AQN - Earnings call transcript Q4 2021 | Algonquin Power & Utilities Corp.

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Operator

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Algonquin Power & Utilities Corp. 2021 Fourth Quarter Earnings Webcast and Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator Instructions]. Investor Amelia begin Relations, your VP, conference. may you Tsang,

Amelia Tsang

Chief Good morning, earnings joining everyone. Banskota, Arthur for on our Kacprzak, Thanks call our for joining quarter and Jeff the Financial the Officer. Executive full us our President us and our and of be year Officer; are available Chief presentation Chief XXXX part algonquinpowerandutilities.com. our today for accompany conference a call Operating Chief Presenting website, fourth call. Arun will this Q&A and we Norman, morning this Johnny Also Officer. Development earnings Officer; morning call the our on have our Johnston, webcast To today, supplemental

are SEDAR on as Our as well EDGAR. also and website financial management information available and statements, the on discussion analysis and form annual

Before website will not regarding would continuing on then you the this EDGAR on Arthur information and pending our the strategic follow additional information will end of filed discussion an recent QX during notice annual for provide our on and results, Arun most to certain refer read these to, plan call, with with business. financial call earnings, Arun information performance. an will MD&A and and will I At update forward-looking that the available expenditures limited including, important to items. our morning, On SEDAR the future our call our Please and remind forward-looking the for conclude our on overview of also will regarding measures. capital include our a we the non-GAAP both but acquisitions. like call, and expectations

questions the to you and for ask to that over to requeue others participate. you allow with additional questions Arun. the questions. We if turn opportunity will I'll it restrict open any line have X And that, then to then I your

Arun Banskota

call on to and been Thank and to those have who us morning Amelia, join you, good the able online. a very

Given provide and earnings speak call, I year that to both year-end financial for this operational and want and full highlights performance, some QX is our to XXXX.

in report renewable Altavista, well facilities including largely Creek the metrics. I'm Firstly, million, of increased Wind nearly from Maverick including XXXX to came the on Empire as year-over-year online and new $XXX.X BELCO as Wind contribution of that full XXXX the a on XX% facilities regulated of side, $X.X pleased year-over-year key financials. from and following billion growth and adjusted on financial steady side, EBITDA new from contribution year ESSAL. in

share year consecutive from per was in reported the in the per year, XX% we year representing increases. $X.XX, dividends our dividend line of our reported tenth expectations. earnings net $X.XX of adjusted Last up annual XXXX of $X.XX prior Our and share came with

increase reported a $XX.X the We XX% also approximately assets, in in year exited year. the prior billion $XX.X billion the with over

Secondly, well successful in continue initiatives and future. to on execute the us execution. positioning for priorities company undertook The strategic which growth are a XXXX, number on of

forward model of Transmission local you of to benefits We AEP very billion Power provide Kentucky acquisition want the gone and each well growth, planned. Algonquin's to to the over an operational sustainability, York, to welcome firmly pending into bringing American of of New the I across X York we pulled more customer on American these the strategic and and as Liberty. in provide growth, Kentucky. The topic of continue Company I Company. on transaction $X.X our operating XXX,XXX efforts on connections counties Southeastern and Earlier employees our services excellence update excited our this Staying which we and will Water committed officially on remain New details York on focus Kentucky transition We Water, to year, pillars. this Eastern X New has pillars: acquisition and look

through As to green end, value for statute, Commission benefits to an of customers local driving customer jointly you mentioned, order are aware on by Power. are of within exploring with for expected our and days. to AEP Kentucky expectation likely rates local shareholders. energy Power's we've opportunities on and application we application bringing while of with reduce the January customers acquisition enhancing X the an Kentucky model, operating in issue are must attributes that investing the help previously local To employment Kentucky communities increased filed all our the XXX that that the approval Commission By the creating

and we transaction hearing have on Electric, of a close FERC-level was of X, state rates and for mid-XXXX Electric Office Public customers approvals regulatory the on Empire Hart-Scott-Rodino held front, Staying progress Commission Hearings review at already outcome February the XXXX, on in receipt implemented believe and We February with the to February closing held XX, the XXXX. was Counsel, of design Empire expect conditions. of continues Public staff approvals. intervenors. settlement our new satisfaction rate other our well. of be fair to and May on company. in a stipulation received were Missouri We the On and and reached the the all among stipulation on X expected other Service after represents rate to date, To a CFIUS

services top to We affordability invest customer mission-critical deliver while mind. our to of keeping communities to our continue in network

