NuScale Power Corporation Class A

Good afternoon and welcome to NuScale's first quarter 2023 earnings results conference call. Today's call is being recorded. All participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press star one. Thank you. A replay of today's conference call will be available and accessible on NuScale's website at ir.nuscalepower.com. The web replay will be available for 30 days following the earnings call. A telephone replay will also be available for seven days through a registration link also accessible on NuScale's website. At this time, for opening remarks, I would like to turn the call over to Scott Kozak Director of Investor Relations. Please go ahead, Mr. Kozak.

Thanks, operator. Welcome to NuScale's first quarter 2023 earnings results conference call. With us today are John Hopkins, President and Chief Executive Officer, and Chris Colbert, Chief Financial Officer. On today's call, NuScale will provide an update of its business and discuss financial results. We will then open up the phone lines for questions. This afternoon, we posted a set of supplemental slides on our investor relations website. As reflected in the safe harbor on slide two, the information set forth in the presentation and discussed during the course of our remarks in the subsequent Q&A session includes forward-looking statements which reflect our current views of existing trends and are subject to a variety of risks and uncertainties. You can find a discussion of our risk factors, which could potentially contribute to such differences, in our SEC filings on Form S-1 and Form 10-Q. I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer. John?

Thank you, Scott, and good afternoon, everyone. I will discuss our recent progress across several operational and financial priorities. Then my colleague, NuScale CFO, Chris Colbert, will provide a detailed update on our financial results and outlook. NuScale is growing and maturing as we continue to build momentum on our path towards commercialization. We are leading the charge as the only publicly traded pure play company focused on zero carbon base load power generation and next generation nuclear technology that supports the critical emerging trends in clean energy and in energy security. As highlighted on slide three, our market opportunity is fueled by dual drivers. First, the energy transition. as power generation must increasingly be sourced from carbon-free sources, including renewables and nuclear, rather than fossil fuels. Second, the growing market need for energy, which is massive and growing. According to a recent McKinsey study, demand for electricity is expected to triple by 2050 as the world shifts away from fossil fuels towards electrification. The resulting need for new low-carbon and zero-carbon generation will be unprecedented. McKinsey estimates that this energy transition could require an additional 400 to 800 gigawatts of new nuclear capacity, about 10 to 20% of future global electricity demand, to meet the need for dispatchable power by 2050. NuScale is preparing to help solve this need. We have numerous competitive advantages and are years ahead of our competitors in the small modular or SMR industry. Not only are we the only SMR design certified by the U.S. Nuclear Regulatory Commission, or NRC, but we are also cost competitive, have an established manufacturing and fuel supply infrastructure, and are poised to begin manufacturing our new scale power modules later this year. On slide four, we highlight the five 2023 company objectives that we detailed on our previous earnings call. We made important progress in all five objectives during the first quarter, and are confident we will achieve those goals this year as we demonstrate our continued advancement towards commercialization. Next, I will provide a business development update, starting with our two committed customers, and then I'll highlight a few developments in our customers' pipeline. As you can see on slide five for the Carbon-Free Power Project, or CFPP, We executed an order for long-lead materials and have transitioned to the NuScale power module fabrication process, which I'll speak about in greater detail in a few minutes. In addition, NuScale is working with our CFPP customer, Utah Associated Municipal Power Systems, or UAMS, to finalize a combined license application, or COLA, which is on track to be submitted in early 2024. The COLA is both a construction permit and operating license used to emphasize Part 52 as a single-step licensing process versus the older two-step Part 50. We're also developing a Class 2 cost estimate for this project. As we have discussed, NuScale and UAMS are targeting 80% subscription to the CFPP by year-end 2023. We are working closely with UAMS on securing additional subscriptions and believe this can be generated through a combination of existing CFPP participants, increasing their subscription levels, UAMS members who are not currently CFPP participants signing on to the project, and additional Western public power entities, investor-owned utilities, and industrials. UAMS members and other public power entities in the Western U.S. are facing a rapid retirement of coal plants and the expense and the challenge of accessing natural gas. These issues highlight their need to add capacity and dispatchable load growth to complement renewable resources. The facts on the ground will be reflected in the integrated resource plans. On slide six, with our second committed customer, Romania's Rural Power, We are proceeding with phase one, front-end engineering and design, or feed work. Activities completed during the first phase of the feed work will define the major site and site-specific inputs for our Voyager 6 power plant, which will be deployed on the site of a decommissioned coal-fired power plant. We are already in discussions on the next phase of the project and have begun engagement with local suppliers. In addition to that work, the Romanian nuclear regulator, CNCAN provided authorization to NuScale for safety-related design work to begin. Now, on slide seven, I'll spotlight our robust customer pipeline and provide a few highlights. Let's start in Poland. As you may recall, in 2022, NuScale signed a task order with KGHM, a global leader in copper and silver production. to deploy the first SMR in Poland. In April, KGHM applied to the Ministry of Climate and Environment what is called a fundamental decision to build an SMR in Poland. A grant by the Ministry will underscore Poland's support for SMRs and pave the way for critical next steps in deployment, such as location