Q2 2024 Canadian Utilities Ltd Earnings Call

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Unknown Executive: Thank you for standing by.

Speaker Change: Thank you for standing by this is the conference operator.

Operator: Thank you for standing by. This is the conference operator. Welcome to the second quarter 2024 results conference call and webcast for Canadian Utilities Limited. As a reminder, all participants are in a listen only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing the star button and the number zero. I would now like to turn the call over to Mr. Colin Jackson, Senior Vice President of Financial Operations. Please go ahead, Mr. Jackson.

Operator: This is the conference operator.

Operator: Welcome to the second quarter of 2024 results conference call and webcast for Canadian Utilities Limited. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. If you need assistance during the conference call, you may press the button and the number zero.

Speaker Change: Welcome to the second quarter 'twenty 'twenty four results conference call and webcast for Canadian Utilities limited.

Speaker Change: As a reminder, all participants are in a listen only mode and the conference is being recorded.

Speaker Change: After the presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.

Speaker Change: Should you need assistance during the conference call you May signal, an operator by a pessimist star button and.

Speaker Change: The number zero.

Colin Jackson: I would now like to turn the conference to Mr. Colin Jackson, Senior Vice President of Financial Operations.

Speaker Change: I would now like to turn the conference to Mr. Colin Jackson Senior Vice President of financial operations. Please go ahead Mr. Jackson.

Colin Jackson: Please go ahead, Mr. Jackson. Thank you and good morning, everyone. We are pleased you could join us for Canadian Utilities' second quarter of 2024 conference call.

Colin Jackson: Thank you and good morning everyone. We are pleased you could join us for the Canadian Utilities second quarter 2024 conference call. With me today we have Katie Patrick, Executive Vice President and Chief Financial Officer of Canadian Utilities, and Wayne Stensby, Chief Operating Officer, Tobacco Energy Systems. Clint Workington, Executive Vice President and Chief Financial and Investment Officer of ATCO Energy Systems; Bob Myles, Chief Operating Officer at ACO Empower, and Greg Stephenson, Chief Financial Officer of ACO Empower.

Colin Jackson: Thank you and good morning, everyone.

Speaker Change: We're pleased you could join us for Canadian Utilities second quarter 2024 conference call.

Colin Jackson: With me today, we have Katie Patrick, Executive Vice President and Chief Financial Officer of Canadian Utilities, Wayne Stenze, Chief Operating Officer of Echo Energy Systems, Clint Worcinton, Executive Vice President and Chief Financial and Investment Officer of Echo Energy Systems, Bob Miles, Chief Operating Officer at Echo Empower, and Greg Stevenson, Chief Financial Officer of Echo Empower. Before we move on with today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, we are speaking to you from our Echo Park head office in Calgary, which is located in Treaty 7 region.

Speaker Change: With me today, we have Katie Patrick Executive Vice President and Chief Financial Officer of Canadian Utilities.

Wayne Stansby: Wayne Stansby, Chief operating officer of <unk>.

Clinton Wording: <unk> Energy systems Clinton, working 10, executive Vice President and Chief financial and investment officer of Atco Energy systems.

Bob Miles: Bob miles Chief operating officer at ACCO empower.

Greg Stevenson: And grade, Greg Stevenson, Chief Financial Officer tobacco empower.

Colin Jackson: Before we move on with today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, we are speaking to you from our Aco Park head office in Calgary, which is located in Treaty 7 territory. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, and the Pagani Nations, the Tsitsinu Nation, and the Stony Nakoda Nations, which include the Tuknaki, Bears Paw, and Good Stony First Nations.

Speaker Change: Before I move on with today's remarks, I would like to take a moment to acknowledge the numerous additional territories in homeland, how much our global facilities are located today.

Bob Miles: Today, we are speaking to you from our Alco Park head office in Calgary, which is located in Treaty seven region.

Colin Jackson: This is the ancestral territory of the Blackfoot Confederacy comprised of the Siksika, the Kainai and the Pagani nations, that's a senior nation and the Stony Dakota nations, which includes the Tukniki, Baerspa and Good Stony First Nations. I also want to recognize the city of Calgary as home to the matination of Alberta, districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month, a time to honor the stories, achievements, and resilience of Indigenous Peoples. We carry this message beyond the months of June and respect the diverse history, languages, ceremonies, and cultures of the Indigenous Peoples who call these areas home.

Bob Miles: This is the ancestral territory of the Blackfoot Confederacy comprised of a six cap.

Bob Miles: And then for Connie Nations, let's see new nation, and the Estonian Dakota Nations.

Bob Miles: It includes the Mckee bearish Pas and good Stony first nations.

Colin Jackson: I also want to recognize that the City of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month, a Time to Honor the Stories, Achievements, and Resilience of Indigenous Peoples. We carry this message beyond the month of June and respect the diverse history, languages, ceremonies, and cultures of the Indigenous peoples who call these areas home.

Bob Miles: Also want to recognize that the city of Calgary is home to the maintain nation of Alberta districts five and six.

Bob Miles: During our second quarter, we proudly celebrated national indigenous just three months.

Bob Miles: A time to honor the stories.

Bob Miles: She'd been some resilience of indigenous peoples.

Bob Miles: We carry this message beyond the months of June and respected diverse history languages ceremonies and cultures of the indigenous people who call these areas home.

Colin Jackson: We will first hear from Katie, who will deliver opening comments on our financial results and recent company development. followed by an update from Wayne and Bob on their respective business segments. Following today's remarks, the Canadian Utilities team will then take questions from the investment community. We ask that you limit questions to two per analyst, and if you have additional questions, please re-enter the queue. For any detailed modeling questions, please follow up with the Investor Relations team after today's call. Please note that a replay of the conference call, a short supplemental presentation, and today's transcript will be available on our website at CanadianUtilities.com following the call.

Colin Jackson: We will first hear from Katie, who will deliver opening comments on our financial results and recent company developments, followed by an update from Wayne and Bob on their respective business segments. Following today's remarks, the Canadian Utilities team will then take questions from the investment community. We ask that you limit questions to two per analyst, and if you have additional questions, please re-enter the queue.

Bob Miles: We will first hear from Katie who will deliver opening comments on our financial results and recent company developments.

Speaker Change: Followed by an update from Wayne and Bob on their respective business segments.

Bob Miles: Following today's remarks, the Canadian utilities team will then take questions from the investment community. We ask that you limit questions to two per analyst and if you have additional questions. Please reenter the queue.

Colin Jackson: For any detailed modeling questions, please follow up with the Investor Relations team after today's call. Please note that a replay of the conference call, a short supplemental presentation, and today's transcript will be available on our website at canadianutilities.com following the call. The materials can be found in the investor section under events and presentations. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian Securities Regulators.

Bob Miles: For any detailed modeling questions. Please follow up with the Investor Relations team after todays call.

Bob Miles: Please note that a replay of the conference call a short supplemental presentation and today's transcript will be available on our website at Canadian utilities Dot com following the call.

Colin Jackson: The materials can be found in the investor section under Events and Presentations.

Bob Miles: The materials can be found in the investors section under events and presentations.

Colin Jackson: Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings at the Canadian Securities Regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, such as total of segment measures, adjusted earnings, adjusted earnings per share in capital investment. Beginning in this quarter, we have also provided adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, for Echo and Power. These non-GAAP measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities.

Bob Miles: Today's remarks will include forward looking statements that are subject to important risks and uncertainties for more information on these risks and uncertainties. Please refer to our filings with the Canadian Securities regulators.

Colin Jackson: During today's presentation, we may refer to certain non-GAAP and other financial measures, such as total of segment measures, adjusted earnings, adjusted earnings per share, and capital investment. Additionally, beginning in this quarter, we have also provided adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, for ACO Empower. These non-GAAP measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities.

Speaker Change: During today's presentation, we may refer to certain non-GAAP and other financial measures such as total segment measures adjusted earnings adjusted earnings per share and capital investment.

Bob Miles: Beginning in this quarter. We have also provided adjusted earnings before interest taxes, depreciation and amortization or adjusted EBITDA for Atco empower.

Speaker Change: These non-GAAP measures do not have any standardized meaning under ifr S and as a result, they may not be comparable to similar measures presented by other entities.

Colin Jackson: Now I'll turn the call over to Katie for her opening remarks.

Colin Jackson: And now, I'll turn the call over to Katie for her opening remarks.

