Q4 2024 Clearway Energy Inc Earnings Call

February 24, 2025

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Speaker Change: Hello, and welcome to Clearway Energy, Inc. fourth quarter earnings call.

Operator: Hello, and welcome to Clearway Energy, Inc. Fourth Quarter Earnings Call. At this time, all participants are on a listen-only 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. I would now like to turn the call over to Akil Marsh. You may begin.

At this time, all participants are on a listen-only mode.

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

Speaker Change: To ask the question during the session, you will need to press star 11 on your telephone. You could then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question, please press star 11 again. I would now like to turn the call over to Akil Marsh. You may begin.

Speaker Change: Thank you for taking the time to join Clearway Energy, Inc.'s fourth quarter call. With me today are Craig Cornelius, the company's president and CEO, and Sarah Rubenstein, the company's CFO.

Akil Marsh: Thank you for taking the time to join Clearway Energy, Inc.'s Q4 call. With me today are Craig Cornelius, the company's President and CEO, and Sarah Rubenstein, the company's CFO. Before we begin, I'd like to quickly note that today's discussion will contain forward-looking statements, which are based on assumptions that we believe to be reasonable as of this date. Actual results may differ materially. Please review the safe harbor in today's presentation, as well as the risk factors in our SEC filings. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation.... In particular, please note that we will refer to both offered and committed transactions in today's oral presentation, and also may discuss such transactions during the question and answer portion of today's conference.

Speaker Change: Before we begin, I'd like to quickly note that today's discussion will contain four looking statements which are based on assumptions that we believe to be reasonable as of this date. Aperture results may differ materially. Please review the safe harbor in today's presentation as well as the risk factors in our SEC filings.

Speaker Change: In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation.

Speaker Change: In particular, please note that we will refer to both offered and committed transactions in today's oral presentation and also may discuss such transactions during the question and answer portion of today's conference.

Speaker Change: Please refer to the safe harbor in today's presentation for a description of the categories of potential transactions and related risk, contingencies, and uncertainties.

Akil Marsh: Please refer to the safe harbor in today's presentation for a description of the categories of potential transactions and related risks, contingencies, and uncertainties. With that, I'll hand it over to Craig.

With that, I'll hand it over to Craig.

Thanks, Akil. Turning to slide four.

Speaker Change: We are very proud of the year that Clearway just turned in over 2024.

Craig Cornelius: Thanks, Akil. Turning to slide four. We are very proud of the year that Clearway just turned in over 2024. Our financial and operational results exceeded our key objectives. We completed the core growth objectives that we'd established, and we simplified and strengthened our platform in ways that enabled these successes and set us up for a bright future. In addition to achieving these outcomes in the year just passed, we made further progress towards meeting the long-term financial goals we set for 2027 and beyond. I remain confident that this platform has the long-lived asset base, growth trajectory, and capital allocation flexibility we need to deliver sustainable earnings growth through the balance of this decade. For 2024, we met our dividend per share growth commitment while delivering full-year CAFD ahead of our guidance.

Speaker Change: Our financial and operational results exceeded our key objectives, we completed the core growth objectives that we'd established, and we simplified and strengthened our platform in ways that enabled these successes and set us up for a bright future.

Speaker Change: In addition to achieving these outcomes in the year just passed, we made further progress towards meeting the long-term financial goals we set for 2027 and beyond.

Speaker Change: I remain confident that this platform has the long-lived asset base, growth trajectory, and capital allocation flexibility we need to deliver sustainable earnings growth through the balance of this decade.

Speaker Change: For 2024, we met our dividend per share growth commitment while delivering full-year CAFD ahead of our guidance.

Speaker Change: We also committed to approximately $450 million of growth investments this year out of creative economics while bringing online over one gigawatt of renewable power generation and energy storage capacity.

Craig Cornelius: We also committed to approximately $450 million of growth investments this year at accretive economics, while bringing online over 1 GW of renewable power generation and energy storage capacity. Looking ahead to 2025, we've reaffirmed our 2025 guidance range and have gained further confidence in our ability to meet the midpoint or better of that range through CAFD, expected to be contributed by committed investments and the ongoing strength in the performance of our fleet. On top of the Tuolumne investment, which we've since signed, we're enthused by the additional announcements we're sharing today that firmed up the predictable earnings power that we expect our existing fleet to contribute, as we drive towards the top half of our 2027 target range of $2.40 to 2.60 per share.

Speaker Change: Looking ahead to 2025, we've reaffirmed our 2025 guidance range and have gained further confidence in our ability to meet the midpoint or better of that range through CAFDI expected to be contributed by committed investments and the ongoing strength in the performance of our fleet.

Speaker Change: On top of the Tuolumne investment, which we've since signed, we're enthused by the additional announcements we're sharing today that firmed up the predictable earnings power that we expect our existing fleet to contribute as we drive towards the top half of our 2027 target range of $2.40.

to $2.60 per share.

Speaker Change: We are making attractive investments in our existing fleet with the commitment to invest in phase one of the honeycomb storage projects and the repowering of Mount Storm, which is underpinned by an awarded PPA with a major technology company.

Craig Cornelius: We are making attractive investments in our existing fleet with the commitment to invest in phase one of the Honeycomb storage projects and the repowering of Mount Storm, which is underpinned by an awarded PPA with a major technology company. We've also firmed up our growth outlook via revenue contracting in our existing fleet, with new RA contracts at El Segundo and a PPA extension at Wildorado that collectively increase our CAFD per share outlook without deploying incremental capital. Our growth prospects for 2027 and beyond also remain robust, as Clearway Group continues to develop an abundant pipeline of CWEN-compatible projects, while also offering reliable, affordable energy to our customers.

Speaker Change: We've also firmed up our growth outlook via revenue contracting in our existing fleet with new RA contracts at El Segundo and a PPA extension at Will Dorado that collectively increase our CAFTI per share outlook without deploying incremental capital.

Speaker Change: Our growth prospects for 2027 and beyond also remain robust as Clearway Group continues to develop an abundant pipeline of CWIN-compatible projects while also offering reliable, affordable energy to our customers.

Speaker Change: The combination of proactive planning to secure qualification for tax credits across multiple COD vintages.

Craig Cornelius: The combination of proactive planning to secure qualification for tax credits across multiple COD vintages, thoughtful procurement, and financial scale, have positioned our enterprise to serve our country's growing electricity demand with resiliency across a spectrum of policy scenarios. Taking all this into account, we're proud of how we've continued to execute in the short run, while we've also methodically assembled accretive building blocks for predictable growth in the long run. Here at Clearway, we like to think that we're setting the gold standard for what it means to be a leading all-of-the-above energy company in the United States. Turning to slide 5. Since our last call, we've once again made steps forward on value accretive growth. We signed a binding agreement to acquire Tuolumne, which continues our successful track record of selective project acquisitions that are right-sized and complementary to our fleet.

Speaker Change: thoughtful procurement, and financial scale have positioned our enterprise to serve our country's growing electricity demand with resiliency across a spectrum of policy scenarios.

Taking all this into account,

Speaker Change: We're proud of how we've continued to execute in the short run, while we've also methodically assembled a creative building blocks for predictable growth in the long run.

Speaker Change: Here at Clearway, we like to think that we're setting the gold standard for what it means to be a leading all of the above energy company in the United States.