selection and construction permitting. Moving now to Indonesia, in March, the US Trade and Development Agency, or USTDA, awarded a grant to Indonesia Power for technical assistance in developing the country's first SMR. Indonesia Power had already selected new skills technology, and now with the USTDA's assistance, next steps will include a site selection plan, power plant and interconnection system design, preliminary environmental and social impact assessment, risk assessment, cost estimate, and regulatory review. President Biden's Partnership for Global Infrastructure Investment support countries like Indonesia seeking reliable zero-carbon baseload power. Finally, I also want to highlight the memorandum of understanding that we have signed recently with two partners in Korea, Doosan and their nobility, and the Export-Import Bank of Korea. Not only will this strengthen our collaboration with these groups, It also supports new-scale SMR deployment as we work together in areas such as marketing, technical support, and development of a global supply chain. Looking at the pipeline more broadly on slide eight, we are pleased and confident with the breadth and scale of our opportunities. In the U.S., we're seeking a notable pickup in interest from potential customers of a better understanding impact of the Inflation Reduction Act repurposing coal plants, and the production of hydrogen are of particular interest. Conversations are at various stages with investor-owned utilities, municipal utilities, tech companies with data centers to support, as well as groups involved in carbon capture initiatives. In addition, major industrial companies are looking to take advantage of the IRA as they seek 24-7 clean, reliable energy and process heat for various applications. In terms of potential customer interest, the size of the pie is growing and diversifying. This is really a continuation of a trend we have been seeing as new potential customers engaged in existing relationships gain further traction. There is a lot of interest in providing color on these customer conversations. So turning to slide nine, I'll talk through considerations that are resonating most prominently This includes modularity beyond construction, meaning that NuScale power modules are modular in fabrication and in operation. Once installed, our multi-module plants can produce reliable clean electricity for the grid while allocating one or more modules to economically produce hydrogen or provide process heat for an assortment of industrial applications. This is a competitive differentiator for NuScale. especially when combined with shorter and staggered refueling outages between modules that further enable a high facility capacity factor. The result is a highly reliable and flexible source of carbon-free energy. Other attributes prominent in customer conversations are NuScale's Black Start and island mode capabilities. As a reminder, Black Start refers to the ability to start the plant out from cold conditions without external grid connections, a first of the kind in the nuclear industry. Island mode is the ability for a single new scale power module to supply all the electrical needs of a Voyager power plant and support a dedicated facility, like a data center in the event of the loss of the grid. Industrial companies who are seeking uninterrupted energy are also keen on our island mode capabilities. One additional top-of-the-mind attribute is the NRC's approval of our methodology for determining the emergency planning zone, or EPC, the New Scale Voyager SMR power plants. The NRC approval enables that, in most instances, an EPC that only extends to a site's boundary will be necessary for New Scale's Voyager power plants, as opposed to the 10-mile radius emergency planning zone, used by every existing U.S. nuclear power plant. NuScale is the only design that has an NRC-approved methodology that supports this capability. This enhances the ability for NuScale SMR plants to be sited near process heat users or at retired coal power plant sites where population densities may be higher. We can also utilize the retired coal plants infrastructure, including transmission lines, and retain and employ a similar local workforce. Customers value NuScale's technology advantages. They appreciate the regulatory path we have chosen and recognize our multi-year head start in licensing. Our shift to manufacturing and customer delivery are other key differentiators compared with SMR competitors that are a much earlier point in the regulatory and commercialization development. On slide 10, we summarize other first quarter operational highlights. In March, the NRC began the technical review of NuScale's updated Standard Design Approval, or SDA, application. This review is a process through which we can attain NRC approval for a power-up rate to a 77 megawatt module that will support the capacity needs for a wider range of customers, as well as improve facility economics. The design reflected in this application includes the same fundamental safety case and features approved by the NRC in 2020. The NRC will issue a review schedule once they docket the application. With our track record of regulatory approvals at the NRC, we are familiar with their process and we expect to see the SDA application accepted for review this year. Now, let's discuss customer material delivery. Back in March, we announced that we'd placed our first long-lead material owner with our partner, Doosan, in our ability. They will produce forgings and materials essential in the manufacturing of the first new steel power modules. Since that announcement, Doosan commenced forging production. Later this year, the manufacturing process begins where the forgings are welded and fabricated to their final dimensions. These are the first fabricated materials to the modules that we delivered to the CFPP plant. We are not aware of another North American SMR vendor that has progressed their technology to the manufacturing phase. In addition, I am pleased to report that the Orion Registrar issued NuScale the highly regarded ISO 9001 2015 certification. This certification is an international standard that recognizes our quality management standards and controls are scalable and repeatable across the globe, further validating new skills technology to customers internationally. In summary, we're off to a great start in 2023. We have a significant opportunity in front of us as we continue to build momentum, grow our business, and deliver on our commitments to our customers. Now I'll hand it over to Chris to provide our financial update for the quarter.