Q2 2026 Algonquin Power & Utilities Corp Earnings Call

August 7, 2026

Speaker #1: Hello. And welcome to ALGONQUIN POWER & UTILITIES CORP.'s second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise.

Operator: Hello, welcome to Algonquin Power & Utilities Corp.'s Q2 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. I will now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations. Please go ahead.

Speaker #1: After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press *1 on your telephone keypad.

Speaker #1: I will now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations. Please go ahead.

Speaker #2: Thank you, Operator, and good morning, everyone. We appreciate you attending our second quarter 2026 earnings conference call. Joining me on the call today will be Rod West, Chief Executive Officer; and Rob Stefani, Chief Financial Officer, who will share prepared remarks.

Brian Chin: Thank you, operator, good morning, everyone. We appreciate you attending our Q2 2026 earnings conference call. Joining me on the call today will be Rod West, Chief Executive Officer, and Rob Stefani, Chief Financial Officer, who will share prepared remarks. Following their remarks, they will be available to answer your questions along with other members of the management team during a Q&A session. To accompany today's earnings call, we have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and Management Discussion and Analysis are also available on the website as well as on SEDAR+ and EDGAR. We would like to remind you that our discussion during the call will include certain forward-looking information and non-GAAP measures. Actual results could differ materially from any forecast or projection contained in such forward-looking information.

Brian Chin: Thank you, Operator, good morning, everyone. We appreciate you attending our Q2 2026 earnings conference call. Joining me on the call today will be Rod West, Chief Executive Officer, and Rob Stefani, Chief Financial Officer, who will share prepared remarks. Following their remarks, they will be available to answer your questions along with other members of the management team during a Q&A session. To accompany today's earnings call, we have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and Management Discussion and Analysis are also available on the website as well as on SEDAR+ and EDGAR. We would like to remind you that our discussion during the call will include certain forward-looking information and non-GAAP measures. Actual results could differ materially from any forecast or projection contained in such forward-looking information.

Speaker #2: Following their remarks, they will be available to answer your questions along with other members of the management team during a Q&A session. To accompany today's earnings call, we have a supplemental webcast presentation available on our website algonquinpower.com.

Speaker #2: Our financial statements and management discussion and analysis are also available on the website, as well as on SEDAR+ and EDGAR. We would like to remind you that our discussion during the call will include certain forward-looking information and non-GAAP measures.

Speaker #2: Actual results could differ materially from any forecast or projection contained in such forward-looking information. Additionally, all net earnings information to be discussed today is for continuing operations and is attributable to the common shareholders of Algonquin.

Brian Chin: All net earnings information to be discussed today is for continuing operations and is attributable to the common shareholders of Algonquin. Certain material factors and assumptions were applied in making the forecasts and projections reflected in such forward-looking information. Please note and review the related disclaimers located on slide two of our earnings call presentation at the investor relations section of our website at algonquinpower.com. Please also refer to our most recent MD&A filed on SEDAR+ and EDGAR and available on our website for additional important information on these items. On the call this morning, Rod will provide a business update, Rob will follow with the details of our financial results. We'll open the line for questions.

Speaker #2: Certain material factors and assumptions were applied in making the forecasts and projections reflected in such forward-looking information. Please note and review the related disclaimers located on slide 2 of our earnings call presentation in the Investor Relations section of our website at algonquinpower.com.

Speaker #2: Please also refer to our most recent MD&A filed on CedarPlus and EDGAR and available on our website for additional important information on these items.

Speaker #2: On the call this morning, Rod will provide a business update, and Rob will follow with the details of our financial results. We'll then open the line for questions.

Speaker #2: We kindly ask that you restrict your questions to 2, then follow up with us after the call if you have any additional questions to allow others the opportunity to participate.

Brian Chin: We kindly ask that you restrict your questions to two, follow up with us after the call if you have any additional questions to allow others the opportunity to participate. With that, I'll turn things over to Rod.

Speaker #2: And with that, I'll turn things over to Rod.

Speaker #3: Thanks, Brian, and good morning, everyone. Thank you for joining us. Second quarter 2026 has been another step forward for Algonquin. On our path to premier, as I've stated consistently since I've arrived, a premier pure-play regulated utility earns its standing through consistent execution, a constructive regulatory compact, and disciplined financial and operational management.

Rod West: Thanks, Brian. Good morning, everyone. Thank you for joining us. Our Q2 2026 has been another step forward for Algonquin on our path to premier. As I've stated consistently since I've arrived, a premier pure-play regulated utility earns its standing through consistent execution, a constructive regulatory compact, and disciplined financial and operational management. These attributes aim to position the company to deliver long-term sustainable value to shareholders, customers, the communities we serve, and our employees. As we will discuss in a moment, this quarter's results reflect all of those, build on the measurable progress we've made since last year, keep us on track to meet our adjusted net earnings per share forecast for 2026 and 2027. In short, we are once again advancing toward our goal of becoming a premier pure-play regulated utility.

Speaker #3: These company to deliver long-term sustainable value to shareholders, customers, and communities we serve and our employees. As we will discuss in a moment, this quarter's results reflect all of those.

Speaker #3: Build on the measurable progress we've made since last year, and keep us on track to meet our adjusted net earnings per share forecast for 2026 and 2027.

Speaker #3: In short, we are once again advancing toward our goal of becoming a premier pure-play regulated utility. Taking measure of our strategic priorities for the year, I'm pleased with the progress we've made in the second quarter.

Rod West: Taking measure of our strategic priorities for the year, I'm pleased with the progress we've made in the Q2. On the regulatory side, we are pleased to achieve progress on our conclusions to several of our rate cases. The Missouri Public Service Commission determined on 15 July that we had satisfied customer service and billing performance metrics required for implementation of the previously approved Empire Electric Missouri settlement. I want to recognize the extensive and professional effort that commission staff and our employees displayed to reach this outcome, for the tremendous patience exhibited by our customers and shareholders as we underwent this process.

Speaker #3: On the regulatory side, we're pleased to achieve progress on or conclusions to several of our rate cases. The Missouri Public Service Commission determined on July 15 that we had satisfied customer service and billing performance metrics required for implementation of the previously approved Empire Electric Missouri settlement.

Speaker #3: I want to recognize the extensive and professional effort that commission staff and our employees displayed to reach this outcome. And for the tremendous process.

Speaker #3: Additionally, we received a proposed decision for our California WeMA proceeding and order approving a settlement for Empire Electric Kansas, a final order for our California water utilities, and new rate case filings at New York Water Empire Electric Arkansas, Energy North Gas, and two water utilities in Arizona.

Rod West: We received a proposed decision for our California WEMA proceeding, an order approving a settlement for Empire Electric Kansas, a final order for our California water utilities, and new rate case filings at New York Water, Empire Electric Arkansas, Energy North Gas, and two water utilities in Arizona. We continue to await an order on our Arizona Liberty Utilities (Litchfield Park Water & Sewer) Corp. rate case and continue to work towards completing new filings at Granite State Electric, Empire Electric Oklahoma, and a Missouri large load tariff before year's end. We filed a case with FERC requesting conversion for our electric transmission projects to a projected test year versus a historic test year, including CWIP into rate base under a transmission formula rate. This rate request, though small, could set the foundation for regulatory treatment of our SPP transmission line project over the next few years. One additional update.

Speaker #3: We continue to await an order on our Arizona Litchfield Park Water and Sewer rate case and continue to work towards completing new filings at Granite State Electric, Empire Electric Oklahoma, and a Missouri large load tariff before year's end.

Speaker #3: Moreover, we filed a case with FERC requesting conversion for our electric transmission projects to a projected test year versus a historic test year, including CWIP, into rate-based under a transmission formula rate.

