Algonquin Power & Utilities Corp. Common Shares

Please stand by, your meeting is about to begin. Good morning, ladies and gentlemen, and welcome to the Algonquin Power and Utilities Corporation third quarter 2022 earnings webcast and conference call. Following the presentation, there will be a question and answer session. I would like to turn the meeting over to Ms. Amelia Tsang, Vice President of Investor Relations. Please go ahead.

Good morning, everyone. Thanks for joining us this morning for our third quarter 2022 earnings conference call. Presenting on the call today are Arun Bansoda, our President and Chief Executive Officer, and Darren Myers, our Chief Financial Officer. Also joining us this morning for the question and answer part of the call will be Jeff Norman, our Chief Development Officer, and Johnny Johnston, our Chief Operating 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 our website, as well as on CDAR. Before continuing the call, we would like to remind you that our discussion during the call will include certain point-looking information, including but not limited to our expectations regarding earnings, capital expenditures, pending acquisitions, asset recycling, transactions and growth. At the end of the call, I will read a notice regarding both point-looking information and non-GAAP measures. Please also refer to our most recent MD&A filed on Cedar and Edgar and available on our website for additional information on these items. On our call this morning, Arun will provide an overview of Q3 performance. Darren will follow with the financial results and then Arun will conclude with an update on a strategic plan for the business. We will then open the lines for questions. I ask that you restrict your questions to two and then re-queue if you have any additional questions to allow others the opportunity to participate. And with that, I'll turn it over to Arun.

Thank you, Amelia, and a very good morning to those who have been able to join us on the call and online. Let me start by taking the opportunity to extend a warm welcome to Darren, who has now been with Algonquin for almost three months. Darren has a very strong background and brings deep experience in finance and capital markets, as he was previously the CFO at two public corporations in Canada. Over the coming months, I hope you all have the opportunity to meet and build a relationship with Darren. Moving to the update for the quarter. Overall, I would describe our third quarter financial results as challenged. We made progress on our growth initiatives with a year-over-year increase in adjusted EBITDA. But at the same time, we experienced pressure from factors such as renewable energy project delays and higher interest rates. Daren will discuss the results in more detail. Over Algonquin's history, we have driven significant growth at our regulated and renewable businesses. Looking ahead over the next several decades, as the industry continues to see an energy transition, we are well-positioned to benefit from a decarbonization transformation. That said, we are currently seeing rapid changes in capital and credit markets, most notably a sharp increase in interest rates. While increasing interest rates is a market-wide phenomenon, the impacts are different by company. As a capital-intensive, growth-oriented company, Alcantara faces headwinds from higher interest rates and capital market volatility. We recognize these challenges and are committed to identifying and implementing adjustments to reduce our reliance on raising equity and to moderate the impact of rising interest rates. Let me now provide you an update on our three strategic pillars of growth, operational excellence, and sustainability. By now, many of you are familiar with the growth levers we have in our organization. One growth lever on the regulated side is from our acquisitions, and I wanted to provide an update on the pending acquisition of Kentucky Power Company and AEP Kentucky Transmission Company. On September 29th, Liberty Utilities and AEP reached an agreement that provides a path towards closing the transaction pending the approval of the transaction by FERC. The terms of the agreement include a reduction in the purchase price by $200 million from approximately $2.8 billion to approximately $2.6 billion. The transaction is currently expected to close in January 2023. We remain firmly committed to completing this acquisition and look forward to bringing the benefits of our local operating model to the customers and communities of Eastern Kentucky. Turning to the growth levers for our renewable business. One lever is our CNI strategy of partnering and collaborating with other companies to help them achieve their environment, social governance, ESG commitments. During the quarter, we started construction on our first two solar projects with Chevron under our framework agreement, which was announced about two years prior to co-develop renewable projects and help Chevron reduce its carbon intensity. We continue to be active on the renewables front, and construction continues to progress well at our Deerfield 2 and Sandy Ridge 2 wind projects. which are expected to add a combined total of approximately 200 megawatts of capacity. All foundations and roadworks are now complete on both projects. Turbine parts are on site at Deerfield 2, with 8 of 21 turbines now topped out. Sandy Ridge 2 has 4 of 15 turbines on site and is expected to start topping out units in November. Approximately 2% of our previously disclosed five-year capital plan includes solar projects, including the Chevron projects and New Market Solar. While we have confirmed deliveries of panels for the Chevron projects, the New Market Solar project continues to be impacted by solar module delivery delays due to U.S. government import restrictions, which is an industry-wide issue. The project already has 24 of 100 megawatts in service, with construction on the remaining 76 megawatts substantially complete, except for module installation. Module deliveries for the remaining 76 megawatts are expected to restart in late Q4 2022 or in Q1 2023. I also want to provide a comment on the passage of the Inflation Reduction Act in August, which has reinforced our strategy of investing in renewable assets. Not only has it increased PTC and ITC tax credit levels associated with wind, solar, storage, and renewable gas projects, but it has also increased those incentives transferability and self-monetization options. In short, the IRA has delivered a greater degree of long-term certainty required for us to continue to invest in developing a pipeline of greenfield opportunities. Moving on now to operational excellence. In a mission-critical industry, safety and reliability are always key areas of focus. We strive to keep our customers and communities safe while maintaining our system reliability and resiliency. I want to thank all of our employees for their ongoing focus on safety and preparedness for weather events. I want to particularly recognize and thank the electric team in Bermuda as the crew was able to restore power back to 97% of customers within 48 hours following Hurricane Fiona in late September. In Q3, our enterprise-wide customer J.D. Power scores came in at 702, representing a seven point increase from the prior quarter. In a challenging environment of increasing commodity prices, we have seen industry scores decline substantially, while our score is only down one point from last year. We were able to move against the trend and improve our customer experience versus other utility companies as measured by J.D. Power. We continue to monitor rising costs and the consequent cost of living challenges. These costs are largely a pass-through, but at the same time, we are acutely aware of the potential impact on customer affordability, so we track that very closely. We are helping our customers through educating on options for financial assistance and providing energy efficiency and water conservation programs. And finally, We remain firmly committed to sustainability through the inclusion of environmental, social, and governance values in our corporate strategy and operations. Earlier this week, we released our 2022 ESG report, which is also available on our corporate website. The report is organized to meet our ESG disclosures as aligned with widely recognized sustainability frameworks. Highlights of the newly released report include an enhanced diversity, equity, and inclusion section, as well as enhanced data-driven content with the inclusion of more relevant key performance indicators. Focusing on the company's ESG progress also included is third-party verification of Scope 1 and 2 emissions data, which is the third year in a row we've had the data successfully verified. With that, I'll pass it over to Darren, who will speak to our third quarter 2022 financial results.