Bob Miles: And now I'll turn the call over to Katy for opening remarks.

Katie Patrick: Thanks, Colin, and good morning, everyone. Thank you all very much for joining us today. This quarter's results highlight our continued focus on operational execution and demonstrate the momentum we are building towards our strategic growth plans. Canadian Utilities delivered another strong quarter with adjusted earnings of $117 million in the second quarter of 2024, up 17% from the same period last year. This translates to adjusted earnings per share of 43 cents. Act Co-Energy Systems delivered adjusted earnings of $112 million, an increase of 14% from Q2 of last year. Results were mainly driven by electric transmission business, which benefited from rate-based growth and higher allowed ROE in 2023.

Katie Patrick: Thanks, Colin. And good morning, everyone. Thank you all very much for joining us today.

Katy: Thanks, Colin and good morning, everyone. Thank you all very much for joining us today.

Katie Patrick: This quarter's results highlight our continued focus on operational execution and demonstrate the momentum we are building towards our strategic growth plan. Canadian Utilities delivered another strong quarter with adjusted earnings of $117 million in the second quarter of 2024, up 17% from the same period last year. This translates to adjusted earnings per share of $0.43.

Katy: This quarter's results highlight our continued focus on operational execution and demonstrate the momentum we are building towards our strategic growth plans.

Katy: Canadian utilities delivered another strong quarter with adjusted earnings of $117 million in the second quarter of 'twenty 'twenty four.

Speaker Change: Up 17% from the same period last year.

Speaker Change: This translates to adjusted earnings per share of 43 cents.

Katie Patrick: Atco Energy Systems delivered adjusted earnings of $112 million, an increase of 14% from Q2 of last year. Results were mainly driven by our electric transmission business, which benefited from rate-based growth and higher allowed ROE in 2023. Wayne will dive into the Atco Energy Systems results later on this call.

Katy: Atco energy systems delivered adjusted earnings of $112 million, an increase of 14% from Q2 of last year.

Speaker Change: Results were mainly driven by our electric transmission business, which benefited from rate base growth and higher allowed ROE in 2023.

Katie Patrick: Wayne will dive into the energy systems results later on this call. Act Co-empower delivered adjusted earnings of $18 million in the quarter, up $10 million from the same period last year. Electricity generation recorded adjusted earnings of $8 million in Q2 2024, up from $5 million last year. These results benefit from a settlement with a major supplier related to wind turbine availability in 2023 and an increase of 24% in generation, the details of which are provided in the MTA. Over to the energy source side, adjusted earnings doubled year over year to $10 million. This business is performing very well and continues to drive growth amid strong spreads and high demand for natural gas and liquid storage.

Speaker Change: Wayne will dive into the energy energy systems results later on this call.

Katie Patrick: Atco Empower delivered adjusted earnings of $18 million in the quarter, up $10 million from the same period last year; electricity generation recorded adjusted earnings of $8 million in Q2 2024, up from $5 million last year. These results benefit from a settlement with a major supplier related to wind turbine availability in 2023 and an increase of 24% in generation, the details of which are provided in the MT&A. Now, on the energy side.

Speaker Change: Echo empower delivered adjusted earnings of $18 million in the quarter up $10 million in the same period last year.

Speaker Change: Electricity generation recorded adjusted earnings of $8 million in Q2, 'twenty 'twenty four.

Speaker Change: Up from $5 million last year.

Katy: These results benefited from a settlement with a major supplier related to wind turbine availability in 2023, and an increase of 24% in generation the.

Katy: The details of which are provided in the MD&A.

Katie Patrick: Adjusted earnings doubled year over year to $10 million. This business is performing very well and continues to drive growth amid strong spreads and high demand for natural gas and liquid storage. Bob will provide additional commentary on the NPOWER results later on today's call. AFCO Australia delivered adjusted earnings of $17 million in the second quarter, consistent with the same period last year. Australia benefited from favorable changes to PPA power pricing and cost efficiency, but this was offset by lower CPI expectations, which fell from roughly four and a half percent in 2023 to approximately three percent this year.

Speaker Change: Over the over to the energy side adjusted earnings doubled year over year to $10 million. This business is performing very well and continues to drive growth amidst strong spreads and high demand for natural gas and liquids storage.

Katie Patrick: Bob will provide additional commentary on the end power results later on today's call. Asco Australia delivered adjusted earnings of $17 million in the second quarter, consistent with the same period last year. Australia benefited from favorable changes to PPA power pricing and cost efficiencies. This was offset by lower CPI expectations, which fell from roughly 4.5% in 2023 to approximately 3% this year. During the quarter, we submitted our revised six-access arrangement or AA-6 plan to the Australian regulator. A response included additional supporting material for demand and expenditure forecasts. Our updated IT strategy, as well as modeling for accelerated depreciation.

Speaker Change: Bob will provide additional commentary on the empower results later on today's call.

Katy: Ask Australia delivered adjusted earnings of $17 million in the second quarter consistent with the same period last year.

Speaker Change: Australia benefited from favorable changes to P. P a power pricing and cost efficiencies.

Speaker Change: This was offset by lower CPI expectations, which fell from roughly four 5% and 2023 to approximately 3% this year.

Katy: During the quarter, we submitted a revised six access arrangement or a six plan to the Australian regulator.

Katie Patrick: During the quarter, we submitted our revised Sixth Access Arrangement, or AA6 plan, to the Australian Regulator. The response included additional supporting material for demand and expenditure forecasts, or updated IT strategy, as well as modeling for accelerated depreciation. We are actively engaged with the Australian regulator on the review of the additional information provided. We believe alignment is achievable and expect to finalize the AA6 plan in November of this year. Finally, we continue to make progress on our growth priorities in Australia. We installed over 3,600 new customer connections during the quarter and over 7,100 new customers year to date.

Speaker Change: Response included additional supporting materials for demand and expenditure forecasts.

Katy: Our updated strategy as well as modeling for accelerated depreciation.

Katie Patrick: We are actively engaged with the Australian regulator on the review of the additional information provided. We believe alignment is achievable and expect to finalize the AA-6 plan in November of this year. Finally, we continue to make progress on our growth priorities in Australia. We installed over 3,600 new customer connections during the quarter and over 7,100 new customers here to date. Being in July, we began work on a sell-down process for the Central West Pump Hydro Initiative, and we are busy evaluating next steps for this project. On the South Australian Government Hydrogen Jobs Plan, we continue to work alongside our partners to bring this initiative to market.

Speaker Change: Actively engaged with the Australian regulator on the reviews of the additional information provided.

Katy: We believe alignment is achievable and expect to finalize the a six plan in November of this year.

Katy: Finally, we continue to make progress on our growth priorities in Australia.

Katy: We installed over 3600, new customer connections during the quarter and over 7100, new customers year to date.

Katy: Yeah.

Katie Patrick: Beginning in July, we began work on a sell-down process for the Central West Pump Hydro Initiative, and we are busy evaluating next steps for this project. On the South Australian Government Hydrogen Jobs Plan, we continue to work alongside our partners to bring this initiative to market. During the quarter, and as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure. We took a hard look at our corporate overhead and business units to ensure our teams are fit for purpose and aligned to our renewed growth ambitions.

Speaker Change: Beginning in July we began work on a sell down process for the central West pump Hydro initiative and we are busy evaluating next steps for this project.

Katy: On the South Australian government hydrogen jobs plan, we continue to work alongside our partners to bring this initiative to market.

Speaker Change: Yeah.

Katie Patrick: During the quarter and as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure. We took a hard look at our corporate overhead and business units to ensure our teams are fit for purpose and aligned to our renewed growth ambitions. Heading into the second half of the year, the Canadian Utilities team is refreshed, nimble, and laser focused on executing our project pipeline. Stepping back and looking at Canadian Utilities as a whole, cash flow from operations was $471 million in the quarter, which supported our operations, capital program, and normal course financial commitments.

Speaker Change: During the quarter and as part of our ongoing drive for operational efficiencies, we took steps to streamline our cost structure.

Speaker Change: We took a hard look at our corporate overhead and business units to ensure our teams are fit for purpose and aligned to our renewed growth ambitions.