Turning to slide five.

Speaker Change: Since our last call, we've once again made steps forward on value accretive growth.

Speaker Change: We signed a binding agreement to acquire Tuolumne, which continues our successful track record of selective project acquisitions that are right-sized and complementary to our fleet.

Speaker Change: The transaction, which is expected to close in the first quarter, is expected to generate an approximately 12% five-year average annual cap-to-yield and expands our portfolio in the western states that make up our fleet's core.

Craig Cornelius: The transaction, which is expected to close in Q1, is expected to generate an approximately 12% five-year average annual CAFD yield and expands our portfolio in the western states that make up our fleet's core. We're also pleased to announce that Clearway committed to phase 1 of the Honeycomb Battery hybridization program, investing in new battery projects adjacent to Clearway's existing fleet of solar projects in Utah. We hope this is the first of many examples of how Clearway's existing renewable projects can one day house complementary battery capacity. Clearway committed to invest approximately $78 million in corporate capital in the program at an attractive CAFD yield. We will fund this investment in 2026. Both investments can be funded with existing sources of liquidity, and Sarah will discuss the company's liquidity position in more detail during her section.

Speaker Change: We're also pleased to announce that CWIN committed to phase one of the Honeycomb Battery Hybridization Program, investing in new battery projects adjacent to CWIN's existing fleet of solar projects in Utah.

Speaker Change: CWIN committed to invest approximately $78 million in corporate capital in the program at an attractive cap-to-yield. We will fund this investment in 2026.

Thank you.

Speaker Change: Both investments can be funded with existing sources of liquidity, and Sarah will discuss the company's liquidity position in more detail during her section.

Thanks for watching. See you next time.

Speaker Change: Lastly, we added 492 megawatts of Western US storage projects to our future identified drop-down opportunities list.

Craig Cornelius: Lastly, we added 492 MW of Western US storage projects to our future identified drop-down opportunities list. The underlying projects have been awarded long-term agreements with investment-grade customers, and Clearway expects to receive an offer to invest in the projects in 2025. As always, any commitment will be subject to the required approvals from Clearway's Governance, Conflicts, and Nominating Committee. Turning to slide 6. During the last quarter, we also extended our track record of high-return, life-extending repowerings in our wind fleet. With our wind fleet's assets located in some of the country's most resource-rich locations, we think this track record increasingly demonstrates how well-sited renewable energy projects can be an effectively perpetual asset base when sustained through disciplined, value-accretive investments....

Speaker Change: The underlying projects have been awarded long-term agreements with investment grade customers and CWIN expects to receive an offer to invest in the projects in 2025.

Speaker Change: As always, any commitment will be subject to the required approvals from CWIN's Governance, Conflicts, and Nominating Committee.

Turning to slide 6.

Speaker Change: During the last quarter, we also extended our track record of high return life-extending repowerings in our wind fleet.

Speaker Change: With our wind fleet assets located in some of the country's most resource-rich locations, we think this track record increasingly demonstrates how well-sighted renewable energy projects can be an effectively perpetual asset base when sustained through disciplined value accretive investments.

Speaker Change: In aggregate, we have repowered or committed to repower 712 megawatts of our wind portfolio, successfully doing so with great effectiveness when projects are eligible.

Craig Cornelius: In aggregate, we have repowered or committed to repower 712MW of our wind portfolio, successfully doing so with great effectiveness when projects are eligible. In our latest example of this track record, the previously announced Cedro Hill project achieved repowering COD in late 2024. This value-enhancing, life-extending repowering was completed on time and on budget relative to the assumptions we disclosed when CECO first committed to the investment. Today's announcement of the Mount Storm repowering is a quintessential example of our fleet optimization efforts continuing. Overall, this planned repowering is expected to extend the asset's useful life, improve its risk profile, and drive incremental CAFD growth. The repowering will also increase the complex's nameplate capacity to 335MW, enabling a substantial increase to its annual production.

Speaker Change: In our latest example of this track record, the previously announced Cedro-Hill project achieved repowering COD in late 2024.

Speaker Change: This value-enhancing, life-extending repowering was completed on time and on budget relative to the assumptions we disclosed when CUN first committed to the investment.

Speaker Change: Today's announcement of the Mount Storm repowering is a quintessential example of our fleet optimization efforts continuing.

Speaker Change: Overall, this planned repowering is expected to extend the asset's useful life, improve its risk profile, and drive incremental CAFD growth.

Speaker Change: The repowering will also increase the complex's nameplate capacity to 335 megawatts, enabling a substantial increase to its annual production.

Speaker Change: To commercialize the project, we are partnering with a major technology company as the offtaker under an awarded 20-year PPA that is being finalized and will be jointly announced soon.

Craig Cornelius: To commercialize the project, we are partnering with a major technology company as the offtaker under an awarded 20-year PPA that is being finalized and will be jointly announced soon. Extending beyond Mount Storm, the Clearway enterprise continues to have engagement with this customer as a core strategic partner for future potential opportunities to provide renewable energy to power data centers across multiple markets. Turning to Slide 7. We also made further progress during the last quarter on driving future organic cash flow growth via contracting of open positions on our operating fleet, and are pleased by the way this pathway continues to evolve for us. 2024 was a successful year for contracting our California gas fleet in the flexible generation segment, which was formerly reported as our conventional segment.

Speaker Change: Extending beyond Mount Storm, the Clearway Enterprise continues to have engagement with this customer as a core strategic partner for future potential opportunities to provide renewable energy to power data centers across multiple markets.

Turning to slide seven.

Speaker Change: We also made further progress during the last quarter on driving future organic cash flow growth via contracting of open positions on our operating fleet, and are pleased by the way this pathway continues to evolve for us.

Speaker Change: 2024 was a successful year for contracting our California gas fleet in the flexible generation segment, which was formerly reported as our conventional segment.

Craig Cornelius: Our new segment name reflects the key value proposition our gas fleet provides to stakeholders, a value proposition that will be increasingly noticeable in the years ahead. As discussed in previous quarters, tight capacity conditions in the Western US, coupled with thoughtful system planning from regulators, continues to put a focus on flexible generation units, such as our gas plants, that can provide dispatchable capacity for grid reliability. Today, we are announcing two new RA contracts at El Segundo for approximately 272MW, awarded through bilateral negotiations with load-serving entities. With these contracts, our California flexible generation fleet is now fully contracted in 2026 and 78% contracted through 2027, at price levels supportive of meeting the midpoint or better of our 2027 CAFD per share target range.

Craig Cornelius: For future contracting at our gas fleet, we remain focused on being methodical in our power marketing to ensure we capture full value for the plant's RA capacity. Successful revenue contracting for our existing fleet was also evident in our renewables segment. While our renewable fleet on average has a 12-year weighted average contract tenor, we are seeing opportunities for PPA extensions or repowerings on projects with soon-to-expire revenue contracts over the next few years, with PPA extensions, where appropriate, allowing us to firm up our growth visibility without deploying incremental capital. The Wildorado Wind Farm in Texas was repowered in 2020 and had a PPA that was set to expire in 2027 and presented an ideal opportunity for a PPA extension.

For future contracting at our gas fleet, we remain focused on being methodical in our power marketing to ensure we capture full value for the plants are a capacity.