$XXX to growth the In over focused in Another Services rate coming safety, security, annually to into greening our on invested improve initiative, brought years, Regulated our megawatts to expect invest online. customer pillar reliability, billion where experience. resiliency and In Group regulated of XXX XXXX, base our including benefit customers. billion, the of wind deploying $X.X Midwest is the between we million $X.X completion and our generation capital business we

In latest a Hydro-Quebec. we of Hill Blue operations, a projects commercial In energy project SaskPower Turning commercial new XX-megawatt our facility and of originate is XXXX with contract being in growth to Algonquin levers this in to facility projects on December either the for Saskatchewan, our with closing nearly megawatts commercial XXXX, X,XXX Quebec, business. XXX-megawatt business, reaching record lever. ability the the has renewable to operations. our renewable all wind with growth execute achieve on critical to in The been operations year under EBR achieve all sold is March with of the energy XXXX. completed track to or

employees. partnership Two projects project program projects X Mexico by of continues second of in Illinois wind a our partnership Day, development state expect progress construction on into Chevron This construction megawatts, immediate Riverbend Our include where QX to Sandhill, Michigan, Investor XXXX. New our Texas. that universe Project important Sandhill being the to natural acquire to establish capital of Environmental acquisition our which to growth expected with of first of is in II and continue in fact a which with Sandy under continue X-year of of end building XXX the to with Ridge construction to culture our At Deerfield advanced for is the megawatts initiatives first developer and XXXX. XXX in renewable growth of hour we prospective in includes platform. projects X pipeline of expected II our plan. platform, we According Also, our and our of solar projects. ongoing are megawatts the and of a into close gas greenfield combined with production Wisconsin net the development other the pandemic, by and projects Violet X,XXX has in agreement natural prospective in we supply QX, entry we totaling expected in represents This strong future Chevron Protection start developed RNG Agency that a experience start development. pipeline X,XXX the wind greenfield construction strong with half of opportunities, to pipeline projects. execute the The on construction chain X challenges of testament are COVID these foundation our of currently first advanced megawatt is hard in growth projects work, discussed report, midyear. from Wind entry to the to Blue giving late-stage an the portfolio and U.S. growing generation and resulted which renewable of base in utilize the end to entrepreneurial in largest us The around midst the X a an successfully projects the the RNG solar X an State XXXX gas and are energy Sandhill the its Wisconsin, represents excited storage platform, as projects, of attractive XXXX in with

have areas hard across reliability XXX is American injury our our strategy passed X of our operational in keeping XXXX, In track a announced Moving of industry, for and million utility excellence. in milestone without finally, as our quickly customers possible highest preparedness Liberty governance holiday for over did and corporate our share record-breaking the and electric call our always safe, that Christmas with as impressive power by that holidays. conditions. to XXXX single XX serve. throughout emissions we The renewables a particularly on all and resiliency. very by for events. expertise maintaining customers to while we environmental, of go communities days, are out to work path, hard target Scope team during I'm time for and safely inclusion customers safety the and extensive through critical pleased business our decarbonization firmly social lost key [Tahoe] work focus. In and in safety by reliability net and thank local weather now our hours, the experience to received management want an that we dedication I supported values on a nearly worked of North over of and communities day-to-day remain restore and want crews ongoing I committed deep system the broader development. their regulated record, to to unnoticed area weather sustainability snowfall focus zero and mission-critical weekend employees operations. as our we in not employees Sanger strong to and and communities And X

pleased XXXX, to successfully On embedded to are third as organization's in model, sustainability compensation company the enhance the the row. positioning year a Gender Equality inclusion ESG in how the throughout finally, aggregate, Index ratings And for the in governance the I'm XXXX our leader. recently, Bloomberg ESG factors side, sustainability goals. report business we More continued to in improve into management's a company's continuing AQN's the embedded

fourth to inclusion executive Arthur quarter With levels. and Our continued that, gender index for our equality is gender results. equality, representation Arthur? to over target a XXXX and Board pass we improved year I'll transparency efforts the and will gender financial full above-market our as testament our into continued speak at who to it

