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Algonquin Power & Utilities Corp
You don't have any saved screeners yet
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
Corporation
2021
Fourth
Quarter
Earnings
Webcast
and
Conference
Call.
All
lines
have
been
placed
on
mute
to
prevent
any
background
noise.
After
the
speakers'
remarks,
there
will
be
a
question-and-answer
session.
[Operator Instructions]
Thank
you.
Amelia
Tsang,
VP
Investor
Relations.
You
may
begin
your
conference.
Good morning,
everyone.
Thanks
for
joining
us
this
morning
for
our
fourth
quarter
and
full
year
2021
earnings
conference
call.
Presenting
on
the
call
today
are
Arun
Banskota,
our
President
and
Chief
Executive
Officer;
and
Arthur
Kacprzak,
our
Chief
Financial
Officer.
Also
joining
us
this
morning
for
the
Q&A
part
of
the
call will
be
Jeff
Norman,
our
Chief
Development
Officer;
and
Johnny
Johnston,
our
Chief
Operating
Officer.
To
accompany
our
earnings
call
today,
we
have
a
supplemental
webcast
presentation
available
on
our
website,
algonquinpowerandutilities.com.
Our
financial
statements, management
discussion
and
analysis
and
annual
information
form
are
also
available
on
the
website
as
well
as
on
SEDAR
and
EDGAR.
Before
continuing
the
call, we
would
like
to
remind
you
that
our
discussion
during
the
call
will
include
certain
forward-looking
information,
including,
but
not
limited
to,
our
expectations
regarding
future
earnings,
capital
expenditures
and
pending
acquisitions.
At
the
end
of
the
call,
I
will
read
a
notice
regarding
both
forward-looking
information
and
non-GAAP
measures.
Please also
refer
to
our
most
recent
MD&A
filed
on
SEDAR
and
EDGAR
and
available
on
our
website
for
additional
important
information
on
these
items.
On
our
call
this
morning,
Arun
will
provide
an
overview
of
our
Q4
and
annual
performance.
Arthur
will
follow
with
the
financial
results,
and
then
Arun
will
conclude
with
an
update
on
our
strategic
plan
for
the
business.
We
will
then
open
the
lines
for
questions.
I
ask
that
you
restrict
your
questions
to
two
and
then
re-queue
if
you
have any
additional
questions
to
allow
others
the
opportunity
to
participate.
And
with
that,
I'll
turn
it over
to
Arun.
Thank you,
Amelia,
and
a
very
good
morning
to
those
who
have
been
able
to
join
us
on
the
call
and
online.
Given
that
this
is
our
year-end
earnings
call,
I
want
to
provide
some
highlights
and
speak
to
performance,
both
financial
and
operational
for
Q4
and
full
year
2021.
Firstly,
on
financials,
I'm pleased
to
report
steady
year-over-year
growth
in
the
following
key
financial
metrics:
2021
Adjusted
EBITDA
of
nearly
$1.1
billion
increased
24%
year-over-year
from
$869.5
million,
largely
from
new
facilities
that
came
online
in
2021
on
the
Renewable
side,
including
Maverick
Creek
Wind
and
Altavista,
as
well
as
contribution
of
new
facilities
on
the
Regulated
side,
including
Empire
Wind
and
a
full
year
of
contribution
from BELCO
and ESSAL.
Our
2021
Adjusted
Net
Earnings
per
share
of
$0.71
was
up
11%
from
the
$0.64
reported
in
the
prior
year
and
came
in
line
with
our
expectations.
Last
year,
we
reported
annual
dividends
per
share
of
$0.67,
representing
our
10th
consecutive
year
of
dividend
increases.
We
also
exited
the
year
with
approximately
$16.8
billion
in
assets,
a
27%
increase
over
the
$13.2
billion
reported
in
the
prior
year.
Secondly, on
execution,
the
company undertook
a
number
of
successful
growth
initiatives
and
continued
to
execute
on
strategic
priorities
in
2021,
which
are
positioning
us
well
for
the
future.
We
continue to
focus
our
efforts
on
Algonquin's
three
strategic
pillars;
growth,
operational
excellence,
and
sustainability.
And
I
will
provide
more
details
on
each
of
these
pillars.
Earlier
this
year,
we
closed on
the
acquisition
of
New
York
American
Water,
which
services
over
125,000
customer
connections
across
seven
counties
in
Southeastern
New
York,
and
we
officially
welcome
the
New
York
American
Water
employees
into
Liberty.
The
transition has
gone
very
well
as
planned.
Staying
on
the
topic
of
growth,
I
want
to
provide
you
an
update
on
our
pending
$2.8
billion
acquisition
of
Kentucky
Power
Company
and
AEP
Kentucky
Transmission
Company.
We
remain
excited
and
firmly
committed
to
this
transaction
and
look
forward
to
bringing
the
benefits
of
our
local
operating
model
to
Eastern
Kentucky.
As
we
previously
mentioned,
our
expectation
of
enhancing
Kentucky
Power's
local
operating
model,
bringing
benefits
to
customers
by
exploring
opportunities
to
reduce
customer
rates
through
investing
in
green
energy
and
creating
increased
local
employment
are
all
attributes
that
are
expected
to
help
customers
and
the local
communities,
while
driving
value
for
our
shareholders.
To
that
end,
you
are
likely
aware
that
we
jointly
filed
with
AEP
an
application
with
the
Kentucky
Commission
on
January
4 for
the
approval
of
the
acquisition
of
Kentucky
Power.
By
statute, the
Commission
must issue
an
order
on
the
application
within
120
days.
We
expect
to
close
the
transaction
in
mid-2022
after
receipt
of
state
and
first
level
approvals
and
satisfaction
of
all
other
closing
conditions.
