Hydro One Limited

Good morning, ladies and gentlemen, and welcome to Hydro One Limited's second quarter 2023 analyst telecom. 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, Communications, Marketing, and 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 Lieberter, and our Chief Financial and Regulatory Officer, Chris Lopez. In the call today, we will go over our quarterly 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 will 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 Liebeter. Thank you, Omar, and good morning, and thank you for joining us for our second quarter earnings call. This morning, I will provide an update on our recent activities, and then Chris will take you through the Q2 financial results. I am pleased to report our teams are doing an excellent job in progressing our capital program and have achieved several significant milestones since our last call. Our investments in modernizing and expanding the grid are playing a pivotal role in accelerating the adoption of sustainable electricity solutions that will contribute to Ontario's economic growth. At the same time, we continue to advance our reconciliation efforts with our First Nations partners, ensuring they also benefit from the expected growth. Coupled with strong project execution, our commitment to sustainability, namely people, planet, and community, and our focus on delivering unparalleled service to our customers, it is no surprise that we remain the transmitter of choice for the province of Ontario. Turning to our recent achievements, first, on July 31st, we filed our Leave to Construct application, otherwise known as a Section 92, for the Wasikin Transmission Line. As mentioned in last quarter's call, Phase 1 of the Wasikin Transmission Line is a double-circuit, 230 kilovolt transmission line from Thunder Bay to Atakokan. which is expected to be in service by the end of 2025. Phase 2 is a single-circuit 230 kV transmission line from Atacocan to Dryden, which will be in service by the end of 2027. Wasagon will bring an additional 350 megawatts of electricity to the region, which is more than two times what it takes to power the City of Thunder Bay. I am pleased with the efforts of our teams put forth and the hard work that went in to get at this point. I also want to acknowledge and thank our First Nations partners for their support of the application and the project. The infrastructure investment for both phases of this fifth project is expected to be approximately $1.2 billion. Hydro One is proud to co-invest with our First Nations partners in the Ontario grid, which will have a positive impact on Ontario's economy. Once built, the Waskyn Transmission Line project will provide Northwest Ontario with clean and reliable electricity to meet forecasted energy demands in the region and support economic growth, job creation, and mining operations. The project is being built in partnership with nine First Nations in the region, who will have the opportunity to invest in the ownership of up to 50% of the transmission line component of the project when complete. Second, we broke ground on the Chatham by Lakeshore line, which, when completed, will provide clean electricity to support growth in agri-food and manufacturing industries in southwestern Ontario. The line will add approximately 400 megawatts of clean electricity to the region, which is enough power to supply a city the size of Windsor. The $268 million project is expected to be in service by the end of 2025. Third, after a thorough evaluation of several routes, we announced a preferred route for the St. Clair transmission line. This transmission line will run from near Sarnia to Chatham with a target completion date of 2028. In addition to technical and cost advantages, the preferred route has the least impact on natural environment, biodiversity, Indigenous values, landowners and agricultural operations. 80% of its route uses existing transmission corridors and upgrades an existing transmission line. These achievements form a key component of our continued growth, and as we look for additional growth opportunities, I was pleased to see the province's commitment to economic development and energy transition as presented in their Powering Ontario's Growth Plan. The plan outlines support for critical transmission infrastructure in the coming years, which will provide Hydro One with additional growth opportunities. As part of the plan, the government proposed the prioritization of the regulatory approval process for three transmission lines in northeastern and eastern Ontario. These will ensure these projects can quickly support the rapid demand for growth in the region. The Ministry also proposed to designate Hydro One as a transmitter to undertake the development work and seek all necessary approvals to construct these priority projects. I have no doubt that the government's confidence in Hydro One is rooted in our execution track record and ongoing engagement with the First Nations communities towards advancing reconciliation. None of this progress is possible without the dedicated employees of the Hydro One family. Our employees are the heartbeat of our organization. and we recognize their invaluable contributions to our success. I am pleased to report we have reached tentative settlements for two collective agreements, the Main Collective Agreement and the Customer Service Operations Agreement with the Power Workers Union. These agreements cover employees in frontline and customer-facing roles across the company's operations. I want to thank our respective teams for negotiating in good faith in search of an agreement which met the needs of employees, customers, and Hydro One. To respect the bargaining process between the teams, we will not be commenting on the specifics of the agreement until it's been ratified by the Power Workers Union. Bargaining with the Society of United Professionals continues with the parties working towards reaching an agreement. As is normal during bargaining, we won't be providing any further comments on this process. Today we released our latest sustainability report, encompassing three priority areas, people, planet, and community. These areas