 per share. Before I turn the call back, as many of you know, this will be my last earnings call with Hydro One. I would like to take this opportunity to thank David, members of the executive team, the board, and all the hardworking employees of Hydro One with whom I've had the pleasure of working for over the past eight years.

Christopher Felix Lopez: Finally, I am pleased to report in line with our long term guidance, we declared a dividend to common shareholders of $31 <unk> per share.

Speaker Change: Before I turn the call back as many of you know this will be my last earnings call with hydro one.

I would like to take this opportunity to thank David members of the executive team the board and all the hard working employees of hydro, one with whom I've had the pleasure of working with over the past eight years.

Christopher Felix Lopez: I would also like to thank our investors, the analyst community, partners, and all other stakeholders that I've come to know during my time at Hydro One. Together, we have, and I'm confident you will, continue to deliver a better, brighter future for all. I'll stop there, and we'd be pleased to take your questions. Thank you, David and Chris.

Speaker Change: I would also like to thank our investors the analyst community partners and all other stakeholders that I've come to know during my time at Hydro one.

Speaker Change: Together, we have and I am confident you will continue to deliver a better product future role.

Speaker Change: I'll stop there and we'd be pleased to take your questions.

Omar Javed: We asked the operator to explain how they'd like to organize the Q&A polling process. In case we can't address your questions today, my team and I are always available to respond to any follow-up questions. We ask that you limit your questions to one question and one follow-up. If you have additional questions, we request you to rejoin the conversation. Please go ahead.

Speaker Change: Thank you, David and Chris we ask the operator to explain how they'd like to organize the Q&A polling process.

Speaker Change: In case, we can address your questions today my team and I are always available to respond to any follow up questions. We ask that you limit your questions to one question and one follow up.

Speaker Change: If you have additional questions. We request you to rejoin the queue. Please go ahead operator.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Operator: Thank you Andrew.

Speaker Change: A reminder to ask a question. Please press star one one you touched on telephone and wafer name to be announced.

Speaker Change: Withdraw your question. Please press star one again.

Operator: Please stand by; we'll compile the Q&A roster. Our first question comes from the line of Ben Pham with BMO. Your line is now open. Hi, thanks. Good morning.

Speaker Change: Please standby will compile the Q&A roster.

Speaker Change: Our first question comes from the line of Ben Pham with BMO. Your line is now open.

Benjamin Pham: Hi, Thanks, good morning.

Benjamin Pham: Maybe on your comments on the broadband discussions you've had in <unk>.

Benjamin Pham: Some of the updated estimates you've provided.

Benjamin Pham: How do you think about the timing.

Benjamin Pham: Is that true.

Benjamin Pham: And into rate base.

Benjamin Pham: Is this more really outcome of these discussions more a matter of just maybe a delay or timing.

Curt: Sanjay this is curt versus an overall change in scope.

Benjamin Pham: Maybe in your comments on the broadband discussions you've had and some of the updated estimates you provided, how do you think about the timing of that $300 to $700 million into rate base? And is this more really the outcome of these discussions, more a matter of just maybe delay or timing? Changes versus an overall change in scope. Good morning, Ben. It's David Lebeter.

Curt: Good morning, Ben It's David Leadbetter nice to hear you.

David Lebeter: The overall scope has not changed. The province remains committed to providing high-speed internet service to 700,000 Ontarians, and we remain committed and ready to support that initiative on their behalf. They've just been slower, as I've said in the past, in getting started. We are seeing an increase. It is picking up.

Sanjay: The overall scope has not changed province remains committed to providing high speed Internet service to 700000, Ontario, and we can remain committed and ready to support that initiative on their behalf they've just been slower as I've said in the past and getting started.

Sanjay: We're seeing an increase it is picking up and.

David Lebeter: And they are using a little bit more plowing or underground than we anticipated, and more than they indicated at the initial onset of the program. And in some cases, they're choosing to go with wireless, which is why we've adjusted our guidance. And just adding to that, it will all be in service during the current rate period, so whatever that range is, whatever it proves to be, will all be in service and counted in the growth rate by the end of the year. Okay.

Sanjay: And they are using a little bit more plowing, our underground than we anticipated.

Sanjay: And more than they indicated the initial onset of the program and in some cases are choosing to go with wireless which is why we've adjusted our guidance.

Speaker Change: And just adding to that it will all be in servicing the current rate period, whatever that range is.

Speaker Change: It proved to be will all be in service and confident in the growth rate by the end of 2007.

Benjamin Pham: And in your refresh strategy, you mentioned regulated and non-regulated opportunities as part of your capital allocation. Has that changed from before? Is it still a non-regulated asset that you're in now, and is this still up to that max 10% of the business? Yeah, nothing's changed there, Ben. We still have the three non-regulated entities, IV, our car charging network, AUX, which is in the battery solutions business, and Acronym, which is our telco. Okay, that's great.

Speaker Change: Okay got it.

Speaker Change: And on your refresh strategy you mentioned.

Our regulated and our non nonregulated opportunities.

Speaker Change: As part of here.

Speaker Change: The allocation is that has.

Speaker Change: Has that changed from before is it still.

Speaker Change: Nonregulated.

Speaker Change: Assets that Youre in now and is this still up to that Max 10% that business yes.

Speaker Change: Yes, nothing has changed there had been we still have the three nonregulated entities.

Speaker Change: <unk>, our car charging network <unk>, which is in the battery solutions and acronym which is our total.

Speaker Change: Yeah.

Sure.

David Lebeter: And Chris, all the best in your next venture. Thank you, Ben. Thank you. Our next question comes from the line of Maurice Choy with RBC Capital Markets. Your line is now open. Thanks, and good morning, everyone.

Speaker Change: Okay.

Speaker Change: And Chris that's in your next venture.

Christopher Felix Lopez: Thank you Ben.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Maurice Choy with RBC capital markets. Your line is now open.

Maurice Choy: It's not immediately clear to me how the strategy is clearly different from the previous strategy. So if I could just ask you to help me tangibly put it, what has changed here? I know you mentioned finding innovative and sustainable ways to accommodate growth. What does that all mean in terms of what you're going to offer? The reason we called it a refresh strategy is because it is not a revamp.

Maurice Choy: Thanks, and good morning, everyone. Maybe you can just pick up on the refresh strategy, it's not immediately clear to me how that strategy.

Maurice Choy: Clearly different from the previous strategy. So if I could just ask you to help me tangible be put it in.

Maurice Choy: Thats changed here.

Maurice Choy: I know you mentioned.

Maurice Choy: Being innovative and sustainable ways to accommodate growth.

Maurice Choy: That will mean in terms of what you can offer.

Speaker Change: Sure. Thanks for the question <unk>.

Speaker Change: The reason, we call that a refresh strategy because it is not a revamp is indicating to Mike earlier comments. Our previous strategy is highly successful what youll see is changed if you were to go back compare that too is we changed our approach to customer want to provide excellent customer service, whereas the previous strategy, we talked about advocating for the customers. So we're really focusing on.

David Lebeter: As I indicated in my earlier comments, our previous strategy was highly successful. What you'll see has changed, if you were to go back and compare the two, is we've changed our approach to customers. We want to provide excellent customer service, whereas in the previous strategy, we talked about advocating for the customers. We're really focusing on the full range of customers, from residential through to industrial, understanding what their needs are, and perhaps rather than waiting for them to say, this is what we want to do, getting involved early so we can help them shape what their electrification journey would look like. The other significant change is that we had ISD or IT as a support function. We've moved that right up to the front.

Speaker Change: The full range of customers from our residential through the industrial understanding what their needs are and perhaps rather than waiting for them to say this we want to do getting involved early so we can help them shape with their electrical electrification journey would look like the other significant changes we had.

Speaker Change: <unk>.

Speaker Change: It is still as a support function, we've moved that right up to the front, we see that having an enhanced data capabilities with digital capability is going to be integral to our success in integrating the modern smart distribution grid into an already intelligent transmission grids are really doubling down on that which is why I'm. So pleased to announce that Rene Mckenzie.

David Lebeter: We see that having enhanced data capabilities or digital capability is going to be integral to our success in integrating the modern smart distribution grid into an already intelligent transmission grid. So really doubling down on that, which is why I'm so pleased to announce that Renee McKenzie has joined us. Those will be the two biggest changes. Of course, we're still going to remain focused on excellence in delivering on our capital program, both in distribution and on the transmission side, and provide incredible customer service in terms of restoring power in times of a storm. I got it.

Rene Mckenzie: He is joined US those would be the two biggest changes of course, we're still going to remain focused on excellence in delivering on our capital program, both in distribution and on the transmission side and providing incredible customer service in terms of restoring power in terms of storms.

David Lebeter: And if I think about the investments, both OpEx and CapEx that go into all this, is this something that's done within the current rate envelope, or is this something that you will have to spend first and then request rates in the next five-year application? No, it will be contained within the current rate envelope. What we're doing is restructuring some of the expenses that we had planned to make sure they align with the refresh strategy.

Speaker Change: Got it and if I think about the investments both opex and Capex that go into all of this is this something that within the.

Right.

Speaker Change: Or is it something that you still have to spend first and then request for it.

Speaker Change: And our next five year application.

Speaker Change: No it will be contained within the current rate envelope. What we're doing is restructuring some of the expenses that we had planned to make sure. They align with the refresh strategy a lot of what we're doing is already in the current envelope such as rolling out our smart meter our second generation smart meters. That's a foundational piece for the distribution grid of the future that was already and we are going to take.

David Lebeter: A lot of what we're doing is already in the current envelope, such as rolling out our smart meter, our second generation of smart meters. That's a foundational piece for the distribution grid of the future.

David Lebeter: We are going to take a look at our IT stack to make sure we have the right programs that we're rolling out there. I can just finish off with the broadband rollout. So you now have a revised work estimate of $300 to $700 million. Historically, I suppose this has provided an upside potential for your EPS guidance as well as your rate-based CAGRs. If you could help us just help quantify, you know, in basis points or even EPS upside, what would this new revised work estimate be?

Speaker Change: Look at our it stack to make sure we have the right programs that we're rolling out there.

Speaker Change: And instead, if I can just finish off with the broadband rollout. So you now have to revise work estimate of $300 million to $700 million.

Speaker Change: Historically its processes provides upside potential to your EPS guidance as well as to a rate based CAGR.

Speaker Change: If you could help us just help kind of quantify in basis points or even EPS upside.

Speaker Change: New advisory work is nippy.

David Lebeter: I think, Maurice, what we talked about in the past was we were saying half a billion to a billion and a billion. I think we had that as a hundred basis points. So you can work off, is that correct, Chris? One percent. One percent.

Speaker Change: I think.

Speaker Change: Most what we talked about in the past.

Speaker Change: Seeing the $5 billion to 1 billion ended 1 billion I think we had that as a 100 basis points. So you can work off.

Speaker Change: <unk> one.

Speaker Change: 1% to 10%.

David Lebeter: But I think, Maurice, to put it in an easier way, it's got the same economics as our distribution business, so it gets the same ROE, 9.36 percent when it goes in service. It will all go in service by the end of this rate period, so you can take whatever number you want in that range, take the midpoint, half a billion dollars, and you can do your calculation. You can work it out pretty quickly.

Speaker Change: I think <unk> been easy way.

Speaker Change: The same economics as a distribution business. So it gets the same ROE a 936%.

