Algonquin Power & Utilities Cor Q1 FY2025 earnings call

• Regulatory Updates: New Hampshire PUC approved Granite State Electric settlement with rates effective April 1; extended stay of EnergyNorth Gas rate case until May 30. Empire Electric Missouri rate case extended test year true-up period. Missouri Commission investigating customer service and billing issues ongoing.
• Transmission: Southwest Power Pool approved $7.7B Integrated Transmission Plan, with $750M-$800M for Empire District Electric, including 161 kV rebuilds, new transmission lines, and stations. Empire accepted first tranche of NTCs, working on second.
• Leadership Initiatives: Rod West outlined vision for premium pure-play utility, focusing on cost reduction, stakeholder engagement, and aligning employee actions with creating sustainable value for stakeholders.

Regulated Services Group: First quarter adjusted net earnings increased by $40.8 million, a 43% rise, driven by new rates ($15.7 million) and lower interest expense ($13.6 million) from debt repayment. Depreciation was flat, offset by $8.2 million in nonrecurring favorable pickups from regulatory orders. Hydro Group: Net earnings rose by $13.4 million primarily due to a one-time tax recovery from the sale of the Renewable Energy business. Corporate: Adjusted net earnings decreased by $22.7 million related to the removal of Atlantica dividends. Revenue contribution: Regulated Services Group had the largest share, followed by Hydro Group and then Corporate.

• On June 3, will provide forward-looking multiyear update with projected adjusted net EPS ranges for 2025-2027.
• Broader strategic thinking on portfolio to be shared later in 2025.

• Regulatory/Customer Issues: Ongoing investigations in Missouri, New Hampshire, and Arkansas related to billing and customer service, which could impact operations and costs.
• Market/Valuation Risks: Uncertainties around timing and valuation of Hydro portfolio divestiture, and market conditions affecting potential offtakers.

Q: Robert Hope asks about impactful changes to the organization.

A: Rod West talks about setting vision for premium utility, focusing on cost reduction, stakeholder engagement, and customer metrics.

Q: Sean Steuart asks about SVP projects and Hydro portfolio.

A: Rod West mentions setting vision and Brian Chin discusses timeline for Hydro divestiture, focusing on value-accretive transactions.

Q: Nelson Ng asks about CRM implementation and noncontrolling interest.

A: Sarah MacDonald talks about CRM focus on customer experience, Brian Chin explains noncontrolling interest is primarily HLBV income.

Q: Rupert Merer asks about operating costs and dis-synergies.

A: Brian Chin says billing issue costs are in the rearview mirror, dis-synergies from Renewable sale are lower.

Q: Mark Jarvi asks about New Hampshire and CalPeco.

A: Brian Chin discusses Granite State settlement and Sarah MacDonald talks about CalPeco interim rates feasibility and timeline uncertainty.