Speaker #3: This rate request, though small, could set the foundation for regulatory treatment of our SPP transmission line project over the next few years. And one additional update: in the second quarter, we captured approval from the Department of Energy for the reimbursement of $5 million of expenses related to an AMI grant in California that was reinstated earlier this year.

Rod West: In Q2, we captured approval from the Department of Energy for the reimbursement of $5 million of expenses related to an AMI grant in California that was reinstated earlier this year. I'm pleased to see in Q2 that we've made continued progress on this year's priority list. I do want to take a moment on slide six to address our announcement regarding the intended re-domicile of Algonquin to the United States. We see this as an important strategic step for the company and one that we expect will create meaningful benefits for shareholders over time. Today, over 80% of our operations are located in the United States, with less than 5% in Canada. Re-domiciling to the US would better align our corporate structure with our assets and where we expect to grow.

Speaker #3: In summary, I'm pleased to see in the second quarter that we've made continued progress on this year's priority list. I do want to take a moment on slide 6 to address our announcement regarding the intended re-domicile of Algonquin to the United States.

Speaker #3: At a high level, we see this as an important strategic step for the company and one that we expect will create meaningful benefits for shareholders over time.

Speaker #3: Today, over 80% of our operations are located in the United States, with less than 5% in Canada. Re-domiciling to the U.S. would better align our corporate structure with our assets and where we expect to grow.

Speaker #3: As we've discussed before, it would also support our efforts to reduce cross-border tax inefficiencies. We've described them as tax friction. And over time, we believe it would strengthen our financial profile: broaden our access to capital and create a path to inclusion in certain U.S.

Rod West: It would also support our efforts to reduce cross-border tax inefficiencies. We've described them as tax friction. Over time, we believe it would strengthen our financial profile, broaden our access to capital, and create a path to inclusion in certain US equity indices and funds. We expect to complete the re-domicile to Delaware through a court-approved plan of arrangement under the Canada Business Corporations Act. We expect to establish our headquarters in Chicago, where our senior executive leadership team would be based, while maintaining our significant presence in Oakville, Ontario. I want to emphasize that this does not change how we operate our utilities, serve our customers, or satisfy our regulatory obligations.

Speaker #3: equity indices and funds. From a structural standpoint, we expect to complete the re-domicile to Delaware through a court-approved plan of arrangement under the Canada Business Corporations Act.

Speaker #3: We expect to establish our headquarters in Chicago, where our senior executive leadership team would be based, while maintaining our significant presence in Oakville, Ontario.

Speaker #3: I want to emphasize that this does not change how we operate our utilities, serve our customers, or satisfy our regulatory obligations. In terms of timing, we expect to seek shareholder approval in the first half of 2027 and to complete the re-domicile following the receipt of the required shareholder and regulatory approvals, and satisfaction of customary conditions.

Rod West: In terms of timing, we expect to seek shareholder approval in H1 2027 and to complete the re-domicile following the receipt of the required shareholder and regulatory approvals and satisfaction of customary conditions. We believe this positions us to more effectively execute on our strategic priorities and enhance long-term shareholder value. Turning to slide seven and eight, focusing a bit more on our regulatory strategy, we continue to prioritize earlier dialogue with stakeholders to identify areas of common ground as well as advancing more pragmatic filings. We expect this to deliver fair regulatory outcomes that allow us the opportunity to capture both recovery of reasonable costs and returns on our investments for the benefit of our customers. I'm pleased to note that in aggregate, this is playing out in a balanced manner.

Speaker #3: Overall, we believe this positions us to more effectively execute on our strategic priorities and enhance long-term shareholder value. Turning to slide 7 and 8, focusing a bit more on our regulatory strategy, we continue to prioritize earlier dialogue with stakeholders to identify areas of common ground, as well as advancing more pragmatic filings.

Speaker #3: We expect this to deliver fair regulatory outcomes that allow us the opportunity to capture both recovery of reasonable costs and returns on our investments for the benefit of our customers.

Speaker #3: I'm pleased to note that in aggregate, this is playing out in a balanced manner. In Missouri, the commission's July 15 order approved implementation of 97 million in annualized revenue adjustments.

Rod West: In Missouri, the commission's 15 July order approved implementation of CAD 97 million in annualized revenue adjustments effective on 3 August. We continue to make regulatory progress in Kansas, where the Corporation Commission approved our settlement agreement for a CAD 8.8 million revenue adjustment and a provision for 50% of wind revenues for year one. The settlement included a black box stipulation for authorized equity ratios and ROE. Out west in California, the California Public Utilities Commission issued a constructive proposed decision in our WEMA proceeding, which authorizes a CAD 58.1 million recovery in wildfire costs, or approximately 75% of our requested recovery. Consistent with standard practices of how other California utility peers have accounted for WEMA and similar proceeding outcomes, we excluded the impact of the final outcome from our adjusted net earnings per share results.

Speaker #3: Effective on August 3, we continue to make regulatory progress in Kansas, where the corporation commission approved our settlement agreement for an $8.8 million revenue adjustment and a provision for 50% of wind revenues for year one.

Speaker #3: The settlement included a black-box stipulation for authorized equity ratios and ROE. Out West, in California, the public utilities commission issued a constructive proposed decision in our WeMA proceeding, which authorizes a 58.1 million recovery.

Speaker #3: In wildfire costs, or approximately 75% of our requested recovery. Consistent with standard practices of how other California utility peers have accounted for WeMA and similar proceeding outcomes, we excluded the impact of the final outcome from our adjusted net earnings per share results.

Speaker #3: Also, in California, we received an order approving an alternate proposed decision for our Apple Valley and Park Water utility cases. For those utilities, the commission approved a combined revenue reduction of 2.7 million and a retroactive true-up to July 2025, totaling 3.1 million, for that revenue reduction.

Rod West: Also in California, we received an order approving an alternate proposed decision for our Apple Valley and Park Water utility cases. For those utilities, the commission approved a combined revenue reduction of CAD 2.7 million and a retroactive true-up to July 2025, totaling CAD 3.1 million for that revenue reduction. In Arizona, our settlement agreement and a final decision regarding formula rate plans remains pending at Litchfield Park Water and Sewer. The ALJ issued a recommended opinion and order, and we've asked the commission for a final decision this month. For new rate cases, New York Water filed its rate case requesting a CAD 38.1 million revenue adjustment based on a 10% return on equity and a 48% equity ratio for a proposed rate year starting May of next year.

Speaker #3: In Arizona, our settlement agreement and a final decision regarding formula rate plans remains pending at Litchfield Park Water and Sewer. The ALJ issued a recommended opinion and order, and we've asked the commission for a final decision this month.

Speaker #3: For new rate cases, New York Water filed its rate case requesting a 38.1 million revenue adjustment based on a 10% return on equity and a 48% equity ratio, for a proposed rate year starting May of next year.

Speaker #3: Empire Electric Arkansas filed its rate case requesting $8.4 million based on a 10% ROE and a 53.4% cap structure, with a proposed implementation date of spring next year.

Rod West: Empire Electric Arkansas filed its rate case requesting CAD 8.4 million based on a 10% ROE and a 53.4% cap structure with the proposed implementation date of spring of next year. EnergyNorth also recently filed its rate case with a CAD 35.8 million rate request based on a 10.25% ROE with a 52% cap structure, and we expect to have permanent rates implemented in the summer of next year. Turning ahead to slide nine, I'll add a few comments regarding our evolving regulatory and legislative landscape. On the operations front, on 17 June, we received our Certificate of Convenience and Necessity, or the CCN, from the Missouri Public Service Commission. This milestone achievement is for one of our most significant capital projects, where we're deploying 250 MW of new gas-fired generation to meet customer demand and Southwest Power Pool requirements.