John Doe: When it goes in service it will all go in service by the end of this rate period. So you can take whatever number you want to net range take the midpoint half a billion dollars and you can apply your calculation you can wake up pretty pretty quickly I think it will come out at 1 billion. It would've been at the St and half a billion would be opposite.

David Lebeter: I think it will come out at one billion, it would have been a percent and half a billion, And from memory, you're not, the dividend is not going to change this rate-based EPS growth. Dividends are going to see it. Yeah, so Maurice, that will be a decision for the board and now the next CFO to recommend to David. So I think I've communicated previously that we would look at it and speak to shareholders, that's still, and all stakeholders. That is still a case.

John Doe: And from memory Youre not.

Speaker Change: Dividend I'm going to chase this rate base EPS growth.

Speaker Change: The dividend is going to see it.

Speaker Change: Alright.

Speaker Change: Yes.

David: That will be a decision for the board and now the next CFO to recommend to David say.

David: <unk> communicated previously that we would look at it and speak to shareholders. That's still the spend all stakeholders that is still the silicate.

David Lebeter: So it's possible it could go up; it's not going to chase it to 10, I think I said in the past when I expected growth to go much higher than that in the next joint rate application, but it could go to seven. This is perfect.

David: Is it possible it could go up it's not going to chase. It to 10 I think is what I said in the past when I expect growth to go much higher than that in a.

Speaker Change: Joint ratification, but it could go to seven.

Maurice Choy: Thank you very much for everything, and thanks for the good years, Chris. I'll see you around. Thanks, Brian. Thank you. Our next question comes from the line of Linda Ezergailis with TD Cowen. Your line is now open.

Christopher Felix Lopez: Perfect. Thank you very much for everything and thanks sort of get years, Chris is here.

Thanks, Brian.

Linda Ezergailis: Thank you. Our next question comes from the line of Linda <unk> with TD Cowen. Your line is now open.

Linda Ezergailis: And before I jump into my question, I wanted to make sure I congratulate Chris on his successful contributions and time at Hydro One. It's been a real pleasure getting to know you. Thank you very much, Linda.

Linda Ezergailis: Thank you and before I jump into my question I wanted to make sure I congratulate Chris on his successful contributions in time of hydro one and it's been a real pleasure getting to know you.

Linda Ezergailis: Thank you very much.

Christopher Felix Lopez: So, maybe just to double-check on your strategy, what are the updated, evolved thoughts on geography? Is the expectation that the focus remains on Ontario, or is there maybe some evolving thought on the merits of toeholds and other jurisdictions? And then, similarly, recognizing that your unregulated business is likely to remain relatively small, can you comment on the merits of considering owning any infrastructure beyond electric transmission and electric distribution? Thanks for the questions, Linda. In terms of geography, we are naturally going to remain focused on Ontario.

Linda Ezergailis: So maybe just just to double check on your strategy.

Speaker Change: What are the updated evolved thoughts on geography.

Speaker Change: Expectation that the focus remains on Ontario.

Speaker Change: Or is there any.

Speaker Change: Evolving thoughts on the merits of a toehold in other jurisdictions and then similarly.

Speaker Change: Recognizing that your unregulated businesses is likely to remain relatively small can you comment on the.

Speaker Change: The merits of considering owning any infrastructure beyond electric transmission and electric distribution.

David Lebeter: Ontario is growing rapidly. There are significant investments that need to be made in this province. That's why we have nine transmission lines.

Speaker Change: Great. Thanks for the questions Linda.

Linda: In terms of geography, we're naturally going to remain focused on Ontario, Ontario is growing rapidly there significant investments that need to be made in this province.

Linda: That's why we have the nine transmission lines, we see significant investments coming also on the distribution sector.

David Lebeter: We see significant investments coming also in the distribution sector, with the recent announcement of the LT1 by the Ontario Independent Electric System Operators. We're going to not, everything we do will not sacrifice our focus on Ontario. We see that as our primary toehold. That being said, we're not looking outside the province, but if something came along that had really strong adjacencies and wouldn't distract us, we would take a look at it.

Ontario: With the recent announcement of VLT won by the Ontario.

Ontario: Independent electric system, operator, so we're going to not everything we do will not sacrifice our focus on Ontario, and we see that as our primary toehold that being said, we're not looking at outside the province, but if something came along that had really strong adjacencies in wouldn't distract us we would take a look at it said that in all of the investor conferences, but we're not looking outside the province, we're focused on what is going on.

David Lebeter: Said that at all of the investor conferences, but we're not looking outside the province. We're focused on what is going on inside Ontario. We just see tremendous growth here. And remind me of your second question: oh, they're unregulated. The Unregulated Regulated, but other than electric transmission and electric distribution.

Ontario: Inside Ontario, we just see tremendous growth here.

Ontario: And remind me of your second question they are unregulated.

Ontario: The unregulated aspects.

Speaker Change: I'm, sorry can reasonably be labeled regulated but other than electric transmission and electric distribution, so whether it would be natural gas distribution transmission.

David Lebeter: So whether it be natural gas distribution, transmission, maybe some, you know, power generation, etc., that could be regulated. But now, at this time, we're not.

Ontario: Maybe some.

Ontario: Our.

Speaker Change: Generation et cetera that could be regulated.

Speaker Change: Now at this time, we're not.

David Lebeter: At this time, we're not looking at all of them. We're going to stay with the wires business. We know that business, distribution and transmission. We're not looking at getting into the gas business, the water business, or the generation business.

Speaker Change: At this time, we're not looking at that all we're going to stay with the wires business, we know that business distribution and transmission.

Speaker Change: We're not looking at getting into the gas business, the water business or the generation business.

David Lebeter: And just as a follow-up, looking at your talent to execute on your refresh strategy, you've appointed Rene and Lisa, which is great. You're almost close to finalizing your CFO search. Just wondering if you can give us an update more broadly at all levels of your organization, where you see any gaps in talent and how you're looking to address that, including maybe the demographic kind of shape of the age of your employees as well.

Speaker Change: Thank you and just as a follow up.

Speaker Change: Looking at your talent to execute on your refresh strategy.

Speaker Change: Yes.

Rene Mckenzie: Pointed Rene and Lisa which is great you Aman.

Speaker Change: Almost close to finalizing your CFO search just wondering if you can give us an update more broadly at all levels of your organization.

Speaker Change: Where you see any gaps potentially.

Speaker Change: Talent, and how youre looking to address that including maybe the demographic.

Speaker Change: Kind of shape.

Speaker Change: <unk> of the age of your of your employees as well.

David Lebeter: From a demographic perspective, our average age is getting younger, so I'm really pleased with our workforce. We have a talented workforce. We continue to bring apprentices in and train them through the system. We've got a strong pool of vice presidents and directors coming up to support the executive team. So I'm very pleased with the depth we have there. We put a lot of effort and time into managing and developing our talent. So right now, I don't see any weaknesses in our bench strength at any level, and I'm quite pleased with where we are.

Speaker Change: From a demographic perspective, our average age is getting younger so I'm really pleased with our workforce who've got a talented workforce, we continue to bring our premises in and train them through the system, We've got a strong pool of.

President: He is president and directors coming up to support the executive team. So I'm very pleased with the depth. We have there we put a lot of effort and time into managing and developing our talent. So right now I don't see any weaknesses in our bench strengthening the levels and I'm quite pleased with where we are I'll be very happy when I'm able to announce the CFO selection.

David Lebeter: I'll be very happy when I'm able to announce the CFO selection. Thank you. As a reminder, to ask a question at this time, please press star one one on your touchtone telephone. Our next question comes from the line of Jonathan Lamers with Laurentian Bank Securities. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Reminder, to ask a question at this time, please press star one one touchstone telephone.

Speaker Change: Our next question comes from the line of Jonathan Lamers with Laurentian Bank Securities. Your line is now open.

Speaker Change: Good morning.

Jonathan Lamers: Good morning, on the upcoming wildfires. I'm just curious how you feel about how well prepared the network in northern Ontario is for the wildfire season and whether you see a need for additional investment to adopt the equipment, you know, for climate change adaptation and whether the current JRAP provides enough weight-based growth for that or and just how you're thinking about that. Thank you.

Jonathan Lamers: On the upcoming wildfire season.

Jonathan Lamers: I'm, just curious how youre feeling about how well prepared.

Jonathan Lamers: The network in Northern Ontario.

Jonathan Lamers: Wildfire season on weather.

Jonathan Lamers: You see a need for additional investment.

Speaker Change: To adopt the equipment.

Jonathan Lamers: <unk>.

Speaker Change: For climate change adaptation in weather.

Jonathan Lamers: Whether the current Jay Rob provides enough rate base growth for that or.

Speaker Change: And just how youre thinking about that thank you.

David Lebeter: Thanks for the question, Jonathan. In terms of wildfires, we're well prepared for what may come this summer. Of course, as we know that we didn't have the usual winter snowpack, we certainly didn't have the low temperatures that we have had in the past.

Speaker Change: Thanks for the question Jonathan in terms of wildfire.

Speaker Change: Well prepared for what May come. This summer courses, we know that we didn't have the usual winter snowpack and we certainly didn't have the low temperatures that we have in the past.

David Lebeter: That said, over the past couple of years, we've been increasing our wildfire capability. We're part of a group that spans North America that looks at best practices. We've already started getting ready in terms of reviewing our training, making sure we have the appropriate equipment and any changes we need to make to our operating procedures, so I feel very comfortable with where we are from that perspective. In terms of climate change adaptation, we're just in the process of finishing a rather in-depth study of what we think climate change is going to be like over the next 20 years and what changes we need to make as we continue to invest and maintain our assets to make sure we harden the grid and we're ready for whatever Mother Nature can throw at us. So we're in a very good position. The investments that we had approved in the joint rate application set us up very nicely to survive and do well in the fire season, so I'm not concerned.

Jonathan Lamers: That said over the past couple of years, we've been increasing our wildfire capability. We're part of a group that spends North America looks at best practices and we've already started getting ready in terms of reviewing our training, making sure we have the appropriate equipment and any changes we need to make to our operating procedures. So feeling very comfortable with where we are from that perspective.

Speaker Change: In terms of climate change adaptation adaptation.

Speaker Change: We're just in the process of finishing.

Speaker Change: Rather in depth study on what we think climate change is going to be over the next 20 years and what changes we need to make as we continue to invest and maintain our assets to make sure. We harden the grid and we're ready for whatever mother nature can throw at us. So we're in a very good position the investments that we had approved the joint REIT application set us up very nicely to survive and do well in the fire season or not.

Jonathan Lamers: There's nothing that we want to do that we're not able to do. Thanks for your comments. Thank you. Our last question is from the line of Mark Jarvi with CIBC. Your line is now open. Yeah, thanks. Good morning, everyone.

Speaker Change: Concerned there is nothing that we want to do that we're not able to do.

Speaker Change: Thanks for your comments.

Speaker Change: Thank you.

Mark Thomas Jarvi: So lots of discussion lately around housing policy in Canada, including some, you know, potential government support. How are you thinking about that in Ontario? How does that factor into sort of the next rate application, potentially? And how are you going through the engagement on that policy front? Thanks for the question, Mark. We're seeing, as we have seen for the last number of years, increased activity and new connections. So, we've been engaging with homeowners associations across Ontario to understand what Hydro One can do and should do to make it easier for them to get their houses built and connected to the grid as quickly as possible. And with that, that also means as low a cost as possible.

Speaker Change: Our last question is from the line of Mark Jarvi with CIBC. Your line is now open.