Arthur Kacprzak

model Thank our the that good and to everyone. morning, reported quarter and pleased you, proven record growth. benefits and steady results, diversified Arun, disciplined resilient full of business I'm and fourth report Algonquin reflecting year track of has

consolidated Creek also BELCO, in as we an compares to reported of Our XX% Services and implemented as XXXX water Results Electric improvement Granite also by Apple and This and California. Water in higher systems at $XXX.X fuel by of last wind which $XXX.X million reflects contributions $XXX.X fourth ESSAL, closed fourth costs is higher Midwest State at operating Granite costs in in the CalPeco. in Renewable as driven and up generation Chilean as well Utility; increase increase for about of from utility, year-over-year which million Results from profit. adjusted from Electric delivered quarter operating profit The The were facilities as year, same service last divisional the QX Bermuda Valley was increase systems from and which as year, both Electric Creek impacted million the of contributed lower CalPeco during The operating quarter our the last milder as million, quarter the were well XXXX. Group weather. consumption acquisitions well year. current XXXX $XXX.X Group Regulated the in to XX%. approximately $XXX.X profit XX%. million was new Energy This period Sugar reported about Empire compares operating EBITDA rates on in which the same quarter offset non-passthrough wind contributions in Maverick State by our addition benefited an million, $XX.X same of placed to Water quarter, facilities, Park our

venture Market provide Our with in a reflecting in our development the benefits year. Solar investment in sale to increasing continued process. million a over through value Ares, through joint also facility the Atlantica benefited recognized our partner, step-up by New with created received dividends also of resulting the $X.X renewable from and the QX gain, a prior construction

lower wind costs, partially impacted was at and increase Sanger facilities higher payments. while this overall However, negatively compliance solar offset operating was our lower some of capacity generation production and and by facility higher this performance quarter of our while costs

last at our $X.XX, million development compared overall investment $X primarily the in Uri corporate expenses basis negatively net hedge compared Our driven as caused to by million adjusted also impacted expected expenses wind QX year. by in of was share and In as are by Texas is last higher were with settlements acceleration production year, administrative Winter net QX costs, and higher higher Fourth facilities by in per largely reverse line coastal last and losses lower-than-expected of future. to which approximately Storm HLBV an earnings year. related in to quarter total, $XX.X came to the expenses a higher-than-expected

In addition to the by our an XXXX were to Kentucky costs Power results increase the funding. average associated drivers financing and deployed acquisition weighted capital the discussed, in impacted shares in related negatively the with

came representing an XX%, in net prior growth. net $X.XX EPS growth annual at in and to the reported adjusted the year, $X.XX in of year-over-year full For year, EPS solid adjusted showing compares

delivered various year. encounter we headwinds the did we Although throughout results, strong

and of load part our operating in the Also, this phenomenon, result was about cents on wind long-term wind on parts weather resources throughout early Midwest the patterns, an XXXX $XX Compared approximately weather the in of of the latter or approximately EPS. year. impact usage early normalized down was customer year, a affected to million an record averages. negatively our which warmer-than-normal of represents experienced on our X.X from As facilities XX% adjusted profit much industry-wide generation the

activities. on sheet financing and to Moving balance the

minutes the progress provide I First, financing an the a acquisition. few towards our spend wanted to Power on to update Kentucky of

Fitch, October proceeds. Canadian Early On we year, of year, U.S. last the in common of of announcement common we issued received S&P offerings that a a Canada. $XXX U.S. approximately equity of the a in raising Recall deal from and $X.X approximately shares, and billion and offering credit XX% back debt deal executed public the equivalent of never hybrid to in dollar concurrent shares. hybrid debt million this in dollar-bought converts

$X.X Kentucky X.X% to factoring an refinanced for is debt, expect approximately million attractive issued we XX-year Company closing, Power brings expected of to or platform, after over the assume billion would approximately future at $X.X established billion to purchase be Kentucky On That expect transaction billion this we have would $X.X X% on rate our rates using Utilities' approximately the towards benefit We financing hedging. of price. of debt customers. which targeted $XXX the total Liberty which XXXA just

as this providing We look this acquisition continue closing to compelling later see to and value forward year.

reliability XXXX, including our and renewable Moving and of our and well new safety relating the Wind, from Altavista initiatives deployed gas Maverick the delivering as and or generation plan. Midwest capital In systems financing billion on as to broader organic projects, of Creek Solar our capital to greening. $X.X water Algonquin electric,

capital, spend this For to billion acquisitions to XXXX, the of $X.X which which the and Power, New year. closed over to Algonquin York earlier with American in this of expected majority is the is Kentucky year; middle Water, close targeting in related

debt targeting year requirements the I associated for is remaining BBB funding the The a the credit balance grade predicated of including regulatory of certain can Our strong us, proceeds remainder long-term spoke cash of already. various funding proceeds well a sources Kentucky maintaining and assets resilient acquisition debt. as combination hybrid of available more to plan some issuance as securitization debt, by rate. Power sheet, funding and be funding from with more and the on solved investment hybrid a retained to to

this equity capital the Investor raise we our down remainder As can be during potential as of we discrete various nonregulated of another discussed for recycling, of selling our we available, when for value-accretive renewables have do a capital expect source us common asset the of additional funding issuance we're not also year. sources Day, Considering viewed to this year. portion