Speaker #3: Energy North also recently filed its rate case with a 35.8 million rate request, based on a 10.25% ROE, with a 52% cap structure, and we expect to have permanent rates implemented in the summer of next year.

Speaker #3: Turning ahead to slide 9, I'll add a few comments regarding our evolving regulatory and legislative landscape. On the operations front, on June 17, we received our certificate of convenience and necessity, or the CCN, from the Missouri Public Service Commission.

Speaker #3: This milestone achievement is for one of our most significant capital projects, where we're deploying 250 megawatts of new gas-fired generation to meet customer demand in Southwest Power Pool requirements.

Speaker #3: This will be the first gas-fired generation project for us under Missouri Senate Bill 4, where we will take advantage of the construction work in progress, or CWIP, regulatory recovery mechanism.

Rod West: This will be the first gas-fired generation project for us under Missouri Senate Bill 4, where we will take advantage of the Construction Work In Progress, or CWIP, regulatory recovery mechanism. In aggregate, the point of these updates, and I recognize that there are many, we continue to make overall progress on rate cases across multiple jurisdictions in a more deliberate and intentional manner. With that, I'll turn it over to Rob to walk through our financial update for the quarter.

Speaker #3: In aggregate, the point of these updates in our recognized that there are many. We continue to make overall progress on rate cases across multiple jurisdictions.

Speaker #3: In a more deliberate and intentional manner. With that, I'll turn it over to Rob to walk through our financial update for the quarter.

Speaker #1: Thanks, Rod. And good morning, everyone. Let's start with slide 11, where you can see our reported second-quarter gap net earnings of 4.9 million, compared to 14.8 million for the same period in 2025.

Rob Stefani: Thanks, Rod, and good morning, everyone. Let's start with slide 11, where you can see our reported Q2 GAAP net earnings of $4.9 million compared to $14.8 million for the same period in 2025. On an adjusted basis for the period, net earnings were $29.2 million versus $33.6 million for the Q2 of 2025. Overall, the Q2 decline in adjusted net earnings from 2025 to 2026 reflects increased rates at several of our utilities, offset by higher financing costs, slightly higher operating expenses, and several non-recurring favorable items from the Q2 of 2025. In the Q2, we also reported a $17.2 million write-down of a regulatory asset related to the previously discussed proposed decision in our California WEMA proceeding.

Speaker #1: On an adjusted basis for the period, net earnings were $29.2 million, versus $33.6 million for the second quarter of 2025. Overall, the second quarter decline in adjusted net earnings from 2025 to 2026 reflects increased rates at several of our utilities, offset by higher financing costs, slightly higher operating expenses, and several non-recurring favorable items from the second quarter of 2025.

Speaker #1: In the second quarter, we also reported a 17.2 million write-down of a regulatory asset related to the previously discussed proposed decision in our California WeMA proceeding.

Speaker #1: The impact of the proposed decision, which, as Rod previously mentioned, authorizes 75% recovery of recorded costs stemming from the 2020 Mountain View Fire, has been excluded from our adjusted net earnings.

Rob Stefani: The impact of the proposed decision, which, as Rod previously mentioned, authorizes 75% recovery of recorded costs stemming from the 2020 Mountain View fire, has been excluded from our adjusted net earnings. Moving to year-to-date results, we reported GAAP net earnings of $88 million compared to $107.6 million for the same period in 2025. Year-to-date adjusted net earnings were $128.8 million versus $142.6 million in the same period the prior year. Taking into account $25.7 million in non-recurring favorable items from 2025, results were higher year over year, as I will explain in more detail in a moment. On slide 12, I will discuss the drivers behind our Q2 2026 adjusted net earnings per share walk. Q2 adjusted net EPS to comment was $0.004 per share, which was flat year over year.

Speaker #1: Moving to year-to-date results, we reported GAAP net earnings of $88 million, compared to $107.6 million for the same period in 2025. Year-to-date adjusted net earnings were $128.8 million, versus $142.6 million in the same period the prior year.

Speaker #1: Taking into account 25.7 million in non-recurring favorable items from 2025, results were higher year over year, as I will explain in more detail in a moment.

Speaker #1: On slide 12, I'll discuss the drivers behind our second quarter 2026 adjusted net earnings per share walk. Second quarter adjusted net EPS to comment was $0.004 per share, which was flat year over year.

Speaker #1: Second quarter year over year results were driven by higher CalPCO-approved rates of 12.1 million and were partially offset by higher wildfire insurance expenses of 5.7 million.

Rob Stefani: Q2 year over year results were driven by higher CalPeco approved rates of $12.1 million and were partially offset by higher wildfire insurance expenses of $5.7 million. Net revenues outside of CalPeco rose at our water utilities in New York, Arizona, and Chile, as well as customer growth in Arizona and favorable weather year over year at Empire, totaling $7.5 million. Net revenues were partially offset by a rate reduction at our Apple Valley and Park Water utilities in California, inclusive of an unfavorable retroactive adjustment to July 2025 of $3.1 million. Interest expense grew by $9.3 million related to a new debt issuance at Liberty Utilities Company and higher commercial paper usage, partially offset by higher investment income of $3.1 million.

Speaker #1: Net revenues outside of CalPCO rose at our water utilities in New York, Arizona, and Chile, as well as from customer growth in Arizona and favorable weather year over year at Empire, totaling $7.5 million.

Speaker #1: Net revenues were partially offset by a rate reduction at our Apple Valley and Park Water utilities, in California, inclusive of an unfavorable retroactive adjustment to July 2025 of 3.1 million.

Speaker #1: Interest expense grew by 9.3 million related to a new debt issuance at Liberty Utilities Company, and higher commercial paper usage, partially offset by higher investment income of 3.1 million.

Speaker #1: Operating expenses were slightly higher due to an additional 3.3 million of higher gas safety and excellence costs and other gains and losses were slightly unfavorable due to a gain on an asset sale in 2025.

Rob Stefani: Operating expenses were slightly higher due to an additional $3.3 million of higher gas safety and excellence costs, and other gains and losses were slightly unfavorable due to a gain on an asset sale in 2025. On slide 13, we provide our year-to-date 2026 adjusted net EPS walk. Year-to-date adjusted net EPS was $0.17 per share compared to $0.19 per share in the H1 of 2025. Although a decline year over year, I would like to highlight that 2025 experienced $25.7 million in favorable items that did not repeat in 2026, including a tax basis step-up recovery of $15.9 million for Hydro, as an example, plus pension adjustments at Empire and depreciation deferrals and rate proceedings in New Hampshire and Arizona. Absent these items, year over year net EPS was $0.01 favorable.

Speaker #1: On slide 13, we provide our year-to-date 2026 adjusted net EPS walk. Year-to-date adjusted net EPS was $0.17 per share, compared to $0.19 per share in the first half of 2025.

Speaker #1: Although a decline year over year, I'd like to highlight that 2025 experienced 25.7 million in favorable items that did not repeat in 2026, including a tax basis step-up recovery of 15.9 million for hydro as an example, plus pension adjustments at Empire and depreciation deferrals in rate proceedings in New Hampshire and Arizona.

Speaker #1: Absent these items, year over year net EPS was 1 cent favorable. Similar to Q2 results, year-to-date year over year benefited from approved rates at CalPCO, net of wildfire insurance expenses of 38.7 million.

