Clearway Energy, Inc. Q2 FY2025 earnings call

• Fleet Optimization: Mount Storm on track for construction over 2 phases in 2026 and 2027, Goat Mountain signed PPA with hyperscaler and set for 2027 COD with $200M corporate investment, San Juan Mesa and Tuolumne advancing repowerings.
• Sponsor-Enabled Growth: All 2026 COD projects offered/committed, offer to invest in 291MW battery storage portfolio, Clearway Group's late-stage pipeline with renewable projects and battery storage.
• Third-Party M&A: Closed Catalina solar project, efficient financing of Tuolumne Wind project.
• Targets: Increased 2027 CAFD per share target range to $2.50 to $2.70, long-term goal of 5%-8% CAFD per share growth and low end of 70%-80% payout ratio.

In the second quarter of 2025, Clearway Energy achieved adjusted EBITDA of $343 million and CAFD of $152 million. The company updated its 2025 CAFD guidance range to $405 million to $440 million, targeting the higher end. This reflects contributions from recently closed project acquisitions, including the Catalina solar project. The fleet optimization pathway sees Mount Storm on track for construction in 2026 and 2027, Goat Mountain commercialized for repowering/expansion in 2027, and San Juan Mesa and Tuolumne advancing repowerings. The sponsor-enabled growth pathway has all 2026 COD projects offered/committed, with an offer to invest in a 291-megawatt battery storage portfolio, and Clearway Group's late-stage pipeline includes substantial renewable and battery storage projects.

• Updated 2025 CAFD guidance to $405M to $440M, targeting the higher end.
• Increased 2027 CAFD per share target to $2.50 to $2.70.
• Expect $270M or more of retained CAFD from 2025 to 2027, with excess debt capacity of $600 million or greater.
• Plan to opportunistically issue modest equity for accretive growth, with filings for equity issuance programs in the near future.

• Lower-than-anticipated wind resources in certain regions.
• Low availability for certain facilities due to maintenance or third-party service model changes.
• Interest rate volatility risk, mitigated by hedging $850 million in bonds.
• Uncertainty around treasury guidance and policy changes affecting repowering and project qualification.

Q: About wind repowering opportunity, how has the volume changed?

A: Craig Cornelius stated the volume of repowering opportunities advancing today is larger than a quarter ago, with projects executing according to plan and additional wind projects in view for repowering throughout the decade.

Q: CAFD raise for 2025 and Tuolumne's contribution?

A: Craig said Tuolumne is contributing to the high end of the $405M to $440M 2025 CAFD range as agreements were signed though not disclosed initially.

Q: Safe harboring and DOI memo implications?

A: Craig Cornelius mentioned Clearway Group safe harbored over 13 gigawatts of projects, with projects planned for completion through 2028 having commenced construction under old tax credits, and compliance with FIAC and DOI requirements managed.

Q: Equity issuances for growth?

A: Craig and Sarah Rubenstein discussed plans to issue modest equity opportunistically for accretive growth, aligning with the listed infrastructure space and leading growth mid-cap utilities model.

Q: Battery storage and contracts?

A: Craig Cornelius spoke about battery projects being eligible for tax credits into the next decade, with competitive locations and interconnection queue positions, and successful contract execution with customers.

Q: Goat Mountain PPA terms?

A: Craig explained that PPAs for Goat Mountain strike a balanced deal, accounting for risks like tariff changes and tax credit variations, ensuring fair returns for Clearway and value for the customer.