Our and of liquidity funding committed facility by arranged that At transaction. had approximately end strong the the XXXX, of reserves acquisition Kentucky capital a supported billion plan Power available. connection in Not was position. we with is counting $X the

over Arun, Before brief turning adjusted to things to I'd provide like a net update XXXX’s EPS our guidance. on

range previously which We our $X.XX, expect EPS was within of be net $X.XX a continue to share to our communicated XXXX Day. at Investor to adjusted per

We continue as a facilities averages. expectations patterns consistent realized with on and long-term production renewable decisions line our rate well to assume normalized earnings with pricing weather as in in resource and generating guidance

that which our We no to solid are to operations. outline that, We model, deliver continue assume diversified we growth-oriented from returns. on will now our and there superior continuing business will COVID-XX growth, history it to strong strategic to impacts with hand drive back With our forward along of plans. to also our I from Arun shareholder earnings look dividend believe

Arun Banskota

Thanks, Arthur.

prepared $XXX XXXX, out of XXXX on At to closed our $XX.X give end close Water earlier that, the New strategic Investor our have York December our capital it executing which an plan through in from Of I billion we morning, -- projects American capital on we investment our capital program, million very update X-year year, this already January. of plan. the on is Before approximately want Day, the visible rest through initiatives. we comments this updated

the additions long-term adjusted expected and growth. New EPS On of American York drive Water the net regulatory the are of to side business, Power Kentucky

of our plan reliability While organic on network. large the being portion safety, the resiliency of to investments is spent a and capital improve

made value. period about over believe growth accelerate we In the shareholder the a prospective have megawatts X,XXX just plan. XXX from opportunity we X,XXX that that converting potential investments of and renewables pipeline a megawatts, our have once-in-a-generation are into X-year new megawatts to to have X grown and greenfield capital and On year, from excited while renewables our growth add we pipeline side, greenfield

at all Once deliver in construction, institutional contracted see while on to with able assets. and somewhere in to discussed, of construction. higher ability we believe prospective of We new hours to have deploy number investments lower improved to own We development with over the now of capture platform then margins X,XXX we sustainable we scale expect should get Investor particular, introduced Day, to as potential we our Investor alternate investors investors. across this be of could partner those to storage we shareholder incremental access both spoke an benefits, platform. value greater make the development megawatts negotiating With opportunities earnings an in In operating and December opportunities. Day. X,XXX to We further to have costs of the our a develop gains we megawatt also sustainable recurring wishing allow transaction source including new pipeline our strength validates increase capital of sell scale, and investments development greenfield to expect We fee. renewable development, At will growth plan take power, and a and development, these of renewables generation. investments creating us adding and opportunity our through which in our accelerating as projects our earning investors we down of for greenfield long-term our a

excited strategies, a will will X planning to foundation that sustainability goals. only on from strive and to line. prospects decarbonization strategy continue bring summary, which sustainability underway to completing questions will are for turn We build both the the and the our In growth which and to contribute Algonquin's positioned execute transformation strategic and plan and well the those business on benefit to call continue With coming we of about be and as pursuing is growth I'm over We to for accelerate the to long-term to regulated to in operational renewables currently XXXX. the well our businesses, that, years. any to our way pillars the execute are from I shareholders. value our positioned our excellence, key operator remain on over this while

Operator

today Your Sean of [Operator line Instructions] first question Securities. from with comes the Steuart TD

Sean Steuart

joint forward Ares, about sale questions. A New that Solar couple how going into project pipeline project The with future for the Market should that to venture sales vehicle? we think of

Arun Banskota

Sure, Sean.

times development So shareholder through about recurring now look, to talking and provide of the us we have for our ability the been a growth value construction few pipeline.

how so I Market what of of the New towards Solar such end value fits strategy really being also talked And that sell-downs. producing through about my shareholder the recurring our was into presentation,

believe we out source, that So going to it's it earnings. not be prudent -- because of fact a thought that our to adjust the we we of believe recurring was

Sean Steuart

context can going into Okay. forward Understood. to you projects there? pace future vehicle? sold The though for provide be that Any

Arun Banskota

our we're process starting Well, on execution about our with Sean. that, process done planning and

a quarterly So we'll able next be probably give call. lot more detail to at the

Sean Steuart

Sandhill more other Okay. you to and, of provide larger that And or I RNG details those front? projects? type acquisition The transition expect guess, into opportunities the context capital for on can Any it's amount whether on investments? investment energy broadly invest you speaking,