Rob Stefani: Similar to Q2 results, year to date, year over year benefited from approved rates at CalPeco, net of wildfire insurance expenses of CAD 38.7 million. New rates at New York, Arizona, Chile, and Peach State all contributed to improved net revenues year over year of CAD 11 million, less CAD 3.1 million related to the Apple Valley and Park Water retroactive adjustment. Operating expenses increased due to gas safety and excellence costs of CAD 6.3 million and higher labor, maintenance, and property tax expenses of CAD 14.1 million. We experienced unfavorable weather of CAD 9.9 million year to date versus the prior year. Lastly, interest expense was unfavorable as previously discussed due to a new financing at Liberty Utilities Co., net of investment income. Briefly touching on slide 14, our balance sheet continues to be in a position of strength. We don't expect to issue equity through 2027.

Speaker #1: New rates at New York, Arizona, Chile, and Peach State all contributed to improved net revenues year over year of $11 million, with the last $3.1 million related to the Apple Valley and Park Water retroactive adjustment.

Speaker #1: Operating expenses increased due to gas safety and excellence costs of 6.3 million and higher labor, maintenance, and property tax expenses of 14.1 million. We experienced unfavorable weather of 9.9 million year-to-date versus the prior year.

Speaker #1: And lastly, interest expense was unfavorable, as previously discussed, due to a new financing at Liberty Utilities Company, net of investment income. Briefly touching on slide 14, our balance sheet continues to be in a position of strength.

Speaker #1: We don't expect to issue equity through 2027. During the second quarter, we raised approximately 1.15 billion at Liberty Utilities Company through a private placement offering of senior unsecured notes and used the proceeds from the offering to pay down 1.15 billion aggregate principal amount of notes at Algonquin Power and Utilities Corp that matured on June 15th.

Rob Stefani: During Q2, we raised approximately CAD 1.15 billion at Liberty Utilities Co. through a private placement offering of senior unsecured notes and used the proceeds from the offering to pay down CAD 1.15 billion aggregate principal amount of notes at Algonquin Power & Utilities Corp. that matured on 15 June. At Algonquin, we continue to be rated BBB by S&P and Fitch, and at Liberty Utilities Co., continue to be rated Baa2 by Moody's and BBB at Fitch and S&P. As Rod indicated at the top of his remarks, our adjusted net EPS forecast is unchanged. We remain on track. With that, I'll turn the call back over to Rod for his closing remarks.

Speaker #1: At Algonquin, we continue to be rated BBB by S&P and Fitch, and at Liberty Utilities Company, continue to be rated BAA2 by Moody's, and BBB at Fitch and S&P.

Speaker #1: As Rod indicated at the top of his remarks, our adjusted net EPS forecast is unchanged, and we remain on track. With that, I'll turn the call back over to Rod for his closing remarks.

Speaker #2: Thanks, Rob. Before we open the line for questions, I want to take a step back and leave you with a few thoughts on where we are and where we're headed.

Rod West: Thanks, Rob. Before we open the line for questions, I want to take a step back and leave you with a few thoughts on where we are and where we're headed. Halfway through the year, we've made substantial progress, as we expected. We continue to have work to do. We've concluded rate cases or resettlement agreements that reduce uncertainty for Empire Electric Missouri, Empire Electric Kansas, and our California Water utilities. We're pending approvals of key decisions and settlements for WEMA and Litchfield Park, and we continue to work diligently on our rate cases at New York Water, Empire Arkansas, EnergyNorth, and in Arizona. On the operations front, we've continued to improve our customer performance metrics and strengthen our standing with our regulators and customers while obtaining approval for CWIP treatment for our Aeries generation project in Missouri.

Speaker #2: Halfway through the year, we've made substantial progress, as we expected, but we continue to have work to do. We've concluded rate cases or resettlement agreements that reduce uncertainty for Empire Electric Missouri, Empire Electric Kansas, and our California water utilities.

Speaker #2: We're pending approvals of key decisions and settlements for WeMA and Litchfield Park, and we continue to work diligently on our rate cases at New York Water, Empire Arkansas, Energy North, and in Arizona.

Speaker #2: On the operations front, we've continued to improve our customer performance metrics, and strengthened our standing with our regulators and customers while obtaining approval for CWIP treatment for our ERAS generation project in Missouri.

Speaker #2: In short, I'm pleased with our trajectory in the second quarter, extending our momentum from the first quarter and from our efforts of last year.

Rod West: In short, I'm pleased with our trajectory in Q2, extending our momentum from Q1 and from our efforts of last year. I couldn't be more excited for what's next. I hope you will join us on our path to premier. Thanks for your time this morning. With that, I'll turn it back to the operator for questions.

Speaker #2: I couldn't be more excited for what's next, and I hope you'll join us on our path to premier. Thanks for your time this morning, and with that, I'll turn it back to the operator for questions.

Speaker #3: Thank you. If you have a question, please press star 1 on your telephone keypad. To withdraw your question, simply press star 1 again. One moment, please.

Operator: Thank you. If you have a question, please press star one on your telephone keypad. To withdraw your question, simply press star one again. One moment please for the first question. The first question comes from the line of Mark Jarvi from CIBC Capital Markets. Your line is now open. You may now begin.

Speaker #3: For the first question. The first question comes from the line of Mark Jarby from CIBC Capital Markets. Your line is now open. You may begin.

Speaker #4: Thanks, Corner One. Thanks for the update on the US re-domicile key. Please walk us through what conversations you've had with the IRS, and just overall expected tax implications, maybe effective tax rate, but also cash taxes if you do re-domicile to the US.

Mark Jarvi: Thanks, good morning, everyone. Thanks for the update on the US re-domiciling. Can you please walk us through what conversations you've had with the IRS and just overall expected tax implications, maybe effective tax rate, but also cash taxes if you do re-domicile to the US?

Speaker #2: Yeah, Rob, go ahead.

Rod West: Yeah. Rob, go ahead.

Speaker #1: Yeah. So, you know, we began discussions with the IRS earlier this year. We filed that private letter ruling, you know, we'll expect a decision here in the back half of the year.

Rob Stefani: Yeah. We began discussions with the IRS earlier this year. We filed that private letter ruling. We'll expect a decision here in the back half of the year. As far as the tax implications, what the re-domicile helps accomplish is elimination of a couple of cash taxes that we pay. Number one is cash on the funds that we send up to Algonquin to pay the dividend from the utilities. We pay about a 5% tax on that. We pay, subject to continued board approval, CAD 200 million of dividends about per year. That's 5% on the CAD 200 million. Then, the other tax that the re-domicile would eliminate was the BEAT tax. That tax is a tax on the cash funds that are sent up to Algonquin to service the debt at the holding company level.

Speaker #1: As far as the tax implications, you know, what the re-domicile helps accomplish is elimination of a couple of cash taxes that we pay. Number one is cash on the funds that we send up to Algonquin to pay the dividend from the utilities.

Speaker #1: And so, we pay about a 5% tax on that. So, and we pay subject to continued board approval, $200 million of dividends, about per year.

Speaker #1: So, that's 5% on the $200 million. And then, the other tax that the re-domicile would eliminate was the BEAT tax. And that tax is a tax on the cash funds that are set up, sent up to Algonquin to service the debt at the holding company level.

Speaker #1: And that's about a 10% tax rate on the funds that we send up to service that debt. So, as far as the as far as the effective tax rate, obviously that'll be determined by a number of factors, but those are two instances of savings that we would point to that we would expect to realize through the re-domicile to the US.

Rob Stefani: That's about a 10% tax rate on the funds that we send up to service that debt. As far as the effective tax rate, obviously that'll be determined by a number of factors, but those are two instances of savings that we would point to, that we would expect to realize through the re-domicile to the US.

Mark Jarvi: Rob, if I recall, you talked about maybe clawing back some of the headwinds you announced earlier on the effective tax rate assumption. Do you still feel like that's possible to reverse some of those reductions?

Speaker #4: And Rob, if I recall, you talked about maybe climb back some of the headwinds you announced earlier on the effective tax rate assumption. Do you still feel like that's possible to reverse some of those reductions?