David Lebeter: And they've given us some very good feedback that we've been incorporating into our procedures and processes. We've changed those, and we'll continue to engage with the homeowners association and with municipalities to make sure we're ready to meet whatever home building targets they have. We're going to be able to meet those.

Speaker Change: Yes. Thanks, good morning, Ron So lots of discussion lately around housing policy and Ken on including some.

Mark Thomas Jarvi: Potential government support how are you thinking about that in Ontario, how does that factor into sort of the next great application potentially and how are you going through that engagement on that policy front.

Mark: Thanks for the question Mark we're seeing as we have seen for the last number of years increased activity and new connections. So we have been engaging with the homeowners' associations across Ontario to understand what is the harder one can do and should do to make it easier for them to get their houses built and connected to the grid as quickly as possible.

Mark: That also means as low cost as possible and they've given us some very good feedback that we've been incorporating into our procedures and processes. We've changed those and we'll continue to engage with the homeowners Association and with municipalities to make sure. We're ready there to meet whatever homeowner homebuilding targets. They have we're going to build to meet those.

David Lebeter: I would also say, Mark, it's part of the integrated planning that's done with the IESO and looking where power needs to be in the province. That will also lead to not just new connections but reinforcement of existing transmission lines and so on, to enable that housing growth to occur and align with policy. All of that will be reflected in our customer consultation, as well as our next joint rate. Have you engaged with the federal government around some of their ambitious targets, like whether or not they're actually realizable in terms of the connections and or the backbones required to meet some of the housing targets they put out there? I was in Ottawa about a month ago.

Mark: I would say also market. It's just it's part of the integrated planning is done with the ISO and looking where power needs to be in the province that will also lead to not just new connections, but reinforcement of existing transmission lines and so on to enable that housing growth to a fair and along with policy all of that will be reflected in our customer <unk>.

ISO: Floatation as well as our next joined Red application.

Speaker Change: Have you engaged with federal government government around their ambitious targets like whether or not there actually realizable in terms of the connections handle our backbone as required to meet.

Speaker Change: Housing targets you put out there.

David Lebeter: We talked mostly about the investment tax credits and the Indigenous Loan Guarantee. The groups, the companies that are involved in generating electricity, they've been in Ottawa having conversations around the clean energy targets, what those look like, as has the provincial government of Ontario. Okay. Then question for you, Chris, maybe just, you know, with the yield curve where it is now, it's inverted, but you know, it could start to flatten later this year.

Speaker Change: I was in Ottawa in about a month ago, we talked mostly about the investment tax credits the indigenous loan guarantee.

Speaker Change: The groups the companies that are involved with generating electricity they'd been in auto we're having conversations around the clean energy targets with those look like as has the provincial government of Ontario.

Christopher Felix Lopez: Any updated views in terms of the debt financing strategy? Anything, you know, subtly different as you work through this year and into next year with the team? I appreciate that maybe you're not there for, you know, to see it through, but just sort of thoughts around that.

Speaker Change: Understood.

Speaker Change: For you, Chris maybe just with the yield curve, where it is now it's inverted but could start to flatten later this year any updated views in terms of debt financing strategy anything subtly different as you work through this year and into next year for the team I appreciate that maybe not there for.

Speaker Change: Just to get through but just sort of thoughts around that.

Christopher Felix Lopez: Yeah, I don't think anything drastically different, Mark. I agree the yield curve is flattening. So previously, you could fund short-term; you could invest it and get the arbitrage there. That's sort of coming away now.

Speaker Change: Yes, I don't think anything drastically different mark I agree that yield curve flattening. So previously you could fund short term.

Speaker Change: <unk> and get the arbitrage.

Speaker Change: That's sort of coming away now we're in a good position, we've always done $800 million of the two to 3 billion per year going forward plenty.

Christopher Felix Lopez: We're in a good position. We've already done $800 million of $2 to $3 billion per year going forward. We have plenty of flexibility on our credit line, so we'll access it opportunistically going forward. So there is no real change. But I do agree with your comments that the short end of the curve is starting to flatten out.

Speaker Change: Plenty of flexibility on our credit line site.

Speaker Change: We'll access it opportunistically going forward, so no real change, but I do agree with your comment that the short end of the curve is starting to flatten out so you're not getting that same benefit.

Mark Thomas Jarvi: So you're not getting that same benefit that you got in the past. So is that something that's going to be taking away a little bit of optionality that you would have been able to leverage last year or in the last, I guess, handful of months? No, not to any material extent because we've already done that financing. We've already done the first part of the financing this year, $800 million. So we're not actually in the market right now.

Speaker Change: So is that something that's going to be taken away a little bit optionality that you would've been able to leverage last year or in the last handful of months Im not sure im not saying not to any material extent, because we've already done that financing. We go down the first part of the financing this year. The 800 million. So we're not actually in the market right now so we've got the chance to wait and look at.

Christopher Felix Lopez: So we've got the chance to wait and look at how to access that market opportunity going forward. We are going to target, Mark, regardless, an average term of 15 years. We're currently sitting at 13, 13, and change. So we'll probably go towards the longer end over the next three to five years.

Speaker Change: How do I exit that market opportunistically going forward.

Speaker Change: We're going to target over the long term not regardless on average 10 or 15 years. We're currently sitting at <unk> 15 and change. So we'll probably go towards the longer end over the next three to five years.

Mark Thomas Jarvi: All right, thanks, and all the best, Chris. Thank you, Mark. Thank you. And that does conclude our Q&A session for today. I'd like to turn the call back over to Omar Javed for any further remarks. Thanks, Jen.

Christian: Alright, Thanks, and all the best Christian.

Christian: Thank you Mark.

Omar Javed: Thank you and that does conclude our Q&A session for today I'd like to turn the call back over to Omar <unk> for any further remarks.

Omar Javed: The management team at Hydro One thanks everyone for their time with us this morning during what is a busy period. We appreciate your interest and your continued support. If you have any questions that weren't addressed on the call, please feel free to reach out, and we'll get them answered for you. Thank you again, and enjoy the rest of your day.

Christian: Thank you Shannon the management team at Hydro one thanks, everyone for their time with US. This morning during what is a busy period.

Shannon: We appreciate your interest and your continued support if you have any questions that weren't addressed on the call. Please feel free to reach out and we'll get them answered for you. Thank you again and enjoy the rest of your day.

Operator: Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Have a great day!

Shannon: Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect have a great day.

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Operator: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good morning, ladies and gentlemen, and welcome to Hydro One Limited's first quarter 2024 Analysts' Teleconference. At this time, all participants are in a listening mode.

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Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: Good morning, ladies and gentlemen, and welcome to Hydro one limited's first quarter 2024 analysts teleconference.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question. During this session you will need to press star one of your telephone.

Speaker Change: You have been hearing automated message revising your hands raised.

Speaker Change: To withdraw your question. Please press star one again.

Omar Javed: To withdraw your question, please press star 11 again. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Omar Javed, Vice President, Investor Relations at Hydro One. Please go ahead.

Speaker Change: As a reminder, this call is being recorded.

Speaker Change: I would now like to introduce your host for today's conference Mr. Omar Chavez, Vice President Investor Relations at Hydro one. Please go ahead.

Omar Javed: Good morning, and thank you for joining us on Hydro One's quarterly earnings call. Joining us today are our President and CEO, David Lebeter, and our Chief Financial and Regulatory Officer, Chris Lopez. In today's call, we will provide an overview of our quarterly results, and then we will take some time answering questions as time permits. There are also several slides that illustrate some of the points we'll address in a moment. They should be up on the webcast now, or if you're dialed into the call, you can find them on Hydro One's website in the investor relations section under events and presentations.

Omar Javed: Good morning, and thank you for joining us and hydro <unk> quarterly earnings call.

Omar Javed: Joining us today are president and CEO, David Liberator, and our Chief financial and regulatory Officer, Chris Lopez.

David Lebeter: The call today, we will provide an overview of our quarterly results.

Omar Javed: And then we will take some time answering questions as time permits.

Speaker Change: We are also several slides that illustrate some of the points, we will address in a moment.

Christopher Felix Lopez: This should be up on the webcast now or if you're dialed into the call you can find them in hydro one's website in the Investor Relations section under events and presentations.

David Lebeter: Today's discussions will likely touch on estimates and other forward-looking information. You should review the cautionary language in today's earnings release and our MD&A, which we filed this morning regarding the various factors, assumptions, and risks that could cause our actual results to differ as they all apply to this call. With that, I'll turn the call over to our President and CEO, David Lebeter. Thank you, Omar.

Christopher Felix Lopez: These discussions will likely touch on estimates and other forward looking information.

Christopher Felix Lopez: You should review the cautionary language in today's earnings release, and our MD&A, which we filed this morning regarding the various factors assumptions and risks that could cause our actual results to differ as they all apply to this call.

Christopher Felix Lopez: With that I'll turn the call over to our President and CEO David leader.

David Lebeter: Good morning, and thank you for joining us for our first quarter 2024 earnings call. Before we start, I'll touch on safety. It's at the core of our business and among the first of our corporate values. Sadly, this quarter, two employees were seriously injured while at work. While we won't discuss the specifics as the investigations are ongoing, it will take a long time for our teammates to heal physically and emotionally. These injuries are a stark reminder of the unforgiving nature of our daily jobs.

David Leader: Thank you Omar good morning, and thank you for joining us for our first quarter 2024 earnings call.

David Leader: Before we start I'll touch on safety is at the core of our business and are among the first of our corporate values sadly.

David Leader: This quarter two employees were seriously injured while at work.

David Leader: While we won't discuss the specifics of the investigations are ongoing it will take a long time for our teammates to heal physically and emotionally.

David Leader: These injuries are a stark reminder of the unforgiving nature of our daily jobs at Hydro one safety goes beyond policies and procedures and must remain firmly ingrained within our culture.

David Lebeter: At Hydro One, safety goes beyond policies and procedures and must remain firmly ingrained within our culture. We are committed to zero life-altering injuries and that every employee returns home safely at the end of each day. With continued focus, eliminating all serious injuries is achievable.

Hydro one: We are committed to zero life altering injuries and that every employee returns home safely at the end of each state continued focus eliminating all serious injuries is achievable.

David Lebeter: Moving on to our update, on today's call, I'm excited to share a refreshed corporate strategy and highlight some key accomplishments that occurred during our first quarter. Chris will then dive deeper into the financial results of the quarter. Delivering on our existing strategy has created exceptional value for Ontarians, our customers, shareholders, and partners. We have made critical strategic investments in our system to build a more modern, intelligent grid, which enables evolving technologies and the increased integration of distributed energy resources.

David Leader: Moving on to our update and today's call I'm excited to share our refreshed corporate strategy and highlight some key accomplishments that occurred during our first quarter. Chris will then dive deeper into the financial results of the quarter.

David Leader: Delivering on our existing strategy has created exceptional value from Terry our customers shareholders and partners, who made critical strategic investments in our system to build a more modern intelligent grid, which enables evolving technology and the increasing integration of distributed energy resources.

David Lebeter: Through these investments, we play a critical role in supporting long-term sustainable economic growth. Not only have we built a reputation for keeping the lights on and restoring power quickly, but we are also delivering major transmission projects on time and on budget. These are some of the reasons why we are now entrusted to build 9 transmission projects in the province. We build strong relationships and trust with many of our partners, including Indigenous communities, municipalities, residents, and the government.

