Hydro One Limited

Good morning, ladies and gentlemen, and welcome to Hydro One Limited's fourth quarter 2022 analyst teleconference. At this time, all participants are on 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. As a reminder, the call is 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 and thank you for joining us in Hydro One's quarterly earnings call. Joining us today are our President and CEO, David Lieberer, and our Chief Financial Officer, Chris Lopez. In the call today, we will go over our quarterly and annual results and then spend 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 investor relations section under events and presentations. 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 all cause our actual results to differ as they all apply to this call. With that, I'll turn the call over to our President and CEO, David Lebeder. Thank you, Omar.

Good morning, and thank you for joining us for our fourth quarter earnings call. This morning, I will talk about our fourth quarter, our annual achievements, and a look forward. This will then take you through the financial results in greater detail. I'm excited to take on the role of the CEO of Hydro One and to continue to work with all our employees across Ontario. As many of you know, I've been the COO at Hydro One for the past three years, and I've seen firsthand the hard work and dedication that our teams bring to our organization every day. Together, we have achieved great success, and I'm confident that we will continue to successfully execute our strategy in the years to come. My top priorities as CEO will be to maintain our focus on safety, meet our customers' expectations, drive operational excellence, and invest in our teams to ensure we have the skills and capabilities to meet the demands of the future. In short, we will continue to focus on executing our strategy. As we move into 2023, I want to assure our employees, shareholders, partners, and stakeholders that the transition from Bill Sheffield's leadership to mine is smooth and seamless. Our priority is to maintain the momentum. I am proud of the results we have achieved. Our strategy, people, culture, and values are what have made Hydro One successful. I'm committed to building upon that foundation, delivering on our promise to our customers and stakeholders. In Q4, we built on the momentum of the first three quarters and achieved outstanding safety results. Our focus on and commitment to protecting the well-being of our employees has truly paid off, as demonstrated by our record-low recordable and serious incidents. I am proud of the dedication and hard work that has gone into making our workplace safer. While we have made good progress, we have much more work to do. Safety will always be a priority as we continue to make the workplace safer. In 2022, Hydro One achieved our best safety results ever and made significant progress to preventing life-altering injuries and fatalities. Our workplace was safer in 2022 than it has ever been because we had a good plan, the Safety Improvement Plan, which we created with our employees two years ago. And because the entire organization was committed to that plan, the results speak for themselves. Hydro One's recordable injury rate of 0.616 for 200,000 hours is well below the world-class benchmark of 1.0. Hydro One saw significant improvement in the number of high-energy serious injuries over 2021, with only one employee sustained a high-energy serious injury in 2022 compared to the four in 2021. This equates to a high-energy serious injury and fatality rate of 0.012 for 200,000 hours, well below our annual target of 0.066. We are well on our way to eliminating all serious injuries and fatalities by 2024. Our safety results are even more impressive when considered in relation to the adverse storms of 2022. Our crews, who are committed to providing the highest level of service to our customers, restored power to nearly 760,000 customers after the Duracho storm in May, spent weeks in Maritime Canada rebuilding their system after post-tropical storm Fiona, and then restored power to approximately 550,000 customers during the December holiday season storm. While these storms adversely impacted our reliability statistics, I am pleased to report there were no recordable incidents during those events. In addition, We are once again recognized by the Edison Electric Institute for our efforts following the May derecho. This is our 13th Edison Electric Institute Award. In late November, the Ontario Energy Board approved our five-year joint rate application. This was a culmination of years of work for many people and established the clear path forward. The rate application was approved because, through the largest customer outreach ever, we knew what Ontarians wanted. We demonstrated year-over-year productivity savings, who were responsive to the concerns of interveners and had built an investment plan which met the evolving needs of our customers while keeping in place the maintenance and growth needs of the transmission and distribution system. We believe this plan will benefit all Ontarians by ensuring we are able to provide safe and reliable electricity for years to come. I also want to recognize our regulator, the Ontario Energy Board, for their constructive process. It is only because we submitted a strong investment plan into