Hydro One Limited

Good morning, ladies and gentlemen, and welcome to the Hydro One Limited's fourth quarter 2021 Analyst Teleconference. At this time, all participants are in a 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 one on your telephone. As a reminder, those being recorded. I would now like to introduce your host for today's conference, Mr. Omar Javid, Vice President, Investor Relations at Hydro One. Please go ahead.

Good morning, everyone, and thank you for joining us in Hydro One's fourth quarter earnings call. Joining us today are our president and CEO, Mark Poeska, and our chief financial officer, Chris Lopez. In the call today, we will go over our fourth quarter results and then spend the most of the call answering as many of your questions as time permits. There are also several slides that illustrate some of the points we'll address in a moment. They should be up on the webcast now, or if you're dialed into the call, You can also find them on Hydro One's website in the events and presentation section in the investor relations section. Today's discussions will likely touch on estimates and other forward-looking information. You should review the cautionary language in today's earnings release and our MD&A, which we filed this morning regarding the various factors, assumptions, and risks that could cause our actual results to differ as they all apply to this call. With that, I turn the call over to our President and CEO, Mark Poesker.

Thank you, Omar. Good morning, and thank you for joining us for our fourth quarter earnings call. This morning, I'll talk briefly about our fourth quarter and annual achievements, then we'll turn it over to Chris to discuss the financial results in greater detail. 2021 was a year in which we accomplished a great amount. We ended the year with a full year EPS of $1.61 compared to $1.51 in 2020. Apart from the strong financial results, it was a year in which we demonstrated our unwavering commitment to our customers and to the communities we serve. It was a year in which we made a public pledge to focus on sustainability and outline specific and measurable targets to help people, the planet and communities. 2021 was the year where we filed our five-year investment plan that will help reduce the impact of power outages, enable the renewal of critical infrastructure, prepare for the impacts of climate change, while ensuring our investments advance, building a grid for the future. I'm very proud of our team for accomplishing all this and much more while facing the continued challenges presented by the COVID-19 pandemic. I'm thankful to our crews who worked to restore power to over 765,000 customers after windstorms resulted in power outages in mid-December. The windstorms faced were some of the most significant since 2018. This dedication to customers, along with investments to improve the grid, have enabled us to have record annual reliability in 2021 as we improved the System Average Interruption Duration Index, otherwise known as SAIDI, of our distribution network by approximately 11% year over year. This was the best distribution reliability result achieved in 15 years. We also improved the safety for our transmission network by 9% year over year, also a significant accomplishment. These wind storms are a reminder of the harsh climate in which our crews operate and where our assets are located. They're also a reminder of why we need to continue to invest in our assets to harden our grid and prepare it for climate change. We are very excited about our five-year investment plan that we filed with the Ontario Energy Board, the OEB, in the joint rate application for both our transmission and distribution businesses. As mentioned in the last call, we received thousands of questions through the interrogatory process. This was followed by a technical conference in mid-December where interveners and OEB staff asked clarifying questions on our responses to interrogatories. We are now in the process of updating our evidence to reflect market conditions and then will likely proceed to a settlement conference in which we will try to settle as many matters as possible prior to entering the oral hearing on the case. our expectation of receiving a decision in the second half of this year remains unchanged. I'm also pleased that we've been meeting our capital investment commitments made in previous rate applications. This year, we deployed $2.125 billion of capital and in-serviced $1.757 billion of assets, which is within 1% of our stated goals for both the transmission and distribution businesses. I'm pleased to say that we have done this while being extremely mindful of costs. Every dollar we invest comes at a cost to our customers and the people of Ontario, which is why we are committed to controlling our costs and improving productivity. In 2021, we achieved productivity savings of $343.9 million, which represents a 20.2% increase year over year. Total productivity savings since 2015 now amount to over a billion dollars. As we look to the future, we see a need to continue to improve customer experiences while controlling costs. To that end, we're exploring innovative solutions to complex problems. We are pleased with piloting several novel initiatives that will help with resilience and reliability in a cost-effective manner. Following the behind the meter energy storage system pilot we talked about in the last call, we