David Leader: Through these investments we play a critical role in supporting long term sustainable economic growth.

Not specified: Not only did we build a reputation for keeping our lifeblood and restoring power quickly but are also delivering major transmission project on time and on budget. These are some of the reasons why we are now entrusted to build nine transmission project and the products.

Speaker Change: We built strong relationships and trust with many of our partners, including indigenous communities municipalities resident and the government, we invest economic reconciliation with indigenous communities through the development of our industry, leading 50, 51st Nations equity model for major projects.

David Lebeter: We advance economic reconciliation with Indigenous communities through the development of our industry-leading 50-50 First Nations equity model for major projects, ensuring economic benefits flow back to Indigenous communities. We implemented programs and tools for our customers that make it easier to do business with us and show them that we care. This resulted in the highest customer satisfaction and overall favorable impression score since the IPO.

indigenous communities: Great economic benefits flow back to indigenous communities.

indigenous communities: We implemented programs and tools for our customers that make it easier to do business with us and show them that we care. This resulted in the highest customer satisfaction and overall overall favorable impression score since the IPO in summary, our existing strategy laid a strong foundation to prepare us as we entered a period of change within the industry.

David Lebeter: In summary, our existing strategy laid a strong foundation to prepare us as we enter into a period of change within the industry. If the previous strategy yielded such significant success, you might wonder why we would now change course. In fact, we are not fundamentally changing our direction.

Speaker Change: If the previous strategy has yielded such significant success you might wonder why we without change course.

indigenous communities: In fact, we are not fundamentally changed in our direction.

David Lebeter: We are delivering a refreshed corporate strategy that builds on what we have done well and sets out the priorities that will meet the pace of changes in our industry and the evolving expectations of our customers. Emerging technologies are shaping how, when, and where our customers use electricity. From the cars they buy, how they monitor electricity consumption, to participating in the energy market, our customers are making energy-related decisions and have evolving expectations of the services they are provided. Not too long ago, visionary people used to talk about sustainable, clean energy.

Speaker Change: We are delivering our refreshed corporate strategy to build on what we have done well and sets out the priorities that will meet the pace of change within our industry and the evolving expectations of our customers.

Speaker Change: Emerging technologies are shaping how when and where our customers use electricity from the cars they buy how they monitor electricity consumption.

Speaker Change: Dissipated in the energy market, our customers are making energy related decision and have evolving expectations of the services. They are provided.

Speaker Change: Not too long ago. This narrowed people used to talk about sustainable clean energy.

David Lebeter: Today, enabling it is a business imperative. We need to remain agile and flexible to meet the changing demand and the changing landscape. All priorities set the foundation of our refreshed strategy. They are, one, to enrich our customers' experience. 2. Enhance grid value needed for sustainable economic growth. 3.

Not specified: Today, enabling it is a business imperative, we need to remain agile and flexible to meet these changing demand and the changing landscape.

unknown: Core priority set the foundation of our refresh strategy.

Richard: They are one and Richard our customers experience.

Richard: To enhance grid value needed for sustainable economic growth.

David Lebeter: Create new solutions for an electrified future, and 4. Win with partners. At the heart of this strategy is a focus on our customers. Our customers expect more proactive services and solutions and information to make informed decisions. We will ensure we understand and meet our customers' evolving needs, all the while delivering an easy and exceptional customer experience. We've already made strides in this area, but there's more work to do across each different customer segment and throughout each customer's journey.

Richard: Three create new solutions for an electrified future and for women with partners.

Richard: At the heart of the strategy the focus on our customers our customers expect more proactive services and solutions and information to make informed decision. We will ensure we understand and meet our customers' evolving needs all the while delivery easy an exceptional customer experience. We've already made strides in the area, but there's more work to do across each different customer segment.

Richard: And throughout each customer's journey.

David Lebeter: With the increasing electrification of transportation, buildings, and industry, combined with population growth, we anticipate the need to deliver more for our customers in the coming years. We will find innovative and sustainable ways to accommodate this growth outside of the traditional solution.

Richard: With the increasing electrification of transportation building and industry combined with population growth, we anticipate the need to deliver more for our customers in the upcoming year, we will find innovative and sustainable ways to accommodate this growth outside of the traditional solutions. In addition to optimizing our existing assets to create more value we will.

David Lebeter: In addition to optimizing our existing assets to create more value, we will look at both regulated and unregulated opportunities to meet this challenge. We also acknowledge that partners are core to this priority. Together, we will deliver sustainable growth and ensure we meet the needs of their communities now and for future generations. We have a vital role to play in enabling Ontario's transition towards the shared goal of decarbonization, whether it's connecting green steel or EV battery manufacturing or simply enabling the bidirectional movement of electrons arising from increased battery storage and EV adoption. As technology advances for both us and our customers, it's necessary that we stay ahead of the curve by anticipating, adapting, and evolving alongside these changes. Central to this will be ensuring that we make informed, data-driven decisions.

Richard: At both regulated and unregulated opportunities to meet this challenge.

partners: We also acknowledge the partners are core to this priority together, we will deliver sustainable growth and ensure we meet the needs of their communities now and for future generations.

partners: We have a vital role to play in enabling Ontario's transition towards a shared goal of de carbonization, whether it's connecting Greenfield for EV battery manufacturing or simply enabling bi directional movement of electrons arising from increased battery storage in EV adoption.

partners: Technology advances for both us and our customers.

partners: We stay ahead of the curve by anticipating adapting and evolving alongside these changes.

partners: Central to this will be ensuring we make informed data driven decisions.

David Lebeter: As such, we plan to expand our advanced analytics and digital capabilities to manage this electrified future. This also means we will collaborate with others within our sector and beyond to foster innovation and accelerate the development of new solutions to shape the future. Powerful alliances between Hydro One, Indigenous communities, all levels of government, regulatory bodies, associations, vendors, and industry partners have been essential to provide stable, reliable, and affordable electricity to Ontarians. Looking ahead, we must continue to collaborate as an industry. We are much stronger when we work together and create mutually beneficial solutions.

partners: As such we plan to expand our advanced analytics and digital capabilities to manage this electrified future. This.

Speaker Change: This also means we will collaborate with others within our sector and beyond to foster innovation and accelerate the development of new solutions to shape the future.

Hydro one: Powerful alliances between hydro one indigenous communities all levels of government regulatory bodies associations vendors and industry partners have been a central provides stable and reliable and affordable electricity to Ontario.

Hydro one: Looking ahead, we must continue to collaborate as an industry. We are much stronger will work together.

Hydro one: Mutually beneficial solutions.

David Lebeter: We all have a part to play to enable a net zero future. Combining our strengths and resources, we can leverage each other's unique perspectives and capabilities to drive innovation and achieve our shared goals. Of course, the successful execution of our strategy relies on our skilled employees. We have a robust pool of talent with deep expertise, matched with unwavering dedication to our customers. This is an exciting time, and our people will undoubtedly be a point of strength for us as we develop new capabilities to meet the evolving energy landscape and deliver on our plans.

Hydro one: We all have a part to play to enable a net zero future combining our strength and resources, we can leverage each other's unique perspective and capabilities to drive innovation and achieve our shared goals.

Speaker Change: Of course, the successful execution of our strategy relies on our skilled employees, we have a robust pool of talent with deep expertise matches unwavering dedication to our customers. This is an exciting time in our people and that it will be a point of strength for us as we develop new capabilities to meet the evolving energy landscape and deliver on our plan.

David Lebeter: On this note, I am pleased to announce the addition of some new talent to our executive team to help us deliver on our strategic objectives. In March, Renee McKenzie joined us as our Executive Vice President of Digital and Technology Solutions. Renee is an experienced technology executive with more than 24 years of delivering engaging applications, modern infrastructure, and personalized experiences to employees and customers.

Speaker Change: On this note I am pleased to announce the addition of some new talent to our executive team to help us deliver on our strategic objectives and March Rene Mckenzie joined Us as our executive Vice President of digital and Technology solutions remains an experienced technology executive with more than 24 years of delivering engaging application modern infrastructure and personalized experiences.

Speaker Change: The employees and customers based on her background and experience you can see how she is the right person to implement our data driven corporate strategy in the coming years.

David Lebeter: Based on her background and experience, you can see how she is the right person to implement our data-driven corporate strategy in the coming year. I'm also delighted to announce that Lisa Pearson has joined Hydro One as our Senior Vice President of Corporate Affairs. Lisa is a transformational executive with extensive experience advising boards and executive teams. She will apply her broad, private, public, and not-for-profit sector knowledge to continue to strengthen our reputation and deepen our relationships with customers, government, and stakeholders.

Speaker Change: I'm also delighted to announce that lease appears <unk> joined <unk> as our senior Vice President Corporate affairs leases, a transformational executive with extensive experience advising boards and executive teams fuel apply her broad private public and not for profit sector knowledge to continue to strengthen our reputation and deepen our relationships with customers government and state.

Speaker Change: Folders.

David Lebeter: In addition to Rene and Lisa's updates, I am pleased to announce that, after an extensive internal and external search process, we are in the final stages of filling the CFO position. We expect to make an announcement in the very near future. Turning to the quarterly update, there are several important developments I'd like to share with you. First, I acknowledge the efforts of our Hydro One employees, who are once again being called upon to help our customers. In February and March, our teams quickly mobilized to restore power to approximately 190,000 customers affected by damaging high winds in parts of central, southern, and eastern Ontario.

Speaker Change: In addition to Renee and leases update I am pleased to announce that after an extensive internal and external search process. We are in the final stages of filling the CFO position, we expect to make an announcement of the very near future.

Speaker Change: Turning to the quarterly update there are several important developments I'd like to share with you first acknowledge the efforts of our hydro one employees for once again called upon to help our customers in February and March our teams quickly mobilized to restore power to approximately 190000 customers impacted by damaging high winds and parts of central southern.

Speaker Change: In Eastern Ontario.

David Lebeter: Thank you for your outstanding efforts in assessing the damage, prioritizing work, and making repairs to restore power. Second, we are pleased to have received approval from the OAB for our Section 92, or Leave to Construct, filing for our Waskin Transmission Line project. The $1.2 billion line, which spans approximately 360 kilometers, was built in cooperation with First Nations partners to support economic growth in northwestern Ontario. As a reminder, Phase 1 is a double-circuit 230 kV line that will run from Thunder Bay to Atikokan, and Phase 2 is a single-circuit 230 kV line between Atikokan and Dryden.

Speaker Change: For your outstanding efforts in assessing damage prioritizing work and making repairs to restore power.

Hydro one: We're pleased to have received approval from the OMB for our section 92 or leave to construct filing for our Washington transmission line project.

Hydro one: The $1 $2 billion line, which spent approximately 360 kilometers with built in cooperation with first nations partners to support economic growth in northwestern Ontario.

Speaker Change: As a reminder, phase one of the double circuit 230 kv line that will run from Thunder Bay to add a coker and phase II single Circuit 230 kv line between adequate and Dragon.

David Lebeter: Third, we received OEB approval for the acquisition of Shaft Flow Hydro, which was announced in November of 2023. We are now working on closing and integrating the acquisition by the end of this year and are excited to join their community. We look forward to sharing best practice between us so we can be efficient in our delivery of services to the community. We are confident that this will be a positive experience for Shaflo's customers and employees and will be an example for other communities who wish to do the same.

Speaker Change: Third we received OCC approval for the acquisition of chef will hydro, which was announced in November of 2023.

