Hydro One Limited

Good morning, ladies and gentlemen, and welcome to Hydro One Limited's first quarter 2025 analyst teleconference. At this time, all participants are on 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 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, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Waseem Khalil, Director of Investor Relations at Hydro One. Please go ahead.

Good morning, and thank you for joining us for Hydro One's quarterly earnings call. Joining us today are our President and CEO, David Liebeter, and our Chief Financial and Regulatory Officer, Harry Taylor. On the call today, we'll provide an overview of our quarterly results, and then we will answer as many questions as time permits. Today's discussion 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, David Lieber.

Thank you, Waseem. Good morning and thank you for joining us for our first quarter 2025 earnings call. This morning, I will provide an update on our recent activities and accomplishments during the quarter. Then, Harry will take you through the financial results. As many people living in Ontario know, this past winter was the most severe one in recent years, capped off at the end of March by an intergenerational ice storm that swept across central and eastern Ontario. The severity of the ice storm resulted in significant damage to power infrastructure and resulted in Hydro One completing over 1.1 million service restorations. Some of our long service employees said it was worse or as bad as the ice storm of 1998. As always, our teams were there for our customers when it mattered the most. Teams from across Hydro One stepped up to safely restore power to homes, businesses, hospitals, schools, and infrastructure. In short, to return life to normal. We are very grateful for the assistance we received from New Brunswick Power Hydro-Quebec, 27 local distribution companies from across Ontario, and 26 contractors from Ontario, Quebec, New Brunswick, and Saskatchewan, who responded to our call for assistance and worked alongside Hydro-One's teams to bring power back faster. At the peak, over 4,800 hardworking and enthusiastic individuals were deployed during the recovery efforts, working tirelessly to restore power for our customers. I'm incredibly proud of the hard work and dedication that everyone displayed in response to the ice storm. This was a great display of the community coming together to help those in need. The damage caused by the storm has been more devastating, leaving lasting impacts on trees, infrastructure, and the communities we call home. We continue to determine the final costs, including those incurred by third-party contractors and other local distribution companies that supported our restoration efforts. Given the severity of the storm, we expect costs to be significant, and as a result, we will apply to recover costs through a Z-factor application with the Ontario Energy Board. This application allows utilities that have experienced a significant, unforeseen event to apply for cost recovery. We understand and appreciate that cleanup will continue long after power is restored. As part of our commitment to supporting recovery efforts, we introduced the Ice Storm 2025 Recovery Grant. The grant allows Indigenous communities and municipalities directly impacted by the storm to apply for grants up to $10,000 to aid in relief and rebuilding efforts. Regardless of the task, safety is always our top priority. The nature of our work means this has to be the case. This focus and commitment to safety continues to set new benchmarks in the industry, and our efforts were recently recognized by the Electricity Distributors Association. Hydro One was the recipient of the Public Electrical Safety Excellence Award. The award acknowledges outstanding contributions to public safety in the context of electrical activities and making significant strides in preventing accidents and promoting safe practices. The award was a result of our 10 meters away, your life depends on it, public safety campaign. The campaign used diverse media channels to enhance public safety awareness and drive behavioral changes. In December, we announced an agreement to purchase a 48% interest in the East-West Thai transmission line. I'm happy to report that on March 4th, 2025, Hydro One successfully completed the transaction and now owns an equity stake in the line in partnership with the remaining owners, the Bumquashwada Limited Partnership, a consortium of six First Nations and affiliates of NextEra Energy Canada. As a reminder, the line is a 450-kilometer, 230-kV double-circuit transmission line spanning from Wawa to Thunder Bay, and has an OEB-approved rate base of approximately $880 million. The final acquisition cost, including closing adjustments, was $261 million. The purchase was immediately creative to earnings, with the full benefits starting in our second quarter. The line is a strategic asset that reinforces our position in Ontario's transmitter of choice and further enhances our ability to support the electrification efforts in Northern Ontario. On March 27, 2025, The OAB issued its decision and order on the generic cost of capital review. The decision and order followed an extensive review process, which included oral hearings and written submissions. Hydro One, local distribution companies, industry associations, and interveners all participated in the process. The OAB retained the foundational elements of its 2009 cost of capital framework, including the use of the formulaic return on equity annual adjustments. However, the OAB did revise the values of the cost of capital parameters to be used to set rates, including the base ROE and the base reference parameters for the long bond yield forecast and utility credit spreads. The updated values will be effective starting in 2026. In addition, the OAB reset the demand deemed long and short-term debt rates and introduced a new index for capital and short-term debt rates. The deemed capital structure remained unchanged at 40% equity and 60% debt for most utilities. The OEB also confirmed the new cost of capital parameters will take effect on the utilities next rebasing rate application and signal intends to review the cost of capital policy again in five years. The changes announced will not impact the terms of Hydro One settlement agreement for the 2023 to 2027 joint rate application or the decisions for partnerships rate applications previously filed using 2025 rates. The OAB did note that utilities facing unique circumstances may bring forward evidence in their next rate application and propose amendments to the generic ruling. We are reviewing the options to offset the impacts of the cost capital parameters in our next rate application, which is expected to be filed in the fall of 2026. Like all our peers, we continue to monitor the evolving tariff situation and uncertainty that it creates. With the rapidly changing environment, we remain agile, but are also taking a long-term perspective. For long-term stability and certainty, we must reduce the volume of materials we source from the U.S.-based manufacturers and further diversify our supplier base. We have taken several steps in this direction, including launching a strategic sourcing initiative that focuses on diversifying our supply base through consideration of alternative designs, standards, and technical specifications. We can qualify additional sources of supply that will allow us to secure a greater percentage of goods and services from manufacturers outside the United States. We are prioritizing partnerships and the purchasing of materials, equipment, and services from Indigenous communities and businesses, further expanding spend in Ontario. We continue with our suppliers to minimize the tariff impacts on the entire supply chain. In the short term, this means moving to Canadian alternatives where available, while developing long-term Canadian source solutions to further reduce trade risk. As part of the initiative, we are leveraging our purchasing power suppliers to incent the manufacturing of more products in Canada, providing longer-term material and labour demand forecasts to our key suppliers, we will enable them to invest in the capacity growth and scaling to develop a Canadian source solution. Lastly, we are exploring consolidating our purchasing power with other Canadian utilities to reduce costs and once again encourage manufacturing within Canada. We will continue to review our procurement practices and identify further actions to further limit our tariff exposure and impacts. Our employees are the driving force behind our organization, and their contributions are a valuable resource for our success. I am pleased to report we have reached tentative agreements for two collective agreements, the main collective agreement and the customer service operations agreement with the Power Workers Union, or the PWU. These agreements cover costs 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 the employees, our customers, and Hydro One. To respect the bargaining process between the teams, we will not be commenting on the specifics of the agreement until they've been ratified by the Power Workers Union. In addition to receiving a Public Safety Excellence Award from the Electrical Distributors Association, Hydro One was also recognized for our sustainable financing initiatives. We are proud to have been recognized by the Electrical Distributors Association Sustainability Excellence Award for showing leadership in sustainable finance. Our sustainable financing initiatives have positioned Hydro One as one of Canada's largest sustainable corporate bond issuers. With that, I will turn the call over to Harry to discuss our financial results. Harry, over to you.