Jeffery Norman

Jeff. Yes. it's Sean,

the I Sandhill acquisition are the X projects digesters. anaerobic think and

more to in in so capital in knowledge see area so important benefits and relatively than of improving that advancing play. they're of It's do said, RNG absolute we That CapEx. an And expanding. us because terms of the our RG small being

Our RNG hydrogen. includes

a start our knowledge, to of we still see as more. important so trade area, We we information an start and lot build build do unfold. but there's to expand And how as to that

Operator

Your next Raymond the James. David from comes question Quezada of with line

David Quezada

think at New of -- talk acquisition, some kind first were there organic opportunities York closed. was there there. now CapEx, potential on of see My what consolidation you question the for I some Water, American curious guess, or the I there, time either here, for otherwise? that, I'm spending about that's just

be any appreciated. thoughts would that So around

Arun Banskota

investments much Look, in I for planning in process very we continued are New York a Water. mean, American

the utilities, invest as for and of water in resiliency due as we and else. with that some all of continue time. case next system anything safety our is Our other not But reliability rate to with

renewable I Now positioning in transport unique a to of terms quite bit our as required you know, there's energy given mean of energy, water.

look unique capability do, serve to that One at utilities think we of to and we which that water is our current energy the renewable profile is substitute generation opportunities have things we do I also, how have, see unique with utilized the energy already. can a we

that's So look a something taking we're close well. at as

David Quezada

Maybe had more regulatory on just are all? of business. raised I'm as inflation for about inflation, your any just discussions there, you've thinking a If at with regulators, Curious Excellent. one the discussions how been if me, cost topic regulated and specifically especially And going? has active -- dockets? on is concern those your

Arun Banskota

more Sure. at XX than inflation right? years, Look, topic I current seen is past in David, what, du least, obviously, seeing I XX, jour, the have the we're think. So probably we mean inflation

on so regulated I a to customer mean, source impact we regulators And pass-through. of track time, all affordability, that's continued level aware But on the increases the the discussion potential we vis-a-vis extremely with look, is On acutely of we right rates. the customer largely side closely. at inflation of that of a business, balance have how the same are the the costing

them your you side, equipment EPC got contracts. you've all got you those X renewable the right? fixed-price it's Once X contracts. energy large have our in of are offtake function side, a minds the your on agreements, contract, you've contracts significant On got contracts, largely energy renewable of You've your signed

as trying holding so concurrently those our not sign closely that in possible as risk. we employ to X contracts the mind, so left And we inflation strategy the is are

being and balloon So the to that's protect our return able margins.

Operator

the from Rob comes with of line question Scotiabank. next Your Hope

Robert Hope

on First Is this of strategy it like renewable question, XXXX? capital I strategy. the should driving Slide year. bit what's looks Renewable if projects of just $XX a on Because a million a a to like of Group looks look bit capital more Energy the be to in million relatively on it X, pivot the at power $X -- investment busy little in a the it

down kind more of equity half to them you're projects, assumption So recoup than pretty bending here be for these your the of going and that quick. kind count capital of

Arthur Kacprzak

obviously, going What sheet mostly you're there. a reflected activity the on But is in really spend in spend -- construction and our spend. lot basically of spend on-balance the JVs. of certainly there the that already development continuing that's but and basically there Not lot seeing a spend year is construction

Arun Banskota

and that keep activity a you likely the why we fairly construction which if then slide is started increasing that's And level significant. only including that you Rob, notice, to on shows of activities, is

So the we construction in operations. into projects to slowed of through through greenfield not continue terms and down process, have development Android advance our

Robert Hope

should on projects guess All of about helpful. as $X.X they come? question I we your significantly then Investor CapEx forward add the right. then net then And and more Day? you That's number put a think is, to we'll how at QX the of billion that that XXX% Is more be could than smaller

Arthur Kacprzak

Yes.

growth think and is the we future. mean, retained obviously, about in as how determined number. that forth so much will monetized of the think actually as can I versus You be

Operator

Your RBC next of Capital. with Nelson Ng line question comes from the

Nelson Ng

terms of quick follow-up a the in Just to that JV. question

Is Ares on bit long-term relationship Are So more with a bit a color Management? -- part of your assets? the they a can buyer that plan? you give give your more of

Jeffery Norman

wouldn't Jeff. characterize it as buyers. Yes. I long-term Nelson, it's

So with want transaction to very it's a we've but one got robust Ares, relationship and we keep do relationship. a we strong options there's exclusive them, more not think open. with out market And I an our and there, to expect than

Nelson Ng

Okay.

