Capital Power Corporation

Welcome to Capital Power's Fourth Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference call is being recorded today, March 1st, 2023. I will now turn the call over to Mr. Randy Ma, the Director of Investor Relations. Please, go ahead. Randy Ma, Director of Investor Relations, Thank you.

Good morning. And thank you for joining us today to review Capital Power's fourth quarter and year-end 2022 results. Our 2022 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 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 of 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 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 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 their nearest GAAP measures can be found in our 2022 Integrated Annual Report. Before I turn it over to Brian, I want to acknowledge that Capital Power's head office in Edmonton is located within the traditional and contemporary home of many Indigenous people of the Treaty 6 region and the Métis Nation of the Burt 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. Okay, over to Brian for his remarks starting on slide 4.

Thanks, Randy, and good morning. 2022 was an excellent year in delivering on our strategic objectives. We exceeded our 500 million committed capital for growth target in 2022 through the acquisition of the Midland Cogen facility with our joint venture partner, Manulife Investment Management. We also added 116 megawatts in renewables with the COD of Clydesdale Solar and Strathmore Solar. We announced that we had successfully recontracted two natural gas facilities with four-and-a-half and six-year extensions for Island Generation and Arlington Valley. For our renewable facilities, we executed three excellent long-term renewable contracts. This included a 10-year contract for ME Global Canada for Whitlaw Wind, a 15-year contract with Shaw Communications for Clydesdale Solar, and a 23-year contract with Public Service and Procurement Canada for the Helker 2 wind project. We are also advancing technologies to enable a clean power system through abated natural gas to achieve net zero by 2045. The Genesee 1 and 2 repowering project continues to progress and is on track to meet its revised cost of $1.1 billion in our off-coal commitment by the end of 2023. We are leveraging our ability to find savings in the switchyard while attracting and retaining labor, which remain the most significant cost risks. Lastly, we reached a major milestone for the Genesee CCS project by announcing a limited notice to proceed as we moved into the next stage of final due diligence and commercial and financial technical assessment. We expect to announce a final investment decision later this year. Turning to slide five, I'll provide an update on the ISO procurement process in Ontario, where our three natural gas facilities are very well positioned for success. Under the expedited RFP, the ISO is aiming to procure 600 megawatts of gas and 900 megawatts of storage. We submitted three projects with a total capital cost of over $600 million on February 16. Our submission included $100 megawatt natural gas turbine expansion for East Windsor, and battery projects of 114 and 47.5 megawatts for York Energy and Gorway, respectively. The ISO is targeting to announce awards in May of this year. The ISO also had a procurement process for same technology upgrades. This involves upgrades at existing facilities targeting 300 megawatts of incremental natural gas with uprated projects eligible for contract extensions through 2035. We've submitted two proposals for Gorway and York Energy. We did not submit a proposal for an uprate at East Windsor because it did not meet the initial criteria for capacity characteristics. On slide six, I'll provide an update on our three North Carolina solar projects. Our expectations had been that once the supply chain related issues caused by COVID had subsided, costs would return to more normal levels. Unfortunately, that has not materialized as these projects continue to be uneconomic with their existing 2020 PPAs and significantly higher construction estimates due to industry-wide cost pressures. In addition to our projects, we believe there are a number of other similarly situated projects that are not proceeding in North Carolina. In discussions with Duke, it is highly probable that the existing PPAs will be terminated and a provision has been recorded in the fourth quarter for the associated penalties. Duke is expected to announce procurement RFPs in the second quarter of this year, which provides an opportunity for us to rebid the three solar projects. Given that our sites are fully permitted and ready for construction, we've signed interconnection agreements allowing Duke to expedite construction and work towards a 2025 COD, while new projects entering the queue couldn't reach COD until 2026 or 2027, and the required interconnection network upgrades for our solar projects are cost-competitive, Whereas new projects would have significantly higher costs, we believe our solar projects, totaling 160 megawatts, are very well positioned for the upcoming RFPs. I'll now turn it over to Sandra.