Katie Patrick: Heading into the second half of the year, the Canadian Utilities team is refreshed, nimble, and laser-focused on executing our project pipeline. Stepping back and looking at Canadian utilities as a whole, cash flow from operations was $471 million in the quarter, which supported our operations, capital program, and normal course financial commitments. Currently, our portfolio of operating assets generates enough cash flow to fund our development pipeline, and we do not anticipate the need for additional equity financing in the near term. With that, let's dive into each segment in more detail. I will now turn the call over to Wayne to discuss the Atco Energy Systems results.

Speaker Change: Heading into the second half of the year the Canadian utilities team is refreshed nimble and laser focused on executing our project pipeline.

Speaker Change: Stepping back and looking at Canadian utilities is a whole cash flow from operations was $471 million in the quarter, which supported our operations capital program and normal course financial commitments.

Katie Patrick: Currently, our portfolio of operating assets generates enough cash flow to fund our development pipeline, and we do not anticipate the need for additional equity financing in the near term.

Speaker Change: Currently our portfolio of operating assets generates enough cash flow to fund our development pipeline and we do not anticipate the need for additional equity financing in the near term.

Katie Patrick: With that, let's dive into each segment in more detail.

Speaker Change: With that let's dive into each segment in more detail.

Wayne Stensby: I will now turn the call over to Wayne to discuss the act of energy systems results.

Speaker Change: I will now turn the call over to Wayne to discuss the Atco energy systems results.

Speaker Change: Yeah.

Wayne Stensby: Good morning, everyone, and thank you, Katie. Just before I get to the numbers, I want to address the current wildfires situation that we're seeing here in Alberta and, in particular, the recent devastating impact that the wildfires have had on the historic mountain community of Jasper. As we speak this morning, there are over 100 active wildfires across Alberta, and the ATCO Energy Systems teams are working with first responders on the response to these fires. In terms of Jasper, we like so many others are heartbroken for the devastation facing the mountain community. Atco has provided natural gas and electricity to the community of Jasper for well over 80 years.

Wayne Stensby: Good morning, everyone. And thank you, Katie.

Wayne Stansby: Good morning, everyone and thank you Katie.

Wayne Stensby: Before I get to the numbers, I want to address the current wildfire situation that we're seeing here in Alberta and, in particular, the recent devastating impact that the wildfires have had on the historic mountain community of Jasper. As we speak this morning, there are over 100 active wildfires across Alberta, and ATCO Energy Systems teams are working with first responders on the response to these fires. In terms of Jasper, we are, like so many others, heartbroken for the devastation facing the mountain community.

Wayne Stansby: Just before I get to the numbers I wanted to address the current wildfire situation that we're seeing here in Alberta and in particular, the recent devastating impact that the wildfires have had on the historic mountain community of Jasper.

Wayne Stansby: As we speak this morning, there are over 100 active wildfires across Alberta, and the Atco energy systems teams are working with first responders on the response to these fires.

Wayne Stansby: In terms of Jasper, we like so many others are heartbroken for the devastation facing the mountain community.

Wayne Stensby: ADCOA has provided natural gas and electricity to the community of Jasper for well over 80 years. We have employees who live in Jasper, and our teams worked arm and arm on the response, and we will continue to partner with the community on the recovery, the re-entry, and the eventual rebuild. Atco Energy Systems delivered another strong quarter with adjusted earnings of $112 million.

Speaker Change: At Cortez provided natural gas and electricity to the community of Jasper for well over 80 years, we have employees, who live in Jasper and our teams worked arm in arm on the response and we will continue to partner with the community on the recovery the reentry and the eventual rebuilt.

Wayne Stensby: We have employees who live in Jasper, and our teams worked arm in arm on the response, and we will continue to partner with the community on the recovery, the reentry, and the eventual rebuild.

Wayne Stansby: Yes.

Wayne Stensby: At Coenergy Systems, delivered another strong quarter with adjusted earnings of $112 million. This is $14 million, up from the same period in 2023. Our second quarter results have benefited from the previously disclosed increase in allowable ROE from 8.5% in 2023 to 9.28% in 2024, as well as rate-based growth. And as Katie mentioned in this quarter, we have carried out some restructuring as we continue to focus on cost efficiencies and also get ourselves aligned and 100% focused on our higher growth future. Year-to-date, we have invested $565 million to serve the evolving needs of our customers, and we are on pace to deliver our 2024 capital investment guidance of $1.2 billion.

Wayne Stensby: This is $14 million up from the same period in 2023. Our second quarter results have benefited from the previously disclosed increase in allowable ROE from 8.5% in 2023 to 9.28% in 2024, as well as rate-based growth. And as Katie mentioned, in this quarter, we have carried out some restructuring as we continue to focus on cost efficiencies and also get ourselves aligned and 100% focused on our higher growth future. Year to date, we have invested $565 million to serve the evolving needs of our customers, and we are on pace to deliver our 2024 Capital Investment Guidance of $1.2 billion.

Speaker Change: Atco energy systems delivered another strong quarter with adjusted earnings of $112 million. This was $14 million up from the same periods in 2023.

Speaker Change: Our second quarter results have benefited from the previously disclosed increase in allowable ROA from eight 5% in 2023% to 9.28% in 2024 as well as rate base growth and as Katie mentioned.

Katie: In this quarter, we have carried out some restructuring as we continue to focus on cost efficiencies and also get ourselves aligned and 100% focused on our higher growth future.

Katie: Year to date, we have invested $565 million to serve the evolving needs of our customers and we are on pace to deliver our 2024 capital investment guidance.

Wayne Stensby: The focus areas for our capital investment include customer growth, and we continue to see large quantities of customer growth here in Alberta, system resilience, climate adaptation, decarbonization, and grid modernization. In the second quarter, we announced the Yellowhead Main Line project, an approximately 200-kilometer pipeline that will deliver one billion cubic feet of natural gas per day to Alberta's industrial heartland. This investment will exceed $2 billion and will enable tens of billions of dollars of new investment in major industrial projects, such as Dow's Path to Zero project, as well as support the ongoing growth and demand that we're seeing.

Wayne Stansby: Of $1 $2 billion.

Wayne Stensby: The focus areas for our capital investment include customer growth, and we continue to see large quantities of customer growth here in Alberta, system resilience, climate adaptation, decarbonization, and grid modernization.

Wayne Stansby: The focus areas for our capital investment include customer growth and we continue to see large quantities of customer growth here in Alberta system resilience climate adaptation de carbonization and grid modernization.

Wayne Stensby: In the second quarter, we announced the Yellowhead mainline project, an approximately 200 kilometer pipeline that will deliver 1 billion cubic feet of natural gas per day to Alberta's industrial heartland. This investment will exceed $2 billion and will enable tens of billions of dollars of new investment in major industrial projects, such as Dow's Path to Zero project, as well as supporting the ongoing growth and demand that we are seeing. We are already consulting with stakeholders, and we expect to start the regulatory process this quarter, with construction commencing in 2026.

Wayne Stansby: In the second quarter, we announced the yellow head mainline project.

Wayne Stansby: And approximately 200 kilometer pipeline that will deliver 1 billion cubic feet of natural gas per day to Alberta industrial Heartland. This.

Wayne Stansby: This investment will exceed $2 billion and will enable tens of billions of dollars.

Wayne Stansby: Of new investment in major industrial projects, such as Dallas path to zero project as well as supporting the ongoing growth and demand that we're seeing.

Wayne Stensby: We are already consulting with stakeholders, and we expect to start the regulatory process this quarter with construction commencing in 2026. On the electricity side, our Central East Transfer Out, or CETO, electric transmission project is also progressing well, and construction will begin later this quarter. As a reminder, this project is an 85-kilometer, 240 kV double circuit, high-voltage electric transmission line and the associated substation expansion.

Wayne Stansby: We are already consulting with stakeholders and we expect to start the regulatory process this quarter with construction commencing in 2026.

Wayne Stensby: On our electricity side, our Central East Transfer Out or CEDO Electric Transmission Project is also progressing well, and construction will begin later this quarter. As a reminder, this project is an 85 kilometer 240 kV double-circuit high voltage electric transmission line and the associated substation expansions. In the quarter, along with the announcement of Yellowhead, we increased the top end of our guidance for three-year rate base growth to $4.7 billion, which represents a compound annual growth rate of 4.3%. And we also affirmed our long-term rate base growth range of 4% to 5%, for which we are feeling very good.

Wayne Stansby: On our electricity side, our central East transfer road or Sito Electric transmission project is also progressing well and construction will begin later this quarter. As a reminder, this project is an 85 kilometers to 40 kv double circuit high voltage electric transmission line and the.

