Capital Power Corporation

Welcome to Capital Power's second quarter 2021 results conference call. As a reminder, all participants are in listen-only mode, and the conference call is being recorded today, July 30th, 2021. I will now turn the call over to Mr. Randy Maaz, the Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today to review Capital Power's second quarter 2021 results, which we released earlier this morning. Our second quarter report and the presentation for this conference call are posted on our website at CapitalPower.com. Joining me on the call are Brian Vazio, President and CEO, and Sandra Haskins, Senior Vice President, Finance and CFO. We will start with opening comments and then open the lines to take your questions. Before we start, I would like to remind everyone that certain statements about future events made on this call are forward-looking in nature and are based on certain assumptions and analysis made by the company. Actual results could differ materially from the company's expectations due to various risks and uncertainties associated with our business. Please refer to the cautionary statement on forward-looking information on slide 2. In today's discussion, we will be referring to various non-GAAP financial measures as noted on slide 3. These measures are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and therefore are unlikely to be comparable to similar measures used by other enterprises. These measures are provided to complement the gap measures, which are provided in the analysis of the company's results from management's perspective. Reconciliations of these non-gap financial measures to their nearest gap measures can be found in our second quarter 2021 MD&A. I will now turn the call over to Brian for his remarks, starting on slide four.

Thanks, Randy, and good morning. I'll start off with the highlights of the second quarter and comment on our 2021 outlook. We delivered strong second quarter results that significantly exceeded our expectations, largely driven by our performance in Alberta, where the Alberta power market continues to be robust with a positive outlook. Accordingly, we've updated our 2021 financial guidance with ranges above the top end of our original targets for adjusted EBITDA and AFFO. Despite the impacts from the Genesee 2 forced outage that started in mid-July, that I'll comment on shortly. In line with our dividend growth guidance, we've announced an approximate 7% dividend increase that is effective with the third quarter 2021 dividend. We also continue to make solid progress on our approximately $1.7 billion in growth projects. As part of our goal to be net carbon neutral by 2050, we continue to advance our CO2 reduction initiatives. This includes carbon capture and storage where there is significant government support and the development is going very well. For the Genesee Carbon Conversion Center, we continue to investigate the commercial opportunities for carbon nanotubes, and board approval for the project facility is expected later this year. Turning to slide five, Genesee II experienced a forced outage in mid-July caused by a generator failure. The outage is expected to last six weeks, with return to operations anticipated in the third quarter of this year. We plan to utilize our Clover Bar peaking facility to partially mitigate the Genesee 2 impact. The three-week planned outage for Genesee scheduled for October will be advanced and completed during this outage. Moving to slide six, this chart shows our solid track record of dividend growth with eight consecutive years of dividend increases averaging 7% per year. As mentioned, we've increased the common share dividend by approximately 7% to $2.19 per year starting in the third quarter. We're also maintaining our dividend guidance for a 5% annual increase in 2022. As you can see, the AFFO payout ratio continues to track below our long-term payout target of 45 to 55%. Turning to slide seven, last month BC Hydro released its draft integrated resource plan. In that draft IRP, it stated that BC Hydro is not currently intending to renew the long-term electricity purchase agreement for our island generation facility that expires in April of 2022. We are actively participating in the IRP review process, including retaining technical experts familiar with BC Hydro's utility resource planning and transmission systems operations to support the review of the draft IRP. Comments are due at the end of this month, with the final IRP expected to be filed by the end of this year. We are also engaging with BC and local government officials and other stakeholders. We continue to believe Island Generation's dispatchable generation remains critical to the reliability of the BC system, particularly on Vancouver Island, as again shown by recent weather and system events. With the current transmission difficulties they're experiencing on Vancouver Island, Island Generation has been continuously dispatched since July 9. I'll now turn the call over to Sandra.