Capital Power Corporation

Thank you for standing by. This is the conference operator. Welcome to Capital Power's third quarter 2023 results conference call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded today, November 1st, 2023. I will now turn the call over to Ms. Kat Perrone, Manager of Media Relations and Communications. Please go ahead.

Good morning, and thank you for joining us today to review Capital Power's third quarter 2023 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. Presenting this morning are Avik De, 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'd 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 three or our regulatory filings available on CDAR. In today's discussion, we will be referring to various non-GAAP financial measures and ratios, also 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 their nearest GAAP measure can be found in our third quarter 2023 MD&A. I would like to acknowledge that capital powers head office in Edmonton is located within the traditional contemporary home of many indigenous peoples of the treaty 6 region and the nation of Alberta region 4. we acknowledge the diverse indigenous communities that are 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. Before I turn it over to. Slide 5 provides an overview of what we'll be covering on today's call. We'll start with updates on our net zero strategy, introduce our expanded executive team, discuss progress on our strategic growth, provide financial results including 2023 full-year guidance, and finally, we'll wrap up with details regarding our upcoming investor day. With that, I will turn it over to Avik for his remarks starting on slide six.

Thanks, Kat, and good morning. During our last call, I talked about our strategic focus on delivering reliable, affordable, and decarbonized power which will be built on three strategic pillars, grid critical baseload generation, renewable generation, and the pursuit of decarbonization solutions. I'll provide a brief update on our progress in these areas before commenting on the quarterly results. Our $1.35 billion Genesee repowering project represents a critical step towards dispatchable baseload generation by providing an additional 512 megawatts of net capacity for Alberta. We continue to deliver on our midlife natural gas strategy, as demonstrated by our agreement to acquire the Fredrickson 1 generating station, which will deliver 265 megawatts of reliable baseload generation to the Puget Sound region. On the renewables front, construction is underway for the Halakirk 2 wind project, and continue to see great progress on the Maple Leaf Solar and Ontario DESS projects. Finally, our decarbonization efforts continue through the Genesee Repowering Project, which will reduce annual CO2 emissions from the facility by 3.4 million tons from 2019 levels. We are also actively engaged in ongoing commercial discussions to advance our near-shovel-ready Genesee CCS project. These projects and initiatives demonstrate that we are taking a balanced, thoughtful approach to energy transition and delivering on our net zero strategy. Addressing climate change is an urgent generational challenge, and we're proud to take a leading role in decarbonizing our power system to deliver long-term value for our business, communities, and planet. Now I'll speak about key highlights from this quarter. I'd like to introduce you to our expanded executive team. a combination of internal promotions and an external new member. With decades of experience in the energy industry, they will lead our company to net zero by 2045. In corporate services, May Wong has been promoted to Senior Vice President, Strategy, Planning and Sustainability, and will lead our corporate strategy, sustainability efforts and long-term planning. May previously held the role of Vice President of Strategy, Forecasting and Sustainability, and has been with the company for 20 years. Pauline McLean joins us from the Alberta Electric System Operator, where she spent 14 years in senior legal and commercial roles. Pauline leads our legal, regulatory, corporate compliance, and external relations functions of Capital Power and provides support, risk management, and strategic insights to senior management and the board of directors. In asset management, Steve Wolin has been promoted to Senior Vice President Operations and will oversee the safe operations of our fleet, which includes the functions of operations, supply chain, and health, safety, security, and environment. He is responsible for reliability and plant efficiency programs that provide industry-leading plant availability and emissions reductions. Steve previously held the positions of Vice President, Thermal Operations East and Renewables, and vice president engineering, and also brings knowledge and experience in pre and post combustion carbon capture technologies. Steve has been with the company for 22 years. Jason Comandante has also been promoted to become our senior vice president, head of Canada. Jason oversees the physical and financial optimization of our Canadian fleet, including the execution of Canadian development and acquisition opportunities, and the assessment and investment in decarbonization technologies in Canada. Jason has held senior leadership roles in commodity trading, corporate strategy, regulatory and commercial management, and has been with the company for 22 years. And finally, Brian Deneve moves into a new role as Senior Vice President, Chief Commercial Officer, where he now oversees commercial business initiatives across North America, including the physical and financial optimization and decarbonization of Capital Powers Fleet. Brian has previously served as Senior Vice President Operations, as well as Senior Vice President Business Development and Commercial Services, and Senior Vice President Finance and CFO. Sandra Haskins, Jackie Polipiak, and Steve Owens continue to serve in their current roles. With their industry experience and expertise, this dynamic group is the propelling force behind the development of critical solutions that will meet the growing long-term demand for power across North America. I'm happy to extend a warm welcome to Pauline, May, Jason, and Steve to our leadership team. We have a very strong pipeline of growth, whether that be through acquisition or development, that we have consistently converted to fleet capacity driving long-term shareholder value. With projects under development and announced this year, we will be adding over 1.2 gigawatt of capacity to our fleet going out to 2026, bringing the total capacity added since 2022 to 2.3 gigawatt in five different power markets across North America. Our pipeline has a strong inventory of projects with another 4.2 gigawatt of near-term growth opportunities. And our strategic alignment with First Solar means that we have secured one gigawatt of responsibly produced ultra-low carbon solar modules that will ensure our U.S. projects meet domestic content rules under the Inflation Reduction Act. I would like to talk about our recent acquisition agreement as we continue to strategically grow our fleet with grid-critical dispatchable baseload natural gas assets. Fredrickson One Generating Station represents an excellent strategic fit with our fleet by providing an additional 265 megawatts of flexible, fully contracted baseload generation. The facility is in the Pacific Northwest, which further diversifies our geographic footprint and is well positioned for recontracting opportunities with legacy coal retirements on the horizon. In addition, the facility sits on approximately seven acres of land and is adjacent to additional lands owned by Capital Power. This represents a prime location for future developments such as a battery installation or a hybrid opportunity. The facility is expected to deliver average contracted EBITDA of 15 million U.S. per year during the five-year period of 2024 to 2029 with accretive near-term cash flows and will be financed using cash on hand and credit facilities. We anticipate the transaction to close in late 2023 with no significant impact on this fiscal year's results. Highlighted by the map on slide 10, the addition of Fredrickson 1 fits very well with the key criteria we look for in the energy markets that we invest in and strategically diversifies our presence across North America. Our expertise to assess, determine, and capitalize on the right market opportunities supported by our ability to optimize, operate, and deliver leading reliability results from our assets is driving value for our business. Geographic diversification of our fleet in markets that hit our sweet spot will provide long-term opportunities for our balanced approach to energy transition. I'd now like to pass it to Sandra to review our financial highlights for the quarter.