Emera Incorporated

Good day and thank you for standing by. Welcome to the EMERA Q1 2022 Analyst Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that this conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Dave Bissonson, Vice President of Investor Relations, please go ahead.

Thank you, Jerome. And thank you all for joining us this morning at AMIRA's first quarter 2022 conference call and live webcast. AMIRA's first quarter earnings release was distributed this morning by Newswire, and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at amira.com. Joining me for this morning's call are Scott Belfour, AMIRA's President and Chief Executive Officer, Greg Blunden, AMIRA's Chief Financial Officer, and other members of AMIRA's management team. Before we begin, I will take a moment to advise you that this morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include references to non-GAAP financial measures. You should refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. Now, I will turn things over to Scott.

Thank you, Dave, and good morning, everyone. MIR reported solid first quarter results this morning, with $0.92 of adjusted earnings per share and a 42% increase in operating cash flow compared to the first quarter of 2021. The four-penny reduction in year-over-year adjusted earnings per share this year, this quarter, was largely driven by decreased contributions from Amir Energy, which in 2021 performed particularly well as a result of market conditions created by winter storm Yuri in 2021. Our regulated utilities delivered an 8% increase in adjusted earnings per share this quarter, highlighting the strength of our regulated portfolio and the consistent, reliable earnings growth that we can expect from these businesses. As an example of that growth, our team in Florida recently achieved another significant milestone in our solar program as the first tranche of Solar Wave 2, 235 megawatts of new solar generation, was placed into service. I'm proud to say our total solar investment to date of over 800 megawatts positions Tampa Electric with the highest proportion of solar generation per customer of any utility in the state. These investments have obviously reduced the carbon intensity of the generation fleet at Tampa Electric, but they've also driven value for our customers through fuel cost savings, something that is particularly beneficial for customers in the current market conditions. And while not the only factor, rising fuel costs are a significant contributor to the current high inflation that we're experiencing and working hard to manage on behalf of our customers. The fuel-to-asset strategy we've been executing on for many years where we've been investing to reduce the carbon intensity of the energy we deliver to our customers, has also helped to reduce the fuel and operating cost profile of the business. These are helpful contributors to reducing, albeit far from eliminating, the inflationary impacts to the business and thus for our customers. We continue to execute well on our capital program, with 9% higher capital investment in the first quarter compared to last year. We're on track to invest close to $3 billion in 2022, and we continue to expect to invest between $8.4 and $9.4 billion through the end of 2024, with over 60% of that capital plan focused on cleaner and more reliable energy. Beyond 2024, we believe that the ongoing need for cleaner generation, infrastructure renewal, and grid modernization will continue to provide robust investment opportunity and growth for the business. In that context, we talked a lot about our capital plan's focus on decarbonizing our generation fleet, but we're also transforming and modernizing our grid. Investments in distributed generation, smart meters, cybersecurity, and data analytics platforms are a vital part of the energy transition. They support the underlying framework that enables the build-out of increased renewable generation, and they make the grid more reliable and more responsive to evolving customer demands. The energy transition underway is complex and costly, and the current environment where costs are rising in virtually all areas is adding to the challenge. We continue to monitor supply chains and the impact of inflation to proactively mitigate any risks around our capital plan and our business more broadly. At this time, we do not have any material changes to our capital plan in response to these challenges, but we continue to watch this closely. As we continue to execute on a capital plan that has a clear focus on reducing emissions and our reliance on coal, we're proud of our track record and the very substantial progress we've made. However, it's important to recognize that the path to further reducing and eliminating carbon from the electric and energy sector is getting even more challenging, notwithstanding the abundance of opportunity for continued deployment of renewables like wind and solar and the exciting developments in battery storage and other technologies. The task ahead is made more difficult by increasing energy demand, more severe weather patterns that are challenging system reliability, increasing levels of intermittent renewable sources that require backup generation or storage solutions which are themselves increasingly challenging and expensive to secure, and of course very ambitious government energy and climate policies. I believe that our strategy is continuing to serve all of our stakeholders well. We remain committed to an energy transition that takes a balanced approach, making real progress while ensuring that reliability is not compromised and that costs remain as manageable as possible for customers. And our approach