Speaker #1: Yeah. So, the effective tax rate is certainly has the BEAT tax and the dividend tax kind of embedded in there. And so, we would expect that effective tax rate, you know, moving forward to, you know, to be lower.

Rob Stefani: Yeah. The effective tax rate certainly has the BEAT tax and the dividend tax kind of embedded in there. We would expect that effective tax rate moving forward to be lower. Obviously, we're targeting approval to proceed in H1 2027. As you think about ramping up to that, you'd need to consider the timing there.

Speaker #1: Obviously, we're targeting an approval to proceed in the first half of 2027. And so, as you think about ramping up to that, you'd need to consider the timing there.

Speaker #4: Understood. And same question for me, just in terms of the filings now in New Hampshire. Last time around, there were some issues with the data.

Mark Jarvi: Understood. Second question from me, just in terms of the filings now in New Hampshire. Last time around, there were some issues with the data. Just your confidence level that you've resolved those issues going in. You feel very confident in terms of the materials you're supporting for that reapplication?

Speaker #4: Just your confidence level that you've resolved those issues—going in, you feel very confident in terms of the materials you're supporting for that re-application?

Rod West: Well, actually, I got the signal that the improvements we've made in our systems give us far greater confidence that the data issues have been identified. Obviously, it's going to be ongoing in terms of our efforts to improve. We spent a fair amount of time and energy addressing our structural deficits and making the case to the regulators that we got the message, that the customer outcomes actually matter. My confidence is high, and I think for us, the proof of concept has been the work that we've done to sort of restore the benefit of the doubt from our stakeholders in Missouri that we're making meaningful gains in that arena. We expect to make similar case in New Hampshire.

Speaker #2: Oh, I'm here. Well, actually, I got the signal that the improvements we've made in our systems give us far greater confidence that the data issues have been identified.

Speaker #2: Obviously, it's going to be ongoing in terms of our efforts to improve, but we've spent a fair amount of time and energy addressing our structural deficits and making the case to the regulators that we got the we got the message that the customer outcomes actually matter.

Speaker #2: So, my confidence is high, and I think for us, the proof of concept has been the work that we've done to sort of restore the benefit of the doubt from our stakeholders in Missouri that we're making meaningful gains in that arena.

Speaker #2: And we expect to make a similar case in New Hampshire.

Mark Jarvi: Is there some dialogue along the way with staff to show them the improvements you've done before you submit the applications?

Speaker #4: Is there some dialogue along the way with staff to show them the improvements you've made before you submit the applications?

Rod West: Always. It's not what you know, it's what you can prove. If you've had a rough experience, whether it's in California, Missouri, or in New Hampshire. Missouri is the Show Me State. New Hampshire is taking a similar stance, and I would if I was them. They want us to prove it, and we've put the work in to be able to do just that. We're looking forward to making the case, and it's been ongoing.

Speaker #2: Always. It's but it's not what you know. It's what you can prove. And if you've had a rough experience, whether it was in California, Missouri, or in New Hampshire, you know, Missouri is the show-me state.

Speaker #2: New Hampshire is taking a similar stance. And I would, if I were them—they want us to prove it. And we've put the work in to be able to do just that.

Speaker #2: So, we're looking forward to making the case and it's been ongoing.

Speaker #4: Sounds good. Thanks for your time this morning.

Mark Jarvi: Sounds good. Thanks for your time this morning.

Speaker #1: Thanks.

Rod West: Thanks.

Speaker #3: The next question comes from the line of Baltaj Sidhu from National Bank of Canada. Your line is now open. You may now begin.

Operator: The next question comes from the line of Baltej Sidhu from National Bank of Canada. Your line is now open. You may now begin.

Speaker #5: Hey, good morning, everyone. Just a question on the re-domiciling and timing. Just between now and the targeted shareholder vote in the first half of '27, are there any key regulatory, tax, court, or legal milestones we should be watching for that could influence the timing or ultimate economics of the re-domicile?

Baltej Sidhu: Hey, good morning, everyone. Just a question on the re-domiciling and timing. Just between now and the targeted shareholder vote in H1 2027, are there any key regulatory tax code or legal milestones we should be watching for that could influence the timing or ultimate economics of the re-dom?

Speaker #1: Yeah. So, as mentioned in the release, you know, we'll, you know, as mentioned in my prior comment, we'll expect an outcome from the IRS, just the guidance there in the second half of the year here.

Rob Stefani: Yeah. As mentioned in my prior comment, we'll expect an outcome from the IRS, just the guidance there in H2 of the year here. That filing, we continue to have a dialogue there. We'll update you on timing, but would expect that here in H2 of the year. We also intend to pursue regulatory filings, so you can expect to see those across several of our jurisdictions.

Speaker #1: You know, that filing—we continue to have a dialogue there. So, you know, we'll update you on timing, but would expect that here in the back half of the year.

Speaker #1: We also intend to pursue regulatory filings in Q2 and Q3. You can expect to see those across several of our jurisdictions.

Speaker #5: Great. Thanks, Rob. And I know you touched on the dividend and the debt tax implications of flowing the capital through the border to Canada.

Baltej Sidhu: Great. Thanks, Rob. I know you touched on the dividend and the debt tax implications of flowing the capital through the border to Canada. I know the revision in the MD&A was significant costs and taxes. Could you directionally frame the magnitude of what could be expected in terms of those two factors?

Speaker #5: But could you directionally frame I know the very reason the MDNA was significant costs and taxes. Could you directionally frame the magnitude of what could be expected in terms of those two factors?

Speaker #1: Yeah. So, you know, the I think the expectation, if you do the math on the 5% on the run-rate dividend assumption plus the BEAT tax, on the current level of debt service, you would be in that kind of 2 to 2 and a half, maybe slightly higher, since of impact on a run-rate basis.

Rob Stefani: Yeah. I think the expectation, if you do the math on the 5% on the run rate dividend assumption, plus the BEAT tax on the current level of debt service, you would be in that kind of two to two and a half, maybe slightly higher sense of impact on a run rate basis. Again, for 2027, you need to think about the timing of our guidance on when we expect to seek shareholder approval with that run rate impact being what we would expect on a recurring basis.

Speaker #1: So, again, you know, for 2027, you need to think about the timing of our guidance on when we expect to seek shareholder approval with that run-rate impact being what we would expect on a recurring basis.

Speaker #5: Great. Thank you. I'll flip the line.

Baltej Sidhu: Great. Thank you. I'll flip the line.

Speaker #3: The next question comes from the line of Rob Pope. From Scotiabank, your line is now open. You may now begin.

Operator: The next question comes from the line of Rob Hope from Scotiabank. Your line is now open. You may now begin.

Speaker #5: I have a question about the tax implications of the re-dom. Can we dive a little bit deeper into slide 20? You mentioned that the re-domicile is expected to be a taxable event in Canada.

Rob Hope: A question on tax on the re-dom. Can we dive a little bit deeper into slide 20? You do comment that the re-domicile is expected to be a taxable event in Canada, as well as a Foreign Investment in Real Property Tax Act as well. Rather than the ongoing tax savings, can you speak to the potential one-time exit tax liability, both deferred and current, that you could incur?

Speaker #5: As well as a foreign investment in real property tax. Toll as well. So, rather than the ongoing tax savings, can you speak to the potential one-time exit tax liability, both deferred and current, that you could incur?

Speaker #1: You want to do you want to speak to the actual the tariff itself? Do you feel like you've got to you want to any kind of color on that, or you're just looking for magnitude?

Rob Stefani: Do you want to speak to the actual tariff itself? Do you feel like you want any kind of color on that, or you're just looking for magnitude?