Speaker Change: Successful revenue contracting for our existing fleet was also evident in our renewable segment.

Speaker Change: While our renewable fleet on average has a 12 year weighted average contract tenor we are seeing opportunities for PPA extensions or repowering is on projects with soon to expire revenue contracts over the next few years with PPA extensions, where appropriate, allowing us to firm up our growth visibility without deploying incremental capital.

Speaker Change: The well Dorado wind farm in Texas was re powered in 2020 and had a PPA that was set to expire in 2027 and presented an ideal opportunity for a PPA extension.

Craig Cornelius: We were able to sign a PPA amendment with the current customer that extends the contract expiration into 2030, at terms and pricing that support our goal of targeting the upper half of our 2027 CAFD per share target range. Between now and 2030, over 800MW of capacity in our wind fleet will present the opportunity for us to recontract or repower as PPAs expire. Based on rigorous analysis with a core focus on maximizing shareholder value, we have currently identified these PPA expirations for either future capital-light contract extensions or contracting to underpin a potential repowering.

Speaker Change: We were able to sign a PPA amendment with the current customer that extends the contract exploration into 2030 at terms and pricing that support our goal of targeting the upper half of our 2027 cap your per share target range.

Speaker Change: Between now and 2030 over 800 megawatts of capacity in our wind fleet will present, the opportunity for us to re contract or Repower as Ppas expire based.

Speaker Change: Based on rigorous analysis with a core focus on maximizing shareholder value. We have currently identified these PPA explorations for either future capital light contract extensions are contracting to underpin our potential repowering.

Craig Cornelius: Under either scenario, our wind fleet is increasingly well positioned to create shareholder value with future contracting, given the asset class's valuable clean energy production profile and the pronounced value of these assets in a market where demand for wind generation shape exceeds the market's ability to construct new supply. Turning to Slide 8. Tying the news we've shared today about growth investments and fleet optimization back to our 2027 targets, we're now in an even better position to achieve the top half of our 2027 CAFD per share target range. Taking into account previously committed growth investments and our prior disclosure for contracted and observed pricing levels for revenues in our Flexible Generation segment, we had previously provided visibility into how we could reach $2.40 per share of CAFD in 2027 at the bottom end of our target range.

Speaker Change: Under either scenario, our wind fleet is increasingly well positioned to create shareholder value with future contracting given the asset classes valuable clean energy production profile and the pronounced value of these assets in a market where demand for wind generation shape exceeds the market's ability to construct new supply.

Speaker Change: Turning to slide eight.

Speaker Change: Tying the news we've shared today about growth investments and fleet optimization back to our 2027 targets. We're now in an even better position to achieve the top half of our 2027 cap do you per share target range taken.

Speaker Change: Taking into account previously committed growth investments and our prior disclosure for contract in an observed pricing levels for revenues and our flexible generation segment.

Speaker Change: We had previously provided visibility into how we could reach $2 40 per share of <unk> in 2027 at the bottom end of our target range.

Craig Cornelius: From $2.40 per share, the growth investments we've announced since our last call position us to deploy over $350 million of capital, getting us closer to meeting the midpoint of the range without need for external equity funding. To reach the high end of the range, we are now pursuing multiple redundant pathways to deliver CAFD per share growth for our investors. The deployment of additional capital is one path. Clearway Group's pipeline has additional potential drop-downs in store that have not yet been offered and could allow for deployment of capital at sufficient levels to meet the top half of our 2027 range. We also remain active in terms of evaluating third-party M&A opportunities and are finding that today's market is presenting potential opportunities to acquire both single assets-... and portfolios consistent with our capital allocation framework.

From $2 40 per share the growth investments, we've announced since our last call position us to deploy over $350 million of capital getting us closer to meeting the midpoint of the range without need for external equity funding.

Speaker Change: To reach the high end of the range. We are now pursuing multiple redundant pathways to deliver cap the per share growth for our investors. The deployment of additional capital is one path.

Speaker Change: Clearway group's pipeline has additional potential dropdowns in store that have not yet been offered and could allow for deployment of capital at sufficient levels to meet the top half of our 2027 range.

Speaker Change: We also remain active in terms of evaluating third party M&A opportunities and are finding that today's market is presenting potential opportunities to acquire both single assets and portfolios consistent with our capital allocation framework.

Craig Cornelius: Additional fleet optimization improvements, such as the recent revenue contracting at El Segundo and Wildorado, provide still another pathway to add to our future CAFD per share levels with limited use of capital. Importantly, when evaluating the sufficiency of these avenues to meet our 2027 CAFD per share range, we've made sure to factor in the current cost of capital environment and its implications for refinancing of future maturities. So all in all, our outlook to meeting our 2027 financial objectives is shaping up well. We are confident in where we stand and look forward to continuing to make progress towards those goals one quarter at a time. With that, I'll turn it over to Sarah for the financial summary section.

Speaker Change: Additional fleet optimization improvements such as the recent revenue contracting at El Segundo and will Dorado provides still another pathway to add to our future cap deeper share levels with limited use of capital.

Speaker Change: Importantly, when evaluating the sufficiency of these avenues to meet our 2027 <unk> per share range. We've made sure to factor in the current cost of capital environment and its implications for refinancing of future maturities.

So all in all our outlook to meeting our 2027 financial objectives is shaping up well we are confident in where we stand and look forward to continuing to make progress towards those goals one quarter at a time.

Speaker Change: With that I'll turn it over to Sarah for the financial summary section.

Sarah Rubenstein: Thanks, Craig. On Slide 10, we provide an overview of our financial results, which include full-year Adjusted EBITDA of $1.146 billion and CAFD of $425 million. Fourth quarter Adjusted EBITDA was $228 million, and CAFD was $40 million, which reflected strong wind resource at Alta, offset in part by lower wind resource across the remainder of the portfolio, along with the benefit of timing with respect to the receipt of payments for insurance proceeds, and due under service contracts. Our fourth quarter results in our Flexible Generation segment, formerly known as conventional, reflected solid availability and the beneficial impact of energy management activities.

Sarah Rubenstein: Thanks, Craig.

Sarah Rubenstein: On slide 10, we provide an overview of our financial results, which include full year adjusted EBITDA of 114, 6 billion and cast the $425 million.

Sarah Rubenstein: First quarter, adjusted EBITDA was $228 million and cat D with $40 million, which reflected strong wind resource at Alta.

Sarah Rubenstein: Offset in part by lower wind resource across the remainder of the portfolio.

Sarah Rubenstein: Along with the benefit of timing with respect to the receipt of payments for insurance proceeds and do under service contracts, our fourth quarter results in our flexible generation segment, formerly known as conventional reflected solid availability and the benefit the beneficial impact of energy.

Sarah Rubenstein: Management activities.

Sarah Rubenstein: We are also pleased with our full-year CAFD results of $425 million, as compared to our guidance of $395 million, noting that it reflects the diligent work of our operating teams to carefully manage our assets and secure payments due under service agreements with our equipment suppliers. Additionally, our primarily unlevered assets in the Flexible Generation segment have provided strong availability and grid reliability during the year, helping us to exceed our expectations for the segment in 2024. We continue to reiterate our 2025 CAFD guidance range of $400 to $440 million, with a target to achieve the higher end of the range through the timely completion of growth investments, the closing of the Tuolumne acquisition, and continued focus on the availability and management of energy margin for our Flexible Generation fleet.