Wayne Stansby: Associated substation expansions.

Wayne Stensby: In the quarter, along with the announcement of Yellowhead, we increased the top end of our guidance for three-year rate-based growth to $4.7 billion, which represents a compound annual growth rate of 4.3%. And we also affirmed our long-term rate-based growth range of 4 to 5%, about which we are feeling very good. On the regulatory side, the Alberta Utilities Commission released a decision that concluded while there was no flaw in the electric and gas distribution performance-based regulatory plans, there was a problem with the operation of these plans.

Wayne Stansby: In the quarter, along with the announcement of yellow head, we increased the top end of our guidance for three year rate base growth to $4 $7 billion, which represents a compound annual growth rate of four 3% and we also affirmed our long term rate base growth range of four to five per cent for which we are.

Wayne Stansby: Feeling very good.

Wayne Stensby: On the regulatory side, the Alberta Utilities Commission released a decision that concluded while there was no flaw in the electric and gas distribution performance-based regulation plans, there was a problem with the operation of these plans. We disagree with this decision, and we have sought permission to appeal it with the Alberta Court of Appeal. We expect a decision on our appeal in 2025, and we will continue to provide updates on this process.

Wayne Stansby: On the regulatory side, the Alberta Utilities Commission released the decision that concluded.

Wayne Stansby: There was no flaw in the electric and gas.

Wayne Stansby: Distribution performance based regulation plans there was a problem with the operation of these plans.

Wayne Stansby: We disagree with this decision and we have sought permission to appeal it with the Alberta Court of appeal.

Wayne Stensby: We disagree with this decision, and we have sought permission to appeal it in the Alberta Court of Appeal. We expect a decision on our appeal in 2025, and we will continue to provide updates on this process. And with that, I turn the call over to Bob, who will speak to NPOWER's results this quarter.

Wayne Stansby: We expect a decision on our appeal in 2025, and we will continue to provide updates on this process.

Bob Miles: And with that, I have turned the call over to Bob, who will speak to end-powers results this quarter. Thanks, Wayne, and good morning, everyone. As Katie indicated earlier, end-powers adjusted earnings were up from the same period in 2023. Within our electric generation business, we recognize an expected settlement related to the historical availability of our wind turbines. Following our contractual discussions with our wind turbine supplier, we have agreed on the amount of generation that was lost in 2023 due to these technical issues. And we are finalizing the recovery with this supplier. In addition, the vendor has also recently completed the necessary warranty repairs to the wind turbines, which should continue to improve generation into the second half of 2024.

Wayne Stansby: And with that I'll turn the call over to Bob who will speak to end Power's results this quarter.

Bob Myles: Thanks, Wayne, and good morning, everyone. As Katie indicated earlier, NPOWER's adjusted earnings were up from the same period in 2023. Within our electric generation business, we recognize an expected settlement related to the historical availability of our wind turbines. Following our contractual discussions with our wind turbine supplier, we have agreed on the amount of generation that will be lost in 2023 due to these technical issues. And we are finalizing the recovery with this supplier.

Bob Miles: Thanks, Wayne and good morning, everyone as Katie indicated earlier and Power's adjusted earnings were up from the same period in 2023 within our electric generation business, we recognize unexpected settlement related to the historical availability of our wind turbines following our call.

Speaker Change: Traction with discussions with our wind turbine supplier. We have agreed on the amount of generation that was lost in 2023 due to these technical issues and we are finalizing the recovery with this supplier. In addition, the vendor has also recently completed the necessary warranty repairs to the wind turbines.

Bob Myles: In addition, the vendor has recently completed the necessary warranted repairs to the wind turbines, which should continue to improve generation into the second half of 2024. We expect the settlement to be completed in the second half of this year.

Wayne Stansby: Which should continue to improve generation into the second half of 'twenty 'twenty four we expect the settlement to be completed in the second half of this year.

Bob Miles: We expect the settlement to be completed in the second half of this year. Looking at our generation this quarter, our old man river hydro asset was returned to service following significant spring rainfall and the alleviation of drought conditions in southern Alberta in Q1 2024. Wind generation increased 9% as our 40 mile and Adelaide assets benefited from favorable weather conditions and stronger operating performance. We also saw contributions from our Barlow, Deerfoot, and Empress Solar assets, which achieved commercial operations in the second half of 2023. Moving to our storage and industrial water business, we recorded another strong quarter, with adjusted earnings growing $5 million from Q2 2023 to $10 million in Q2 2024.

Bob Myles: Looking at our generation this quarter, our Old Man River hydro asset was returned to service following significant spring rainfall and the alleviation of drought conditions in southern Alberta in Q1 2024. Wind generation increased 9% as our 40-mile and Adelaide assets benefited from favorable weather conditions and stronger operating performance. We also saw contributions from our Barlow, Deerfoot, and Empress solar assets, which achieved commercial operations in the second half of 2023. Moving to our storage and industrial water business, we recorded another strong quarter with adjusted earnings growing $5 million from Q2 2023 to $10 million in Q2 2024.

Wayne Stansby: Looking at our generation this quarter, our old Man River Hydro asset was returned to service following significant spring rainfall and the alleviation of drought conditions in southern Alberta in Q1, 'twenty 'twenty four winds.

Wayne Stansby: Wind generation increased 9% as our 40 mile and Adelaide assets benefited from favorable weather conditions and stronger operating performance.

Wayne Stansby: We also saw contributions from our Barlow Dear foot and Empress solar assets, which achieved commercial operations in the second half of 2023 <unk>.

Wayne Stansby: Moving to our storage and industrial water business, we record recorded another strong quarter with adjusted earnings growing $5 million from Q2, 2000 $23 million to $10 million in Q2, 'twenty 'twenty four higher earnings this quarter were primarily driven by increased volumes with the.

Bob Miles: Higher earnings this quarter were primarily driven by increased volumes, with the team securing several fixed and long-term contracts. These contracts provide line of sight to higher margins and earnings as we move forward through 2024. End Powers adjusted EBITDA for the quarter was $45 million, up 45% from $31 million last year. These results reflect the operational performance discussed earlier. During the quarter, the federal government passed Bill C-59, which approved investment tax credits related to, among other things, carbon capture utilization and storage. This enabled us to take a positive final investment decision on our Atlas carbon storage hub alongside our partner, Shell.

Bob Myles: Higher earnings this quarter were primarily driven by increased volumes with the team securing several fixed and long-term contracts. These contracts provide a line of sight to higher margins and earnings as we move forward through 2024. NPower's adjusted EBITDA for the quarter was $45 million, up 45% from $31 million last year.

Wayne Stansby: Team securing several fixed and long term contracts. These contracts provide line of sight to higher margins and earnings as we move forward through 2024.

Wayne Stansby: And Power's adjusted EBITDA for the quarter was $45 million up 45% from $31 million last year. These results reflect the operational performance discussed earlier.

Bob Myles: These results reflect the operational performance discussed earlier. During the quarter, the federal government passed Bill C-59, which approved investment tax credits related to, among other things, carbon capture, utilization, and storage. This enabled us to take a positive final investment decision on our Atlas carbon storage hub, alongside our partner Shell. This multi-phase, open access carbon storage hub is a major milestone in our commitment to advancing products and services which may contribute positively to society's goal of reducing emissions.

Wayne Stansby: Join the quarter the federal government passed Bill C 59, which approved investment tax credits related to among other things carbon capture utilization and storage. This enabled us to take a positive final investment decision on our Atlas carbon storage hub alongside our partner shell.

Bob Miles: This multi-phase open access carbon storage hub is a major milestone in our commitment to advancing products and services which may contribute positively to society's goal of reducing emissions. This is the first step in at-go end powers work to create a full value chain for hydrogen development from production and carbon abatement to transport and export. The Atlas carbon storage hub is integral to At-go's long-term strategy and sustainability aspirations. Finally, and speaking more about the Heartland hydrogen hub, we have made significant progress advancing this important opportunity. We have entered into a letter of intent with an operator and equity partner for both domestic and export opportunities.

Wayne Stansby: This multi phase open access carbon storage hub is a major milestone in our commitment to advancing products and services, which may contribute positively to society goal of reducing emissions.