To-date,
we
have
already
received
Hart-Scott-Rodino
and CFIUS approvals.
Staying
on
the regulatory
front, our
rate
review
at
Empire
Electric
continues
to
progress
well.
On
February
4, 2022,
a
stipulation
was
reached
among
Empire
Electric,
Office
of
the
Public
Council,
Staff
of
the
Missouri
Public
Service
Commission
and
other
interveners.
Hearings
were
held
on
February
7
on
rate
design,
and
a
hearing
on
the
stipulation
was
held
on
February
10,
with
new
rates
expected
to
be
implemented
in
May
of
2022.
We
believe
the
settlement
represents
a
fair
outcome
for
customers
and
the
company.
We
continue
to
invest in
our
network
to
deliver
mission-critical
services
to
our
communities,
while
keeping
customer
affordability
top
of
mind.
Another
growth pillar
in
our
Regulated
business
is
focused
on
deploying
capital
to
benefit
our
customers.
In 2021,
the
Regulated
Services
Group
invested
over
$1.9
billion,
including
the completion
of
our
Midwest
greening
(sic) [greening the fleet] (00:07:47) initiative,
where
we
brought
600
megawatts
of
wind
generation
online.
In
the
coming years,
we
expect
to
invest
between $800
million
and
$1.2
billion
annually
into
our
rate
base
to
improve
safety,
security,
reliability,
resiliency
and
customer
experience.
Turning
to
the growth
levers
on
our
Renewable
business.
In
this
business,
our
ability
to
originate
and
execute
projects
is
a
critical
growth
lever. 2021
has
been
a
record
year
for
Algonquin,
with
nearly
1,200 megawatts
of
new
Renewable
projects
either
closing
or
reaching
commercial
operations.
In
December
2021,
we
completed
our
latest
project
to
achieve
commercial
operations,
the
24-megawatt
EBR
wind
facility
in
Québec,
with
all
of the
energy
being
sold
to
Hydro-Québec.
The
175-megawatt
Blue Hill
facility
in
Saskatchewan,
with
all
of
the energy
under
contract
with
SaskPower,
is
on
track
to
achieve
commercial
operations
in
March
2021.
Our
construction program
continues
with
the
expected
start
of
construction
in
Q2
2022
of
the
Deerfield
2
and
Sandy
Ridge
2
wind
projects.
Also,
we
continue
to
progress
our
partnership
with
Chevron
and
expect
to
start
construction
on
the
first
two
of
these
solar
projects
in
mid-year.
The
fact
that
we
continue
to
successfully
execute
on
construction
in
the
midst
of
the
COVID
pandemic
and
supply
chain
challenges
is
a
testament
to
the
hard
work,
entrepreneurial
culture
and
experience
base
of
our
employees.
At
our
Investor Day,
we
discussed
our
strong
development
platform,
where
our
ongoing
development
has
resulted
in
growing
our
greenfield
pipeline
of
prospective
generation
projects
to
3,800
megawatts
by
the
end
of
2021.
This
growth
is
net
of
projects
totaling
640
megawatts,
which
advanced
from
our greenfield
pipeline
into
our
five-year
capital
plan. The
640
megawatts
that
advanced
includes
the
Riverbend
Wind
Project
in
Michigan,
the
Blue
Violet
combined
wind/solar
project
in
Illinois,
and
four
projects
being
developed
in
partnership
with
Chevron
in
New
Mexico
and
Texas.
Two
other
important
initiatives
in
2021
to
establish
a
strong
foundation
for
future
growth
include
building a
1,700
megawatt
hour
pipeline
of
prospective
energy
storage
projects
and
entry
into
renewable
natural
gas
with
the
agreement
to
acquire
Sandhill,
a
developer
of
RNG
projects. Sandhill
represents
an
attractive
platform,
giving
us
immediate
entry
via
its
portfolio of
four
projects
in
the
state
of
Wisconsin,
two
of
which
are
currently
under
construction
with
first
production
expected
around
the
end
of
Q1
and
two
projects
which
are
in
late-stage
development.
According
to
a
US
Environmental
Protection
Agency
report,
Wisconsin
represents
the
state
with
the
second
largest
universe
of
renewable
natural
gas
opportunities,
and
we
are
excited
to
utilize
Sandhill
as
an
RNG
growth
platform.
This
acquisition
is
expected
to
close
in
the
first
half
of
2022.
Moving
on
now
to
operational
excellence.
In
a
mission-critical
industry,
safety
and
reliability
are
always
key
areas
of
focus. I'm
very
pleased
to
share
that
we
have
passed
the
impressive
milestone
of
over
750
days.
That
is
nearly
11
million
work
hours
without
a
single
lost
time
injury
across
our
North
American
business,
while
keeping
our
customers
and
communities
safe
and
maintaining
our
system
reliability
and
resiliency.
I
want
to
thank
all
of
our
employees
for
their
ongoing
focus
on
safety
and
preparedness
for
weather
events.
I
want to
particularly
call
out
and
thank
the
electric
team
in
Tahoe
as
that
area
received
record
breaking
snowfall
over
the
Christmas
holidays. Liberty
crews
worked
hard
throughout
the
holiday
weekend
to
restore
power
to
our
customers
and
communities
as
quickly
and
safely
as
possible
during
harsh
weather
conditions.
The
hard
work
and dedication
of
our
employees
did
not
go
unnoticed
by
the
customers
and
local
communities
we
serve.
And
finally,
we
remain
firmly committed
to
sustainability
through
the
inclusion
of
environmental,
social
and
governance
values
in
our
broader
corporate
strategy
and
day-to-day
operations.