Sarah Rubenstein: We are also pleased with our full year cost the result of $425 million as compared to our guidance of 395 million, noting that it reflects the diligent work of our operating teams.

Sarah Rubenstein: Carefully manage our assets and secure payments due under service agreements with our equipment suppliers.

Sarah Rubenstein: Additionally, our primarily unlevered assets, a flexible generation segment.

Sarah Rubenstein: Provided strong availability and grid reliability during the year, helping us to exceed our expectations for this segment in 2024.

Sarah Rubenstein: We continue to reiterate our 2025, Kathy guidance range of $400 million to $440 million with a target to achieve the higher end of that range through the timely completion of growth investments the closing of the two on the acquisition and continued focus on the availability.

Sarah Rubenstein: And management of energy margin for our flexible generation fleet.

Sarah Rubenstein: The guidance range reflects P50 renewable production expectations at the midpoint, with the upper and lower ends of the range reflecting variability in potential outcomes for resource and availability. The company remains well positioned for growth with a strong balance sheet, forward-looking credit metrics in line with target ratings, and 98% of its consolidated long-term debt with a fixed interest cost. To fund growth to support our longer-term targets, we expect to be able to utilize retained CAFD as a primary source of capital, targeting retained CAFD in excess of $220 million accumulated over 2025 through 2027, based on our CAFD per share growth outlook. In addition, we anticipate having excess corporate debt capacity based on the target leverage midpoint, calculated using the low end of our target CAFD per share numbers for 2027.

Sarah Rubenstein: The guidance range reflects pieces, Steve renewable production expectations at the midpoint with the upper and lower ends of the range, reflecting variability in potential outcomes for resource and availability.

Sarah Rubenstein: The company remains well positioned for growth with a strong balance sheet.

Sarah Rubenstein: We're looking credit metrics in line with target readings and 98% of its consolidated long term debt with a fixed interest cost.

Sarah Rubenstein: To fund growth to support our longer term targets, we expect to be able to use utilize retained Kathy as the primary source of capital.

Sarah Rubenstein: Targeting retained Kathy in excess of 220 million accumulated over 2025 through 2027 based on our <unk> per share growth outlook.

Sarah Rubenstein: In addition, we anticipate having excess corporate debt capacity based on the target leverage midpoint calculated using the low end of our target <unk> per share numbers for 2027.

Sarah Rubenstein: That would potentially allow for excess cumulative debt capacity of approximately $300 to 400 million. Our revolving credit facility, which is largely undrawn, remains a key source of liquidity for the company. Beyond 2027, we will target maintaining a long-term payout ratio that is trending towards the bottom end of our 70% to 80% target in order to retain incremental CAFD, while also prioritizing our other capital allocation targets. Our long-term vision continues to anticipate the modest, predictable, periodic issuance of equity to fund growth investments. Only when the equity issuance required to capitalize them is anticipated to be accretive and to create long-term value for CWEN. We will aim to utilize this source of liquidity to assist us in achieving the high end of our 2027 CAFD per share target range and continue to anticipate no external equity is needed to achieve the midpoint.

Sarah Rubenstein: That would potentially allow for excess cumulative debt capacity of approximately $300 million to $400 million.

Sarah Rubenstein: Our revolving credit facility, which is largely undrawn remains a key source of liquidity for the company.

Sarah Rubenstein: Beyond 2027, we will target maintaining a long term payout ratio that is trending towards the bottom end of our 70% to 80% target.

Sarah Rubenstein: In order to retain incremental cost be.

Sarah Rubenstein: So prioritizing our other capital allocation target.

Our long term vision continues to anticipate the modest predictable periodic issuance of equity to fund your growth investments.

Sarah Rubenstein: Only when the equity issuance required to capitalize them is anticipated to be accretive and to create long term value for cys.

We will aim to utilize this source of liquidity to assist us in achieving the high end of our 2027 per share target range.

Sarah Rubenstein: Can you to anticipate no external equity is needed to achieve the midpoint of our 2027 objective.

Craig Cornelius: Now I will turn it back to Craig for a long term growth update and closing remarks.

Craig Cornelius: Thanks Sarah.

Craig Cornelius: Turning to slide 12.

Craig Cornelius: Key among our multiple pathways to growth in 2027 and beyond is clear right groups late stage pipeline, which we continue to believe is in a strong position.

Craig Cornelius: As a reminder, clearway group's late stage pipeline is diverse in technology and regional composition Clearway.

Craig Cornelius: Clearway group has made investments to secure qualification for tax credits for projects across multiple vintages.

Craig Cornelius: Has established framework agreements with major equipment suppliers, enabling access to domestic and risk mitigated supply chains and.

<unk> possesses the robust backlog of Derisked interconnection queue positions.

Craig Cornelius: Also clearway group is managing its progress through the federal permitting nexis, where applicable with a systemic approach and with confidence that its historical success and policy aware development will continue.

Beyond the projects that have already been committed to our offered clearway group's late stage pipeline represents over $750 million of potential corporate capital investments through the 2029 vintages.

Craig Cornelius: The amount includes at least $250 million of incremental investment opportunities in the 2026 and 2027 vintages that can support delivering 2027 cap per share at the high end of the range.

Craig Cornelius: In summary, clearway group's pipeline provides more than sufficient capital deployment opportunities to meet <unk> growth objectives through 2027 and beyond.

Turning to slide 13.

Craig Cornelius: We're also pleased that we have been enhancing our positioning as a leading energy provider for the rapidly growing demand.

Craig Cornelius: That is emerging from the rise of digital infrastructure and Reindustrialization here in America.

Craig Cornelius: The fact that the U S is poised for secular electricity demand growth is something this audience is familiar with already.

Craig Cornelius: But given our conservative organizational culture.

<unk> weighs that clear way is poised to benefit from this trend have been less apparent up to now.

Craig Cornelius: Though we intend to remain true to our culture and being deliberate about communicating commercial agreements and objectives. When they are material indefinite we will provide more of a window into our work in this area today and in future quarters.

Craig Cornelius: Within its overall pipeline Clearway group now has active development engagements on five gigawatts of projects that could serve data center demand in front of the meter or co location revenue arrangements across multiple markets, including PJM MISO ERCOT and the WAC.

Craig Cornelius: In addition to these front of the meter development stage projects Clearway group and Clearway Energy, Inc. Have begun to scope a select set of behind the meter projects in locations, where interconnection agreements and regulatory design are expected to allow for them.

Craig Cornelius: As we prove out those concepts the elbow Creek wind facility, we will host our first demonstration project for behind the meter renewable generation to serve data center load with that data center now currently under construction.

Craig Cornelius: The enterprise is also developing multi technology gigawatt scale clean energy complex is across five states to potentially serve co located data centers, implying of Varian combination of wind solar battery and gas generation technology in those development projects.

Craig Cornelius: Other project concepts of this kind these remain in the early stages of formulation, but around the end of the decade. These could potentially provide for accretive high return capital deployment opportunities to drive <unk> growth in the long run.

Craig Cornelius: As always the enterprise will be cognizant of the need to pace structure and optimize investments aligned with <unk> capital allocation framework.