launched a pilot project with Peak Power to study the benefits of using electric vehicle charging technology to improve resiliency and reliability for our customers. Two-way vehicle to home charging technology will be installed at the homes of program participants to test the ability of EVs to act as batteries and provide backup electricity through simulated power outages. In terms of EV charging, we have made significant progress. IV charging recently signed an agreement with Enroute and its partners, Canadian Tire Corporation and the Ministry of Transportation, to install fast chargers at Enroute locations along the 400 series highways in Ontario. We are also partnering with the federal government to develop a pilot project for heavy duty electric truck charging stations, establishing a model that can be used by other utilities and businesses. These are just some of the ways we're being innovative and supporting the shift to electrification in a low carbon economy for customers in Ontario. As one of the largest electric utilities in North America, we are uniquely positioned to support sustainability and electrification of the province. Our vision for a better and brighter future for all guides us in these endeavors and our leadership was emphasized with the public release of our sustainability priorities and goals in 2021. I'm happy to report that shortly after the fourth quarter, we put these commitments into action by amending our credit facilities to include a pricing adjustment which can increase or decrease our cost of funding based on our performance on certain sustainability performance measures that span people, planets, and communities. We are especially proud to be the first organization in Canada to incorporate a sustainability performance measure that is based on increasing Indigenous procurement spend. As part of our commitment to being a trusted partner to Indigenous communities, this year we increased total procurement with Indigenous businesses to $58.3 million, our highest spend to date. We are well on our journey to achieve our procurement target for Indigenous businesses of 5% of our purchase of materials and services by 2026. We have a deep responsibility to help build a better and brighter future for the communities we serve. Over the year, we proudly supported local organizations that work to keep our community safe and healthy. We proudly launched Hydro One's Energizing Life Community Fund, which funds projects that promote the physical, psychological, and emotional safety of Ontarians. By supporting organizations who energize life for so many, we can build safer and more resilient communities. Our support of Feed Ontario to provide the equivalent of 450,000 meals to help Ontarians who are facing hunger was another example of this commitment. This sense of responsibility goes beyond the corporation and has become a part of our individual identities. Hydro One employees themselves raised over $790,000 to support local organizations last year. I'm extremely proud to work alongside such engaged colleagues, and this effort is reflective of our commitment to create a diverse, inclusive, and engaged workforce. It is no wonder that we were once again recognized by Forbes in its list of Canada's best employers for the seventh consecutive year. Having a caring and engaged workforce is the key to having satisfied customers. I'm very pleased that our residential and small business customer satisfaction increased to 89% from 87%, and our large customer satisfaction increased to 92% from 83%. These numbers highlight our success in advocating on behalf of our customers and working for their benefits. Our Connected for Life initiative is an example of our focus on what matters. Through various programs since the start of the pandemic, we have helped customers access financial relief programs, resulting in approximately 16,800 program sign-ups, allowing those customers to concentrate on staying safe and navigating these challenging times. We also invested in technology to meet our customers' expectations for a more personalized service and more access to real-time data to help them make smart choices. Customers are our priority, and I'm again very pleased to report that this year we shared approximately $24.5 million with our distribution customers on account of the earnings sharing mechanism. This is, again, an example of a constructive regulatory model in which we can and have achieved value for our customers. Our many successes this year, however, are overshadowed by the tragic death of our teammate to an accident involving a third-party vehicle. Nothing is more important than ensuring our employees come home safe at the end of the day. Though we have reduced the recordable injury rate by 90% since 2004 and achieved a best-in-class rate of 0.74 in 2021, we must continue to do more. To build a stronger safety culture and eliminate serious injuries at Hydro One, we will continue to implement recommendations made by the employee-led safety improvement team with the goal to eliminate life-altering injuries. Finally, I'm very pleased to announce that Hydro One was recently added to the S&P TSX 60 index. We are pleased with this recognition and the addition to an index that represents the large cap market segment of the Canadian equity market. And with that, I'll turn it over to Chris to discuss our financial results this quarter. Over to you, Chris.