Canadian Utilities Limited

Thank you for standing by. This is the conference operator. Welcome to the second quarter 2025 results conference call and webcast for Canadian Utilities Limited. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for the Canadian Utilities Second Quarter 2025 Conference Call. On the line today, we have Bob Miles, Chief Executive Officer, Canadian Utilities Limited, and Katie Patrick, Executive Vice President, Chief Financial and Investment Officer. Before we move into today's remarks, I'd like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, I am speaking to you from our Ackle Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Sissica, the Kainai, and the Pagani Nations, the Tsutina Nation, and the Stony Dakota Nations, which include the Chinooki, Bears Paw, and Good Stony First Nations. I also want to recognize that the City of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month in Canada, a time to honor the stories, achievements, and resilience of Indigenous peoples. May we continue to respect and celebrate the diverse history, languages, and culture of Indigenous peoples beyond the month of June. Today, you'll hear from Bob, who will deliver opening comments along with key developments within our aqua energy systems and ATCO Empower businesses. And then you'll hear from Katie, who will discuss our Q2 financial results. Following today's remarks, the Canadian Utilities team will take questions from the investment community. Please note that a replay of the conference call, a copy of the presentation, and today's transcript will be available on our website at CanadianUtilities.com following the call. The materials can be found in the investor section under events and presentations. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian security regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings and adjusted earnings per share. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented with other entities. Please refer to our filings with the Canadian security regulators for more information. And with that, I'll turn the call over to Bob for his opening remarks.

Thanks, Colin, and good morning, everyone. Thank you for joining us today. Let's begin with our largest asset, Atco Energy Systems, which includes our Alberta utilities. As we strategize and execute on our plans through 2027, we expect growth to be predominantly driven by projects in our transmission businesses, in addition to pursuing efficiencies across all of our utilities. Our growth plan is the largest capital plan on which our company has ever embarked and encompasses a robust project pipeline, including the Central East Transfer Out Project and the Yellowhead Pipeline Project. These, combined with other future opportunities, including those we expect to be directly assigned by the ISO, sets us up to deliver significant growth for our share owners and investors over the long term. We look forward to sharing our plans beyond 2027, and we'll update our three-year capital forecast in our year-end disclosures. Now, jumping into our current major projects. Our Central East Transfer Out project, or CETO, is well into the construction phase and remains on track to be completed in mid-2026. This $280 million project upgrades and strengthens the transmission system in central east Alberta to the rest of Alberta's interconnected electric system, improving the reliability and reducing congestion in this area. We are proud of this project and the impact it will have on our customers across Alberta. CETO is essential for integrating additional renewable energy resources and enhancing the reliability of the transmission system. As Alberta's energy landscape continues to evolve, it's crucial we invest in projects that address our province's changing energy needs, enhancing Alberta's energy infrastructure, while enabling a modernized system that can readily accommodate generations. We also continue to see positive momentum on our $2.8 billion Yellowhead Pipeline project. The impact of this project cannot be understated. Without the Yellowhead Pipeline, we believe there will be a shortfall of gas delivery on Alberta's system due to capacity constraints. At already 90% contracted, the Yellowhead Pipeline will serve communities across Alberta, strengthening the province's natural gas network and supporting Alberta's growing industrial sector, including petrochemicals and refining. As I've indicated previously, with construction set to begin in 2026, The Yellowhead Pipeline will deliver long-term economic benefits, including 24,000 jobs by 2028, $20 billion in investments, and will contribute $3.9 billion annually to Alberta's GDP. Regarding our needs application for the Yellowhead Pipeline project, we expect to hear back from the AUC in August of this year. We will then file our facilities application in Q4. As we move through the regulatory process for Yellowhead, our teams are proactively working through the procurement process for key project materials, including the sourcing of our steel pipe. Moving to the regulatory front, in 2024, the Alberta Utilities Commission issued its decision on phase one of the second generation of the performance-based regulation, or PBR2, framework review. the AUC claimed that the distribution businesses failed to quantify or attribute all efficiency gains under PBR2 to specific