positions us well to continue to deliver value and growth for customers and our shareholders. Since 2005, we've reduced the use of coal by 65%, and we currently have more than 1,400 megawatts of installed renewable generation capacity across the business. That's in addition to the renewable energy that can now be imported into Nova Scotia with benefit of the maritime link. Last year, we announced our climate commitment, which includes clear decarbonization goals and our vision to achieve net zero CO2 emissions by 2050. We continue to be transparent in our characterization of a net zero carbon future as a vision and not a concrete goal because the path to get there is not clear, certainly not in a way that does not sacrifice reliability or place an extraordinary cost burden on customers. Our major projects, like the Maritime Link, Big Bend Modernization, the solar program in Florida, and the Eastern Clean Energy Initiative at Nova Scotia Power, are critical pieces of our decarbonization strategy. However, to meet the challenges ahead, we'll need to do more. And we know that innovation and emerging technologies will play an important role in shaping a viable path to achieving ambitious climate targets in both the U.S. and Canada. A critical factor to achieving net zero will be accelerating timelines and ensuring that today's emerging technologies can be commercially viable and ready to support the transition and help to not only provide cleaner energy, but also the reliability and energy availability that customers need. While we speak often of our big project initiatives, I want to take a moment to talk about some of the smaller projects our teams are working on across the business that highlight our innovative thinking and the attention we're paying to emerging technologies. Earlier this year, the team in Tampa completed construction of a floating solar array. It's the largest floating array in Florida and the first of its kind in the Tampa Bay area. Half of the solar panels used in the project are double-sided. which can produce as much as 30% more energy than traditional panels. Exploring this type of alternative solution helps us expand the solar potential for Tampa Electric, where land availability and cost is a meaningful factor in that region. We continue to believe that our gas utilities are an important part of the transition to a greener energy future. One example, the team at Peoples Gas in partnership with a local dairy is building a renewable natural gas facility. Construction is underway, and once the facility is in service, RNG will be injected into Florida's pipeline systems and used as a reliable and cost-effective energy source. Another example, at New Mexico Gas, the team launched a pilot project this year to test the blending of hydrogen with natural gas that can then be used in typical household appliances. The project is in early stages, but is part of our commitment and strategy to reduce the carbon and emission intensity of the energy we deliver to our customers. The team is also exploring the value of a gas storage project to help manage the risk of supply constraints as well as the risk of volatile gas prices, and expects to file an application for this project with the regulator later this year. While grid-scale renewable natural gas and hydrogen blending projects might not be commercially and economically feasible today, It's essential that we continue to explore and support emerging technologies like this by making small investments now so we can be ready to make the best assessment for our customers when these technologies become commercially viable. Our block energy initiative is another clear example of our commitment to innovation and our work to capitalize on customer trends. Recognizing that it would have a meaningful impact on our sector, we established Amira Technologies over five years ago to explore the emerging trend of distributed generation. By 2019, a full-scale demonstration project was developed and put into service at the Kirkland Air Force Base with resounding success. We followed this with our first residential project for 37 homes and a new subdivision in the Tampa Bay area, which importantly, the Florida Public Service Commission approved as a rate-based investment for Tampa Electric. Utilities are expert operators, which makes block energy a win-win for customers and utilities alike. Customers benefit from more renewable energy with a step change in reliability, but without the upfront costs or ongoing maintenance of making the investments themselves in rooftop solar, battery storage, or backup generation. And the technology allows utilities to do what they do best, invest in rate base with economies of scale and optimizing the flow and sharing of energy sources to reduce the overall cost for all customers. We know emerging technologies like these and many others will play an important role in achieving a net zero carbon future. And we're committed to continuing to explore and invest in these ideas to drive value for our customers and growth for our shareholders. More examples, along with progress on our safety journey, climate transition plan, and other ESG commitments, will be included in our upcoming sustainability report that will be released next month. Before I pass the call over to Greg, I wanted to provide a quick update on our regulatory calendar. Our rate cases in Nova Scotia, New Mexico, and Barbados are ongoing, and we expect to have resolution on all three by the end of the year. And while we don't have a substantial update on the Atlantic Loop project, we continue to be encouraged by the ongoing conversations and hope to provide more clarity on the project later this year. Greg?