Speaker #5: Both would be helpful.

Rob Hope: Both would be helpful.

Speaker #1: Okay. So, the way the FERPTA tax is calculated is effectively we go back and look at non-US shareholders that held the shares in the prior 10 years prior to the re-domicile.

Rob Stefani: Okay. The way the FIRPTA tax is calculated is effectively, we go back and look at non-US shareholders that held the shares in the prior 10 years, prior to the re-domicile. We look at shareholders who were over 5% holders, and the tariff is then based on a rate based on those shareholders who sold over that 10-year period that held a greater than 5% position. We've done that math. We're confirming methodology with the Internal Revenue Service, which is the purpose of the private letter ruling. We continue to have discussions with them. Obviously, we and our advisors have worked through those calculations, and given the expected value creation opportunity of the tax savings relative to those one-time costs, we believe this is a beneficial move.

Speaker #1: We look at shareholders who were over 5% holders. And, you know, the tariff is then based on a rate based on those shareholders who sold over that 10-year period that held, you know, a greater than 5% position.

Speaker #1: So, we've done that math. We're confirming methodology with the Internal Revenue Service, which is the purpose of the private letter ruling. We continue to have discussions with them.

Speaker #1: We've obviously we, in our advisors, have worked through those calculations and given the value creation opportunity expected value creation opportunity of the tax savings relative to those one-time costs we believe this is a beneficial move.

Speaker #5: Thank you. And then do you have an estimate of the one-time costs?

Rob Hope: Thank you. Do you have an estimate of the one-time cost?

Rob Stefani: We have a range, we aren't disclosing that at this point in time, just given the fact that we are confirming that methodology. Again, relative to the range of outcomes, we believe that this is a value-accretive transaction and expect, relative to those one-time transaction costs, that the recurring benefit outweighs that one-time transaction cost.

Speaker #1: We have a range. And we aren't disclosing that at this point in time. Just given the fact that we are confirming that methodology. But again, you know, relative to the range of outcomes, we believe that this is a, you know, value creative transaction.

Speaker #1: And expect, relative to those one-time transaction costs, that the recurring benefit outweighs that one-time transaction cost.

Speaker #5: All right. Thank you. And then, maybe just going back to the regulatory approvals, can you just confirm which states you think will need commission approval for the transaction?

Rob Hope: All right. Thank you. Maybe just going back to the regulatory approvals. Can you just confirm which states you think will need commission approval for the transaction? Do you have an expected timelines or past precedents you can help us with there?

Speaker #5: And, you know, do you have any expected timelines or, you know, past precedents you can help us with there?

Speaker #1: Okay. So, we're going to pursue regulatory filings in Arizona, California, Georgia, Iowa, Illinois, New York, and Texas, and then in New Brunswick. You know, these are filings.

Rob Stefani: Okay. We're going to pursue regulatory filings in Arizona, California, Georgia, Iowa, Illinois, New York, and Texas, then in New Brunswick. These are filings, we would expect the outcomes of the filings to occur and coincide with that timing that we had discussed earlier as far as when we would expect to take this for shareholder vote. Again, these are filings, there'll be more there in the coming weeks.

Speaker #1: And, you know, we would you know, we would expect the outcomes of the filings to, you know, occur and coincide with that, you know, that timing that we had discussed earlier as far as when we would expect to take this for shareholder vote.

Speaker #1: So, again, these are filings and they'll be more there in the coming weeks. As you see them get filed.

Rob Hope: All right. Thank you.

Rob Stefani: As you see them get filed.

Speaker #3: Next question comes from the line of Michael Lonegan from Barclays. Your line is now open. You may begin.

Operator: Next question comes from the line of Michael Lonergan from Barclays. Your line is now open. You may now begin.

Operator: Next question comes from the line of Michael Lonegan from Barclays. Your line is now open. You may now begin.

Speaker #6: Hi, good morning. Thanks for taking my questions. Your trailing 12-month FFO to debt was 12.9% as of the first quarter, and it went to 11.9% this quarter.

Michael Lonergan: Hi. Good morning. Thanks for taking my questions. Your trailing 12-month FFO to debt was 12.9% as of Q1. It went to 11.9% this quarter, versus the downgrade threshold of 11%. Obviously, you said you had no equity, still no equity expected through 2027. I was just wondering if you could talk about where you expect to land this year through 2027, and what kind of cushion you're targeting versus your downgrade threshold in general.

Michael Lonegan: Hi. Good morning. Thanks for taking my questions. Your trailing 12-month FFO to debt was 12.9% as of Q1. It went to 11.9% this quarter, versus the downgrade threshold of 11%. Obviously, you said you had no equity, still no equity expected through 2027. I was just wondering if you could talk about where you expect to land this year through 2027, and what kind of cushion you're targeting versus your downgrade threshold in general.

Speaker #6: You know, versus the downgrade threshold of 11%. Obviously, you said you had no equity, and still no equity is expected through 2027.

Speaker #6: I was just wondering if you could talk about where you expect to land this year through '27 and, you know, what kind of cushion you're targeting versus your downgrade threshold, you know, in general.

Speaker #1: Yeah, so, you know, I think you have to also consider, like, rate case timing and implementation. So, obviously, we'll begin to get the Missouri rates in August.

Rob Stefani: Yeah. I think you have to also consider rate case timing and implementation. Obviously we'll begin to get the Missouri rates in in August. We've gotten the California rates in, and those will continue to benefit from those. All of the rate implementation associated with some of the updates that Rod made. We expect on an FFO to debt basis to continue to be above our S&P downgrade threshold. We haven't put guidance out for FFO to debt, in particular for beyond this year. We continue to expect to, on an S&P FFO to debt base, to maintain above that threshold.

Speaker #1: And we've gotten the California rates in. And those will continue to, you know, continue to benefit from those. And then all the, you know, rate implementation associated with some of the updates that Rod made.

Speaker #1: And so, you know, we will we expect on an FFO to debt basis to continue to be above our S&P downgrade threshold. We haven't put guidance out for FFO to debt in particular for beyond, you know, beyond this year.

Speaker #1: But we continue to, you know, expect to on an S&P FFO to debt basis to maintain above that threshold.

Speaker #6: Great. Thank you. And then, you know, I was wondering if you could talk about the discussions you're having with data centers and large load in Missouri.

Michael Lonergan: Great. Thank you. Then, I was wondering if you could talk about the discussions you're having with data centers and large load in Missouri. I know you're planning on filing a large load tariff sometime this year. What is your pipeline there, and when could we potentially expect an announcement?

Michael Lonegan: Great. Thank you. Then, I was wondering if you could talk about the discussions you're having with data centers and large load in Missouri. I know you're planning on filing a large load tariff sometime this year. What is your pipeline there, and when could we potentially expect an announcement?

Speaker #6: You know, I know you're planning on filing a large load tariff sometime this year. You know, what is your pipeline there? And, you know, when could we potentially expect an announcement?

Rod West: It's Rod, you know I very much appreciate the question. The only thing I can say, whether it was a data center or any other customer, one, we're planning to file our large load tariff in the coming weeks, if not days. The team constantly updates me on that. I would not and cannot disclose any conversation around any potential or existing pipeline as it relates to a specific customer, unless we were at a point in alignment with that customer to say something public about it. The only thing that I've been able to say publicly, and it's consistent, is that our service territory, particularly in this instance, Missouri, is in the heat map of interest of the types of load that are consistent with data center interests.

Speaker #7: And it's Rod. And you know I very much appreciate the question. And the only thing I can say that whether it was a data center or any other customer, one, we're planning to file our large load tariff in the coming weeks if not days.