Bob Myles: This is the first step in ATCO NPower's work to create a full value chain for hydrogen development from production and carbon abatement to transport and export. The Atlas carbon storage hub is integral to ATCO's long-term strategy and sustainability aspirations. Finally, and speaking more about the Heartland Hydrogen Hub, we have made significant progress advancing this important opportunity. We have entered into a letter of intent with an operator and equity partner for both domestic and export opportunities.

Speaker Change: This is the first step and Atco Anne powers work to create a full value chain for hydrogen development from production and carbon abatement to transport and export the Atlas carbon storage hub is integral to add goes a long term strategy and sustainability aspirations five.

Wayne Stansby: Finally, and speaking more about the heartland hydrogen hub, we have made significant progress advancing this important opportunity we've entered into a letter of intent with an operator and equity partner for both domestic and export opportunities. We are also progressing discussions with interested first nations to Purdue.

Bob Myles: We are also progressing discussions with interested First Nations to participate in our large hydrogen initiative. We continue to work towards making a project FID in 2025, and we will continue to provide updates as we progress this important project. With that, I'll now pass the call back to Katie.

Bob Miles: We are also progressing discussions with interested First Nations to participate in our large hydrogen initiatives.

Speaker Change: <unk> and our large hydrogen initiative, we continue to work towards making a project F. I D. In 2025, and we will continue to provide updates as we progress. This important project with that I'll now pass the call back to Katie.

Bob Miles: We continue to work towards making a project FID in 2025, and we will continue to provide updates as we progress this important project.

Katie Patrick: With that, I'll now pass the call back to Katie. Thanks, Bob and Wayne. Katie Utilities delivered another great quarter, and we are in a strong footing for 2024. As we talked about on our Q1 call and during our AGM, the entire Canadian Utilities team is focused on delivering this new phase of growth we have set out for ourselves. We are building momentum across our businesses, growing earnings, all while delivering sustainable share owner value.

Katie: Thanks, Bob and when can.

Katie Patrick: Canadian Utilities delivered another great quarter, and we are on a strong footing for 2024. As we talked about on our Q1 call and during our AGM, the entire Canadian Utilities team is focused on delivering this new phase of growth we have set out for ourselves. We are building momentum across our businesses, growing earnings, all while delivering sustainable shareholder value. With that, we will now open the line for questions.

Katie: Canadian utilities delivered another great quarter, and we are in a strong footing for 'twenty 'twenty four as.

Katie: As we talked about on our Q1 call and during our AGM. The entire key utilities team is focused on delivering this new phase of growth, we have set out for ourselves.

Wayne Stansby: We are building momentum across our businesses growing earnings all while delivering sustainable shareowner value.

Unknown Executive: With that, we will now open the line for questions. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speaker phone, please pick up your headset before pressing the keys. To withdraw your question, please press star, then two. Once again, anyone on the conference call who wishes to ask a question may press star, then one at this time.

Speaker Change: That we will now open the line for questions.

Operator: We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging that you've heard your request. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Once again, anyone on the conference call who wishes to ask a question may press star then 1 at this time. The first question comes from Mark Jarvi with CIBC Capital Markets. You may now go ahead.

Speaker Change: We will now begin the question answer session.

Speaker Change: To join the question queue you may have.

Speaker Change: Press Star then one on your telephone keypad.

Speaker Change: You'll hear tone acknowledging your request.

Speaker Change: If you're using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: Once again any one on the conference call who wishes to ask a question Press Star then one at this time.

Mark Jarvi: The first question comes from Mark Jarvi with CIBC Capital Markets.

Speaker Change: The first question. The first question comes from Mark Jarvi with CIBC capital markets.

Mark Jarvi: You may now go ahead. Thanks.

Speaker Change: You May now go ahead.

Mark Jarvi: Thanks. Good morning, everyone. Just on the hydrogen project, you've got a letter of intent. When would you be in a position to share who the partners are, outline sort of how you see this coming to the formation of the project, and are you leaning towards more of an export for the offtake, or is it more of a domestic use case at this point?

Mark Jarvi: Thanks corner, one just on the hydrogen project.

Mark Jarvi: Good morning, everyone. Just on the hydrogen project, it's got a letter of intent. When would you be in a position to share who the partners are outlined, sort of how you see this coming to the formation of the project, and are you leaning towards more an export for the off-take, or is it a domestic use case at this point?

Speaker Change: If you've got a letter of intent.

Mark Jarvi: We can give you in a position to share who the partners are outlined sort of how you see this coming to the formation of the project and are you lean towards more of an export hub for the offtake or is that a domestic use case at this point.

Bob Miles: Hi, Mark. Bob here. I want to be able to tell you who the party is, but right now it's still confidential. But I did want to share with everyone that we did, as we said in Q2, at the end of Q2, we wanted to be able to announce that we have found a partner. We really were focusing on bringing a partner in who brings operational capabilities on the hydrogen side, but with regards to domestic and export, we are pursuing both. And we're currently looking at the export side because there are a lot of auctions that are proceeding in the Southeast Asia market.

Bob Myles: Hi Mark, Bob here. I want to be able to tell you who the party is.

Bob Miles: Hi, Mark Bob here.

Speaker Change: I want to be able to tell you who the party is but right now its still confidential and but I did want to share with everyone that we did as we said in Q2 you know at the end of Q2, we wanted to be able to announce that we have found a partner, we really were focusing on bringing a partner in who brings operational.

Speaker Change: <unk> on the hydrogen side, but with regards to domestic and export we are pursuing both.

Bob Myles: But right now, it's still confidential, and but I did want to share with everyone that we did, as we said, in Q2, you know, at the end of Q2, we wanted to be able to announce that we had found a partner. We really were focusing on bringing in a partner who brings operational capabilities on the hydrogen side. But with regard to domestic and export, we are pursuing both. And we're currently looking at the export side, because there are a lot of auctions that are taking place in the Southeast Asian market.

Speaker Change: And we're currently looking at the export side because there are a lot of auctions that are proceeding in the southeast Asia market, and we really want to be participating in that and as you know a lot of the export is really tied to us being able to address the rail concerns and being able to get the product to market. So.

Bob Miles: And we really want to be participating in that. And as you know, a lot of the export is really tied to us being able to address the rail concerns and being able to get the product to market. So we do want to progress both domestic and export.

Speaker Change: So we do want to progress both domestic and export.

Mark Jarvi: What holds you back from communicating who the operating partner is? You haven't finalized all the documentation in the structure of the arrangement, or is there something else?

Judy: What holds you back from communicating Judy the operating partner is just you haven't finalized all of the documentation that N and the structure of the arrangement or is there something else.

Bob Myles: And we really want to be participating in that. And as you know, a lot of the export is really tied to us being able to address the rail concerns and being able to get the product to market. So we do want to progress both domestically and export.

Bob Miles: No, it's more Mark; our partner has asked us to say what we want to just get aligned on how we make this announcement. This is quite recent, like this is in the last couple of weeks.

Mark Jarvi: No it's more Mark our partners asked us they what we wanted to just get aligned on how we make this announcement. This is this is quite recent like this isn't the last couple of weeks. So we hope to be able to inform everybody here in the very near future.

Mark Jarvi: What holds you back from communicating who the operating partner is? Is it just that you haven't finalized all the documentation and the structure of the arrangement?

Mark Jarvi: So we hope to be able to inform everybody here in the very near future. Okay.

Bob Miles: Okay.

Mark Jarvi: And I'm turning into the Access Arrangement in Australia. Given your interactions as you go through this process now in the last couple of months, where are you seeing alignment on which item? In what aspects of the initial provisional sort of decision are you still struggling to get sort of alignment with what your reviews would be and push back from the regulators?

Bob Miles: And then turning to access arrangement in Australia.

Bob Myles: Or is there something else?

Speaker Change: Given your interactions as you go through this process now of the last 12 months, where are you seen alignment on which I don't think and what aspects.

Bob Myles: No, it's more, Mark, our partner has asked us, we want to just get aligned on how we make this announcement. This is quite recent, like the last couple weeks, so we hope to be able to inform everybody here in the very near future.

Mark Jarvi: and then Karina, the Access Arrangement in Australia. Given your interactions as you go through this process now, the last couple months, where are you seeing alignment on which items and what aspects of the initial provisional sort of decision? Are you still struggling to get sort of alignment on what your views would be and push back from the regulators?

Speaker Change: Of the initial professionals. Our decision are you still struggling to get sort of alignment for what your views would be in and pushed back from the regulators.