Finally to calibrate what we are seeing overall in power marketing trends amidst the backdrop of growing electricity demand. We are glad to note. The customers are acknowledging the value of ready to build projects and the importance of strong franchises backing.

Craig Cornelius: With a need for new capacity and generation to come online throughout the country load serving entities and commercial and industrial customers are engaging with us on pricing and deal terms that allow projects to progress while relevant tax trade and permitting policies are uncertain.

In arrangements, we have reached an awarded in signed agreements in markets across the country.

Craig Cornelius: We are finding ways to assure adequate project investment returns, while also delivering a solid value proposition for our customers.

Craig Cornelius: Turning to slide 14.

Craig Cornelius: To recap clearway exceeded our 2024 financial objectives across the board.

Craig Cornelius: Our team worked with resolve to beat our 2024 goals, while putting ourselves in a great place to meet the targets, we set for 2025 and beyond.

Craig Cornelius: Turning to this year and the pass through 2027, we aim to continue to be a success oriented culture meeting or exceeding the midpoint of our 2025 FTE guidance range meeting, our dps growth commitments and further crystallizing visibility into meeting the top half of the 2027 target Caf II per share range.

Craig Cornelius: Seth.

Seth: Beyond 2027, we aim to accumulate further growth pathways from dropdown offers from Clearway group's development pipeline further repowering and hybridization opportunities and selective third party M&A.

Seth: We view the long term outlook for Clearway is one positioned for secular growth serving unabated growth in corporate and utility energy demand with solutions that meet our customers' goals.

Seth: Accretive capital allocation and financial flexibility will remain key pillars of our capital allocation framework as we pursue growth in that backdrop aiming to execute and extend our five to eight plus percent long term <unk> per share growth goal.

Seth: The combination of multiple growth pathways, a strict focus on allocating capital to the highest return investments and our long term target payout ratio trending towards 70% together provide a clear roadmap to effectuate predictable earnings power beyond 2027 across multiple scenarios.

Seth: In conclusion, we are proud to close the books on 2024 as a great year and are enormously grateful to the excellent clearway team that has put us on strong footing to create shareholder value for years to come as.

Seth: As the best in class all of the above energy company that we are.

Speaker Change: Operator, you may open the lines for questions.

Seth: Thank you.

Seth: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and wait to hear your name to be announced to withdraw. Your question. Please press star one again.

Seth: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Michael on again.

Speaker Change: With Evercore your line is open.

Michael: Hi, Thanks for taking my questions and congrats on a solid update.

Michael: So as we think about your excess debt capacity, you are now, saying $300 million to $400 million versus the 300 plus million last quarter.

Michael: Your total liquidity position hasnt changed much so adding incremental caf II without debt.

Michael: Not too different I was wondering if you could talk about what now potentially gets you to the $400 million versus the 300 plus previously.

Michael: Sure.

Michael: Yeah.

Michael: Thanks for the question I appreciate the recognition.

Michael: The basic expression of that range reflect the outlook we have.

Michael: For la.

Michael: <unk> contribution from the fleet incorporating some of the latest updates as I think you are implying.

Michael: And it's our intention to maintain.

Michael: That kind of outlook for incremental debt capacity in a way that incorporates investment commitments that have been made kathie that's been contributed.

Michael: By changes in our operating fleet as well as new commitments of that kind.

Michael: And with that Sara I'd love to turn to you if there's anything you'd like to add.

I think.

Speaker Change: You kind of covered it generally but essentially we have.

Michael: Yeah.

Michael: Based on what we've been working on.

Michael: And what we're able to do with the existing fleet in terms of re contracting our assets.

Michael: We feel comfortable that we can achieve.

Michael: Up to that $400 million of excess debt capacity.

Michael: <unk>.

Michael: Just on <unk>.

Michael: Without sort of investing incremental capital.

And adding additional commitments.

Michael: I think we still.

Michael: Express that in a range because there.

Michael: There's obviously a variety of outcomes that can occur, but as we sort of continue to execute on our plans and firm up some of the incremental capacity that we can.

Michael: Realized from the existing fleet, we feel more comfortable including that $400 million at the high end of the range.

Speaker Change: Got it. Thank you and then as we think about the new political administration.

Speaker Change: The reciprocal tariffs the tariffs on steel and aluminum and the 30 day pause in Mexico, and Canada coming to an end soon I was just wondering if you could talk about what portion of Clearway group supply chain is that risk and how quickly you would be able to shift to new suppliers and also if you expect delays or renegotiations.

Speaker Change: The PPA is due to increased equipment cost.

Speaker Change: Thanks for the question, Yes, I think.

Speaker Change: Planning for and mitigating policy risk is.

Speaker Change: A competency that differentiates our company and has over time.

Speaker Change: And the present circumstances are are one that really play to our strengths.

Speaker Change: So for the ranges.

Speaker Change: Changes in tariff are applicable duty rates that have been announced so far.

Speaker Change: Clearway group sponsor entity.

Speaker Change: Has put in place either arrangements with respect to revenue contracts or arrangements with respect to.

Speaker Change: Equipment suppliers and relationships with them in a way that allows for.

Speaker Change: For the projects that have been planned to contribute to <unk>.

Speaker Change: Both goals that have been committed to already or <unk>.

Speaker Change: Identified as part of its near term growth.

Speaker Change: Pathway to be able to proceed on the schedule that was planned.

Speaker Change: Absorbing.

Speaker Change: Implications of those changes in applicable duties.

Speaker Change: And what we're finding in general.

Speaker Change: Is that the.

The importance of near term constructive all projects that are well structured and are located in places where our customers need them.

Speaker Change: As such that.

Speaker Change: <unk>.

Speaker Change: The incremental cost that's attributable to tariffs like the ones that you've noted.

Speaker Change: Can be absorbed in some way that's reasonable.

Speaker Change: By the pricing of the revenue contract.

It's still delivering a really compelling value proposition for our customers. So we were planning for scenarios like the ones that are emerging now in the U S trade law and are pleased that the positioning of our projects and the relationships, we have with our customers and with our equipment suppliers are allowing us to continue to proceed in construction even with those changed.

Speaker Change: And applicable trade policy.

Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Julien Dumoulin Smith with Jefferies. Your line is open.

Hannibal Oscar: Hey, Good afternoon. This is Hannibal Oscar, Ontario, Julien I think the call and congrats on a quarter.

Hannibal Oscar: Churn is around M&A opportunities that you alluded to so what sort of assets or technologies are you looking at primarily is it wind or solar.

Hannibal Oscar: The ghastly and then separately I know you talk about.

Hannibal Oscar: Not really meeting any equity or big equity raises to get to 2027 mid point and potentially better but further write transaction would you consider a big block common equity raise.

Hannibal Oscar: Okay.

Hannibal Oscar: On the first question.

Hannibal Oscar: I think as we have historically we.

Hannibal Oscar: Select for potential operating asset acquisitions based on.

Hannibal Oscar: A few key factors first complementarity to the existing.

Hannibal Oscar: Technology resource and customer portfolio that we have.

Hannibal Oscar: Second.

Hannibal Oscar: Opportunities too.

Hannibal Oscar: Extract cost our operating synergy based on proximity or similarity of technology.

Hannibal Oscar: Third the ability for a clear way to apply some kind of unique.

