Capital Power Corporation

Thank you for standing by. This is the conference operator. Welcome to Capital Power's third quarter 2022 results conference call. As a reminder, all participants are in listen-only mode, and the conference call is being recorded today, October 31st, 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 third quarter 2022 results, which we released earlier this morning. Our third quarter 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 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 GAAP measures which are provided in the analysis of the company's results from management's perspective. Reconciliations of these non-GAAP financial measures to the nearest GAAP measures can be found in our third quarter 2022 MD&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 the traditional and contemporary home of many indigenous peoples of the Treaty 6 region and the 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. Overall, our third quarter results were strong, and we set a record quarter for adjusted EBITDA. We had strong operational performance with a 96% average availability that enabled a 15% increase in generation compared to a year ago. On the strength of Alberta power prices that averaged $221 per megawatt hour in a quarter, our Alberta commercial facilities generated strong results. Outside of Alberta, our Gorway facility in Ontario and Decatur in Alabama also delivered strong results with double-digit percentage increases in adjusted EBITDA in the third quarter. At the end of September, we closed the acquisition of the Midland Cogen facility. We've executed a partnership and management services agreement with our joint venture partner, Manulife Investment Management. Capital Power is responsible for the operations and maintenance and asset management of the Midland Cogen facility. Work continues to integrate Midland into our commercial portfolio and transition operational and business systems interfaces into our networks. We are forecasting $35 million-plus in adjusted EBITDA for Q4 of this year. Although the in-service date for Genesee 1 has been revised from late 2023 to 2024, Due to delays in the interconnection, the overall project continues to progress well, and we remain on track to be off coal in 2023. Feed study activities for the Genesee CCUS project continues and moving forward as expected. We continue to pursue other growth opportunities, including in Ontario, where we are very optimistic with the competitiveness of our three natural gas facilities. I look forward to sharing more details on our growth opportunities at our upcoming investor day. Turning to slide five, recently there have been numerous favorable policy announcements that are a continuation of supportive market dynamics for our strategy. Alberta Environment and Parks initiated consultations on potential changes to the tier framework that Alberta expects will maintain equivalency with the federal backstop framework. and preserve provincial jurisdiction over carbon pricing. It includes proposal to commit Alberta to adopt the federal Alberta price schedule through 2030, introducing a 2% year reduction in the electricity stringency from 0.37 tons per megawatt hour performance standard until 2030. The AEP is targeting to finalize the recommendation by fall of 2022 and have the enabling regulations completed by December 31, 2022. Overall, we are supportive of the proposed changes by AEP. The ASO has initiated consultation on potential changes to the current MSSC limit of 466 megawatts. The current limit impacts the Genesee repowering project at each combined cycle unit. It would exceed the current level. However, battery storage could alleviate any constraints the existing MSC limit may present. We are supportive of ASO increasing this limit. The U.S. Inflation Reduction Act, enacted in August, is the most significant legislation to invest in clean energy and address climate change in the U.S. history. It includes an extension of PTCs and ITCs until the end of 2024. for most forms of renewable energy, including energy storage technology. Overall, the IRA provides strong support for renewable asset growth plans in the United States. In Ontario, the Ministry of Environment, Conservation, and Parks issued proposed changes to the Emissions Performance Standard Program for 2023 to 2030. It includes a proposal to change the performance standard from 0.37 to 0.31 tons of CO2 per megawatt hour starting in 2023 and remain constant until 2030. For our Ontario natural gas facilities, there are contract provisions that will limit the impact of proposed EPS benchmark changes to capital power. I'll now turn it over to Sandra.