Katie Patrick: Yeah, I mean, I mentioned this few. Thanks, Mark. Sorry, it's Katie. I mentioned the few areas that we continue to have discussion on. I think we've had very open dialogue with the regulator down there and have exchanged a lot of information. In particular, the operating costs, the accelerated appreciation, and the demand forecast are the three areas that we continue to work with them on. I do believe that there is an alignment or a solution that will come somewhere between where our original submission was and where the original drafts. response was, but I think we should obviously have that in roughly November timeframe, and we look forward to a positive decision there.

Katie Patrick: Yeah, I mean, I mentioned a few. Thanks, Mark. Sorry, it's Katie.

Bob Miles: Yeah, I mean, I mentioned the few Ann Thanks, Mac, sorry, it's it's Katie.

Katie: Mentioned in a few areas that we continue to have discussion on I think.

Speaker Change: We've had very open dialogue with the regulator down there and have exchanged a lot of information and you know in particular to the operating costs the accelerated depreciation and the demand forecast in the three areas that we continue to work.

Bob Miles: With them on.

Bob Miles: I do believe that there is a a N.

Katie Patrick: I mentioned a few areas that we continue to have discussions on. I think, you know, we've had a very open dialogue with the regulator down there and have exchanged a lot of information. In particular, operating costs, accelerated depreciation, and the demand forecast are the three areas that we continue to work with them on. I do believe that there is an alignment or a solution that will come somewhere between, you know, where our original submission was and where the original draft, response was, but I think we should obviously have that in roughly the November time frame, and we look forward to a positive decision there.

Bob Miles: In alignment our solution that will come in somewhere between you know where our original submission was and where the original draft.

Bob Miles: Response was but I think we should.

Bob Miles: Obviously, we'll have that in methylene November timeframe and look forward to a positive decision there.

Mark Jarvi: Okay, last question for me is, can you elaborate on the restructurings, any financial impact, whether it's near-term costs or medium or longer-term earnings benefits from those efforts?

Katie Patrick: Okay, last question for me is, do you elaborate on the restructuring, any financial impact, whether it's near-term costs, hand-or-medium, or longer-term earnings benefits from those efforts? Sure, yeah, as I mentioned, we're focused on trying to drive cost efficiencies, as we always are. And in particular, we took a hard look at our corporate overhead structure in this quarter across our business units and at the corporate level. We do have note disclosure on the total amount of the severance and restructuring for the quarter, with a small amount anticipated still to come, very small amount. In terms of ongoing cost savings, we're not going to disclose exact figures, but we obviously look to continue to benefit from those cost restructuring initiatives in the future years.

Speaker Change: Last question for me is just can you elaborate on the restructuring.

Speaker Change: Any financial impact.

Speaker Change: Whether it's near term costs handle or medium or longer term earnings benefits from those efforts.

Katie Patrick: Sure. Yeah, as I mentioned, we're focused on trying to drive cost efficiencies as we always are. And in particular, we took a hard look at our corporate overhead structure in this quarter across our business units and at the corporate level. We do not have any disclosure on the total amount of the severance and restructuring for the quarter, with a small amount anticipated still to come. A very small amount. You know, in terms of ongoing cost savings, we're not going to disclose exact figures, but we obviously look to continue to benefit from those cost restructuring initiatives in the coming years. But as well, we set ourselves up with the right team and the right people to drive growth across the business as we move forward into our new strategic initiatives.

Speaker Change: Sure Yeah.

Speaker Change: Yeah as I mentioned, you know we're focused on trying to drive cost efficiencies as we always are.

Speaker Change: And in particular, we took a hard look at our corporate overhead structure in this quarter across our business units and at the corporate level.

Speaker Change: We do have note disclosure in the total amount is that the severance and restructuring for the quarter with a small amount anticipated are still to come very small amount.

Speaker Change: You know in terms of ongoing cost savings, we were not we were not going to disclose exact figures, but we obviously look to.

Speaker Change: Continues to benefit from those cost restructuring initiatives are in the future years, and but as well set ourselves up with the right team and the right people to drive growth across the business as we move forward into our new strategic initiatives.

Katie Patrick: But as well, set ourselves up with the right team and the right people to drive growth across the business as we move forward into our new strategic initiatives. Would we see any cost savings through the balance of this year? We do have some modest cost savings this year, yes.

Mark Jarvi: Would we see any cost savings through the balance of this year?

Speaker Change: What do we see any cost savings through the balance of this year.

Katie Patrick: We do have some modest cost savings this year, yes. Okay. I'll leave it there. Thank you.

Speaker Change: We do have some modest cost savings this year, yes.

Mark Jarvi: Okay, I'll leave it there. Thanks for your time today, everyone.

Mark Jarvi: Okay, I'll leave it there.

Speaker Change: I'll leave it there thanks for the time today Evan.

Mark Jarvi: Thanks for the time today, everyone.

Maurice Choi: Our next question will come from Maurice Choi with RBC Capital Markets. You may now go ahead. Thanks, and good morning, everyone. Maybe just starting off with the hydrogen bid. Can you discuss what remains is the bottleneck in signing the off-taker, both on a domestic and export side? I know you mentioned specifically for the export there is the real bit. So what is the status of, you know, getting regulations amended to accommodate this, but just our next or both domestic and export, please.

Operator: Our next question will come from Maurice Choy with RBC Capital Marketing. You may now go.

Speaker Change: Our next question will come from Maurice Choy with RBC capital markets. You May now go ahead.

Maurice Choy: Thanks, and good morning, everyone. Maybe I should start off with the hydrogen bid. Can you discuss what remains as the bottleneck in signing the offtaker, both on the domestic and export sides? I know you mentioned specifically for the export, there is the rail bit. So what is the status of getting regulations amended to accommodate this? But just the bottlenecks for both domestic and export, please.

Maurice Choy: Thanks, Ed and good morning, everyone, maybe just starting off with the hydrogen bed.

Maurice Choy: Can you discuss what remains is the bottleneck and citing the off taker both on a domestic and export side I know you mentioned.

Speaker Change: Screen for the export areas derail a bit.

Speaker Change: So what is the status of <unk>.

Speaker Change: Regulations amended to accommodate us, but just our Mexico, both domestic and export piece.

Bob Miles: I'm Maurice Bob here again. The if I could start with the domestic on the domestic side, I would say the bottleneck is really still the need for certainty on the policies and the programs here in Canada. And in particular, I think the ITC has been really helpful from the federal government, but there's still uncertainty as to what's going to happen in the future with the clean fuel standard. And will that continue, or will it not? So those are the things that are really holding back some of the domestic market in my mind with regards to export and having been reached very recently in the Japanese market.

Bob Myles: Hi Maurice, Bob here again. If I could start with the domestics. On the domestic side, I would say the bottleneck is really still the need for certainty in the policies and the programs here in Canada. And in particular, I think the ITC has been really helpful from the federal government, but there's still uncertainty as to what's going to happen in the future with the clean fuel standard. And will that continue, or will it not?

Bob Miles: I'm already its Bob here again, the if I could start with the domestic.

Speaker Change: On the domestic side I would say the bottleneck is really still the the need for certainty on the policies and the programs here in Canada and in particular I think the I T. C has been really helpful from the from the federal government, but the still there's still uncertainty as to what's going to happen in the <unk>.

Maurice Choy: Future with the clean fuel standards and will that continue or will it not so.

Bob Myles: So those are the things that are really holding back some of the domestic market, in my mind. With regard to export, and having been in the Japanese market recently, it's really coming down to the Asian market getting comfort with Canada, that Canada will be able to provide the product if they enter into contracts with us. And it's all around rail. And so if they can't get the confidence, they being the Asian market, that we can resolve our rail issues here, then they're not going to enter into any contracts with Canada. So that's kind of what we're working on as we speak.

Speaker Change: So those are the things that are really holding back some of the domestic.

Speaker Change: The domestic market in my mind with regards to export and having been reached very recently and the Egypt Japanese market, it's really coming down to the Asian market and market getting comfort with Canada, Canada will be able to provide the product to if they enter into contracts.

Bob Miles: But it's really coming down to the Asian market getting comfort with Canada that Canada will be able to provide the product to if they enter into contracts with us. And it's all around rail. And so if they, if they can't get the confidence, they being the Asian market, that we can resolve our rail and issues here, then they're not going to enter into any contracts with Canada. So that's kind of what we're working on as we speak.

Speaker Change: Tracks with us.