Speaker Change: We're now working on closing and integrating the acquisition by the end of this year and are excited to join their community.

Speaker Change: We look forward to sharing best practices between us. So we can be efficient in our delivery of services to the community. We are confident that this will be a positive experience for <unk> customers and employees and will be an example for other communities who wished to do the same more broadly we continue to engage with other local electricity distribution companies and look for additional opportunities to facilitate <unk>.

David Lebeter: More broadly, we continue to engage with other local electricity distribution companies and look for additional opportunities to facilitate further consolidation within the sector. In addition to these updates, we continue to support businesses through our critical investments. We are happy to welcome Volkswagen and Stellantis as customers and support the construction of their EV battery plant.

Speaker Change: Further consolidation within the sector.

Speaker Change: In addition to these updates we continue to support businesses through our critical investments.

Speaker Change: We're happy to welcome Volkswagen has collapsed as customers and support the construction of their EV battery plants. In addition, we welcome the recent announcement by Honda for the creation of Canada's first comprehensive electric vehicle supply chain.

David Lebeter: In addition, we welcome the recent announcement by Honda of Canada on the creation of Canada's first comprehensive electric vehicle supply chain. As the largest transmitter of electricity in the province, Hydro One is ready to support Honda and other large manufacturers as we enable economic growth in Ontario. Moving on to broadband, I have some additional clarity today that I'd like to share. Hydro One continues to work with telcos and internet service providers, or ISPs, to advance the delivery of high-speed internet to some 700,000 Ontarians.

Speaker Change #178: As the largest transmitter of electricity in the province Hydro one is ready to support Honda and other large manufacturers as we enable economic growth in Ontario.

Speaker Change: Moving on to broadband I have some additional clarity today, but I'd like to share hydro and continues to work with the telco and Internet service providers or ISP to advance the delivery of high speed Internet. Some 700000 on tariffs.

David Lebeter: We have been ready for a while. At this stage, the existence of alternative solutions for the telcos and ISPs and the pace of orders we have received would suggest the previous expectations of approximately half a billion to one billion dollars of work are unrealistic. But we don't have enough orders yet to put forward a solid forecast. Our expectation is that these factors will result in $300 million to $700 million worth of work being completed. This work will take place in our distribution segment and will be additive to rate. It is worth noting that these values are not factored into our earnings guidance and represent a potential growth opportunity.

Speaker Change #179: We have been ready for a while at this stage the existence of alternative solutions to the telcos and Isps and the pace of orders. We have received would suggest the previous expectation of approximately $5 billion to $1 billion of work is unrealistic.

Speaker Change: But we don't have enough orders yet to put forward a solid forecast our expectation is that these factors will result in $300 million to $700 million worth of work being completed.

Speaker Change: This work will take place in our distribution segment will be additive to rate base and.

Speaker Change: It is worth noting these values are not factored into our earnings guidance and represent a potential growth opportunity that said, we continue to gain the telcos and Isps and will provide an update when appropriate.

David Lebeter: That said, we continue to engage with the Telco's NISPs and will provide an update to this amount when appropriate. As I conclude my remarks, I'll highlight a few key awards that we have received recently. A key to our success has been our ability to build trusted relationships with Indigenous partners and communities. This is why Hydro One was once again proud to be a sponsor of the Little Native Hockey League, the LNHL, honoring a partnership that first began in 2003. In recognition of this historic alliance, we were humbled recently to have been inducted into the LNHL Hall of Fame as a friend of the Little NHL.

Speaker Change: As I conclude my remarks, I will highlight a few key awards that we received recently.

Speaker Change: A key to our success has been our ability to build trusted relationships with indigenous partners and communities. This is why hydro one was once again proud to be a sponsor little native Hockey League.

Speaker Change: Or the <unk> NHL honoring a partnership that first began in 2003 in recognition of this historic Alliance. We're humbled recently have been inducted into the L. NHL Hall of Fame is a friend of the little NHL, who is a great honor for us and we're very touched by the significant gesture.

David Lebeter: This is a great honor for us, and we're very touched by the significant gesture. We're also proud to have been listed in the 2024 edition of the Globe Mail's Women Lead Year Annual Benchmark of Gender Diversity and Executive Roles in Corporate Canada, receiving this recognition as a testament to our continued efforts in building a strong and diverse executive leadership team, one that will lead us into the next phase of our corporate evolution.

Speaker Change: We're also proud to have been listed in the 2024 edition of the globe meals women lead here annual benchmark of gender diversity and executive roles in corporate Canada, receiving this recognition is a testament to our continued efforts in building a strong and diverse executive leadership team one that will lead us into the next phase of our corporate evolution.

David Lebeter: Lastly, in keeping with our efforts to enable decarbonization, we will recognize the corporate knights in the Global 100 list, a ranking of the world's most sustainable corporations. The Global 100 list lists the top firms that are increasing their investments in green solutions, such as renewable energy, energy efficiency, and the circular economy.

Speaker Change: Lastly, in keeping with our effort to enable de carbonization, we were recognized the corporate Knights in their global 100 list ranking of the world's most sustainable corporations ranking list. The top firms that are increasing their investments in green solutions, such as renewable energy energy efficiency and the circular economy. The award celebrates our relentless commitment to.

David Lebeter: The award celebrates our relentless commitment to sustainability and environmental stewardship. With that, I'll turn the call over to Chris to discuss our financial results. Over to you, Chris. Thank you, David. Good morning, everyone.

Speaker Change: Ability and environmental stewardship.

Chris: With that I'll turn the call over to Chris to discuss our financial results over to you Chris.

Chris: Thank you David Good morning, everyone and thank you for joining us today I am confident the refreshed corporate strategy will position <unk> for continued success in the years to come as together, we build a better future for all.

Christopher Felix Lopez: And thank you for joining us today. I am confident the refreshed corporate strategy will position Hydro One for continued success in the years to come, as together we build a better, brighter future for all. Looking at our first quarter financial results, we delivered basic earnings per share of $0.49 compared to $0.47 in the first quarter of 2023.

Chris: Looking at our third quarter financial results, we delivered basic earnings per share of 49% compared to 47 in the first quarter of 2023.

Christopher Felix Lopez: The key drivers behind the year-over-year change included higher revenues, net of purchase power, on account of Ontario Energy Board or OEB-approved rates for both segments, which considers the annual investment in grid or power, partially offset by higher financing charges resulting from higher weighted average interest rates on our long-term debt, as well as having a higher volume of long-term debt, and higher income tax expense when adjusted for net income neutral items, resulting from As a reminder, both the transmission and distribution segments had net income-neutral items in revenue, including the Deferred Tax Asset, or DTA, recovery that expired at the end of June 2023, as well as normal course regulatory adjustments. These have corresponding offsets in tax expense and OM&A, making them net income neutral. Our first quarter revenue net purchase power was high year-over-year by 0.6%.

Speaker Change: The key drivers behind the year over year change included high revenues net of purchase power on account of Ontario Energy Board of OSB, if rig rates for both segments, which considered the annual investment and greater power system, partially offset by higher financing charges, resulting from higher weighted average interest rate on our long term debt as well as having a high volume of long term data.

Speaker Change: And higher income tax expense when adjusted for net income neutral items, resulting from lower deductible timing differences compared to the prior year and higher pre tax earnings.

Speaker Change: As a reminder, both the transmission and distribution segment had net income neutral items and revenue, including the deferred tax asset or DTA recovery that expired at the end of June 2023, as well as normal course regulatory adjustments. These.

Speaker Change: These have corresponding offset in tax expense and eliminate making NIM net income neutral.

Speaker Change: Our first quarter revenue net of purchase power was higher year over year by 6%.

Christopher Felix Lopez: The increase is mainly due to higher revenues resulting from OEB-approved rates in both segments, coupled with higher energy consumption in the distribution segment. However, this is partially offset by the impact of lower average monthly peak demand in the transmission segment, as well as net income-neutral items referenced earlier. Revenues were lower by 0.4% compared to last year. The decrease was reflective of net income-neutral items coupled with lower average monthly peak demand, which was down 2.1% compared to last year.

Speaker Change: The increase is mainly due to higher revenues, resulting from OSB approved rates in both segments, coupled with high energy consumption and distribution segments. These.

Speaker Change: These are partially offset by the impact of lower average monthly peak demand in the transmission segment as well as net income neutral items referenced earlier.

Speaker Change: For the transmission segment revenues.

Speaker Change #182: Revenues were lower by <unk>, 4% compared to last year. The decrease was reflective of net income neutral items, coupled with lower average monthly peak demand, which was down two 1% compared to last year.

Christopher Felix Lopez: These are partially offset by higher revenues resulting from the fully de-approved rate. Looking at a distribution segment, revenues that have purchased power increased by 2%, mainly due to the OEB-approved rates and higher energy consumption, which increased by 0.8% year over year. These are partially offset by Net Income Neutrality. On the cost front, operating, maintenance, and administration expenses in the quarter decreased by approximately 1.8% year over year.

Speaker Change #183: These are partially offset by higher revenues, resulting from the fully be approved rates.

OMB: Looking at the distribution segment revenues net of purchased power increased by 2%, mainly due to the OMB approved rates and higher energy consumption, which increased by 8% year over year.

Speaker Change: These are partially offset by net income neutral items.

Speaker Change: On the cost front operating maintenance and administration expenses in the quarter decreased by approximately one 8% year over year.

Christopher Felix Lopez: The variance is mainly due to net income neutral items. Adjusting for these net income neutral items, OM&A was in line with last year for both segments, with marginal increases in program expenditures in transition and higher allowances for DAFL accounts in distribution. Depreciation expense for the quarter was higher year-over-year by 0.8%.

Speaker Change: <unk> is mainly due to net income neutral items.

Speaker Change: Adjusting for these net income neutral items <unk> was in line with last year for both segments with margin increases in programming expenditures in transmission and higher allowances for doubtful accounts in distribution.

Speaker Change: Depreciation expense for the quarter was higher year over year by 8%.

Christopher Felix Lopez: This was due to growth in capital assets, which is consistent with our state of capital investment program, partially offset by lower amortization of regulatory assets. On financing, we saw an 8.8% increase in financing charges year-over-year, mainly due to a higher weighted average interest rate on our long-term debt and a higher volume of long-term debt resulting from issuances in 2023 and the first quarter of 2024. The charges were partially offset by a lower average volume of short-term notes and higher volume of short-term investments.

Speaker Change: This was due to growth in capital assets, which is consistent with our stated capital investment program, partially offset by lower amortization of regulatory assets.

Speaker Change: On financing, we saw an eight 8% increase in financing charges year over year, mainly due to a higher weighted average interest rate on our long term debt and higher volume of long term debt, resulting from issuances in 2023 in the first quarter of 2024.

Speaker Change: The charges are partially offset by lower average volume of short term notes and high volume of short term investments.

Christopher Felix Lopez: During the quarter, Hydro One issued $800 million of medium-term notes. This consisted of $550 million of 4.39% notes due in 2034 and $250 million of 3.93% notes due in 2029. The issuance was completed under our Sustainable Financing Framework. We continue to be pleased with the stability of our balance sheet and robust investment grade credit rating. Our income tax expense in the quarter was $51 million, compared to $64 million in the same quarter last year. However, when we adjusted for the impact of net income-neutral items, the adjusted income tax expense was higher.

Speaker Change: During the quarter Hydro and issued 800 million of medium term notes. This consisted of $550 million of 439% notes during 2034 and $250 million of 393% notes during 2029.