a robust regulatory process in which all participants, interveners, the Ontario Energy Board regulators, and Hydro One displayed a high level of cooperation, but such a complex case was settled so quickly. Now that the approval is behind us, it's all hands on deck executing our investment plan and delivering on our promises to our customers and stakeholders. I have no doubt that every person in Hydro One will continue to execute their work to the best of their abilities. Once again, we met our capital investment commitments. This year, we deployed $2.132 billion of capital and in-service $2.267 billion of assets. I am pleased to say we have done this while being extremely mindful of costs. Every dollar we invest comes at a cost to our customers, which is why we are committed to spending wisely and continually improving productivity. In 2022, we achieved productivity savings of $374 million, which represents an 8.6% increase year-over-year. Total productivity savings since 2015 now amount to almost $1.5 billion. This is a remarkable effort, especially considering the inflationary pressures faced this past year. We operate in the traditional and treaty territories of more than 100 Indigenous communities. In 2022, we were proud to announce a historic partnership model with First Nations when building new transmissions. This partnership model reflects our commitment to reconciliation, sustainable development, inclusivity, and being a responsible corporate citizen. By working together, we aim to create long-lasting benefits for Indigenous people, Ontarians, and Hydro One. The Hydro One equity model offers First Nations a 50% equity stake in new transmission line projects with a value exceeding $100 million and will transform the benefits of infrastructure development for First Nations. We believe that this collaboration sets an example for the industry and demonstrates the power of listening, respect, and seeking mutually beneficial outcomes in infrastructure development. As part of our commitment to being a trusted partner to Indigenous communities, this year we also increased total procurement with Indigenous businesses to 95.9 million, our highest spend to date. This is a significant increase from last year and has us well on our journey to purchase 5% of our materials and services from Indigenous businesses by 2026. The Indigenous procurement target is one of the many goals that are included in our updated sustainability report that was released in August. At Hydro One, we take our commitments to the people, planet and community seriously, and we'll continue to keep you informed of our annual progress report. Following the release of the sustainability pricing on our lines of credit in January 2022, we recently published our sustainability financing framework in January 2023. The framework, which is a first for a utility in Canada, allows Hydro One and its subsidiaries to issue sustainable financing instruments, such as sustainable and green bonds, and allocate the net proceeds to investments in eligible green and social project categories. The framework was so well received that we issued Hydro One's first medium-term notes in accordance with the sustainability financing framework. This was the largest aggregate amount in issuance of sustainable bonds by a corporate issuer two days in Canada. Looking out for our people, planet, and communities is ingrained in the DNA of our organization. Hydro One employees personally raised approximately $1.6 million in the annual Power to Give month last September, more than doubling what was raised the year before. It is this commitment to serving others and doing the right thing that makes Hydro One such a special place to work. For the eighth consecutive year, Forbes recognized Hydro One as one of Canada's best employers. It's an honour for me to lead this committed and dynamic group of people. Looking ahead, I see tremendous opportunities for Hydro One. Ontario and Canada are building an economy more reliant on clean electricity. The Independent Electricity System Operator, or ISO, estimates that attaining a decarbonized electricity sector by 2050 will require a system more than double the size it is today, at an estimated cost of around $400 billion. Hydro One has the unique opportunity to be a leading player in achieving that goal. As I take on the leadership role of Hydro One, my top priorities are, one, ensure our safety journey continues, two, fill the vacancies on our executive team, And three, remain disciplined in executing our maintenance and capital investments. As I conclude my remarks, I want to thank Bill Sheffield, who stepped in from the board as interim CEO when the company needed him. Bill, I know you're listening to today's call. On behalf of the company, the executive team, and myself, I want to thank you for your service to the company, its shareholders, partners, customers, and stakeholders. Your leadership and dedication to ensuring a smooth transition has not gone unnoticed, and I'm truly grateful for your unwavering support. Your guidance has been invaluable and has set a strong foundation for my role as incoming CEO. I'm confident that your contributions will have a lasting impact on Hydro One, and I'm eager to build on the progress that you have made. With that, I'll turn it over to Chris to discuss our financial results. Over to you, Chris.