Speaker Change: And it's all around rail and so if they if they can't get the confidence they being in the Asian market that we can resolve our rail issues. Here, then they're not going to enter into any contracts with Canada. So that's kind of what we're working on as we speak.

Maurice Choy: And just to follow up on that real bit, is it just purely regulation, or is it just availability of ships? Can you just elaborate on that, and specifically, when do you think this will get resolved on the real side?

Bob Miles: And just to follow up on that real bit, is it just purely regulation or disability of cranes and chips can just elaborate that. And specifically, when do you think this will get resolved on the real side? Yeah, so the first thing on the rail side is there are a bunch of capital improvements that I think everybody feels is needed to be able to transport ammonia safely. And even though ammonia is being transported today, you know, the projects we're looking at is an increase in the amount of ammonia that will be transported. So it's a safety issue that Transport Canada really needs to get comfort around as well as, you know, our rail provider.

Speaker Change: And just a follow up on that real bad is it just purely regulation or just a bit of a building.

Speaker Change: Training Center.

Chips: Chips can you just elaborate that and specifically when do you think this will get resolved some real side.

Bob Myles: Yeah, so the first thing on the rail side is there are a bunch of capital improvements that I think everybody feels are needed to be able to transport ammonia safely. And even though ammonia is being transported today, you know, the projects we're looking at are an increase in the amount of ammonia that will be transported.

Speaker Change: Yeah. So the first the first thing on the rail side is there are a bunch of capital improvements at.

Speaker Change: I think everybody feels as needed to be able to transport ammonia safely and even though ammonia is being transported today.

Speaker Change: No. The projects. We're looking at is as an increase in the amount of ammonia that will be transported so it's a safety issue that transport, Canada really needs to get comfort around as well as you know our rail provider and then secondly, as you know the the issue around indemnity in liability and making sure everyone gets it.

Bob Myles: So it's a safety issue that Transport Canada really needs to get comfortable around, as well as, you know, our rail provider. And then, secondly, the issue of indemnity and liability and making sure everyone gets comfortable with that. So those are the two main areas of concern that we have to address. With regard to timing, Maurice, it's, we're pushing to still be involved in auctions this year. So we're pushing the government and we're pushing the rail provider to be able to address that with industry in 2024. And that's our timeline.

Bob Miles: And then secondly is, you know, the issue around indemnity and liability and making sure everyone gets comfort with comfortable with that. So those are the two main areas of concern that we have to address with regards to timing, Maurice. It's we're pushing to still be involved in auctions this year. So we're pushing the government, and we're pushing the rail provider to be able to address that with industry in 2024. And that's our timeline.

Maureen: Comforter with comfortable with that so those are the two main areas of concern that we have to address with regards to timing Maureen sits where we're pushing to still be involved in auctions. This year. So we're pushing the government and we're pushing the rail provider to be able to address that with industry in 2024.

Maureen: Sure.

Maureen: And that's our timeline.

Maurice Choi: Thanks. And the second question relates to obviously a small one, but obviously the decision to suspend the drip in July, not that you are saving much cash given the participation rate here, but just philosophically speaking, what has changed between when you really should have the trip to right now? Sorry, Marie.

Maurice Choy: Thanks. And the second question relates to a small one, but obviously the decision to suspend the drip in July. Not that you are saving much cash given the participation rate here, but just philosophically speaking, what has changed between when you re-initiated the trip and right now?

Speaker Change: Got it thanks.

Speaker Change: And second question relates to.

Speaker Change: Only a small one but obviously to the physician to suspend the drip in July.

Speaker Change: Not that you are saving much cash given the participation rate here, but just philosophically speaking.

Speaker Change: Let's change between when you initiate the crib to right now.

Operator: Sorry, Maurice, you cut out there for one second. Could you just, could you repeat the question? Yeah. Sorry.

Speaker Change: So it varies he cut out there for one second can you just could you repeat the question yet.

Katie Patrick: If you cut out there for one second, could you just could you repeat the question? Sorry about that. The question is about the drip in your position to suspend the program back in July. You weren't saving a whole lot of cash with this plant because of participation, but just wondering, philosophically speaking, what has changed from the time that you initiated the program to right now? Yeah, I think we there was two big factors there. I mean, we looked at the participation, which, as you noted, I think investors right now are very mindful of their cash dividend in this environment, and we looked at the participation, which was very low.

Maurice Choy: Sorry about that. The question is about the DRIP and your decision to suspend the program back in July. You weren't saving a whole lot of cash with this plan because of your participation, but I was just wondering, philosophically speaking, what has changed from the time that you re-initiated the program to right now.

Speaker Change: The question was about the trip and positioned to suspend the program back in July.

Speaker Change: You weren't saving a whole lot of cash with this plant.

Speaker Change: Plants like I said about participation, but just wondering philosophically speaking what has changed from the time that you re initiated the program to two right now.

Katie Patrick: Yeah, I think we have two big factors there. I mean, we met and we looked at the participation, which, as you noted, I think investors right now are very mindful of their cash dividend in this environment. And we looked at the participation, which was very low. And as you noted, it was not saving a significant amount of cash. Combined with, you know, the dilutive impact based on the share price of where we're at with the grip, we didn't make the determination to suspend that at the moment.

Speaker Change: Yeah, I think we there was two big factors there I mean, we met we looked at the participation, which as you noted I think investors right now are very mindful of their cash at dividend in this environment and we looked at the participation which was very low.

Katie Patrick: And as you noted, it was not saving a significant amount of cash combined with, you know, the dilutive impact based on the share price of where we're at with the drip. We didn't make the determination to suspend that at the moment. So, while it is dilutive impact to EPS, clearly you do have quite a bit of cash needs in the future. So I suppose this trip, I should I should depart this drip position from how you view how much cash that can be in the future, which still remains relatively hard and cost. Yeah, I mean, obviously, as we drive rate base growth, we're going to continue to have needs to finance that growth.

Speaker Change: And as you noted it was not savings.

Speaker Change: Difficult amount of cash.

Speaker Change: Combined with the dilutive impact based on the share price of where we're at with the with the Dep, We did make the determination to suspend that at the moment.

Maurice Choy: So while it is to do this impact sheet EPS, fairly, you do have quite a bit of cash needs in the future. So I suppose this trip, I should depart this trip position from how you view how much cash equity you need in the future, which still remains relatively unchanged from the past.

Speaker Change: So whilst it is dilutive impact to EPS.

Speaker Change: You do have quite a bit of cash needs in the future. So I suppose this trip I should I should take heart this drip position from.

Speaker Change: How you view, how much cash actually union future, which still remains relatively.

Speaker Change: Carton cost.

Speaker Change: Okay.

Katie Patrick: Yeah, I mean, obviously, as we drive rate-based growth, we're going to continue to have needs to finance that growth. And as I mentioned in my comments in the near term, we don't anticipate needing equity. But as we move forward and, you know, start to accelerate that rate-based growth, we'll obviously consider all our options available to us to make sure we maximize shareholder value in our financing decisions.

Speaker Change: Yeah, I mean, obviously as we drive rate base growth, we're going to continue to have needs to finance that growth.

Katie Patrick: And as I mentioned in my comments, in the near term, we don't anticipate needing equity.

Speaker Change: And as we as I mentioned in my comments in the near term, we don't anticipate needing equity.

Katie Patrick: But as we move forward and you know, start to accelerate that rate base growth, we will obviously consider all our options available to us to make sure we maximize shareholder value in our financing decisions.

Speaker Change: But as we move forward and you know like start to accelerate that rate base growth will obviously consider all our options available to us to make sure we maximize shareholder value in the financing decisions.

Unknown Executive: Anderson, thank you very much. Again, if you have a question, please start in one.

Maurice Choy: I understand. Thank you very much.

Speaker Change: Understood. Thank you very much.

Operator: Again, if you have a question, please press star then 1. Our next question will come from Ben Pham with BMO. You may now go ahead.

Speaker Change: Again, if you have a question. Please press Star then one our next question will come from Ben Pham with BMO you May now go ahead.

Ben Pham: Our next question will come from Ben Pham with BMO. She may now go ahead. Hi, thanks morning. There was reference to feeling good about the 45% rate-based growth.

Ben Pham: Alright, thanks, good morning.

