Capital Power Corporation

Welcome to Capital Power's fourth quarter 2021 results conference call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded today, February 24, 2022. I will now turn the call over to Mr. Randy Ma, the Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today to review Capital Power's fourth quarter and year-end 2021 results, which we released earlier this morning. Our 2021 integrated annual report and the presentation for this conference call are posted on our website at CapitalPower.com. Joining me this morning are Brian Vazio, President and CEO, and Sandra Haskins, Senior Vice President, Finance and CFO. We'll 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 and ratios as noted on slide 3. These measures do not define 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 are disclosed in our 2021 Integrated Annual Report. I will now turn the call over to Brian for his remarks starting on slide four.

Thanks, Randy, and good morning. Capitol Power's head office in Edmonton is located within the traditional and contemporary home of many Indigenous peoples of the Treaty 6 region and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community and our lives as we continue to learn more about the Indigenous history of the lands on which we live and work. 2021 was an excellent year in advancing our strategy and commitment to being off coal in 2023, where we saw strong progress from strategic, sustainability, and financial perspectives. At a high level, we escalated our renewables and storage footprint. We had success on long-term contracting of our renewable projects. And we made progress in repositioning Genesee 1 and 2 to be the most efficient combined cycle units in Alberta once the repowering project is completed. Sustainability continues to be integral to our business, where we have incorporated broad compensation that is linked to our ESG targets. We have also advanced our decarbonization strategy through strategic partnerships, such as collaborating with Enbridge on a CCUS project. Sandra will provide more details on our financial highlights. These highlights include delivering record financial performance and maintaining a strong balance sheet and access to capital to fund our growth. We have also significantly managed down several short-term and medium-term risks to capital power. And based on the stability of our cash flows, we have extended our annual dividend guidance to 2025. On slide five is a list of strategic highlights and accomplishments for 2021. We've enhanced the Genesee 1 and 2 repowering project with the integration of a 210 megawatt battery energy storage system, the largest in Canada. Once repositioned, Genesee 1 and 2 will have the dominant baseload position in the Alberta power market. We executed a six-year tolling agreement extension for Arlington Valley, that reaffirms our strategy of investing in strategically positioned natural gas assets. We completed the combustion turbine upgrade at Decatur that increases our contracted capacity and efficiency, which enhanced economics consistent with the contract extension we executed in 2020. WIDLAW became the largest wind facility in Alberta at 353 megawatts when phases two and three were completed ahead of schedule in early December and below budget. We executed 15-year renewable contracts with both Labatt's Breweries and Dow Chemicals to help them reach their sustainability goals through customized renewable energy solutions. And demand for renewable contracts for us continues to be very positive. Growth in our Alberta renewable assets continues with our latest project, Helcurt II, a 150 megawatt wind farm that is adjacent to our existing Helcurt wind facility in central Alberta. Lastly, we expanded our solar and storage development pipeline with the acquisition of a portfolio of solar sites with battery potential in the United States, providing us with a platform for significant renewable growth. Overall, these strategic advances support growth, and a roadmap to decarbonization. Turning to slide six, this chart shows our growth in renewables from 2016 to 2024. Based on current growth projects, we have achieved a compound annual growth rate of 18%. As the chart illustrates, we've delivered constant annual growth where new contracted renewable projects are added every year, except for 2023, when the original completion dates for the North Carolina projects have been delayed to 2024 due to the delays in the interconnection process. We are hoping to have at least one additional renewable project to be announced this year. Moving to slide seven, We are committed to be carbon neutral by 2050 and have a clear pathway that includes setting targets along that pathway. We've compensation elements for executives and capital power leaders that are directly linked to ESG targets. These include targets on diversity, a 30% carbon reduction by 2024, and employee well-being. In 2021, we achieved our sustainability targets to develop company-wide water management and sustainability sourcing strategies that are designed around ESG principles to positively contribute to society and ensuring our environment can thrive over the long term. We are moving to implement these strategies in 2022. Our Genesee 1 and 2 repowering project continues to be on track, supporting our commitment to be off-coal in 2023. We've also incorporated sustainability into our financing by transitioning existing credit facilities to sustainability-linked credit facilities that are tied to emission intensity targets. We're advancing our Genesee 1 and 2 CCS project by collaborating with Enbridge that I'll elaborate on shortly. Through our achievements in 2021, we've increased our velocity to meet our sustainability targets and positions the company to deliver long-term value for our stakeholders and the environment. Turning to slide eight, we have made substantial progress on the advancement of CCUS. The CO2 hub development process is moving forward in Alberta with the Enbridge project fitting our needs very well. We're in the process of finalizing our pre-feed study aimed at solidifying project definition technology licensing, scoping, preliminary engineering deliverables, and costing details. We're optimistic that sufficient financial support for the $1.8 to $2 billion carbon capture project will come from both federal and provincial governments. We're in discussions with the Canadian Infrastructure Bank on the framework for financing. We also expect First Nations participation as well as other potential partnerships for the project. One of the key issues for this project to proceed is de-risking carbon policy. There's a general appreciation by governments that long-term policy uncertainty presents unique risks to investments in CCS. Our discussions with governments has focused on potential mechanisms and approaches to mitigate adverse impacts in the event of carbon policy related changes. The final investment decision is now expected in mid-2023 and is subject to satisfactory hub progress, government support, and policy risk mitigation. I'll now turn the call over to Sandra.