In
2021, we
announced
our
target
for
net
zero
for
Scope
1
and
2
emissions
by
2050
with
a
credible
path
supported
by
our
strong
decarbonization
track
record,
extensive
experience
in
regulated
utility
management,
and
deep
expertise
in
renewables
development.
On
the governance
side,
we
successfully
embedded
sustainability
into
our
management's
compensation
model,
continuing
to
enhance
how
ESG
factors
are
embedded
throughout
the
organization's
business
goals. And
finally,
in
2021, AQN's ESG
ratings
continued
to
improve
in
the
aggregate,
positioning
the
company
as
a
sustainability
leader.
More
recently,
I'm
pleased to
report
the
company's
inclusion
in
the
2022
Bloomberg
Gender-Equality
Index
for
the
third
year
in
a
row.
Our
inclusion into
their
Index
is
a
testament
to
our
continued
efforts
for
continued
gender
equality
– improved
gender
equality
and
transparency
as
we
target
above-market
gender
representation
at
our
board
and
executive
levels.
With
that, I'll
pass
it
over
to
Arthur,
who
will
speak
to
our
fourth
quarter
and
full year
2021
financial
results.
Arthur?
Thank
you,
Arun,
and
good
morning,
everyone.
I'm
pleased
to
report
that
Algonquin
has
reported
steady
fourth
quarter
and
full year
results,
reflecting
the
benefits
of
our
diversified
and
resilient
business
model
and
proven
track
record
of
disciplined
growth.
Our
fourth
quarter
2021
consolidated
Adjusted
EBITDA
was
$297.6
million,
which
is
up
approximately
18%
from
the
$253.1
million
we
reported
for
the
same
period
last
year.
The
Regulated
Services
Group
delivered
$191.4
million
in
operating
profit
in
the
current
quarter,
which
compares
to
$162.4
million
in
the
same
quarter
last
year,
an
increase
of
about
18%.
This
improvement reflects
contributions
from
our
Midwest
wind
facilities,
which
were
placed
in
service
in
2021,
as
well
as
contributions
from
BELCO,
our
Bermuda
electric
utility;
and
ESSAL,
our
Chilean
water
utility
as
both
acquisitions
closed
during
Q4
of
2020.
Results
also
benefited
from
new
rates
implemented at
CalPeco
and
Granite
State
Electric
Systems
as
well
as
Park
Water
and
Apple
Valley
Water
systems
in
California.
This
was offset
by
lower
consumption
driven
by
milder
weather. Results
were
also
impacted
by
higher
non-pass
through
fuel
costs
at
Empire
Electric
as
well
as
higher
operating
costs
at
Granite
State
and CalPeco.
The
Renewable Energy
Group
reported
fourth
quarter
divisional
operating
profit
of
$123.9
million,
which
compares
to
$97.9
million
in
the
same
quarter
last
year,
an
increase
of
about
27%.
The
addition
of
the Sugar
Creek
and
Maverick
Creek
wind
generation
facilities
contributed
to
the
year-over-year
increase
in
operating
profit.
Our
investment
in
Atlantica
also
continued
to
provide
benefits
with
dividends
received
increasing
by
$4.4
million
over
the
prior
year.
Q4
also
benefited
from
the
sale
of
our
New
Market
Solar
facility
to
a
joint
venture
with
our
renewable
construction
partner
Ares,
resulting
in
a
recognized
gain
reflecting
a
step-up
in
the
value
created
through
the
development
process.
However, this
increase
was
partially
offset
by
lower
overall
production
on
some
of
our
wind
and
solar
generation
facilities
and
higher
operating
costs,
while
performance
at
our Sanger facility
was
negatively
impacted
this
quarter
by
higher
compliance
costs
and
lower
capacity
payments.
Our
investment
in
the Texas
Coastal
Wind
Facilities
was
also
negatively
impacted
by
higher
than
expected
basis
cost,
lower
than
expected
production
and
an
acceleration
of
HLBV
losses
of
$9
million
related
to
Q1
hedge
settlements
caused
by
winter
storm
Uri
that
were
expected
to
largely
reverse
in
the
future.
Fourth
quarter
corporate
expenses were higher
by
approximately
$10.5
million
as
compared
to
last
year,
driven
primarily
by
higher
administrative
expenses
and
higher
overall
net
development
expenses
as
compared
to
last
year.
In
total,
our
Q4
Adjusted
Net
Earnings
per
share
came
in
at
$0.21,
which
is
in
line
with
last
year.
In
addition
to the
drivers
discussed,
our
results
were
negatively
impacted
by
financing
costs
associated
with
the
capital
deployed
in
2021
and
an
increase
in
the
weighted
average
shares
related
to
the
Kentucky
Power
acquisition
funding.
For
the
full
year,
Adjusted
Net
EPS
came
in
at
$0.71
and
compares
to
$0.64
reported
in
the
prior
year,
representing
an
annual
growth
in
Adjusted
Net
EPS
of
11%,
showing
solid
year-over-year
growth.
Although
we delivered
strong
results,
we
did
encounter
various
headwinds
throughout
the
year.
As
a
result
of
record
load
wind
resources
experienced
throughout
the
early
part
of
the
year,
which
was
an
industry-wide
phenomenon,
generation
on
our
wind
facilities
was
down
approximately
10%
from
long-term
averages.
Also, much
warmer-than-normal
weather
in
the
Midwest
negatively
affected
customer
usage
in
the
early
and
latter
parts
of
the
year.
Compared
to
normalized
weather
patterns,
this
represents
an
impact
of
approximately
$48
million
on
our
2021
operating
profit,
or
about
$0.055
on
our
Adjusted
EPS.