reflect our commitment to conducting business responsibly, energizing life for all Ontarians, while focusing on delivering a sustainable future. Under the People section, we prioritize employee safety, health and well-being, and providing a welcoming, inclusive, equitable work environment where every employee can thrive professionally and personally. Nothing is more important than ensuring our people return home safely. This year, we are on track to match our lowest ever recordable injury frequency at 0.62 for 200,000 hours work achieved in 2022. However, we recognize there's more work to do to achieve a workplace free of life-altering injuries and fatalities. Additionally, we highlight our ongoing efforts to promote diversity, equity, and inclusion within our organization. We are creating an inclusive workplace where diverse perspectives thrive and enable us to, one, better understand and serve the needs of our varied customer base, two, innovate, and three, continue to identify and actualize efficiency improvements. While we continue to exceed our targets for gender diversity, both at the board and executive levels, we have not yet met our commitments to the Black North Initiative. We continue to remove the biases and barriers in our hiring and selection processes by running educational sessions on anti-Black racism and diversity, equity and inclusion, foundational trainings. But we have more work to do. The Plan It section of our report outlines our comprehensive approach to environmental stewardship. It outlines the efforts and work that goes into building, operating and maintaining a grid that is resilient and can reliably serve the needs of Ontarians today and for generations to come. This grid must be one that is environmentally sustainable and can adapt to future worsening climatic change impacts. We continue to make progress towards our goal of achieving net zero greenhouse gas or GHC emissions by 2050 and 30% GHC reduction by 2030 Our GHC reduction figures from last year were rebased to account for new Canadian industry guidelines. As a result, 2021's reduction from a 2018 base year, which was reported last year, was recalculated from 9 to 4%. Using the same guidelines, at the end of 2022, we had reduced GHG emissions by 7% compared to 2018. After a slow start in 2021, Due to vehicle availability, we converted 17% of our fleet of SUVs and sedans to electric vehicles or hybrids at the end of 2022. We still expect to convert 50% of our fleet to EVs or hybrids by 2025 and 100% by 2030. The community section of our report highlights our dedication to being a responsible corporate citizen. We believe that our success is intricately linked to the well-being of the communities we serve. As such, we are deeply invested in various social and philanthropic activities that empower and uplift communities. Through targeted programs, charitable giving, and partnerships, we strive to make a positive and lasting impact on the lives of our customers, neighbors, and partners. A significant accomplishment last year was the launch of the equity partnership model through which First Nations communities can invest in 50% ownership in the transmission line component of Hydro One's new build transmission line projects that are greater than $100 million. This unique milestone agreement is industry leading and a meaningful step towards reconciliation. I'm also proud to report that in 2022 we exceeded our targets for Indigenous procurement with our highest spend ever and also exceeded our targets for corporate donations and sponsorships to Indigenous communities. During the past quarter, we were confronted by storms and wildfires. As utilities serving diverse geographies, we understand the profound impact severe weather and natural disasters can have on our customers and communities. While we have not experienced any significant impacts from the wildfires, our response teams are ready to respond to restore power, health, and bring relief to those affected. Our dedication to preparedness, early warning systems, and robust infrastructure investment allows us to respond swiftly and effectively to the challenges posed by these extreme events. We take immense pride in our ability to respond to these types of events to ensure power is restored in a quick and efficient manner for our communities. Our commitment to disaster management extends beyond just restoring power. We continuously analyze and learn from our experiences, refining our protocols to further enhance our disaster response capabilities. Our goal is not only to minimize disruptions during emergencies, but also to actively contribute to building more resilient communities. I am proud to share that Hydro One received our 14th award from the Edison Electric Institute for our exemplary performance in storm restoration after winter storm Elliot. It reflects the dedication and resilience of our employees and the effectiveness of our disaster management protocols, as well as the continuous improvements we have made to enhance our response capabilities. In addition, we are once again recognized by Corporate Knights as one of the best 50 corporate citizens in Canada for our relentless commitment to sustainability and environmental stewardship. This recognition is a testament to the dedication of our teams in driving our sustainability initiatives and adopting the best practices throughout our operations. We are humbled and inspired by these accolades. These recommendations are a testament to the collective efforts of our employees, partners, and stakeholders who have contributed significantly to our achievements. On other matters, it is my pleasure to announce the successful election of three new board members, Brian Baggio, Helga Rydell, and Mitch Panciuk, all in our annual general meeting of shareholders in early June. We believe that an experienced and diverse board is essential to effective corporate governance and strategic decision-making. Our new board members bring a wealth of experience from diverse industries, and their appointment further strengthens our company's leadership. With that, I will turn it over to Chris to discuss our financial results this quarter. Over to you, Chris.