Market case, have past, end, isn't assets, be at So New it is kind and right? would at the JV, will then a usually But it would the a move Ares in constructed. right? know long-term And buy the in of this you shareholder you I a assets into back equity the you that other nominal price.

Jeffery Norman

elements Yes. on think X to that. There's of

construction on The and are And participating the there's the on side, the projects. risk type development those JVs. first moving through where one projects we they're is in then

but not there the think it original -- may But may up Ares the may party primary thereafter I primary that them we that a be construction is is the difference third take well. at as -- picks not the goal, be Ares' back to end. difference long-term between the projects

So time. at not absolutely this that's certain

Nelson Ng

one Okay. And follow-up question. just last then

In it have JV after on close value moved there's to terms rather of on completion? a be presume or construction still to is I to after down -- a things guess, than you at, COD? so timing, financial had during hit sold the plan and of or I prior extra just bit if to construction or

Arun Banskota

of the period all these them projects and the a expertise is to of through plan in operation, down. then sell of best development issues, clearly take have take of care certain construction. [fees Those the bidding we're through store] The are that position through areas derisk and initial down we and

Nelson Ng

Okay.

Sorry, go on.

Jeffery Norman

I No, JVs, I value mean, obviously going construction throughout the the the full to look upside cycle. add. to just was with still retain And construction Algonquin

Operator

question the with comes from America. Bank of of next Ryan Greenwald line Your

Ryan Greenwald

you're Maybe frame forward? how excluding the about It way typically looks the gain thinking payout at with, like tracking you guys you any were that? thinking about and it? you're any starting Is does to additional sell annual would there How approximately on color the dividend here, help the growth how XXX% going cadence ratio. revisit

Arthur Kacprzak

we're between we communicated to -- XX%. XX% I our in we've would changed the dividends. to I XX% in stance that's the Yes. really dividends, communicated previously. what And wanted target. term it's But our long I targeting think XX% it's payout be we what ratio past targets, say sustainable to mean certainly hasn't

well. in further years. certain up an end some certainly going dividend long-term But as as to from where perspective, a we So be seeing and there overall lumpiness that is growth

Ryan Greenwald

that? you it. in Ares how about And helpful. sale just thinking about And the of forward? Got relationship AY That's to AUI, you're the going instead terms can of then talk

Arun Banskota

strong, I right? have told I've dropped ESG profile I AY AY mean assets as the like multiple Atlantica. the we down as like into relationship some we well, saw, mean other remains times. you of Look,

the the strong. the I relationship with So want around construct to AI that whole remains drop-down. remind just folks on

to around category. obviously non-North this So not that necessarily fall assets, right? does be it So nonregulated that going American into is

company, as we in our So find good ourselves I renewables multiple options. that we think grow a we -- a as have portfolio, position we

Ryan Greenwald

I just if maybe may. And Yes, more, understood. one

M&A further bit? been renewable then asset regulated for can table? perspective, more side? from the the have on any appetite to In where perhaps, the private transacting divestment you a And Or beyond going separately, in recycling on environment, will given terms market of touch valuation LDCs that be is your a

Arun Banskota

you mean, we of any sell-down well, Having first looking is the be portfolio of of renewable shareholder that, more business operations. that there to and the our that we value. our number pipeline, assets then said see all Ryan, we're perspective, external on to we cows projects closing when in And our we're would I market increase the that of right? given never look strategic flow a saying, as at able pipeline, I here, to always tell the and no sacred Look, from are construction the the the believe the because side really phase development control ability doors into

against having that, doing and said a pace it's one-offs, it's we're controllable either. rather one-offs right? much not Now shareholder a more much more recurring So than value recurring of

we look versus at in And so ways asset, somebody ownership. -- valuable the particular more our any that ownership one our is else's under of

always looking at. something we're that's So

Operator

of question next Pham line comes the from Ben with Your BMO.