Moving
on
to the
balance
sheet
and
financing
activities.
First,
I
wanted
to
spend
a
few
minutes
to
provide
an
update
on
our
progress
towards
the
financing
of
the
Kentucky
Power
acquisition.
On
announcement of
the
deal
back
in
October
of
last
year,
we
executed
a
Canadian
dollar
bought
deal
offering
of
common
shares,
raising
a
US
dollar
equivalent
of
approximately
$640
million
in
proceeds.
Early
this
year,
we
issued
approximately
$1.1
billion
of
hybrid
debt
and
a
concurrent
public
offerings
in
the
US
and
Canada.
Recall
that
hybrid
debt
receives
50%
equity
credit
from
S&P
and
Fitch
and
never
converts
to
common
shares.
We
have
issued
this
financing
on
an
attractive
expected
10-year
rate
of
approximately
4.95%
after
factoring
hedging.
That brings
the
total raise
for
the
transaction
to
just
over
$1.7
billion
towards
the
$2.8
billion
purchase
price. On
closing,
we
expect
to
assume
approximately
$1.2
billion
of
Kentucky
Power
company
debt
of
which
approximately
$500 million
is
targeted
to
be
refinanced
using
Liberty
Utilities'
established
144A
debt
platform,
which
we
would
expect
would
benefit
our
future
Kentucky
customers.
We
continue to
see
this
acquisition
as
providing
compelling
value
and
look
forward
to
closing
later
this
year.
Moving
on
to
the
broader
capital
and
financing
plan.
In
2021,
Algonquin
deployed
$3.7
billion
of
capital
on
our
organic
initiatives
relating
to
the
safety,
reliability
of our
electric,
water
and
gas
systems,
as
well
as
delivering
new
renewable
generation
from
our
projects,
including
Maverick
Creek
Wind,
Altavista
Solar
and
our
Midwest
Greening.
For
2022,
Algonquin
is
targeting
to
spend
over
$4.3
billion
in
capital,
with
the
majority
related
to
the
acquisitions
of
New
York
American
Water,
which
closed
earlier
this
year
and
Kentucky
Power,
which
is
expected
to close
in
the
middle
of
this
year.
Our
funding plan
for
the
remainder
of
the
year
is
predicated
on
maintaining
a
strong
and
resilient
balance
sheet,
targeting
a
BBB
investment-grade
credit
rating.
I
spoke to
the
funding
associated
with
the
Kentucky
Power
acquisition
already.
The
remaining
funding
requirements
can
be
solved
by
a
combination
of
various
funding
sources
available
to
us,
including
retain
cash,
some
more
hybrid
debt,
proceeds
from
securitization
of
certain
regulatory
assets
and
as
well
as
issuance
of
long-term
debt.
As
we
discussed
during
our
Investor
Day,
asset
recycling
or
selling
down
a
portion
of
our
non-regulated
renewables
can
also
be
viewed
as
another
source
of
potential
value-accretive
capital
for
us
this
year.
Considering
the
various
funding
sources
available,
we
do
not
expect
to
raise
additional
capital,
but
we
have
issuance
of
discrete
common
equity
for
the
remainder
of
this
year.
Our
funding plan
is
supported
by
a
strong
liquidity
position.
At
the
end
of
2021,
we
had approximately
$2
billion
of
committed
capital
in
reserves
available,
not
counting
the
acquisition
facility
that
was
arranged
in
connection
with
the
Kentucky
Power
transaction.
Before turning
things
over
to
Arun,
I'd
like
to
provide
a
brief
update
on
our
2022's
Adjusted
Net
EPS
guidance.
We
continue
to
expect
our
2022
Adjusted
Net
EPS
per
share
to
be
within
a
range
of
$0.72
to
$0.77,
which
was
communicated
previously
at our
Investor
Day.
We
continue
to
assume
in
our
earnings
guidance,
normalized
weather
patterns
and
rate
decisions
in
line
with
expectations,
as
well
as
resource
production
and
realized
pricing
at our
renewable-generating
facilities
consistent
with
long-term
averages.
We
also
assume
that
there
are
no
impacts
from
COVID-19
on
our
operations.
We
look
forward to
continuing
to
deliver
solid
earnings
from
our
diversified
and
growth-oriented
business
model,
which
along
with
our
history
of
superior
dividend
growth,
we
believe,
will
continue
to
drive
strong
shareholder
return.
With
that,
I
will
now
hand
it
back
to
Arun
to
outline
our
strategic
plans.
Thanks,
Arthur.
Before
we
close
out
our
prepared
comments
this
morning,
I
want
to give
an
update
on
our
strategic
initiatives.
At
our
December
Investor
Day,
we
updated
our
five year
capital
investment
program,
which
projects
$12.4
billion
from
2022
through
the
end
of
2026
with
a
very
visible
capital
plan.
Of
that,
we
have already
closed
on
New
York
American
Water
earlier
this
year,
executing
on
approximately
$600
million
of
the
capital
plan
in
January.
On
the Regulated
side
of the
business,
the
additions
of
New
York American
Water
and
Kentucky
Power
are
expected to
drive
long-term
Adjusted
Net
EPS
growth,
while
a
large
portion
of
the
capital
plan
is
being
spent
on
organic
investments
to
improve
the
safety,
reliability
and
resiliency
of
our
network.
On
the
Renewable side,
we
are
excited
about
the
growth
potential
and
believe
that
we
have
a
once
in
a
generation
opportunity
to
accelerate
renewables
growth
and
add
shareholder
value.
In
just
over
a
period
of
one
year,
we
have
made
investments
and have
grown
our
prospective
greenfield
pipeline
from
3,400
megawatt
to
3,800
megawatts,
while
converting
640
megawatts
from
that
greenfield
pipeline
into
our
new
five year
capital
plan.