Speaker #7: And the team constantly updates me on that. I would not and cannot disclose any conversation around any potential or existing pipeline as it relates to a specific customer unless we were at a point in alignment with that customer to say something public about it.

Speaker #7: The only thing that I've been able to say publicly—and it's consistent—is that our service territory, and particularly in this instance Missouri, is in the heat map of interest for the types of load that are consistent with data center interests.

Speaker #7: The large load tariff is an enabling aspect of our ability to further any conversations we might have with potential customers. At the moment that we're at a point where we could disclose any type of engagement with a specific customer, we won't hesitate to do that.

Rod West: The large load tariff is an enabling aspect of our ability to further any conversations we might have with potential customers. The moment that we're at a point where we could disclose any type of engagement with a specific customer, we won't hesitate to do that. I cannot get ahead of any process, whether it existed or didn't exist, just as a matter of course. I know that might be frustrating to hear, but there are reasons why we have to be deliberate. We will not disclose anything unless we're at the point where we're aligned. I do appreciate the question, though.

Speaker #7: But I cannot get ahead of any process, whether it existed or didn't exist, just as a matter of course. So, I know that might be frustrating to hear, but there are reasons why we have to be deliberate and we will not disclose anything unless we're at the point where we're aligned.

Speaker #7: So, I do appreciate the question.

Speaker #6: Great. Thanks for taking my question.

Michael Lonergan: Great. Thanks for taking my question.

Michael Lonegan: Great. Thanks for taking my question.

Speaker #3: Again, if you would like to ask a question, please press star, then the number one on your telephone keypad. The next question comes from the line of Ellen Yoson.

Operator: Again, if you would like to ask a question, please press star then the number one on your telephone keypad. The next question comes from the line of Ellyn Joseph from J.P. Morgan. Your line is now open. You may now begin.

Operator: Again, if you would like to ask a question, please press star then the number one on your telephone keypad. The next question comes from the line of Eli Jossen from JPMorgan. Your line is now open. You may now begin.

Speaker #3: From JP Morgan, your line is now open. You may now begin.

Speaker #5: Hey, good morning. Everyone. You know, maybe just sticking with Missouri. You know, I know that you guys have had a lot of activity in the state.

Rob Stefani: Hey, good morning everyone. Maybe just sticking with Missouri. I know that you guys have had a lot of activity in the state, and you just talked about not being able to provide much clarity or specifics on the large load tariff filing right now. Maybe just kind of the other filings for formula rates and CWIP incentives. Any color there just in terms of potential timeline or quantifying uplift at this time? I know it's an ongoing process, but just broader color would be great. Yeah. Definitely excited about a couple aspects. I think just the Aeries project in particular, that project being eligible for CWIP treatment, and helping stem some of the regulatory lag that you would otherwise see in part. On a transmission filing, that will really apply mainly to the future of transmission development and SPP.

Eli Jossen: Hey, good morning everyone. Maybe just sticking with Missouri. I know that you guys have had a lot of activity in the state, and you just talked about not being able to provide much clarity or specifics on the large load tariff filing right now. Maybe just kind of the other filings for formula rates and CWIP incentives. Any color there just in terms of potential timeline or quantifying uplift at this time? I know it's an ongoing process, but just broader color would be great.

Speaker #5: And you just talked about, you know, not being able to provide much clarity on the or specifics on the large load tariff filing right now.

Speaker #5: But maybe just kind of the other filings for formula rates and CWIP incentives. You know, any color there just in terms of potential timeline or quantifying uplift at this time?

Speaker #5: I know it's an ongoing process, but just broader color would be great.

Speaker #1: Yeah. So, definitely excited, you know, about, you know, a couple aspects. I think, you know, just the ARIS project in particular, that project being eligible for CWIP treatment.

Rob Stefani: Yeah. Definitely excited about a couple aspects. I think just the Aeries project in particular, that project being eligible for CWIP treatment, and helping stem some of the regulatory lag that you would otherwise see in part. On a transmission filing, that will really apply mainly to the future of transmission development and SPP.

Speaker #1: You know, and helping kind of stem some of the regulatory lag that you would otherwise see. In part. And then on the transmission filing, that will really apply mainly to the kind of future transmission development and SPP.

Speaker #1: So, obviously, that's a large project for us that extends over the next, you know, several years. But, you know, moving for those assets to a future test year as well as getting CWIP treatment as well as part of that filing was a cancellation or abandonment provision.

Rob Stefani: Obviously that's a large project for us that extends over the next several years. Moving for those assets to a future test year, as well as getting CWIP treatment, as well as part of that filing was a cancellation or abandonment provision. All of those are beneficial. That future test period will also help eliminate some of the lag component for us on that future development work.

Speaker #1: You know, all of those are beneficial. And so, you know, that future test period, you know, will also help eliminate some of the lag component for us on that future development work.

Speaker #5: Got it. And then, I know there's been a lot of questions on the reDOM. But if we think about the broader index inclusion benefits, you know, you talked about a 2-cent impact.

Ellyn Joseph: Got it. I know there's been a lot of questions on the redom, but if we think about the broader index inclusion benefits, you talked about a $0.02 impact. How do you frame sort of the broader index inclusion upside, I guess, if you've done any math there? Maybe broadly on the $0.02 impact from what you've already talked about, what would the timing look like just in terms of actually flowing through EPS? Would that be kind of phased in through 2027 and 2028, or how would that look?

Eli Jossen: Got it. I know there's been a lot of questions on the redom, but if we think about the broader index inclusion benefits, you talked about a $0.02 impact. How do you frame sort of the broader index inclusion upside, I guess, if you've done any math there? Maybe broadly on the $0.02 impact from what you've already talked about, what would the timing look like just in terms of actually flowing through EPS? Would that be kind of phased in through 2027 and 2028, or how would that look?

Speaker #5: Maybe does that include potential—like, how do you frame sort of the broader index inclusion upside? I guess if you've done any math there.

Speaker #5: And maybe broadly on the 2-cent impact, from what you've already talked about, what would the timing look like just in terms of actually flowing through EPS?

Speaker #5: Would that be kind of phased in through 27 and 28? Or how would that look?

Speaker #1: Yeah. So, as far as the tax savings and the expected EPS impact of that kind of 2 to 3 cents, you know, if the 2027 impact would be determined based on kind of when in the year we're able to achieve the approval.

Rob Stefani: Yeah. As far as the tax savings and the expected EPS impact of that kind of CAD 0.02 to CAD 0.03, the 2027 impact would be determined based on when in the year we're able to achieve the approval. Then 2028, assuming that we've been approved, that would be what we would expect to be more run rate. We haven't extended the guidance for the EPS out there. As far as the kind of separate issue of index inclusion, based on the work that we've done with our advisors, the expectation is there would be some positive fund flow associated with inclusion in at least one of the indexes in the US. I think one of your peers has also done some work around that. I think that's all we can say at this point.

Speaker #1: And then, you know, 2028, you know, assuming that we've been approved, that would be what we would expect to be more run-rate. We haven't extended the guidance for the EPS out there.

Speaker #1: So, but the as far as the kind of separate issue of index inclusion, you know, based on, you know, the work that we've done with our advisors, the expectation is there would be, you know, some positive fund flow associated with inclusion and at least one of the indexes.

Speaker #1: In the US, I think one of your peers is also done some work around that. But, you know, I think that's all we can say at this point.

Speaker #5: All right. Appreciate the caller.

Ellyn Joseph: All right. Appreciate the color.

Eli Jossen: All right. Appreciate the color.

Speaker #3: The next question comes from the line of Ben Thomas, from BMO Capital. Your line is now open. You may now begin.

Operator: The next question comes from the line of Ben Pham from BMO Capital. Your line is now open. You may now begin.