programs or initiatives. We disagree, and our appeal with the Alberta Court of Appeal is expected to be heard in the first half of 2026. In May 2025, the AUC issued a second decision related to PBR2 re-opener proceeding, involving a refund to customers. Following this Phase 2 decision, we submitted a review and variance and a permission to appeal the AUC and Alberta Court of Appeal last month. At the core of its framework, PBR incentivizes utilities to reduce costs while maintaining safe and reliable service and then share these cost savings with customers. With that, we are extremely disappointed with the position announced by the AUC, and we fundamentally disagree with its recent decisions. We are the only utility in Alberta to reduce distribution costs during the PBR2 regulatory term, delivering more than $500 million of savings in distribution costs, which customers are already benefiting from over the 2023 to 2028 period. As we move forward, we remain focused on being a leader in advocating for a fair, affordable, and efficient regulatory and business environment in Alberta. Before we jump into the other parts of the business, I want to take a moment to address the current wildfire situation in certain parts of our service territory. Currently, there are over 50 active wildfires across Alberta. Addressing wildfires is a collaborative effort, and I want to thank everybody who continues to support these efforts, including our team members, first responders, businesses, government, and local authorities who are working around the clock to keep our community safe. At this time, we remain focused on the safety of our employees and communities where we operate. While there's been no impact material impact to our assets, we continue to work with all parties to ensure the safety of the communities and to take proactive measures, including wildfire mitigation and fireproofing of our infrastructure. We have an ambitious capital program and are committed to building a resilient energy system that can withstand the impacts of extreme weather related events, including wildfires. As part of our plan and spend, our focus continues to be on wildfire mitigation. Investing in a robust energy system includes resilient hardware, such as composite poles and undergrounding. This protects our assets and the communities where we operate, and having a stable, reliable, and resilient power grid has never been more important. Now moving to our ATCO and power business. Starting with our hydrogen development at the Atco Heartland Hydrogen Hub, or AH3 as we call it, we are optimistic on recent policy developments, including Bill C-5, which includes the Building Canada Act. This act aims to reduce project approval duplication between federal and provincial governments, with a one project, one review approach. We believe this is a positive step in the right direction, accelerating the regulatory process for national interest projects and signaling investor confidence. We continue to engage in conversations with key stakeholders, including federal and provincial governments, to ensure our project is seen both as a nation-building project priority and part of Canada's ambition to be an energy superpower. We, along with our identified strategic partners, remain committed to advancing the development of this project once the regulatory framework is in place to ensure the production and transport of ammonia economically to Asia and any other consuming nations. We await a final decision by all levels of the Canadian government to enable both the approvals for transport and the economic frameworks to move forward with this project. For our storage and industrial water segment, gas storage remains a fundamental asset to Atco and Power. Looking at our history, since 2021, we have more than doubled our capacity from 52 petajoules to 117 petajoules and expect to see our per annum revenue in 2025 more than triple from that of 2021. We would like to acknowledge both our commercial, our project, and our operational teams for this performance and the results achieved to date. Within Alberta, we continue to see strong fundamentals with increased demand for storage stemming from the start of the LNG exports and continued development of further export volumes in the coming years. The increased demand from additional gas power generation and other industrial demand within Alberta. We see similar market fundamentals throughout North America as we explore opportunities for ATCO and Power to achieve further growth in storage capacity and revenues beyond Alberta. Our storage facilities are highly contracted next year and positions us well to repeat this record performance that we saw in 2026, or sorry, that we had seen in 2025. We have made final investment decisions to expand our existing storage capacity by approximately 10% through further well development and facility improvement projects with expected in-service dates for 2026. Over the next year, we will evaluate further expansion opportunities, including possible pool extensions at both our Carbon and Alberta Hub natural gas storage facilities. In addition to these organic opportunities, we will continue to review inorganic growth available to complement our storage portfolio, both within Alberta and in other jurisdictions. With that, I'll pass the call to Katie to discuss our Q2 financial results.