Capital Power Corporation

Welcome to the Capital Powers First Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference call is being recorded today, May 2, 2022. I will now turn the call over to Mr. Rondi Ma, the Director of Investor Relations. Please go ahead.

Good morning and thank you for joining us today to review Capital Powers First Quarter 2022 Results. which we released earlier this morning. Our first quarter report and the presentation for this conference call are posted on our website at CapitalPower.com. Joining me this morning are Brian Baggio, 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 the 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 two. In today's discussion we will be referring to various non-GAAP financial measures and ratios as noted on slide three. 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 first quarter 2022 MB&A. I will now turn the call over to Brian for his remarks, starting on slide four.

Thanks, Randy, and good morning. Capital Powers head office in Edmonton is located within a 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 learn more about the indigenous history of the lands on which we live and work. In the first quarter, Capital Power delivered on our strategic objectives of growing our renewables fleet increasing contracted cash flows, and re-contracting our natural gas assets. Strathmore Solar, our first Canadian solar facility, began commercial operations in March. The 41 megawatt facility is fully contracted with 100% of the renewable energy and associated renewable energy credits sold to TELUS under a 25-year PPA. We also executed a 10-year renewable energy agreement with ME Global Canada for the balance of the uncontracted portion of the Whitlaw Wind facility. Whitlaw Wind is now fully contracted for 100% of the energy generated and approximately 86% of the environmental attributes for 10 years. The additional phases of Whitlaw Wind representing an additional 151 megawatts began commercial operations in December of 2021. After four months of operations, it's operating very well with higher generation than forecast. The contract renewal for our island generation facility is nearing completion. We have agreed in principle to the terms of a four and a half year electricity purchase agreement with BC Hydro. Both parties are finalizing details and execution is expected within the next several weeks. We continue to aggressively intervene in the BCUC IRP process based on our expectation that island generation is needed beyond four and a half years. Turning to slide five, I will touch on the significant progress that has been made on our Genesee CCS project in the first quarter and the very encouraging developments that have occurred on the policy front. Enbridge's open access Waubman Carbon Hub which would provide transportation and sequestration services for the Genesee CCS project, was awarded the right to pursue development of a carbon hub as part of the Government of Alberta's CCUS hub process. For our Genesee CCS project, we have completed our preliminary feed study that updated various technical and cost parameters, and feed study activities are proceeding. On April 7th, the federal government provided the details of the proposed refundable CCUS investment tax credit as part of the 2022 federal budget document. The CCS IT for projects undertaken before 2030 would be set at 60% for investment in direct air capture projects, 50% for all other capture projects, and 37.5% for investment in transportation, sequestration, and use. The details of the proposed ITC are encouraging and will provide important support for the Genesee CCS project. We continue our discussions with the Canadian Infrastructure Bank on the framework for financing. We also continue to explore programs the federal and provincial governments have launched that are intended to provide targeted support for accelerated deployment of CCUS and other large-scale decarbonization technologies. We also expect First Nations participation as well as other potential partnerships for the project. We have been clear that a decision to ultimately proceed with the project will require a mechanism for de-risking carbon policy. We were pleased to see the federal government's 2030 Emissions Reduction Plan document released on March 29 included a commitment to explore these types of mechanisms. The ERP specifically stated the following. To enhance long-term certainty, the Government of Canada will explore measures that help guarantee the future price of carbon pollution. This includes, for example, investment approaches like carbon contracts for differences, which enshrine future price levels in contracts between the government and low-carbon project investors, thereby de-risking private sector low-carbon investments. We will continue to engage with the federal government on this issue. Turning to slide six, I'll comment on our prospective growth outlook. In Ontario, our three natural gas assets, York Energy, East Windsor, and Gorway, are currently under long-term contracts with the earliest expiry in 2029. The ISO recently published their annual acquisition report that identified incremental capacity needs of 2500 megawatts by 2027 and an additional 1500 megawatts by 2030. This creates significant opportunities for capital power either for expansion of existing facilities or the addition of batteries. These developments support that these facilities are well positioned for re-contracting in regions with significant needs. We continue to advance numerous sites in our U.S. solar and storage pipeline and expect to begin actively marketing more advanced facilities. With respect to M&A, we are seeing significant opportunities for both thermal and renewable assets and expect to meet or exceed our annual $500 million committed capital for growth target. I'll now turn the call over to Sandra.