Benjamin Pham

structures you I follow some where drop-downs Maybe on do want had start the interesting there's some development off position be Ares to different you and operating structures of you AY, asset that you asset and Is mainly the how think how up construction, sits? sales, at of How to I'm you then wondering, assets, sit. utilizing. bunch look when it where or things party? a on would going, Ares questions see that third to you're do of you to compare about -- so like

Arun Banskota

the not utilize as joint we development we of have, this right? Ares, is -- venture one obviously, totally we basically, So to well. So options look we with do have it when could construction, and ourselves develop at other any but

So we or. flexibility either, doing of have that

construction We developing or projects normally are not Atlantica. through with going

separate of large, assets. the side, we mean other, is X the obviously our operation we are the each Atlantica I those from entity by operating On try operator learn their set on base. operational And to and are on but platforms. asset

Benjamin Pham

element guidance assume, X% to those if a numbers? I thinking drop-down even there's correct your then And Okay. wrong, XXXX for baked the me into X%, would

Arthur Kacprzak

we pipeline, to extracting out certainly greenfield have Yes. look guidance. into development at our value the that of We bake do and

pure through fees looking growth be that's is or there current or such extracted as go. drop-down and -- the thing it's are gain of is value plan work we certainly forth, whether so at we to a it's some to pure Now management whether different through. still ways, But our X obviously created

Benjamin Pham

understand. last my Okay. one. And then I

suggesting Power. for You funded still that Or left? a Power? now mentioned offer, were fully slice you're funding for there's you Kentucky some wasn't I of bridges Kentucky sure the on

Arthur Kacprzak

Power hybrid We're our done for billion. $X.X the of funded terms price. We purchase with cash Kentucky notional Yes. basically the of debt melts in

credit side of Now need all metrics come right to our other the into we everything out on make of obviously sure this. mix put and the

there's So with certainly of rest -- are there that. the considered funding -- plans

Operator

of next Kuske Your the Andrew from question comes Credit line Suisse. with

Andrew Kuske

All portions the more more you And entirely ability being is accelerate warmer kinds But those complicated a certain terms of effectively the And use pretty the first compelling. that? do and simple? really how you do of question of I structure financial monetize that versus around assets, sort it then how proceeds growth. balance to about ceilings? guess think to whether can be are fuzzy just

Arun Banskota

Thank great question. Andrew, you.

given years I we there's on it, have, trying the you really costs, fundamental fees development should one able So the the whole business. the decarbonization right? look of on we're now, specialized if skill just leverage accelerate the So to those and growth we the to scale leveraging a side. operations do of that even sets on be -- sides more thesis. level One And fundamentally, utilizing that's that's at right? is believe external environment certain and think, over the X we both really And have there, that specialized what side out we and by

Now the should significantly number to if capital. be there, investors with lot expand that greenfield construction out operations, looking obviously, the to taking renewables sustainable to derisking view again, along access And portfolio, that, we the that obviously those investors amount of you sell a a down to our market, external need grow at of of able we is to energy growth. renewable believe flywheel, provide sustainable point those the we you goes more can will, our where of and thesis value that's into continue pipeline, So right? renewables our shareholders, back redeploying that to through capital selling recurring at development down, a that really

Andrew Kuske

flywheel the standpoint. Caribbean Okay. more the really good you've then renewables assets more business that appreciate there there's we've do just needs that LDC That's offer seen that. recently the to And and expertise there because your decarbonization utilities opportunity maybe in from more broadly exposure an side, thinking the do the on in have about and is investment U.S. I just transactional storage, markets renewable that businesses, compelling you focus and think business your the and helpful. about the region but value got other an through in How more Bermuda, broadly? both

Arun Banskota

where were Well, hurricanes experience attracted We profiles, lot like fewer from up hurricane of look the things Caribbean. the at Bermuda the including parts the to sort, does factors, we a than other things burn it of the size. even different even of

of is to acquisitions. in a lot of we any we Scale believe, being with So at look when things we look lot able terms more there's less. obviously important, do a at

But which financial answer. answering -- metrics, question fold. but question, lot X of assets closely. are need our at X metrics hope that things that we opportunities just we again, just continue your across executing scale have fit. it's at be a we But our disciplined very to than lot under risk more because look electric has in to I end Andrew, So we any water, need of that to we and terms extremely building especially those a a of look I'm We again, bring around at, looking against long-winded modalities, up

Operator

question comes of Naji Baydoun from next line Industrial Alliance. with the Your

Naji Baydoun

start a Just of balance clarification on the this wanted funding off year. for to guess, with, I

monetizations sell offering, large existing that asset of this just thinking asset the priorities you -- is in for and more So development is for sales? really loans the recycling, you're hybrid just asset clarify Or terms focus if it noncore about on in can year? or

Arthur Kacprzak

would look, say, this I year, So think I of funding all, optionality. as got, we've we first we've plan, for got about mean, our

we've potentially year. always, need potentially in it's we we got this mean that our -- is funding assets I what lot look As sources we've of come quite that and a are recycling satisfy can of that certainly sources existing fleet. one those But a funding to to tap. different from got lot funding to asset of would sources do again,

Naji Baydoun

Okay.

