Emera Incorporated

Good morning ladies and gentlemen and welcome to the EMIRA Q3 2023 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct the questions and answer sessions. If at any time during this call you require immediate assistance, please press star zero for the operator. Remember that this call is being recorded on Friday, November 10th, 2023. I would now like to turn the conference over to Ariane Amirkal-Khali. Please go ahead.

Thank you, Sergio, and thank you all for joining us this morning for AMIRA's third quarter 2023 conference call and live webcast. AMIRA's third quarter earnings release was distributed this morning via 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 Balfour, AMIRA's President and Chief Executive Officer, Greg Blunden, AMIRA's Chief Financial Officer, and other members of the 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. And now, I will turn things over to Scott.

Thank you, Ariane, and good morning, everyone. This morning, we reported third quarter adjusted earnings per share of 75 cents compared to 76 cents in the third quarter of 2022. Our regulated portfolio, led by Tampa Electric, continues to drive our strong financial results. Earnings contributions from our regulated portfolio increased 8% this quarter over the same quarter last year, or 6 cents in adjusted EPS terms, driven by higher rate-supported capital investment customer growth, and by favorable weather in Florida. This increase was partially offset by lower earnings from the energy and the impact of higher interest costs across the business. The sustained customer growth and overall strong demand we continue to see across our portfolio, combined with the investment opportunities identified in a refreshed capital program, reinforce our confidence in our continued delivery of long-term earnings cash flow, and dividend growth to our shareholders. To that end, during this quarter, our board of directors approved a 4% increase in our dividend and extended our dividend growth guidance of 4% to 5% out to 2026. This represents 17 years of continuous dividend increases. Looking forward, our updated capital plan reflects $8.9 billion of capital investment over the next three years. with the majority of that focused on reliability, cleaner energy, and infrastructure modernization. This investment profile translates to 7% of annualized growth in consolidated rate base over the same period. In addition to our baseline capital plan, we see incremental investment opportunities that could drive rate base growth to 8% or more on an annualized basis over this period. However, as always, we are focused on optimizing our capital investment strategy to manage the timing of capital deployment to consider the rate impacts on customers. That's particularly important now because, as Greg will discuss shortly, we are sensitive to the current higher cost of capital environment and the impact that is having on customer rates. Also increasingly important in this higher cost of capital environment is the need to align the deployment of capital with planned regulatory filings to minimize regulatory lag to the greatest extent possible. In this context, I will share that in addition to the rate cases currently underway at New Mexico Gas and in the Caribbean, we expect to file for new rates at Tampa Electric in 2024 to be effective in 2025. We expect that to the extent the incremental investment opportunities we have identified are supported by regulatory outcomes, including required rate support, or support from potential government funding initiatives such as clean energy tax credits, these investments will be incorporated into updates to our baseline capital plans over time. With both Tampa Electric and Peoples Gas continuing to experience strong customer growth, over 75% of our three-year capital program will be invested in our Florida operations, where population growth and economic conditions also continue to be very strong. We also continue to see the impacts of electrification and changing weather patterns on customer demand. In August, Tampa Electric set new record load levels, and during the quarter, Nova Scotia Power experienced their highest third quarter residential load. And on the gas side, Peoples Gas continues to see customer growth of around 5%. As the economies and populations and overall demand in our service territories grow, so does the level of capital investment required to support that growth. In addition to supporting growth across our portfolio, our capital plan continues to be focused on advancing our strategy of delivering cleaner and more reliable energy to our customers, with over 60% of our capital spend focused on investments that will support reliability and reduce the carbon intensity of our generation mix. Our solar program and investments in storm hardening and TAMP Electric continue to be the two largest projects in our three-year capital program. By the end of this year, Tampa Electric will have over 1,200 megawatts of solar generation on the system, representing 14% of their generation capacity. This will grow to over 1,600 megawatts by the end of 2025. Thanks in part to these investments, as well as the very successfully completed Big Bend modernization project, By 2025, we expect less than 2% of our generation of Tampa electric will come from coal. In addition, this capital plan includes $165 million of investment in battery storage to complement the solar build-out. The value of these investments for our customers is clear. In 2022, solar investments in Florida saved customers around $80 U.S. million in avoided fuel costs. And our investments in reliability and storm protection resulted in Tampa Electric's best ever reliability performance, with an impressive 17% increase in reliability metrics compared to last year's results, which were also record best. In Nova Scotia, our capital program continues to be focused on supporting the customer growth we are seeing in the province, as well as key investments in the safe and reliable operation of the system. Since 2015, we've increased our annual investment in the transmission and distribution system by over 50%, allowing us to achieve the second-best reliability performance last year for duration and frequency of outages among all comparable utilities in Atlantic Canada and Maine. Similarly, at our gas utilities, the focus on our capital plan is investment in maintaining the reliability and safety of the system. as well as investments to support growing customer demand of people's gas. We're also continuing to invest in cleaner energy initiatives like the renewable natural gas projects being advanced in Florida. I mentioned that our capital plan in Nova Scotia is currently focused on the safe and reliable operation of the system. However, we're also working to meet the ambitious federal and provincial clean energy goals for 2030. Last month the province of Nova Scotia released their Clean Energy Plan, which aligns with one of the pathways within Nova Scotia Power's most recent integrated resource plan, a plan we feel is achievable by the 2030 timeline. We're encouraged by this recent progress, and we continue to work with the province and the federal government on the next steps to achieve the climate goals for Nova Scotia. I also wanted to highlight that yesterday we received a very successful regulatory outcome at People's Gas. This rate case outcome will add $107 U.S. million in expected revenue for People's Gas starting next year, improving its targeted return on equity to 10.15% while maintaining its equity thickness at 54.7%. This was a fully litigated regulatory process that took considerable time and effort by our team at People's Gas, as well as the interveners and the Florida Public Service Commission. These are not easy processes, but we landed in a place that has both the best interest of customers and the financial health of the utility in mind. Thank you to everyone involved in getting this over the finish line. Achieving successful and balanced regulatory outcomes is critical to our success, but also to the success of the customers and communities that we serve. The growth opportunities in front of us are as robust as we've seen in decades, as customer expectations for cleaner and more reliable energy drive a higher need for capital across the utility industry. However, as we're all aware, the cost of capital across our industry is much higher today than it was even just a few months ago. When we walked you through our financial priorities at Investor Day earlier this year, we were clear that our priority was strengthening the financial position of the company to allow us to deliver on the organic growth opportunities in front of us. Based on the increase in the cost of capital we've seen over the last year, the continued deleveraging and strengthening our balance sheet is even more important. This is why you will see that select asset sales now form part of our capital investment funding plan. We're working to optimize our portfolio so that we can fund our best growth opportunities and maintain a strong foundation for our business, just as we've done successfully through asset sales in the past. We've been evaluating our portfolio through several financial and strategic lenses, including value, marketability, and opportunities for future growth. We know that redeploying capital into the growth investments of our strongest performing assets will lead to higher quality earnings and cash flows, creating an even stronger AMIRA that offers the best value proposition for both current and future stakeholders. I'll now turn it over to Greg to take you through our results and to share a bit more of our thinking on the funding plan. Greg?