Ben Pham: There was reference to feeling good about the 45% rate-based growth. Can you clarify? I think the thinking was that it was going to be more of a long-term, sorry, long-term, outcome versus something a bit more near-term in the next few years. Has that changed at all, or is it maybe there's a bit more of an accelerated top X cycle you can see?

Speaker Change: There is reference to kill.

Speaker Change: They don't care about the 5% rate base growth.

Ben Pham: Can you clarify, is that more, I think I was thinking that was going to be more of a long-term, sorry, long-term outcome versus something a bit more near term next few years? Is that change for all, or is it maybe a bit more in a solid rate of capex, like we can see?

Ben Pham: Can you clarify is that more I think I think it was that was going to be more of a how long term are I'm, sorry long term AR.

Ben Pham: Outcome versus something a bit more near term next few years, how has that changed at all or that maybe there's a bit more of an accelerated capex cycle you can see.

Wayne Stensby: Yeah, no, Ben, I think, thank you, it's Wayne Stensby speaking. Yeah, I think I was kind of providing my sentiment that we continue to see very, very strong growth here in Alberta. And as we, you know, work with our customers, even just through the last few months, we continue to see signs of increased demand for both electricity and gas capacity. So we are maintaining the guidance that we shared at our May AGM.

Ben Pham: Oh, Yeah, no Ben I think thank you its Wayne Stansby speaking.

Wayne Stensby: Yeah, no, Ben, I think, thank you. It's Wayne Stensby speaking. Yeah, I think I was kind of providing my sentiment that we continue to see very, very strong growth here in Alberta. And as we work with our customers, even just through the last few months, we continue to see signs of increased demand for both electricity and gas capacity. So we are maintaining the guidance that we shared at the May AGM. However, I would just, you know, I would just indicate that we continue to feel very good about that guidance. And our focus is not only on Yellow Head, although Yellow Head is a very near term permitting discussion for us, but it's a number of other opportunities as well.

Ben Pham: Yeah, I think I was kind of providing my sentiment that.

Ben Pham: That we continue to see very very strong growth here in Alberta and as we.

Ben Pham: Work with our customers.

Ben Pham: Even just through last few months.

Ben Pham: We continue to see signs of increased demand for both electricity.

Ben Pham: City and gas capacity so we.

Ben Pham: We are maintaining the guidance that we shared at her may AGM.

Wayne Stensby: However, I would just, you know, I would just indicate that we continue to feel very good about that guidance. And our focus is not only on Yellowhead, although Yellowhead is a very near-term permitting discussion for us, but there are a number of other opportunities as well.

Speaker Change: However, I would just you know I would just indicate that.

Ben Pham: We continue to feel very good about that guidance and our focus.

Ben Pham: <unk> is not only on yellow head, although yellow head is the very near term permitting discussion for us, but it's a number of other opportunities as well.

Ben Pham: And there's an honored equity need question: if the rate base goes to five percent, does that change the calculus on needing equity, and you can't self-fund your program anymore?

Wayne Stensby: And on an equity need question, if the rate base goes to 5%, does that change the calculus on needing equity, and you can't self-fund your programming more? Thanks, Ben. Yeah, no, as I mentioned, in the near term, we do not anticipate having any equity issuance needed to fund our near-term growth. Over the longer term, if we are successful, and we certainly will be in driving our rate base growth to those levels of 5% plus, you know, then we'll have to look at all available options to us, including equity, capital recycling, or other measures to fund that growth.

Ben Pham: And then on.

Ben Pham: On an equity.

Speaker Change: Good question.

Ben Pham: If if the rate base goes to.

Ben Pham: 5%.

Ben Pham: So does that change the calculus.

Ben Pham: Needing equity and you can self fund the program anymore.

Pat: Thanks Pat.

Katie Patrick: Yeah, no, as I mentioned, in the near term, we do not anticipate having any equity issuance needed to fund our near-term growth. But, over the longer term, if we are successful, and we certainly will be, in driving our rate-based growth to those levels of 5% plus, then we'll have to look at all available options to us, including equity, capital recycling, or other measures to fund that growth.

Speaker Change: Yeah, no as I mentioned it in the near term, we do not anticipate having any equity issuance needed to fund our near term growth.

Pat: Over the longer term if we are successful and we certainly will be in driving our rate base growth to those levels of 5% plus.

Ben Pham: Then we'll have to look at all available options to us, including equity capital recycling or other measures to fund that growth.

Ben Pham: Okay, got it.

Ben Pham: Okay, got it. And maybe lastly, maybe just more of a reminder, I mean, just the 10 year is hitting 3% here in Canada today. Can you remind us at what level it is at ROE, and it went up last year. But those 3% actually push it down into next year. And can you also clarify that that only impacts your non-PBR? You totally are, that's right.

Speaker Change: Okay got it.

Ben Pham: And then maybe lastly, let me just more of a reminder. I mean, just the 10-year is hitting 3% here in Canada today. Can you remind us of what level does that are we, you know, it went up last year? But the 3% actually pushed it down into next year.

Speaker Change: And then maybe lastly.

Speaker Change: And then just more of a reminder, I mean, the 10 year.

Speaker Change: It had a 3% and here in Canada today.

Speaker Change: Can you remind us at what level does.

Speaker Change: At our ROA, Yeah. It went up last year.

Speaker Change: But the 3% actually push it down into next year.

Clint Worcinton: And he also clarified that only impact you're not on PBR utility assets, right? Yeah, hi, Ben. It's Clint Work in here. That's right, long-term bond rates have come down since November when the 2024 return on equity was set. The commission will establish 2025's return on equity in November of this year. The bond rates are said to be lower, so the ROE would come down if bond rates stay as they are at the moment. In terms of the generic cost to capital decision, that return on equity applies across all of our regulated utilities, so our electric and gas distribution and transmission utility.

Speaker Change: And can you also clarify that that only impaction on P. B R E.

Tony: Tony assets right.

Clint Workington: Yeah. Hi Ben, it's Clint Orkington here.

Tony: Yeah, Hi, Ben it's Clinton or continued here.

Speaker Change: That's right long term bond rates have come down since November when the 'twenty 'twenty four return on equity was with that.

Clint Workington: That's right. Long-term bond rates have come down since November when the 2024 return on equity was set. The Commission will establish 2025's return on equity in November of this year. The bond rates, it said, would be lower, so the ROE would come down if bond rates stay as they are at the moment. In terms of the generic cost of capital decision, that return on equity applies across all of our regulated utilities, so our electric and gas distribution and transmission utilities. So yeah, your PBR one year it's it's it's on it's on a

Speaker Change: The Commission will establish 2025 return on equity in November of this year.

Speaker Change: The bond rates, you said will be lower so the ROE would come down a bond rates stay as they are at the moment in terms of the generic cost of capital decision that return on equity applies across all of our regulated utilities, so our electric and gas distribution and transmission utilities.

Ben Pham: And I just want to check the PBR ones. Is that rebased too with that, or are you protected there?

Speaker Change: So yeah.

Clint Worcinton: So it's on a formula so that will happen every year, November, each year, that you'll get re-determined.

Tony: Our one year, it's all it's all on a formula So that will happen every year November each year, you'll get re determined.

Clint Worcinton: And I just want to check the, but the PVR ones, is that rebased too with that, or are you protected there? Sorry on the PVR ones, so the return on equity piece does get determined every year. Okay, all right, got it. Okay, thank you.

Speaker Change: And I just wanted to check that but that's the PBR ones.

Speaker Change: Is that Rebase two of that are you protected there.

Clint Workington: Sorry on the PBR one. So the return on equity piece does get determined every year.

Speaker Change: Sorry on the P. B R. One so the return on equity piece does get does get determined every year.

Speaker Change: Okay, Alright got it okay. Thank you.

Ben Pham: Thank you.

Ben Pham: All right, I got it. Okay, thank you.

Unknown Executive: This concludes the question and answer session.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.

Colin Jackson: I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Thank you, Anthony. Thank you all for participating today. We appreciate your interest in Canadian Utilities, and we look forward to speaking with you again soon.

Speaker Change: Yeah.

Colin Jackson: Thank you Anthony.

Colin Jackson: Thank you all for participating today. We appreciate your interest in Canadian Utilities, and we look forward to speaking with you again soon. That concludes today's call.

Colin Jackson: Thank you all for participating today, we appreciate your interest in Canadian utilities, and we look forward to speaking with you again soon that.

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Operator: That concludes today's call. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant...

Speaker Change: That concludes today's call.

Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.