We
also introduced
our
new prospective
pipeline
of
storage
opportunities
of
1,700
megawatt
hours
at
our
December
Investor
Day.
We
believe
this
validates
the
strength
of
our
development
platform.
We
now
have
scale
across
both
our
development
platform
as
discussed,
and
we
own
and
have
investments
in
over
4,000
megawatts
of
renewable
generation.
At
our
Investor
Day,
we
spoke
of
accelerating
renewables
growth
and
adding
shareholder
value
as
we
plan
to
increase
our
investments
in
greenfield
development,
which
we
expect will
allow
us
to
capture
the
higher
development
margins
and
take
a
number
of
those
projects
through
construction.
Once
in
construction, we
see
an
opportunity
to
partner
with
institutional
investors
wishing
to
make
alternate,
sustainable
investments
with
our
ability
to
develop
and
deliver
on
long-term
contracted
sustainable
assets.
In
particular,
we
should
be
able
to
sell
down
to
the
investors,
while
earning
an
operating
fee.
We
could
then
deploy
some
or
all
of
the
capital
gains
in
further
greenfield
development,
creating
a
potential
new
recurring
source
of
earnings
for
our
investors.
With
scale,
we
expect
to get
incremental
benefits,
including
improved
negotiating
power,
lower
transaction
costs
and
access
to
greater
opportunities.
We
are
on
our
way
to
completing
planning
and
plan
to
execute
this
strategy
in
2022.
I'm
excited
about
the
prospects
for
Algonquin's
Regulated
and
Renewables
businesses,
which
are
both
well-positioned
to
contribute
to
and
benefit
from
the
decarbonization
transformation
that
is
currently
underway
and
which
will
only
accelerate
over
the
coming
years.
In
summary,
our
three
strategic
pillars
of
operational
excellence,
growth
and
sustainability
would
be
a
key
foundation
as
we
continue
to
build
the
business
and
strive
to
bring
long-term
value
to
our
shareholders.
We
remain
well-positioned
to
continue
to
execute
on
our
growth
strategies,
while
pursuing
our
sustainability
goals.
With
that,
I
will
turn
the
call over
to
the
operator
for
any
questions
from
those
on
the
line.
[Operator Instructions]
Your
first
question
today
comes
from
the
line
of
Sean
Steuart
with
TD
Securities.
Your
line
is
now
open.
Thank
you.
Good
morning,
everyone.
Good
morning,
Sean.
Good
morning.
A
couple of
questions,
the
New
Market
Solar
Project
sale
to
the
joint
venture
with
Ares,
how
should
we
think
about
that
project
pipeline
going
forward
for
future
sales
into
that
vehicle?
Sure, Sean.
So,
look,
we
have
been
talking
a
few
times
now
about
the
ability
for
us
to
provide
recurring
shareholder
value
through
the
growth
of
our
development
and
construction
pipeline.
And
so
what
I
talked
about
towards the
end
of
my
presentation
was
really
how
that
New
Market
Solar
also
fits
into
our
strategy
of
producing
recurring
shareholder
value
through
such
sell-downs.
So
because
of
the
fact
that
we
believe
it's
going
to be
a
recurring
source,
we
thought –
believe
it
is
prudent
to
knot
just
that
out
of
our
earnings.
Okay.
Understood.
The
pace
going
forward,
though,
for
future
projects
to
be
sold
into
that
vehicle,
any
context
you
can
provide
there?
Well,
we're
about
done
with
our
planning
process,
I mean
starting
our
execution
process
on
that,
Sean.
So,
we'll
probably
be
able
to
give
a
lot
more
detail
at
that at the
next
quarterly
call.
Okay.
Thanks
for
that.
The
Sandhill
acquisition
and
I
guess
context
on
the
amount
of
capital
you
expect
to
invest
into
those
projects,
and more
broadly
speaking,
larger
investment
opportunities
for
whether
it's
RNG
or
other
energy
transition-type
investments.
Any
details
you
can
provide
on
that
front?
Hey, Sean,
it's
Jeff.
Yeah,
I
think
the
Sandhill
acquisition
and
the
four
projects
are
anaerobic
digesters.
And
so,
they're
relatively
small
in
terms
of
CapEx.
It's
important
to
us
because
of
the
benefits
of
advancing
RNG
and
improving
our
knowledge
in
that
area,
more
so
than
an
absolute
capital
play.
That
being
said,
we
do
see
RNG
expanding.
RNG
includes
hydrogen.
And
so,
as
we
start
to
build
our
knowledge,
start
to
build
how
we
trade
and
expand
more,
we
do
see
that
as
an
important
area.
But
there's
still a
lot
of
information
to
unfold.
Okay.
Thanks,
Jeff.
That's
all
I
have
for
now.
Thanks,
guys.
Thanks,
Sean.
Your
next
question
comes
from
the
line
of
David
Quezada
with
Raymond
James.
Your
line
is
now
open.
Thanks.
Morning,
everyone.
My
first
question
here,
just
on
New
York
American
Water,
now
that
that's
closed,
I'm
curious
what
kind
of
potential
you
see
there,
I
guess
for
spending
CapEx
either
organic
or
otherwise.
I
think
at
the
time
of
the
acquisition, there
were
some
talk
about
opportunities
for
consolidation
there. So,
any
thoughts
around
that
would
be
appreciated.
Look,
I
mean, we
are
very
much
in
the
planning
process
for
continued
investments
in
New
York
American
Water.
Our
next
rate
case
is
not
due
for
some
time.