Hannibal Oscar: <unk> addition to the operating assets through some commercialization or technology change.

Hannibal Oscar: And.

Hannibal Oscar: And then last and.

Hannibal Oscar: Essentially the compatibility of the investment with the corporate capital allocation framework, we've committed to our investors.

Hannibal Oscar: Those are the same principles that we apply in today's environment.

Hannibal Oscar: We are presently looking at projects that span the same family of resource technologies that make up our fleet today, which include all of wind solar battery and gas resources.

We would expect the business to continue to look like it does today, where emissions free resources are really the principal contributor of generation output for the facility for the company and its earnings powers.

Hannibal Oscar: As far as.

Hannibal Oscar: Yes magnitude of transaction I think what we feel is that we've made a really clear roadmap that's compelling to our investors and first and foremost we want to focus on acquisitions that are right sized and complementary to our growth profile.

Hannibal Oscar: Without.

Hannibal Oscar: Unduly disrupting the capital allocation framework.

Hannibal Oscar: We've laid out so far.

Hannibal Oscar: But we are at a time, where big enterprises of scale will want.

Hannibal Oscar: Remaining cognizant of the bigger opportunity set and so.

Hannibal Oscar: We will do that.

Hannibal Oscar: But at the moment, we are focused first and foremost when engaging on M&A around acquisitions that are compatible with the corporate allocation framework, we've laid out and that enable us to.

Hannibal Oscar: Complete a set of commitments that underpin our goal to.

Hannibal Oscar: To meet or exceed the top half of our $2027 50 per share range.

Speaker Change: Okay Super helpful. Thank you and then just as a second question on the two contracts that are a contract signed for a single window.

Speaker Change: Previously I think last quarter, you talked about hopefully signing additional capacity at levels that you saw throughout 2024 was there any upside to where you priced el Segundo add or was it fairly consistent with you expect it to be I'm, just trying to see if there's any incremental upside to getting towards.

Speaker Change: Point or better on 2027 guide.

Speaker Change: We priced those latest contracts for <unk> consistent with.

Speaker Change: The pricing.

Speaker Change: We estimated we would realize for resource adequacy sales in order to deliver on the range that we've articulated.

Speaker Change: So.

Speaker Change: That capacity cleared at the levels that would be necessary for us to hit the midpoint.

Speaker Change: Or better of our 2027 per share range, and where the balance of the opposite open position clears will help us determine.

Speaker Change: We're in that upper half of the range or better we planned.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Noah Kaye with Oppenheimer <unk> Company. Your line is open.

Noah Kaye: Thanks folks for taking the questions.

This this very interesting slide on the data center capabilities I, just want to unpack it a little bit.

Noah Kaye: First of all I'll just.

Noah Kaye: Not sure I heard it correctly did you say that you had five gigawatts of projects in development front, a meter or gigawatt scale in five states.

Noah Kaye: Tried to clarify we said both.

Noah Kaye: Okay.

Noah Kaye: Alright.

Noah Kaye: Maybe the question.

Noah Kaye: It will help us understand.

Noah Kaye: I understand the opportunity set.

Noah Kaye: Is to think about how your land positions your interconnection and your mix of resources aligned with.

Speaker Change: The data center development ambitions of some of the Hyperscale and Colo customers Youre clearly talking to here talk to us a little bit about that and where you think you might have an advantage in terms of speed to market.

Noah Kaye: On the.

Noah Kaye: The.

Noah Kaye: First for our front of the meter arrangements.

Noah Kaye: The five gigawatts worth of projects we've referenced there.

Noah Kaye: Our project that are in service territories, where either through.

Noah Kaye: Utility sleeve relationships are deregulated power sales we have.

Noah Kaye: Sure.

Noah Kaye: Renewable or battery project that can deliver on the needs of hyper scaler in that market.

Noah Kaye: During the timeframe, where in the next year hyper scaler would be procuring.

Noah Kaye: Supply.

Noah Kaye: And I think something we've seen in the last six months I've noted.

Speaker Change: Your research and others is that.

Noah Kaye: <unk>.

Noah Kaye: Hyperscale, there's utilities, who serve them other commercial industrial companies continue to see great usefulness and.

Noah Kaye: The supply of front of the meter power in particular in places where there is density of load growth. So.

Noah Kaye: Theres a lot for <unk>.

Noah Kaye: <unk> that deliver power under a bus bar contracts or hub settled contracts.

Noah Kaye: To do in order to support load growth over the course of the next three or four years, which is the timeframe.

Noah Kaye: Supply.

Noah Kaye: For which hyperscale theirs are procuring now in particular resources to come alive in the.

Noah Kaye: Next three years. So those projects are mature they are being sponsored by a company that knows how to deliver them in a lot of cases.

Noah Kaye: They are in places that exhibit complementary load shape.

Noah Kaye: And you see some of the Repowering projects that we've announced is evidence of.

Where when shaping a lot of these places it's proving to be kind of useful for data center load growth.

Noah Kaye: Support.

Noah Kaye: And then in terms of.

Noah Kaye: Sort of other more complex co location project concepts.

Noah Kaye: We have a lot of acreage in different places in the country where.

Noah Kaye: The combination of data center location.

Noah Kaye: Wind or solar construction.

Noah Kaye: And <unk>.

Noah Kaye: <unk> C T or battery construction.

Noah Kaye: Feasible and can support more sizable load construction.

Noah Kaye: And.

Noah Kaye: I think we'd noted starting back in July that we were working through our bank of those resources and engagements with.

Noah Kaye: The co location developers and data center customers.

Noah Kaye: Determined which of them are most complementary for individual customers.

Noah Kaye: I think we found that a lot of those development resources are complementary to their plans and as a company that knows how to operate and construct really all of the constituents technologies that are needed I think.

Noah Kaye: We bring a credibility to those conversations that helps our customers choose to focus on us. So I think we.

Noah Kaye: We've gotten a lot of questions about what the rise of industrialization and digital infrastructure will mean for clearway and.

We've wanted to start to answer those questions with an affirmation that it will.

It will mean eventually additional investable opportunities and I think what you can probably count on from US is that when we've got.

<unk> that are definite.

Noah Kaye: In terms of their asset construction and their potential financial contribution that will that will share more about them and we're optimistic about what the future holds.

Noah Kaye: We're looking forward to that I'll take the rest of my questions offline appreciate.

Noah Kaye: The response.

Noah Kaye: I'll Echo the congrats on the strong great. Thanks Noah.

Noah Kaye: Please standby for our next question.

Speaker Change: Our next question comes from the line of Justin Clare with Roth Capital Partners. Your line is open.

Justin Clare: Hi, yes, thanks for the time here.

Justin Clare: I just wanted to follow up on the opportunity here with <unk>.

Justin Clare: Data centers.

Justin Clare: <unk> capabilities in solar and wind and storage and so just wondering if you could talk a little bit more about the solutions that you might be offering.

Justin Clare: Data center customers and then maybe if you could speak to how contracts are being structured are you looking at potentially providing round the clock renewable power and then.

I guess the last piece here just.

Justin Clare: If youre thinking about behind the meter opportunities can you potentially get to.

Justin Clare: Build those quicker by avoiding interconnection Qs is that something that you are.

Speaker Change: Are you waiting here.

Speaker Change: I think.

Speaker Change: <unk>.

