Algonquin Power & Utilities Corp. Common Shares

Thank you for standing by. This is the conference operator. Welcome to the Algonquin Power and Utilities Corp. 2020 Second Quarter Analyst and Investor Earnings Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Christopher Jarrett, Vice Chair of Algonquin Power and Utilities Corp. Please go ahead.

Great. Thanks. Good morning, everyone, and thanks for joining us this morning for our 2020 Second Quarter Earnings Conference Call. As mentioned, my name is Chris Jarrett, and joining me on the call today are Arun Banskota, our Chief Executive Officer, David Bonachewski, our Chief Financial Officer, and Arthur Kasperchuk, our Deputy Chief Financial Officer. To accompany our earnings call today, we have a supplemental webcast presentation available on our website, algonquinpowerandutilities.com. Our financial statements and management discussion analysis are also available on the website, as well as on CEDAR and EDCAR. And before continuing the call, we would like to remind you that our discussion during the call will include certain forward-looking information and including but not limited to our expectations regarding future earnings and capital expenditures, as well as potential future impacts of the COVID-19 situation. We will also refer to certain non-GAAP financial measures, and at the end of this call, Amelia from our investor relations team will read a short notice regarding both forward-looking information and non-GAAP financial measures. Please refer to our most recent MD&A files for important information on these items. On our call this morning, Arun is going to provide the strategic achievements for Q2 2020. Arthur is going to follow with the Q2 financial results. And David will speak to our recent capital raise. And then we'll wrap up with Arun concluding with our strategic outlook for the business. We then open the lines for questions. And as usual, I'd ask that you restrict your questions to two and then re-queue if you have any additional questions. Now, before I turn things over to Arun, I would like to say a few words regarding David Broniszewski. who is retiring in September after serving as Algonquin's CFO for 13 years. On behalf of all our employees and the Board of Directors, I would like to thank David for his many contributions. Personally, I can tell you that it's been an absolute pleasure to work with David over the past 13 years, and I wish him the best in retirement. David's contributions to this organization over this time period have been immense, including building an extremely strong finance team that will succeed him. Thank you, David. And with that, I would turn things over to Arun.

Thank you, Chris. And good morning to those who've been able to join us on the call and online. As a business providing mission-critical energy and water services to our customers, we continue to perform well, both from a financial and operational standpoint, as we continue to navigate through the impacts of COVID-19. Given the resiliency in our business model, the company has been able to provide uninterrupted and continued high quality utility services since the onset of the pandemic. As expected, given the changing patterns of our customers, we have seen some moderate decreases in customer demand across some of our utilities, which have impacted our second quarter results by just over one cent on a per share basis. Arthur will provide more commentary on these financial impacts. Operations of our renewable energy generation facilities have naturally supported social distancing, and with the lion's share of our business under long-term contracts with creditworthy counterparties, we have not experienced any negative COVID-19 impacts. Our major renewable energy construction projects of approximately 1600 megawatts continue to be considered essential infrastructure in the jurisdictions in which they are located. And therefore, construction has been proceeding despite the COVID-19 pandemic. At all of these sites, the anticipated timing for the projects to be placed in service has not been materially impacted by COVID-19 to date. I'm pleased to report that the continuity safe harbor deadline for U.S. federal production tax credits has been extended by one year, which provides more flexibility for our U.S. wind projects currently under construction to qualify for the maximum PTC. Overall, I'm pleased with the progress we've made so far this year, and I'm confident we'll continue this into the second half of the year. Since joining the organization in February, I've been focusing my efforts on three pillars, operational excellence, growth, and environmental social governance, ESG. I would like to spend a bit of time going over each pillar. Firstly, on operational excellence, which is all about having a laser focus on improving our day-to-day service delivery in all areas. To do this well takes real organizational agility. Our response to COVID-19 has been a great example of how our organization and our frontline workers were able to pivot without missing a beat in delivering essential services for our customers. At Algonquin, safety is more than a priority. It is part of how we operate, and despite our industry-leading performance, we are always looking for ways to improve. I'm pleased to share that our safety culture was recently recognized and awarded by the National Safety Council in our central region for working 2 million employee hours without injury. An even greater achievement when you take into account the reference timeframe includes operating under COVID-19 times. Customer focus has to be at the heart of any operational excellence strategy. Over the past three years, we have increased our JD Power results by 48 points as we strive towards top quartile. We continue to listen and act upon our customers' needs. Specifically as part of our grid modernization efforts, we have now installed over 13,000 electric meters in the first few weeks of our advanced metering project in Missouri, as we continue to demonstrate the customer benefits and receive regulatory support for our smart meter deployment. We have progressed well on our customer first program and recently completed the global design phase and are on schedule to launch first in Massachusetts. Second, Algonquin has a strong history of growth, and I am committed to continuing this growth trajectory and add value to our customers and shareholders. As I look forward at the changing energy market, I believe that the commercial and industrial CNI business segment will represent an enormous channel for growth. Today, it accounts for the majority of energy consumption. In fact, more than transport and residential commercial combined. And the vast majority of industrial consumption is fossil fuels, petroleum, coal, and natural gas. Commercial and industrial businesses will want to continue to decarbonize in the coming years, and I'm confident they will become much larger consumers of renewable energy. That is why I am particularly excited by our recently announced four-year framework agreement with Chevron, seeking to co-develop more than 500 megawatts of renewable power projects to provide electricity to their operations. This partnership unites Algonquin's technical and operations renewable power expertise with Chevron's scale, land, and local knowledge to enable faster, more cost-effective, renewable power solutions. This is exactly the type of growth opportunity that gets me excited about the prospects for this sector and our collaboration with Chevron is proof of concept. We can create shareholder value for Algonquin by helping customers decarbonize. And finally on ESG, environment sustainability governance. We remain firmly committed to sustainability through the inclusion of environmental, social, and governance values in our daily operations and business planning activities. There has been much focus on the E, or environmental, including the closing of our Asbury coal plant in March, which has reduced our greenhouse gas emissions by approximately 1 million metric tons of carbon dioxide. I wanted to provide some commentary on the S, social factors, and G, governance factors as well. In terms of social initiatives, one of our key sustainability goals is to achieve top quartile employee engagement. Despite COVID-19, I'm pleased to report that the organization has made great progress on our 2020 employee engagement results. Our 2020 engagement score is near North American top quartile ranking. The improvement is evidence that we're committed to putting actions in place to continue to be a top employer of choice. As for GE, we are focused on building effective governance practices for the long term. Our commitment to diversity and corporate governance practices can be evidenced by our continued year-over-year improvement in governance scores from independent organizations such as the Globe and Mail and ISS. Before turning the call over to Arthur, I want to touch upon the recent Empire Electric ruling in Missouri that we received last month. Under Missouri law, Senate Bill 564, electric utilities have the option to apply for a weather decoupling mechanism. In our 2019 rate review, we requested a weather decoupling mechanism to provide stable rates to customers. We believed and continue to believe that this is a good to reduce volatility, not just for the utility, but also for customers. However, with its recent order, The Commission denied our request and as a result of this decision, the company re-evaluated other options under Missouri law and opted to elect PISA, Plant and Service Accounting. The PISA election is not subject to additional approval, is expected to reduce regulatory lag, smooth the rate impact of necessary investments for customers, and will remain in place through 2023. Later on this call, I will provide an update with respect to our major capital projects. With that, I'll pass it over to Arthur for a review of our Q2 2020 financial results. Arthur?