Speaker Change: Issuance was completed under our sustainable financing framework.

Speaker Change: We continue to be pleased with the stability of our balance sheet and robust investment grade credit ratings.

Speaker Change: Our income tax expense in the quarter was 51 million compared to $64 million in the same quarter last year. However, when we adjust for the impact of net income neutral items. The adjusted income tax expense was higher.

Christopher Felix Lopez: Contributing to the increase were lower deductible timing differences compared to last year and higher adjusted pre-tax earnings. The effective tax rate this quarter was 14.7% versus the effective tax rate last year of 18.4%. This rate is consistent with our tax guidance of 13-16% for the remainder of the JRAC period. Moving to our investing activities, in the first quarter, we placed $240 million of assets in service for our customers, which was an increase of 1.3% compared to the prior year.

Speaker Change: Contributing to the increase were lower deductible timing differences compared to last year and higher adjusted pretax earnings.

Speaker Change: The effective tax rate this quarter was 14, 7% versus the effective tax rate last year of $18, 4%.

Speaker Change: This rate is consistent with our tax guidance of 13% to 16% for the remainder of the <unk> period.

Speaker Change: Moving to our investing activities in the first quarter, we paid $240 million of assets and service for our customers, which was an increase of one 3% compared to the prior year.

Christopher Felix Lopez: In the transmission segment, we saw a decrease of 44.3% year-over-year, primarily attributed to the timing of assets placed in service for station refurbishments and replacements in the prior year, partially offset by a high volume of wood pole replacements.

Speaker Change: In the transmission segment, we saw a decrease of 44, 3% year over year, primarily attributable to the timing of assets placed in service the station refurbishment and replacement in the prior year, partially offset by a high volume of wood pole replacements.

Christopher Felix Lopez: In the distribution segment, in-service additions increased by 41% from the prior year due to a higher spend on line refurbishments and wood pole replacements, as well as customer connections. Also contributing to the increase was a higher spend on minor fixed assets, system capability reinforcement projects, and a higher volume of storm-related asset replacement from earlier this year. In terms of our capital investments for the first quarter, we invested $673 million, which is an increase of 34.9%.

Speaker Change #180: In the distribution segment in service additions increased by 41% from the prior year due to a higher spend on line Refurbishments and wood pole replacements as well as customer connections pulse.

Speaker Change: Also contributing to the increase was the highest spend a modest success at system capability reinforcement projects and a high volume of storm related asset replacement from earlier this year.

Speaker Change: In terms of our capital investments for the first quarter, we invested $673 million, which is an increase of 34, 9%.

Christopher Felix Lopez: The increase resulted from both the transmission and distribution segments on account of higher volumes of refurbishments and replacements, higher volumes of customer connections, as well as investments in new transmission lines and initiatives. This is partially offset by a low spend on IT initiatives due to the execution of major projects in the prior year.

Speaker Change: The increase resulted from both transmission and distribution segments on account of higher volumes of Refurbishments and replacement high volumes of customer connections as well as investments in new transmission lines and initiatives.

Speaker Change: These are partially offset by a lowest <unk> initiatives due to the execution of major projects in the prior year.

Christopher Felix Lopez: On guidance, we reaffirm our previous target of 5% to 7% growth for earnings per share through 2027 on the normalized 2022 EPS of $1.61. As a reminder, the EPS guidance range does not factor in growth from broadband, LDC consolidation, the transmission lines that have been previously awarded but only have preliminary estimates, or any amounts from externally driven variants. Given Wasigan's successful Section 92 approval, we have included it in our estimates, but at this stage, there is no change to the guidance range.

Speaker Change: On guidance, we reaffirm our previous target of 5% to 7% growth the earnings per share through 2027 on the normalized 2020 to EPS of $1 61.

Speaker Change: As a reminder, EPS guidance range does not factor in growth from broadband LDC consolidation. The transmission lines that had been previously awarded early preliminary estimates or any amounts from externally driven variance accounts.

Speaker Change: Once again successful 692 approval we have included in our estimates but at this stage there is no change to the guidance range.

Christopher Felix Lopez: Finally, I am pleased to report, in line with our long-term guidance, we declared a dividend to common shareholders of $31.42 per share. Before I turn the call back, as many of you know, this will be my last earnings call with Hydro One. I would like to take this opportunity to thank David, members of the executive team, the board, and all the hardworking employees of Hydro One with whom I've had the pleasure of working for over the past eight years.

Speaker Change: Finally, I am pleased to report in line with our long term guidance, we declared a dividend to common shareholders of $31 <unk> per share.

Hydro one: Before I turn the call back as many of you know this will be my last earnings call with hydro one.

Speaker Change: I would like to take this opportunity to thank David members of the executive team the board and all the hard working employees of hydro, one with whom I've had the pleasure of working with over the past eight years.

Christopher Felix Lopez: I would also like to thank our investors, the analyst community, partners, and all other stakeholders that I've come to know during my time at Hydro One. Together, we have, and I'm confident you will, continue to deliver a better, brighter future for all. I'll stop there, and we'd be pleased to take your questions. Thank you, David and Chris.

Speaker Change: I would also like to thank our investors the analyst community partners and all other stakeholders that I've come to know during my time at Hydro one.

Speaker Change: Together, we have and I am confident you will continue to deliver a better broader future role.

Speaker Change: I'll stop there and we'd be pleased to take your questions.

Omar Javed: We asked the operator to explain how they'd like to organize the Q&A polling process. In case we can't address your questions today, my team and I are always available to respond to any follow-up questions. We ask that you limit your questions to one question and one follow-up. If you have additional questions, we request you to rejoin the conversation. Please go ahead, Omar.

Speaker Change #105: Thank you, David and Chris we ask the operator to explain how they'd like to organize the Q&A polling process.

Speaker Change: In case, we can address your questions today my team and I are always available to respond to any follow up questions. We ask that you limit your questions to one question and one follow up.

Operator: If you have additional questions. We request you to rejoin the queue. Please go ahead operator.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: Thank you.

Speaker Change #109: Reminder, to ask a question. Please press star one one you touched on telefon and wafer name to be announced.

Speaker Change: Your question. Please press star one again.

Operator: Please stand by; we'll compile the Q&A roster. Our first question comes from the line of Ben Pham with BMO. Your line is now open. Hi, thanks, good morning.

Speaker Change #111: Please standby will compile the Q&A roster.

Speaker Change: Our first question comes from the line of Ben Pham with BMO. Your line is now open.

Benjamin Pham: Maybe in your comments on the broadband discussions you've had and some of the updated estimates you provided, how do you think about the timing of that $300 to $700 million into rate base? And is this more really the outcome of these discussions, more a matter of just maybe delay or timing? Changes versus an overall change in scope. Good morning, Ben. It's David Lebeter.

Benjamin Pham: Hi, Thanks, good morning.

Benjamin Pham: Maybe on your comments on the broadband discussions.

Benjamin Pham: <unk> had in <unk>.

Speaker Change #112: Some of the updated estimates you provided.

Speaker Change #110: How do you think about the timing is that true.

Speaker Change #108: And into rate base.

Speaker Change: Is this more really outcome of these discussions more a matter of just make it up later or timing change.

Speaker Change: Changes versus an overall change in scope.

David Lebeter: It is nice to hear from you. The overall scope has not changed. The province remains committed to providing high-speed internet service to 700,000 Ontarians, and we can remain committed and ready to support that initiative on their behalf. They've just been slower, as I've said in the past, in getting started. We are seeing an increase. It is picking up.

Speaker Change: Good morning, Ben It's David Liberator Nice to hear you.

Speaker Change #146: Overall scope has not changed province remains committed to providing high speed Internet service to 700000, Ontario, and we can remain committed and ready to support that initiative on their behalf.

Speaker Change: <unk> been slower as I've said in the past and getting started we are seeing an increase it is picking up.

David Lebeter: And they are using a little bit more plowing or underground than we anticipated, and more than they indicated at the initial onset of the program. And in some cases, they're choosing to go with wireless, which is why we've adjusted our guidance. And just adding to that, it will all be in service during the current rate period. So whatever that range is, whatever it proves to be, will all be in service and counted in the growth rate by the end. Okay, I got it.

Speaker Change: And they are using a little bit more plowing, our underground than we anticipated.

Speaker Change: And more than they indicated initial onset of the program and in some cases are choosing to go with wireless which is why we've adjusted our guidance.

Speaker Change #101: And just adding to that it will all be in servicing the current rate period, whatever that range is.

Speaker Change: If it proves to be will all be in service and confident in the growth rate by the end of 2007.

Benjamin Pham: And in your refresh strategy, you mentioned regulated and non-regulated opportunities as part of your capital allocation. Has that changed from before? Is it still a non-regulated asset that you're in now, and is this still up to that max 10% of the business? Yeah, nothing's changed there, Ben. We still have the three non-regulated entities, IV, our card charging network, AUX, which is in the battery solutions business, and Acronym, which is our telco.

Speaker Change #102: Okay got it.

Speaker Change #100: And on your App refresh strategy you mentioned.

Speaker Change #100: Our regulated and our non nonregulated opportunities.

Speaker Change #100: As part of your capital allocation is that has.

Speaker Change #100: Has that changed from before is it still.

Speaker Change #100: Nonregulated.

Speaker Change #113: Assets that Youre in now and is this still up to that Max 10% that business yes.

Speaker Change #103: Yes, nothing has changed there had been we still have the three nonregulated entities.

Speaker Change #184: <unk>, our car charging network <unk>, which is in the battery solutions and acronym which is our telco.

Speaker Change #103: Sure.

David Lebeter: Okay, that's great. And Chris, all the best in your next venture. Thank you, Ben.

Speaker Change #103: Yes.

Speaker Change #100: Okay.

Chris: And Chris I Wonder if that's in your next venture.

Benjamin Pham: Thank you Ben.

Benjamin Pham: Thank you.

Benjamin Pham: Thank you. Our next question comes from the line of Maurice Choy with RBC Capital Markets. Your line is now open. Thanks, and good morning, everyone. If you could just pick up on the refresh strategy.

Speaker Change #125: Our next question comes from the line of Maurice Choy with RBC capital markets. Your line is now open.

Maurice Choy: It's not immediately clear to me how the strategy is. So, I just want to ask you, Tangel B, to put it this way: what has changed here? I know you mentioned finding innovative and sustainable ways to accommodate growth. What does that all mean in terms of what you're going to offer? Sure, thanks for the question, Maurice. The reason we called it a refresh strategy is that it is not a revamp.

Maurice Choy: Thanks, and good morning, everyone. Maybe you can just pick up on the refresh strategy, it's not immediately clear to me how that strategy.

Speaker Change #128: Clearly different from the previous strategy. So if I could just ask you to help me tangible be put it in what has changed here.

Speaker Change #107: I know you mentioned.

Speaker Change #107: Finding innovative and sustainable ways to accommodate growth.

Speaker Change #114: What does that all mean in terms of what you can offer.

Speaker Change #106: Sure. Thanks for the question Mark.

Speaker Change #116: The reason, we call that a refresh strategy because it is not a revamp of the indicating to Mike earlier comments. Our previous strategy is highly successful what youll see is changed if you were to go back compare that too is we changed our approach to customer want to provide excellent customer service, whereas the previous strategy, we talked about advocating for the customer. So we're really focusing on the <unk>.