But,
as
with
all
of our
other
utilities,
we
continue
to
invest
in
the
safety
and
reliability
and
resiliency
of
that
water
system
as
with
anything
else.
Now,
given
our
unique
positioning
in
terms
of
renewable
energy,
as
you
know, there's
quite
a
bit
of
energy
required
to
transport
water.
One
of
the
unique
things
we
do
do
is
look at
opportunities
to
see
how
we
can
substitute
the
current
energy
profile
with
our
renewable
energy
generation
to
serve
our
water
utilities
also,
which
I
think
is
a
unique
capability
that
we
have.
And
we
have
utilized
that
already.
So
that's
something
we're
taking
a
close
look
at
as
well.
Excellent.
Thanks,
Arun.
Maybe
just
one
more
from
me
just
on
the
topic
of
cost
inflation,
and I'm
thinking
specifically
about
your
Regulated
business.
Curious
if
you've
had
any
discussions
with
regulators,
especially
on
your
active
regulatory
dockets,
if
inflation
has
been
raised
as
a
concern
there
at
all
and
how
are
those
discussions
going.
Sure.
Look,
David,
I
mean,
inflation
is
the
current
topic
du jour,
right?
So
obviously
we're
seeing
more
inflation
than
we
have
seen
in
the
past,
probably,
what,
10, 15
years
at
least,
I
think.
On
the
Regulated
side
of
the
business,
look,
I
mean,
inflation
is
largely
a
pass-through.
But
at
the
same
time,
we
are
acutely
aware
of
the
potential
impact
on
customer
affordability,
so
we
track
that
extremely
closely.
And
that's
a
continuing
source
of
discussion
we
have
with
the
regulators
on
how
to
balance
all
the
cost
increases
vis-à-vis
the
right
level
of
customer
rate.
On
the
renewable
energy
side,
it's
largely
a
function,
in
our
minds,
of
you have
three
significant
contracts
on
the
renewable
energy
side,
right?
You've
got
your
large
equipment
contracts, you've
got
your EPC
contracts,
you've
got
your
offtake
contracts.
Once
you
sign
those
three
agreements,
all
of
them
are
fixed
price
contracts.
And
so,
in
our
mind,
the
strategy
that we
employ
is
trying
to
sign
those
three
contracts
as
closely
concurrently
as
possible,
so
that
we
are
not
left
holding
the
inflation
risk.
So –
and
that's
the
way
we've
been
able
to
protect
our
return
margins.
Excellent.
Appreciate
the
color.
Thanks,
Arun.
That's
all
I
had.
Thank
you,
David.
Your
next
question
comes
from
the
line
of
Rob
Hope
with
Scotiabank.
Your
line
is
now
open.
Good
morning,
everyone.
First
question
is just
on
the –
it
looks
like
a
little
bit
of
a
pivot
on
the
renewable
power
strategy
to
a
bit
more
of
a
capital
light
strategy.
Is
this
what's
driving
the
investment
in capital
projects
in
the
Renewable
Energy
Group
of
$5
million
to
$30 million
in
2022?
Because,
if
I
look
at
slide
7,
it
looks
like
it
should
be
a
relatively
busy
year.
So
is
the
assumption
that
you're
going to
be
kind
of
bending
down
more
than
half
of these
projects,
equity
count
for
them
and
kind
of
recoup
your
capital
here
pretty
quick?
That's
basically
it,
Rob.
What
you're
seeing
there
is
basically
the
spend
that's
really
beyond
balance
sheet
spend,
but
obviously,
a
lot
of
activity
going
on
in
the
year
and
certainly,
a
lot
of
development
spend
and
continuing
construction
spend,
but
that
spend
is
mostly
reflected
in
our
construction
JVs.
And
that
activity
is only
likely
to
keep
on
increasing,
Rob.
And
that's
why,
if
you
notice,
we've
started
including
a
slide
that
shows
you
the
level
of
construction
activities,
which
is
fairly
significant.
So
we
have
not
slowed
down
in
terms
of
continue
to
advance
our
greenfield
projects
through
the
development
process,
through
construction
and
into
operations.
All
right, that's
helpful.
And
then,
I
guess
the
question
is,
how
should we
think
about
the
$3.6
billion
of
CapEx
that
you
put
forward
at
your
Investor
Day?
Is
that
then
more
of
a
100%
number
and
then
net
to
AQN
could
be
significantly
smaller,
then
we'll
add
on
more
projects
as
they
come?
Yeah.
You
could
think
of
that
as
the
gross
number.
I
mean,
obviously,
as
we
think
about
how
much
is
actually
retained
versus
monetized
and
so
forth
would
be
determined
in
the
future.
All
right. Thank
you.
Thanks,
Rob.
Your
next
question
comes
from
the
line
of
Nelson
Ng
with
RBC
Capital.
Your
line
is
now
open.
Great.
Thanks
and
good
morning,
everyone.
Just
a
quick
follow-up
to
that
question
in
terms
of
the
JV.
So
can
you
give
a
bit
more
color
on
your
relationship
with
the
Ares
Management?
Are
they
a
long-term
buyer
of
your
assets?
Is
that
part
of
the
plan?
Yeah.
Nelson,
it's
Jeff.
I
wouldn't
characterize
it
as
a
long-term
buyer, so
we've
got
a
strong
relationship
with
Ares,
and
we
expect
to
do
more
than
one
transaction
with
them.
But
it's
not
an
exclusive
relationship.
And
I
think
there's
a
very
robust
market
out
there
and
we
want
to
keep
our
options
open.
Okay.
So,
I
know
in
the
past
you
would
move
assets
into
a JV,
have
it
constructed.
And
then
at
the
end,
you
would
usually kind
of
buy
it
back
at
a
nominal
price.