Okay. in I some terms necessity term? no, the there's accelerating guess, of here So in that short of

development the that that this runway Just that us you the and know of potentially how you growth update just the that year. other mentioned. 'XX, renewables have maybe about in lot I question pipeline was just on I a the projects going But accelerating could an XXXX for give time. can new beyond over are projects have you extend

Jeffery Norman

X-year projects capital pipeline to that megawatts, think we the feeding plan, the Day. into well pipeline see down plan. in we Investor rolled our Arun what for as it's And is greenfield that pipeline, add capital pull as at X,XXX and I which referred to advance continue Naji, the That our out to Jeff. we

here, we're So well the or we new progress pump feel making pulling entrants good from capital spectrum the like the primed out flywheel we've that got stuff pipeline and and into greenfield into the plan. across turning

And working able process so we names the 'XX, you, ready anything 'XX, is be say to share until have certainly with concrete 'XX, we won't to but well.

Arthur Kacprzak

of top to you on of And Okay. which storage hours showed also about. pipeline XXX-megawatt the pretty we that, bullish XX we're

Naji Baydoun

you're new the in to to of Of again, clear, think next projects course. gigawatt add you said be looking about years. a X And just I

to megawatts do feel like So are on you still track you're you this development? at XXX -- new year of least do

Jeffery Norman

Yes.

of into megawatts. the XXX least that capital at terms new would we at development expect plan Day, that fall Investor In would shared we

Operator

Merer question National final from Your today with Rupert the of line Bank. comes

Rupert Merer

asset sell sell could on you Are Can development you on existing your assets? of to well? recycling question do sell assets? looking Another Or downs you potential only to on freight. as downs existing assets talk about

Jeffery Norman

that extent Rupert, the anything Yes. term, given looking in the got assets the amount we're more to value table, on seeing are in be. it's the to market. they've And certainly we where Jeff. the Existing shorter material we're transactions and good that's monetize the would believe

Rupert Merer

would you venture then assets Texas control a going you're So XX% the control have look say, to of then accounting or you And assets? to with joint look you and aim have in your to like maintain somewhat future?

Arun Banskota

operating on not mean, I I believe of we us. asset be important management Rupert. important entity make we're have necessarily, scale are and going because, of that also level to to for again, and furthering business creating is for sure continues take. decided is the more side ownership to exactly us we Not what the what

still what sell down, So on, exactly planning that's what will we that's stages. we the in percent is focus

Rupert Merer

then some I Great. some on know you coastal assets. And on saw in headwinds, just the color wind Texas, December. situation you Okay. that finally gave us back

of outlook could what walk wondering you're over for and is Just walking year? I like time, forward? in the us if but for you these what there look the outlook through going what understand -- remainder does improved saw the you transmission assets looking QX, at this

Arun Banskota

Sure.

there a right, so So factors, coastal of combination really Rupert, was those facilities. wind on

was of there North oversupply, believe And in wind finally, anticipated got that all, were phenomenon anticipated. announced of ERCOT. prices that, quite by the of that as than obviously the late American assets lower is transmission top On to than an And is third, the towards general market. a which, you the one resources, industry-wide during were periods XXXX. year, our in affected later of there I of of projects number constraint again, saw lower First wind actually COD

approved factors. already we general region time and because transmission ERCOT and with means it transitory. those The of one, that have is away really upgrades of around So the fourth that a first to facility. that combination the of announcement was go both believe X that of the a commission transmission should constraint, We that going believe, be

to is over away. go significantly going XXXX, So we believe that should time, -- basis that be risk starting

-- we about, those are the will I of XXXX. factors of one, transitory, So them until talked believe X X continue

Operator

further the call are to at There time. you. Arun, over questions back no turn I this

Arun Banskota

our thank for please everyone, line the for our time With the and you, call on today. you, stay that, Thank disclaimer. operator, on taking

Amelia Tsang

information our expectations to future recycling results on from that and could call information. This not on limited those this SEDAR cause and pending during subject our forward-looking including anticipated discussion risks in but historical or MD&A acquisitions, including, capital based contains and Our certain EDGAR available filed forward-looking described capital is regarding uncertainties assumptions, growth. certain and most on our materially earnings, expenditures, to, by to forward-looking is website, results actual recent results differ and the information,

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Algonquin Power & Utilities (AQN) 4 Mar 222021 Q4 Earnings call transcript