David Lebeter: As I indicated in my earlier comments, our previous strategy was highly successful. What you'll see has changed, if you were to go back and compare the two, is we've changed our approach to customers. We want to provide excellent customer service, whereas in the previous strategy, we talked about advocating for the customers. We're really focusing on the full range of customers, from residential through to industrial, understanding what their needs are, and perhaps rather than waiting for them to say, this is what we want to do, getting involved early so we can help them shape what their electrification journey would look like.

David Lebeter: The other significant change is that we had ISD or IT as a support function. We've moved that right up to the front. We see that having enhanced data capabilities or digital capability is going to be integral to our success in integrating the modern smart distribution grid into an already intelligent transmission grid.

Speaker Change #106: A full range of customers from our residential through the industrial understanding what their needs are and perhaps rather than waiting for them to say this we want to do getting involved early so we can help them shape with their electrical electrification journey would look like the other significant changes we had.

Speaker Change #106: <unk>.

Speaker Change #122: As a as a support function, we've moved that right up to the front, we see that having an enhanced data capabilities with digital capability is going to be integral to our success in integrating the modern smart distribution grid into an already intelligent transmission grids are really doubling down on that which is why I'm. So pleased to announce that Rene Mckenzie.

David Lebeter: So really doubling down on that, which is why I'm so pleased to announce that Renee McKenzie has joined us. Those will be the two biggest changes. Of course, we're still going to remain focused on excellence in delivering on our capital program, both in distribution and on the transmission side, and provide incredible customer service in terms of restoring power in times of a storm.

Speaker Change #122: <unk> joined US those would be the two biggest changes of course, we're still going to remain focused on excellence in delivering on our capital program, both in distribution and on the transmission side and providing incredible customer service in terms of restoring power in terms of our stores.

David Lebeter: And if I think about the investments, both OPEX and CAPEX, that go into all this, is this something that's done within the current rate envelope, or is this something that you will have to spend first and then request rates in the next five-year application? No, it will be contained within the current rate envelope. What we're doing is restructuring some of the expenses that we had planned to make sure they align with the refresh strategy.

Speaker Change #115: Got it and if I think about the investments both opex and Capex that that go into all of that is this something that is done within the.

Speaker Change #115: Right.

Speaker Change #131: Or is it something that you still have to spend first and then request flow.

Speaker Change #130: Our rates next year application.

Speaker Change #136: No it will be contained within the current rate envelope. What we're doing is restructuring. Some other expenses that we had planned to make sure. They align with the refresh strategy a lot of what we're doing is already in the current envelope such as rolling out our smart meter our second generation smart meters. That's a foundational piece for the distribution grid of the future that was already in.

David Lebeter: A lot of what we're doing is already in the current envelope, such as rolling out our smart meter, our second generation of smart meters. That's a foundational piece for the distribution grid of the future.

David Lebeter: We are going to take a look at our IT stack to make sure we have the right programs that we're rolling out there. I can just finish off with the broadband rollout. So you now have a revised work estimate of $300 to $700 million.

Speaker Change #115: We are going to take a look at our it stack to make sure we have the right programs that we're rolling out there.

Speaker Change #127: And instead, if I can just finish off with the broadband rollout. So you now have to revise work estimate of $300 million to $700 million.

David Lebeter: Historically, I suppose this has provided an upside potential to your EPS guidance as well as your weight-based categories. If you could help us just help quantify, you know, in basis points or even EPS upside, what would this new revised work estimate be? I think, Maurice, what we talked about in the past was we were saying half a billion to a billion and a billion. I think we had that as a hundred basis points. So you can work it off, or what, is that correct, Chris?

Speaker Change #115: Historically its process has provided us with upside potential to your EPS guidance as well as your rate base CAGR.

Speaker Change #120: Could help us just help kind of quantify in basis points or even EPS upside to that little bit.

Speaker Change #118: New advisory work is nippy.

Morris: I think Morris.

Chris: What we talked about in the past was we are seeing the $5 billion to 1 billion ended 1 billion I think we had that as a 100 basis points. So you can work off or was that correct Chris.

Christopher Felix Lopez: One percent. One percent. But I think, Maurice, in an easier way, it's got the same economics as our distribution business, so it gets the same ROE, 9.36% when it goes in service. And it will all go in service by the end of this rate period. So you can take whatever number you want in that range, take the midpoint, half a billion dollars, and you can apply your calculation; you can work it out pretty quickly.

Speaker Change #117: 1% to 7%.

Speaker Change #117: I think <unk> been easy way.

Speaker Change #117: It's got the same economics as a distribution business. So it gets the same ROE a 936%.

Speaker Change #117: When it goes in service it will all go in service by the end of this rate period. So you can take whatever number you want to net range take the midpoint half a billion dollars and you can apply your calculation you can wake up pretty pretty quickly I think it will come out at 1 billion. It would have been at the St and half a billion would be opposite.

David Lebeter: I think it'll come out at one billion, it would have been a percent and half a billion, And from memory, you're not, the dividend is not going to change this rate of pay CPS growth. Dividends are going to see it. Yeah, so Maurice, that will be a decision for the board and now the next CFO to recommend to David. So I think I communicated previously that we would look at it and speak to shareholders, that's still, and all stakeholders. That is still a case.

Speaker Change #134: And from memory Youre not.

Speaker Change #117: Dividend quite going to chase this rate base EPS growth.

Speaker Change #117: The dividend is going to see it.

Speaker Change #115: Alright.

Speaker Change #115: Yes.

Speaker Change #119: That will be a decision for the board and now the next CFO to recommend to David say.

Speaker Change #123: <unk> communicated previously that we would look at it and speak to shareholders that is still the spend all stakeholders that is still the silicate.

David Lebeter: So it's possible it could go up; it's not going to chase it to 10, I think I said in the past when I expected growth to go much higher than that in the next joint rate application, but it could go to 7. This is perfect.

Speaker Change #119: It's possible it could go up it's not going to chase. It to 10 I think is what I said in the past when I expect growth to go much higher than that in a.

Speaker Change #119: I'm joined by application, but it could go to seven.

Maurice Choy: Thank you very much for everything, and thanks for the years, Chris. I'll see you around. Thank you, Brian. Thank you. Our next question comes from the line of Linda Ezergailis with TD Cowen. Your line is now open.

Speaker Change #143: Perfect. Thank you very much for everything and thanks for get years, Chris here.

Brian: Thanks, Brian.

Speaker Change #124: Thank you. Our next question comes from the line of Linda <unk> with TD Cowen. Your line is now open.

Linda Ezergailis: And before I jump into my question, I wanted to make sure I congratulate Chris on his successful contributions and time at Hydro One. It's been a real pleasure getting to know you. Thank you very much, Linda.

Linda: Thank you and before I jump into my question I wanted to make sure I congratulate Chris on his successful contributions in time of hydro one and it's been a real pleasure getting to know you.

Speaker Change #144: Thank you very much.

Christopher Felix Lopez: So maybe just to double-check on your strategy, what are the updated, evolved thoughts on geography? Is the expectation that the focus remains on Ontario, or is there maybe some evolving thought on the merits of toeholds and other jurisdictions? And then, similarly, recognizing that your unregulated business is likely to remain relatively small, can you comment on the merits of considering owning any infrastructure beyond electric transmission and electric distribution?

Speaker Change #124: So maybe just just to double check on your strategy.

Speaker Change #124: What are the updated evolved thoughts on geography.

Speaker Change #124: Expectation that the focus remains on Ontario.

Speaker Change #124: Or is there any.

Speaker Change #124: Evolving thought on the merits of a toehold in other jurisdictions and then similarly.

Speaker Change #158: Recognizing that your unregulated businesses is likely to remain relatively small can you comment on that.

Speaker Change #158: The merits of considering owning any infrastructure beyond electric transmission and electric distribution.

David Lebeter: Great. Thanks for the questions, Linda. In terms of geography, we are naturally going to remain focused on Ontario. Ontario is growing rapidly. There are significant investments that need to be made in this province. That's why we have the nine transmission lines.

Speaker Change #124: Great. Thanks for the questions Linda in terms of geography, we're naturally going to remain focused on Ontario, Ontario is growing rapidly the significant investments that need to be made in this province.

Speaker Change #124: That's why we have the nine transmission lines, we see significant investments coming also on the distribution sector with.

David Lebeter: We see significant investments coming also in the distribution sector, with the recent announcement of the LT1 by the Ontario Independent Electric System Operator. So we're not going to, everything we do will not sacrifice our focus on Ontario. We see that as our primary toehold. That being said, we're not looking outside the province. But if something came along that had really strong adjacencies and wouldn't distract us, we would take a look at it.

Speaker Change #124: With the recent announcement of VLT won by the Ontario Independent electric system. Operator, So we're going to not everything we do we will not sacrifice our focus on Ontario, and we see that as our primary tool.

Speaker Change #124: <unk> that being said, we're not looking outside the province, but if something came along that had really strong adjacencies in wouldn't distract us we would take a look at it said that in all of the investor conferences, but we're not looking outside the province, we're focused on what is going on inside Ontario, We just see tremendous growth here.

David Lebeter: We said that at all of the investor conferences, but we're not looking outside the province. We're focused on what is going on inside Ontario. We just see tremendous growth here. And remind me of your second question: Oh, they were unregulated. Regulated, but other than electric transmission and electric distribution.

Speaker Change #138: And remind me of your second question the run regulated.

Speaker Change #129: The unregulated aspects.

Speaker Change #157: I'm, sorry can reasonably be labeled regulated but other than electric transmission and electric distribution, so whether it be natural gas distribution and transmission.

David Lebeter: So whether it be natural gas distribution, transmission, maybe some, you know, power generation, et cetera, that could be regulated. Now, at this time, we're not. At this time, we're not looking at all of that. We're going to stay with the wires business. We know that business distribution and transmission. We're not looking at getting into the gas business, the water business, or the generation business.

Speaker Change #129: And maybe some power.

Speaker Change #129: Generation et cetera that could deregulated.

Speaker Change #129: At this time, we're not.

Speaker Change #129: At this time, we're not looking at that all we're going to stay with the wires business, we know that business distribution and transmission.

Speaker Change #129: We're not looking at getting into the gas business, the water business or the generation business.

David Lebeter: And just as a follow-up, looking at your talent to execute on your refresh strategy, you've appointed Rene and Lisa, which is great. You're almost close to finalizing your CFO search. Just wondering if you can give us an update more broadly at all levels of your organization, where you see any gaps in talent and how you're looking to address that, including maybe the demographic kind of shape of the age of your employees as well.

Speaker Change #133: Thank you and just as a follow up.

Speaker Change #161: Looking at your talent to execute on your refresh strategy.

Speaker Change #132: Appointed Rene at Liza, which is great you Aman.

Speaker Change #141: Almost close to finalizing your CFO search just wondering if you can give us an update more broadly at all levels of your organization.

Speaker Change #141: Where you see any gaps potentially.

Speaker Change #141: <unk> talent and how youre looking to address that including maybe the demographic.

Speaker Change #140: Kind of shape.

Speaker Change #132: The age of your of your employees as well.

David Lebeter: From a demographic perspective, our average age is getting younger, so I'm really pleased with our workforce. We have a talented workforce. We continue to bring apprentices in and train them through the system. We've got a strong pool of vice presidents and directors coming up to support the executive team, so I'm very pleased with the depth we have there. We put a lot of effort and time into managing and developing our talent. So, right now, I don't see any weaknesses in our bench strength at any level, and I'm quite pleased with where we are. I'll be very happy when I'm able to announce the CFO selection.