But
this
isn't
the
case,
right?
Ares
will
be
a
long-term
equity
shareholder
in
New
Market
and
the
other
assets.
Is
that
right?
Yeah.
There's
two
elements
to
think
of
– on
that.
The
first
one
is
on
the
development
side,
where
we
are
moving
projects
through
and
are
participating
in
the
risk
on
those
projects.
And
then
there's
the
construction
type
JVs.
I
think
the
primary
difference
is
Ares
–
the
primary
difference
between
the
original
construction
projects
and
this
would
be, we
may
not
take
them
back
at
the
end,
but
it
may
not
be
Ares that
has
the
long-term
hold.
There
may
be
a
third-party
that
picks
up
thereafter
as
well.
So,
that's
not
absolutely
certain
at
this
time.
Okay.
Thanks. And
then just
one
last
follow-up
question,
in
terms
of
timing,
so
is
it
the
plan
to
have
things
sold
down
and
move
to
a
JV,
I
guess,
on
financial
close
or
just
prior
to
construction
or
during
construction,
rather
than
on
or
after
completion?
I
presume
there's
still
a
bit
of
extra
value
to
be
had
if
after
you
hit
COD.
The
plan
is
that
we're
in
the
best
position
to
de-risk
these
projects
through
development
and
through
construction.
But
those
are
clearly
areas
of
expertise
we
have
and
take
them
through
a
certain
period
of
operation,
take
care
of
all
the
initial
bidding
down
issues
[indiscernible]
(00:38:40) and
then
sell
them.
[indiscernible]
(00:38:45)
Okay.
Thanks
for
that. Yeah. Sorry go
on.
No.
I was
just
going
to
add,
and
I
mean –
so,
with
the
construction
JVs,
Algonquin
still
looks
to
retain
the
full
obviously
outside
value
throughout
the
construction
cycle.
Okay.
Got
it. All
right,
I'll
get
back
in
the
queue.
Thanks,
everyone.
Thanks,
Nelson.
Your
next
question
comes
from
the
line
of
Ryan
Greenwald
with
Bank
of
America.
Your
line
is
now
open.
Hey.
Good morning,
everyone.
Maybe
starting
with
any
additional
color
how
you're
thinking
about
the
dividend
growth
going
forward?
Looks
like
excluding
the
gain
on
the
sale
here,
you
guys
were
tracking
at
approximately
100%
payout
ratio.
So
any
way
to
help
frame
how
you're
thinking
about
that
ahead
of
the
annual
cadence
in which
you
would typically
revisit
it?
Yeah. I'd
say
it's
– our
stance
really
hasn't
changed
what
we
communicated
previously.
Look,
our
dividends,
we
certainly
want it
to
be
a
sustainable
dividend.
And
I
think
we've
communicated
in
the
past
an
80%
to
90%
payout
ratio
target.
I
mean,
it's
a
long-term
target
that
we're
targeting
between
80%
to
90%,
so
there
is
going to
be
a
lumpiness
in
certain
years.
But
from
an
overall
long-term
perspective
that
that's
where
we
end
up
seeing
and
certainly
do
see
some
further
dividend
growth
as
well.
Got
it. That's
helpful.
And
then
in
terms
of
the
sale
to Ares
instead
of AY, can
you
just
talk
about
that
and
how
you're
thinking
about
the AY relationship
going
forward?
Look,
the AY relationship
remains
strong,
right?
I mean,
you
saw
we
have
dropped
down
some
other
assets
into AY
as
well.
Like
I've
told
multiple
times,
I
mean,
we
like
the
ESG
profile
of
Atlantica,
so
the
relationship
remains
strong.
And
I
just
want
to remind
folks
that
in
the
whole
construct
around –
with AY
and
the
dropdowns
were
that
it
is
going
to
be
around
non-regulated,
non-North
American
assets,
right?
So
this
does not
obviously
necessarily
fall
into
that
category.
So
I
think
as
a
company,
as
we
grow
our
Renewables
portfolio,
we
find
ourselves
in
a
good
position
that
we
have
multiple
options.
Yeah. Understood.
And
then
maybe
just
one
more, if
I
may.
In
terms
of your
appetite
for
further
M&A
and
the
market
environment, can
you
touch
on
that
a
bit?
And
then
perhaps
separately,
given
where
LDCs
have
been
transacting
from
a
private
valuation
perspective,
would
a
regulated
divestment
be
on
the
table
or
is
any
asset
recycling
going to
be
more
on
the
Renewable
side?
Look,
I
mean, Ryan
and I
will
tell
you
that
we're
always
looking
to
increase
shareholder
value.
And
then
we're
never
closing
any
doors
and
saying,
there
are
no
sacred
cows
here,
right?
Having
said
that,
from
a
strategic
perspective,
when we
look
at
all
of
our
assets
in
our
portfolio
and
given
the
external
market
as
well,
we
believe
that
the
fourth
phase
is
really
the
sell-down
on
the
Renewable
side
of
the
business
because
we
see
our ability
to
be
able
to
control
more
that
development
pipeline,
the
construction
pipeline,
the
flow
of
the
number
of
projects
into
operations.
So,
it's
a
much
more
recurring
and
it's
a
much
more
controllable
piece
of
recurring
shareholder
value
rather
than
one-offs
right
now.
Having
said
that,
we're
not
against
doing
one-offs
either
and
so,
one
of
the
ways
we
look
at
that
is,
is
any
particular
asset
more
valuable
under
our
ownership
versus
in
somebody
else's
ownership.
So,
that's something
we're
always
looking
at.
Great.
I'll leave
it
there.
Thanks
so
much
for
the
time.
Thanks,
Ryan.