Speaker Change: Why.

Speaker Change: We and others signed is that any engagement around and energy solutions starts with what's technically possible in one place or another.

Speaker Change: First and then second.

Speaker Change: What applicable.

Speaker Change: Rules for.

Speaker Change: Interconnection and cost allocation work for those resources.

Speaker Change: And as you and others have noted those rules are in varying stages of formation from one power pool to another.

Speaker Change: There's more for us yet to all see.

Speaker Change: In terms of what the FERC has to say about.

Speaker Change: All of that but.

Speaker Change: Sure.

Speaker Change: We are generally engaging with customers around our.

Speaker Change: Concepts for.

Speaker Change: Technology driven.

Speaker Change: Physical infrastructure around which some family up revenue contracts could be structured.

Speaker Change: That generally don't attempt to aggregate all of those technologies as though theyre, one but acknowledged that you have multiple generation sources all in some common location and each of those probably deserves its own unique type of revenue contracting instrument and I think for the right family of infrastructure.

Speaker Change: Knowledge is.

That are responsive to given customers' needs.

Speaker Change: One can find some kind of revenue contracting structure that is compatible with regulation and what the technologies can deliver.

Speaker Change: I think.

Speaker Change: <unk>.

Speaker Change: We sort of feel like it's kind of premature to get into the details of that.

Speaker Change: Today, we have wanted simply to make it clear because folks have asked.

Speaker Change: What our family of technologies allow for and we're optimistic about what they will.

Speaker Change: Got it okay.

Speaker Change: Helpful.

Speaker Change: And then one more just wanted to ask about.

Speaker Change: The President's executive order on federal permitting for waiting projects from January just wondering if you've seen a change in clearway energy group's ability to secure permits for wind projects or for solar or storage as well and then just thinking about the repowering.

Speaker Change: Entity.

Speaker Change: Is there any challenge in securing those permits is it easier.

Speaker Change: Maybe just speak to how things have evolved here.

Speaker Change: Yeah.

Speaker Change: I think it's been a changeable landscape over the course of.

Speaker Change: The last.

Speaker Change: 45 days I think.

Speaker Change: We have found that Clearway group is able to continue to make progress in advancing its development pipeline.

Speaker Change: On that.

Speaker Change: Leaders of the new administration and the agencies that make up the administration.

Speaker Change: Our.

Speaker Change: Continuing to make progress on advancing the <unk>.

Speaker Change: Administration.

Speaker Change: Energy dominance agenda mindful of how important it is to enable projects that can be constructed in the next three or four years to be constructed.

Speaker Change: For Clearway group, specifically of the nine gigawatt late stage pipeline that was referenced in our materials today.

Speaker Change: There is there is only 390 megawatts worth 391 megawatts worth of projects.

Speaker Change: That rely on the issuance of some sort of federal right away.

Speaker Change: Thats more directly implicated by the executive order and the balance of the projects are being executed on private land.

Speaker Change: And.

Speaker Change: A large quantity of them.

Speaker Change: Already have in hand.

Speaker Change: Determinations of no hazard or.

Speaker Change: Or not.

Speaker Change: Not susceptible to.

Speaker Change: Consideration under the executive order because of the technology that they employ.

Speaker Change: So I think for the I think what we're finding for the projects that are really essential for Clearway group to advance for Clearway Energy, Inc to meet its goals.

Speaker Change: They're able to keep progressing.

Speaker Change: We're optimistic that the administration in the fullness of time, we will also recognize how important it is for all of these technologies can be deployed in the next four years to turn into new spinning hardware in the ground.

Speaker Change: And.

Speaker Change: As far as the the.

Speaker Change: Let's see the other question that you posed beyond executive order susceptibility was what I'm sorry.

Speaker Change: I had mentioned just on Repowering.

Speaker Change: Yes, yes on the Repowering.

Yes, I think what we've actually found is that some of these projects are.

Speaker Change: Executable with a greater level of certainty.

Speaker Change: And I think that's one of the things thats really position them to exhibit a great value proposition for the customers, we plan to serve with them and for Clearway Energy Inc. Reinvestments. So.

Speaker Change: I think we're optimistic about the embedded value and operating wind projects and projects that can be re powered and certainly diminished risk profile and execution is one of those value propositions.

Speaker Change: Okay got it makes sense. Thank you.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Mark choppy with CIBC. Your line is open.

Speaker Change: Thanks, everyone Great update here Tonight.

Speaker Change: Just Craig maybe on the commentary around the 2027 targets I think youre kind of saying that youre getting close to the midpoint of the range now.

Speaker Change: With a view that Mount storm comes online.

Speaker Change: Effectively after 2027 is not really included in that projection at this point.

Speaker Change: Yes, good question, yes.

Speaker Change: The bulk of its long run cap the contribution will be in 2028 and beyond based on.

Speaker Change: The phasing of its construction.

Speaker Change: <unk>.

Speaker Change: We will start construction at the end of this year.

Speaker Change: Yes.

Speaker Change: Growth capital commitments that we've announced today along with some of.

Speaker Change: The evolutions in our op.

Speaker Change: We have shifted our outlook to the point, where we're really focused on delivering the top half of the $2 40 to $2 60 per share range, meaning that.

Speaker Change: Additional agreements on our operating fleet for additional growth investments would be actions that we're executing to try to land us in that top half between $2 50, and $2 60 per share.

Speaker Change: And then to that point, Craig I think you were saying that there's still ample assets.

Speaker Change: At the sponsor to facilitate in the top end of range is that right and then when you said $250 million I believe of capital commitments was that inclusive of the storage projects identified on slide five.

Speaker Change: Or would that be on top of that that.

Speaker Change: That includes it includes those projects that were constructed ball for funding and completion in 2026 and 2027.

Speaker Change: And then still others.

Speaker Change: Which have not yet been identified but.

But will be identified in due course.

Speaker Change: And then wanted to follow up on the cap to yield a nice step up from the last update of 11% to 13% both on the third party M&A and the organic is there something specific about some of those investments that have led to the higher cash do you think thats sustainable and then I guess, if you can do acquisitions that 12% cap to yield we think that that's a lower risk adjusted are pretty good great perfect.

Speaker Change: The return is that something you prioritize now if you can find more deals like that.

Speaker Change: Yeah.

Speaker Change: Well I think first of all we're pleased that.

Speaker Change: The cap the yields on those announcements or further improved over the expectation at the time that those commitments were initially made.

Speaker Change: Or when they were initially offered.

Speaker Change: <unk> improvements.

Speaker Change: Were were achieved through continued optimization of.

Speaker Change: Our plan for operating the project.

Speaker Change: Financing there.

Speaker Change: Ultimate funding or acquisition.

Speaker Change: And yes, I think our goal will certainly be to deliver.

Speaker Change: Cap the yields that are at the.

Speaker Change: The highest achievable level with an acceptable risk profile thats consistent with the investment mandate that we've established for Clearway Energy Inc.

Speaker Change: I think what we have.

Speaker Change: What we've used to underpin the long term growth goals with a 10% cap to yield.

Speaker Change: And the commitments, we're making and reaffirming today are still underpinned by that being the basic planning assumption for incremental corporate capital commitments, whether they're to operating asset acquisitions or new dropdown offers.

Speaker Change: <unk>.