Speaker Change #166: From a demographic perspective, our average age is getting younger so I'm really pleased with our workforce who've got a talented workforce, we continue to bring our premises in and train them through the system. We've got a strong pool of the.

Speaker Change #132: <unk>, President and directors coming up to support the executive team. So I'm very pleased with the depth. We have there we put a lot of effort and time into managing and developing our talent. So right now I don't see any weaknesses in our bench strengthening the levels and I'm quite pleased with where we are I'll be very happy when I'm able to announce the CFO selection.

Speaker Change #137: Thank you.

David Lebeter: Thank you. As a reminder, to ask a question at this time, please press star 11 on your touchtone telephone. Our next question comes from the line of Jonathan Lamers with Laurentian Bank Securities. Your line is now open.

Speaker Change #132: Thank you.

Speaker Change #163: To ask a question at this time, please press star one one R&D touchtone telephone.

Speaker Change #142: Our next question comes from the line of Jonathan Lamers with Laurentian Bank Securities. Your line is now open.

Speaker Change #150: Good morning.

Jonathan Lamers: Good morning, on the upcoming wildfires. I'm just curious how you feel about how well prepared the network in northern Ontario is for the wildfire season and whether you see a need for additional investment to adopt the equipment, you know, for climate change adaptation and whether the current JRAP provides enough rate-based growth for that or and just how you're thinking about that. Thank you.

Speaker Change #145: On the upcoming wildfire season.

Jonathan Lamers: I'm, just curious how youre feeling about how well prepared.

Speaker Change #165: Network in Northern Ontario is for wildfire season on weather.

Speaker Change #168: You see a need for additional in Boston.

Speaker Change #154: To adopt the equipment.

Speaker Change #132: For climate change adaptation.

Speaker Change #139: Whether the current Jay Rob provides enough rate base growth for that or.

Speaker Change #135: And just how youre thinking about that thank you.

David Lebeter: Thanks for the question, Jonathan. In terms of wildfires, we're well prepared for what may come this summer. Of course, as we know that we didn't have the usual winter snowpack, we certainly didn't have the low temperatures that we have had in the past.

Speaker Change #147: Thanks for the question Jonathan.

Speaker Change #149: A wildfire.

Speaker Change #172: We are well prepared for what May come. This summer of course, as we know that we didn't have the usual winter snowpack. We certainly didn't have the low temperatures that we have in the past.

David Lebeter: That said, over the past couple of years, we've been increasing our wildfire capability. We're part of a group that spans North America that looks at best practices. We've already started getting ready in terms of reviewing our training, making sure we have the appropriate equipment and any changes we need to make to our operating procedures, so I feel very comfortable with where we are from that perspective. In terms of climate change adaptation, we're just in the process of finishing a rather in-depth study of what we think climate change is going to be like over the next 20 years and what changes we need to make as we continue to invest and maintain our assets to make sure we harden the grid, and we're ready for whatever Mother Nature can throw at us.

Speaker Change #135: That said over the past couple of years, we've been increasing our wildfire capability. We're part of a group that spans North America looks at best practices and we've already started getting ready in terms of reviewing our training, making sure we have the appropriate equipment and any changes we need to make to our operating procedures. So feeling very comfortable with where we are from that perspective.

Speaker Change #135: In terms of climate change adaptation adaptation.

Speaker Change #135: We're just in the process of finishing.

Speaker Change #135: Rather in depth study on what we think climate change is going to be over the next 20 years and what changes we need to make as we continue to invest and maintain our assets to make sure. We harden the grid and we're ready for whatever mother nature can throw at us. So we're in a very good position the investments that we had approved the joint REIT application set us up very nicely to survive and do well in the fire season.

David Lebeter: So, we're in a very good position. The investments that we had approved in the joint rate application set us up very nicely to survive and do well in the fire season. So, I'm not concerned. There's nothing that we want to do that we're not able to do.

Speaker Change #135: Our concern there is nothing that we want to do that we're not able to do.

Jonathan Lamers: Thanks for your comments. Thank you. Our last question is from the line of Mark Jarvi with CIBC. Your line is now open. Yeah, thanks. Good morning, everyone.

Speaker Change #148: Thanks for your comments.

Speaker Change #170: Thank you.

Speaker Change #159: Our last question is from the line of Mark Jarvi with CIBC. Your line is now open.

Mark Thomas Jarvi: So lots of discussion lately around housing policy in Canada, including some, you know, potential government support. How are you thinking about that in Ontario? How does that factor into sort of the next rate application, potentially? And how are you going through the engagement on that policy front? Thanks for the question, Mark. We're seeing, as we have seen for the last number of years, increased activity and new connections. So, we've been engaging with homeowners associations across Ontario to understand what Hydro One can do and should do to make it easier for them to get their houses built and connected to the grid as quickly as possible. And with that, that also means as low a cost as possible.

Mark Thomas Jarvi: Yes. Thanks, good morning, Ron So lots of discussion lately around housing policy and Ken on including some.

Mark Thomas Jarvi: Potential government support how are you thinking about that in Ontario, how does that factor into sort of the next great application potentially and how are you going through that engagement on that policy front.

David Lebeter: And they've given us some very good feedback that we've been incorporating into our procedures and processes. We've changed those, and we'll continue to engage with the homeowners association and with municipalities to make sure we're ready there to meet whatever home building targets they have. We're going to be able to meet those. I would also say, Mark, it's part of the integrated planning that's done with the IESO and looks where power needs to be in the province.

Mark: Thanks for the question Mark we're seeing as we have seen for the last number of years increased activity and new connections. So we have been engaging with the homeowners' associations across Ontario to understand what is the harder one can do and should do to make it easier for them to get their houses built and connected to the grid as quickly as possible.

Mark: And with that that also means as low cost as possible and they've given us some very good feedback that we've been incorporating into our procedures and processes. We've changed those and we'll continue to engage with the homeowners Association and with municipalities to make sure. We're ready there to meet whatever homeowner homebuilding targets they have they're going to build to meet those.

Speaker Change #148: <unk> sales. So it's just it's part of the integrated planning is done with the ISO and looking where power needs to be in the province that will also lead to not just new connections.

David Lebeter: That will also lead to not just new connections but reinforcement of existing transmission lines and so on to enable that housing growth to occur and align with policy. All of that will be reflected in our customer consultation, as well as our next joint rate. Have you engaged with the federal government around some of their ambitious targets, like whether or not they're actually realizable in terms of the connections and or the backbone that's required to meet some of the housing targets they put out there? I was in Ottawa for about a month ago.

Speaker Change #148: Reinforcement of existing transmission lines, and so on to enable that housing growth to a fair and along with policy all of that will be reflected in our customer consultation as well as our next joint rate application.

Speaker Change #173: Have you engaged with federal government government around their ambitious targets like whether or not there actually realizable in terms of the connections handle our backbone as required to meet some of the <unk>.

Speaker Change #151: Housing targets you put out there.

Speaker Change #174: I was in Ottawa at about a month ago, we talked mostly about the investment tax credits the indigenous loan guarantee.

David Lebeter: We talked mostly about the investment tax credits and the Indigenous Loan Guarantee. The groups, the companies that are involved in generating electricity, they've been in Ottawa having conversations around the clean energy targets, what those look like, as has the provincial government of Ontario. Okay. Then question for you, Chris, maybe just, you know, with the yield curve where it is now, it's inverted, but you know, it could start to flatten later this year.

Speaker Change #151: The groups the companies that are involved with general electric they have been in Ottawa, having conversations around the clean energy targets with those look like as has the provincial government of Ontario.

David Lebeter: Any updated views in terms of the debt financing strategy? Anything, you know, subtly different as you work through this year and into next year with the team? I appreciate that maybe you're not there for, you know, to see it through, but just sort of thoughts around that.

Speaker Change #167: Understood. Thanks, a question for you, Chris maybe just with the.

Speaker Change #152: <unk>, where it is now it's inverted but could start to flatten later this year.

Speaker Change #152: The updated views in terms of debt financing strategy anything subtly different as you work through this year and into next year for the team I appreciate that maybe not there for.

Speaker Change #152: Just to get through but just sort of thoughts around that.

Christopher Felix Lopez: Yeah, I don't think anything drastically different, Mark. I agree the yield curve is flattening. So previously, you could fund short-term; you could invest it and get the arbitrage there. That's sort of coming away now.

Speaker Change #154: Yes, I don't think anything drastically different mark.

Speaker Change #154: The yield curve flattening. So previously you could fund short term.

Speaker Change #154: Invest it and get the arbitrage.

Speaker Change #177: <unk> sort of coming away now we're in a good position, we've always done $800 million.

Christopher Felix Lopez: We're in a good position. We've already done $800 million in $2 to $3 billion per year going forward. There is plenty of flexibility on our credit line, so we'll access it opportunistically going forward. So, no real change. But I do agree with your comments that the short end of the curve is starting to flatten out. So is that something that's going to be taking away a little bit of optionality that you would have been able to leverage last year or in the last, I guess, handful of months? No, not to any material extent because we've already done that financing. We've already done the first part of the financing this year, $800 million.

Speaker Change #154: Two to 3 billion per year going forward.

Speaker Change #154: Plenty of flexibility on our credit lines.

Speaker Change #156: We'll access it opportunistically going forward, so no real change, but I do agree with your comment that the short end of the curve.

Speaker Change #156: Starting to flatten out so you're not getting that same benefit equally in the past.

Speaker Change #175: So is that something that's going to be taken away a little bit optionality that you would've been able to leverage last year or in the last handful of months Im not sure im not saying not to any material extent, because we've already done that financing. We go down the first part of the financing this year. The 800 million. So we're not actually in the market right now so we've got the chance to wait and look at.

Christopher Felix Lopez: So we're not actually in the market right now. So we've got the chance to wait and look at how to access that market opportunity going forward. We are going to target, Mark, regardless, an average term of 15 years. We're currently sitting at 13, 13, and change. So we'll probably go towards the longer end over the next three to five years.

Speaker Change #160: What how do I access that market opportunistically going forward.

Speaker Change #160: We're going to target over the long term not regardless and average term of 15 years. We're currently sitting at <unk> 15 and change. So we'll probably go towards the longer end over the next three to five years.

Mark Thomas Jarvi: All right, thanks, and all the best, Chris. Thank you, Mark. Thank you. And that does conclude our Q&A session for today. I'd like to turn the call back over to Omar Javed for any further remarks.

Speaker Change #164: Alright, Thanks, and all the best Chris.

Michael: Thank you Michael.

Speaker Change #162: Thank you and that does conclude our Q&A session for today I'd like to turn the call back over to Omar <unk> for any further remarks.

Omar Javed: Thanks, Jen. The management team at Hydro One thanks everyone for their time with us this morning during what is a busy period. We appreciate your interest and your continued support. If you have any questions that weren't addressed on the call, please feel free to reach out, and we'll get them answered for you. Thank you again, and enjoy the rest of your day. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Have a great day.

Shannon: Thank you Shannon the management team at Hydro one thanks, everyone for their time with US. This morning during what is a busy period.

Speaker Change #176: We appreciate your interest and your continued support if you have any questions that weren't addressed on the call. Please feel free to reach out and we'll get them answered for you. Thank you again and enjoy the rest of your day.

Speaker Change #171: Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect have a great day.