Algonquin Power & Utilities Corp. Q1 FY2025 earnings call

Rod's Opening Remarks - Acknowledged the Lexington, Missouri gas incident and expressed condolences. - Shared initial thoughts on his first 60 days, focusing on setting a vision for a premium pure play utility, lowering cost profile, improving stakeholder engagement. ### Regulatory Updates - New Hampshire PUC approved Granite State Electric settlement with new rates effective April 1 and extended Energy North Gas rate case stay until May 30. - Empire Electric Missouri rate case test year true up period extended to March 31, 2025. ### SPP Projects - Southwest Power Pool approved $7.7 billion 2024 Integrated Transmission Plan, with ~$750M-$800M for Empire District Electric service area including 161 kV rebuilds/conversions, new 345 kV lines, and transmission stations. Empire accepted first tranche of Notices to Construct and received second tranche. ### Financial Results - Brian detailed adjusted net earnings of $111.6 million, up 39% from 2024; Regulated Services Group up 43%, Hydro Group up due to tax recovery; EPS flat year-over-year with various drivers including regulatory orders and tax recovery.

The Regulated Services Group saw adjusted net earnings from continuing operations increase by 43% to $40.8 million in the first quarter. This was primarily due to the implementation of new rates ($15.7 million) and lower interest expense ($13.6 million) from debt repayment. The Hydro Group had a $13.4 million increase in net earnings, mainly due to a one-time tax recovery related to the sale of the renewable energy business. Adjusted net earnings from continuing operations for the quarter were $111.6 million, up 39% from $80.1 million in 2024.

- Scheduled Investor Update Call on June 3 with projected adjusted net EPS ranges for 2025, 2026, and 2027. ### - Aimed to share broader strategic thinking on the portfolio later in 2025.

- Heartbreaking incident in Lexington, Missouri gas service territory on April 9. ### - Ongoing investigations into customer service and billing issues in various states, including Arkansas and New Hampshire. ### - Market environment impacts on the timing and value of divesting the Hydro portfolio.

Q: Rod, what are the most impactful changes you've made to the organization so far?

A: Set a vision for a premium pure play utility, focused on lowering cost profile, improving stakeholder engagement capacity. ### Q: On SPP projects, how much capital could be involved and when will it start being spent?

A: No specific disclosure beyond public info, but expectation to capture more CapEx opportunities if execution is successful. ### Q: Thoughts on investigations in Arkansas and New Hampshire related to billing issues?

A: Billing issues related to system overhaul, lacked stakeholder engagement prior, working with regulators to remedy, expect to work through investigations. ### Q: Update on Hydro portfolio divestiture thinking?

A: Looking to transact if value accretive, monitoring market for off takers, timeline not forced but will transact if conditions met. ### Q: CRM implementation and cost savings?

A: Implementation focused on customer experience improvement first, cost savings will come from digital channels, lower calls, and paper expenses once system functions optimally. ### Q: Non-controlling interest earnings?

A: Primarily HLBV income, with a small portion from minority interest in Suralis in Chile. ### Q: Operating costs related to billing issues?

A: Majority of extra costs recorded in Q4 as bad debt, trend improving, expected to temper off. ### Q: New Hampshire rate cases and CalPeco interim rates?

A: Granite State settlement has stay out period until Jan 1, 2026; CalPeco interim rates application is feasible, but timeline for clarity in California is uncertain.