Speaker Change: When we've got the opportunity to secure an asset on.

Speaker Change: On a well defined risk adjusted basis, both through trailing operating data or the kind of structure and its contracts.

Speaker Change: That underpin the asset.

Speaker Change: We're certainly going to allocate capital to the highest achievable long term internal rate of return and Caf deal.

Speaker Change: <unk>.

Speaker Change: I think if it was our intention to.

Speaker Change: Lead you.

Speaker Change: To expect 11% to 13% cap yields on a routine basis.

Speaker Change: We will let you know, but I think for the time being.

Speaker Change: The way we would suggest you think about these outcomes as they represent our relentless focus on value optimization and.

Speaker Change: We'll try to continue to deliver cap deals that are very compelling, but it would be premature I think to re rate the entire expectation for further growth capital investments just yet.

Speaker Change: Thanks for the time Tonight.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Our next question comes from the line of Angie stores and ski with Seaport. Your line is open.

Thank you.

Speaker Change: So I was just wondering.

Speaker Change: <unk>.

Reflecting a higher cost of capital and the returns on the assets you are.

Speaker Change: Wiring.

Speaker Change: But I'm just wondering I mean is this.

Speaker Change: You do need to execute on your growth targets, if not exceed them.

Speaker Change: <unk>, yes.

Speaker Change: Our long term financing plan.

Speaker Change: And yet.

Speaker Change: Cost of financing is not subsiding.

Speaker Change: I mean is this just.

Speaker Change: The plan is to just stick with that.

Speaker Change: The plan and then continue to execute and then wait for the market to.

Speaker Change: To recognize how different do you all versus your peers.

Speaker Change: Or will there come a time, where you might consider somewhat options.

Speaker Change: <unk>.

Speaker Change: I think.

Speaker Change: I think we are very proud of the work we've done as a company really throughout.

Speaker Change: The life of Clearway Energy, Inc. As a public entity.

Speaker Change: And I think.

Speaker Change: Our history of making good on financial commitments once made.

Speaker Change: And assembling a business that's run with.

Speaker Change: Discipline within our means I think.

Speaker Change: We will prove out over time, how compelling our business model. This is we look at.

Speaker Change: The 5% to 8% plus <unk> per share growth goals that we've laid out is compelling and absolutely consistent with what the best leading edge.

Speaker Change: Midcap utilities in the United States deliver.

Speaker Change: Look at the corporate capital structure that we've put in place.

Speaker Change: And commitments, we've made around that is being disciplined and cautious.

Speaker Change: And I think Angie our hope is that.

Speaker Change: Okay.

Speaker Change: In due time.

Speaker Change: That prudence as well as the compelling growth proposition, where our offering is going to be rewarded.

Speaker Change: With cost of capital on a share price that really reflects how compelling it is.

Speaker Change: So I think we like the plan, we built we know how to execute it.

Speaker Change: At executing really the top end of the range of it and.

Speaker Change: Our intention is to do that and I think our hope is that through actions we will.

Speaker Change: Find that our financial stakeholder base theyre going to reward us with.

Speaker Change: A compelling valuation that drives to the kind of cost of capital outcome that I think you are alluding to.

Speaker Change: Okay, and then separately on the third party M&A you guys have looked at.

Speaker Change: Numerous projects for many years.

<unk>.

Speaker Change: With.

Speaker Change: With few findings so so what's changed.

Speaker Change: Feel like there is.

Speaker Change: The it's just the time has lapsed that these owners of assets have waited long enough or is there.

Speaker Change: Some sort of shift in the investment.

Speaker Change: Focus for both sellers I mean, what do you think drives the higher appeal.

Some of the assets that Youre looking at right now well I think so far the types of acquisition to I'll. Let me is representative of.

Speaker Change: The limited number of assets centered acquisitions, we've executed in the past, where we had a relationship with the preexisting owner, we were well positioned to be able to operate that we are in a position to be able to potentially repower at in the future.

Speaker Change: All of those things made it.

Speaker Change: Really compatible with our ability to do something unique and value creative for the asset.

Speaker Change: That was true also for Mount Storm, which we acquired a few years ago with the expectation we were eventually going to repower. It like we are now doing.

Speaker Change: I played to our strengths in mid Atlantic wind.

Speaker Change: And for the time being we're really focused on first and foremost asset acquisitions of that kind of whether they're a single asset or a portfolio of them.

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: And what I think is marginally different today than you might have seen a few years ago was that the environment of demand for.

Speaker Change: Financial.

Speaker Change: Investors, who could compete against us as a financial sponsor has dissipated somewhat.

Speaker Change: And for sellers, who are looking to find somebody else to.

Speaker Change: To acquire their project or improve it.

Speaker Change: We stand out now more as somebody who has a certain buyer who is in a good position to be able to do something to improve their asset.

Speaker Change: And I think just the community of buyers is now a shorter list for contracted.

Speaker Change: Renewable operating assets than you might've seen in the past.

Speaker Change: I think were sober about how long these cycles last in our industry. So I wouldn't assume that it's going to be an environment that is.

Speaker Change: Usually advantaged.

Speaker Change: Forever, but when we do end up with these moments of opportunity we want to be ready to work hard to execute on investments that exhibit a compelling value proposition and hopefully we.

Speaker Change: We will do so over the course of the next six months, but just in ways that are measured.

Speaker Change: And then just last question. So we saw some recent M&A.

Speaker Change: M&A deals involving renewable power portfolio square.

Speaker Change: Public entities team up with the financial sponsors is that an option for you.

Speaker Change: Now that JP has been acquired.

Speaker Change: And basically has the largest financial backing.

Speaker Change: I think for a clear way one of the things that.

Speaker Change: We really consider a blessing as that between.

Speaker Change: The CIP Blackrock and total we enjoy financial sponsors that are amongst the biggest and most committed investors and clean power assets here on planet Earth.

Speaker Change: <unk>.

Speaker Change: If we have some good idea as an operator or.

Speaker Change: Development agent.

Speaker Change: That is compelling but requires financial resources beyond those that we can prudently deploy.

Speaker Change: It's an idea that we can still engage on by virtue of the relationship that we have with CIP Blackrock in total so.

Speaker Change: <unk>.

Speaker Change: Hopefully, we will find more opportunities that give us the chance to deploy the capital of Clearway Energy, Inc. In way that is compelling and leverage the.

Speaker Change: Market presence and.

Speaker Change: In investment power of those entities as well.

Speaker Change: Hey, good thank you. Thanks.

Angie: Thanks Angie.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, im showing no further questions in the queue I would now like to turn the call back to create comes off.

Clearway energy for closing remarks.

Craig Cornelius: Thanks, everyone for joining us today and for your ongoing support of clear way.

Craig Cornelius: Looking forward to continuing to demonstrate to you what we really think is a leading market position.

Craig Cornelius: In the coming quarters that is further magnified by our operating excellence and discipline.

Craig Cornelius: Operator, you can close the call. Thank you.

Speaker Change: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.

Craig Cornelius: Okay.

Craig Cornelius: [music].

Craig Cornelius: Uh huh.

Craig Cornelius: Sure.

Craig Cornelius: [music].

Craig Cornelius: Yes.

Craig Cornelius: [music].

Q4 2024 Clearway Energy Inc Earnings Call

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