Speaker #5: All right. Thanks. Good morning. You mentioned the kind of the tax benefits from the reDOM. So, pushing beyond your guidance, you haven't extended the guidance.

Ben Pham: Hi. Thanks. Good morning. You mentioned some of the tax benefits from the redomicile pushing beyond your guidance. You haven't extended the guidance. I'm just curious, more specific to the guide, you had that 3 years through 2027. How should we think about when you do extend your guidance? I'm presuming it's not going to be until you get through on the redomicile H1. Do you think from then, do you think 3-year CAGR through end of decade is reasonable for you given the regulatory timeline, or is it maybe something less or even more than that?

Speaker #5: I'm just curious more specific data guide yet at three-year through 27. Should we expect how should we think about the when you do extend your guidance, I'm presuming it's not going to be until you get approval of the reDOM first half.

Speaker #5: Can you confirm that? And then is it do you think three-year CAGR through in a decade is reasonable for you, given the regulatory timeline?

Speaker #5: Or is it maybe something less or even more than that?

Speaker #1: Yeah. I think, you know, we've talked a little bit about this. You know, I think that moving forward, you know, when we do, you know, move to, you know, that's typically done at the, you know, the four Q results, end-of-year results call.

Rob Stefani: Yeah. We've talked a little bit about this. I think that moving forward, when we do move to-- That's typically done at the 4Q results, end-of-year results call. We would look to be more consistent with our peers providing prompt year guidance and then the long-term growth rate. Wouldn't say right now how far out we'll go. I think your rationale is broadly consistent of a longer-term EPS growth rate would likely be subject to board approval of that guidance. That mechanic would put us on par with our peer group. As far as what we bake into those projections, we'll address at that point in time.

Speaker #1: You know, we would look to be more consistent with our peers providing kind of promptier guidance. And then the long-term growth rate. Wouldn't say right now, you know, how far out we'll go.

Speaker #1: But I think, you know, your rationale is broadly consistent of, you know, a longer-term EPS growth rate. Would likely be subject to board approval of that guidance that mechanic would put us on par with our peer group.

Speaker #1: As far as what we bake in, yeah, as far as what we bake into those projections, we'll address, you know, at that point in time.

Speaker #5: Okay. Could you also provide just on OPEX kind of things? You had a guidance around OPEX trending lower as a percent of a growing revenue base.

Ben Pham: Okay. Could you also provide just on the OpEx side of things, you had a guidance around OpEx trending lower as a percent of a growing revenue base. Could you perhaps update on progress on that, where you are right now? Have you surfaced the easy pickings? Has there been some challenges along the way on some of these areas, and how should we look at the trends this year, next year?

Speaker #5: Could you perhaps update on progress on that? Where you are right now, have you surfaced the easy pickings? Has it been some challenges along the way on some of these areas?

Speaker #5: And how should we look with the trends this year and next year?

Speaker #1: Yeah. We're continuing to target that kind of mid-30s. You know, O&M to gross revenue. You know, we continue to make progress on our, you know, cost savings.

Rob Stefani: We're continuing to target that mid-30s O&M to gross revenue. We continue to make progress on our cost savings efforts. I wouldn't get into specifics here, that continues to progress.

Speaker #1: Efforts—you know, I wouldn't get into specifics here, but that continues to progress.

Speaker #5: Okay. All right. Thank you very much.

Ben Pham: Okay. Thank you very much.

Speaker #1: Thanks.

Rod West: Thanks.

Speaker #3: Thank you so much. The next question comes from the line of John Mould, from TD Cohen. Your line is now open. You may now begin.

Operator: Thank you so much. The next question comes from the line of John Mould from TD Cowen. Your line is now open. You may now begin.

John Mould: Hi. Morning, everybody. I'd like to go back to the large load opportunity in Missouri. Not focusing on any specific customer discussions, but more just about the ability in your system as it stands right now to handle incremental loads. I'm just wondering if you can give us a sense of the scale that might be available in your system right now, like what kind of room you've got.

Speaker #6: Hi. Good morning, everybody. I'd like to go back to the large load opportunity in Missouri, not focusing on any specific customer discussions.

Speaker #6: But more just about, you know, the ability in your system as it stands right now to handle incremental loads. I'm just wondering if you can give us a sense of the scale that might be available in your system right now.

Speaker #6: Like, what kind of room you've got? Yeah. And again, yeah, go ahead. You had a second part to your question. Go ahead. Oh, I was just thanks, Rod.

Rod West: Yeah. Go ahead. You had a second part to your question? Go ahead.

John Mould: Oh, thanks, Rod. I was just going to add the pace at which you think you might be able to add supply in the state if you did see that as an incremental demand driver.

Speaker #6: I was just going to add, you know, the pace at which you think you might be able to add supply in the state if you did see that as an incremental demand driver.

Speaker #6: Yeah. And again, and, you know, we've been around in conversations before, and we're not seeking, you know, to obfuscate I think the question. The answer to that question would be premature because disclosing it would then signal the size, the scale of any potential customer.

Rod West: Yeah. Again, we've been around in conversations before, we're not seeking to obfuscate, I think, the question. The answer to that question, it would be premature because disclosing it would then signal the size, the scale of any potential customer. I commit, and we commit to you the moment we're in a position, remember that we have multiple stakeholders who are part of this conversation, including the State of Missouri, the Commission, as well as any potential customers in shaping an integrated resource plan. It's premature for us to signal a size before we're in a position to actually match that integrated resource plan with expected loads. All of those things are to be determined.

Speaker #6: I commit, and we commit to you, that the moment we're in a position—remember, we have multiple stakeholders who are part of this conversation, including the State of Missouri, the Commission, as well as any potential customers.

Speaker #6: In shaping an integrated resource plan, it's premature for us to signal a size before we're in a position to, you know, to actually match that integrated resource plan with expected loads.

Speaker #6: And all of those things are to be determined. And what we're framing up with the large load tariff is enabling a range of outcomes that would then allow us to get further along analytically, you know, around just what scale of, you know, generation and transmission, either at or beyond our existing plans, we'd be able to go public with.

Rod West: What we're framing up with the large load tariff is enabling a range of outcomes that would then allow us to get further along analytically around just what scale of generation and transmission, either at or beyond our existing plans, we'd be able to go public with. It's just a little early. I will signal this. We are internally putting more resources to work, in anticipation, one, of our large load tariff filings, and in furtherance of our efforts to bring economic development to our service territory. I guess I'm comfortable signaling internally that we're putting more resources to bear in anticipation of us having a greater impact in the areas that we're seeking to file a large load tariff. I'll leave it at that. That's all I can communicate.

Speaker #6: It's just a little early. I will signal this. We are, internally, putting more resources to work in anticipation—one, of our large load tariff filings, and in furtherance of our efforts to bring economic development to our service territory.

Speaker #6: And I guess I'm comfortable signaling internally that we're putting more resources to bear in anticipation of us having greater impact in the areas that we're seeking to file a large load tariff.

Speaker #6: And I'll leave it at that. That's all I can communicate. Okay. No, I appreciate that incremental insight on the thought process. I'll leave it there.

John Mould: Okay. No, I appreciate that incremental insight on the thought process. I'll leave it there. Thank you.

Speaker #6: Thank you.

Speaker #3: Thank you so much. There are no further questions at this time. I will now turn the call to Mr. Rod West. Please go ahead.

Operator: Thank you so much. There are no further questions at this time. I will now turn the call to Mr. Rod West. Please go ahead.

Speaker #6: All right. Well, then if there are no more questions, I will simply say thank you for your continued interest. Support, and feedback. And with that, we will end the call.

Rod West: Well if there are no more questions, I will simply say thank you for your continued interest, support, and feedback. With that, we will end the call.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

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