Your
next
question
comes
from
the
line
of
Ben
Pham
with
BMO.
Your
line
is
now
open.
Hi.
Thanks. Maybe
I
want
to
start
off
–
to
follow
up
on
I mean
some
of
the
questions
you
had
on
Ares
and
some
of
the
structures
that
you
utilize.
And
I'm
wondering
when
you
look
at
asset
dropdowns
or
asset
sales,
like
how
do
you
position
where
it
fits?
Is
Ares
many
development
construction,
AY,
operating
assets
and
then
you
compare
that
to
third-party?
How
do
you
– there's
a
bunch
of
different
structures
going
so
it
would
be
interesting
to see
how
you
think
about
where
things
fit?
So
basically,
when
we
look
at
development
and
construction, one
of
the
options
we
have,
obviously,
is
to
utilize
this
joint
venture
with Ares,
right?
So
we
do
not
have
any
other
–
but
we
could
develop
it
totally
ourselves
as
well,
so
we
have
that
flexibility
of
doing
either
or. We
are
not
normally
developing
projects
or
going
through
construction
with
Atlantica.
On
the
operational
side,
by
and
large,
we
are
the
operating
entity
on
our
asset
base
and
Atlantica
is the
operator
on
their
set
of
assets.
I
mean,
we
obviously
try
to
learn
from
each
other,
but
those
are
two
separate
operation
platforms.
Okay.
And
then
your
2022
guidance
or
even
thinking
the
7%
to
9%,
I
would
assume,
correct
me
if I'm
wrong,
there's
a
dropdown
element
baked
into
those
numbers?
Yeah.
We
do
certainly
look
at
extracting
value
out
of
our
greenfield
development
pipeline, and
we
have
baked
that
into
the
guidance.
Now,
whether
it's
a
pure
dropdown
or
a
pure
gain
or
whether
it's
to
extract
it
through
different
ways
such
as
management
fees
and
so
forth,
that's
to
be
still
worked
through. But
there
is
certainly –
and
we
are
looking
at
it is
obviously
some
of
the
value
created
through
our
current
growth
pipeline.
Okay.
I
understand.
And
then
my
last
one,
you
mentioned
some
of
the
bridges
on
the
funding
for
Kentucky
Power.
I
wasn't
sure,
Arthur,
were
you
suggesting
that
you're
now
fully
funded
for
Kentucky
Power
or
there's
still
a
slice
left?
Yeah,
we're
basically
done
in
terms
of
the
notional
amounts
for
Kentucky
Power
with
our
hybrid
debt
of
$1.1
billion,
which
we
funded
the
cash
purchase
price.
Now,
we
obviously
need
to
kind
of
put
everything
into
the
mix
and
make
sure
our
credit
metrics
come
out
right
on
the
other
side
of
all
of
this.
So
the
rest
of
our
funding
plan
certainly
considers
that.
Okay.
Got
it.
Okay.
Thank
you.
Your
next question
comes from
the
line
of
Andrew
Kuske
with
Credit
Suisse.
Your
line
is
now
open.
Thanks.
Good
morning.
I
guess
the
first
question
is
really
around
the
ability
to
monetize
certain
assets,
portions
or
entirely
and
then
use
those
proceeds
to
effectively
accelerate
growth.
All
that
can
be
pretty
compelling.
But
how
do
you
balance
just
a
more
complicated
structure
versus
being
more
simple,
and
how
do
you
think
about
that,
whether
the
financial
term
sort
of
warm
or
fuzzy
kinds
of
feelings?
Andrew,
great
question.
Thank
you.
So,
fundamentally,
if
you
really
look
at
it,
what
we're
trying
to
do
is
leverage
two
specialized
skill
sets
we
have,
right,
one
on
the
development
side
and
one
on
the
operational
side.
And
I
think
over
the
years
now,
we
have
a
certain
level
of
skill
on
both
sides
of
the
business,
and
we
believe that
we
should
be
able
to
just
accelerate
that
growth
by
utilizing
and
leveraging
those
specialized
skill
sets
even
more
in
a
given
external
environment
and
the
whole
decarbonization
thesis
that's
out
there,
right?
So
that's
really
the
fundamental
thesis.
Now,
obviously, to
grow
significantly
along
that
renewable
energy
portfolio,
you
obviously
need
to
access
a
lot
of
capital.
And
our
view
is
that,
again,
looking
at
the
external
market
with
the
amount
and
number
of
sustainable
investors
out
there,
we
believe
that
we
should
be
able
to
sell
down
to
those
sustainable
investors
at
a
point
where
we
can
provide
recurring
value
to
our
shareholders,
right?
So
that's
really
the
thesis
of
that
flywheel,
if
you
will,
continue
to
expand
our
renewables
greenfield
pipeline,
taking
those,
de-risking
those
through
development,
construction
and
operations,
selling
down,
redeploying
that
capital
back
into
more
renewables
growth.
That's helpful.
Appreciate
that.
And
then
maybe
just thinking
about
that
flywheel
and
your
businesses
and
the
transactional
marks
we've
seen
in
the
US
more
recently
on
the
LDC side.
Is
there
an
opportunity
to
really
focus
your
expertise
in
both
the renewables
business
and
the
utilities
business
more
broadly
through
the
Caribbean
because you've
got
the exposure
in
Bermuda?
But
there's
other
assets
there
that
do
have
good
decarbonization
stories,
renewable
needs
and
offer
just
more
compelling
value
from
an
investment
standpoint.
How
do
you
think
about
that
region
more
broadly?
Well,
we're
attracted
to
Bermuda
from
a
lot
of
different
factors,
including
the
– we
even
looked
at
things
like
hurricane
profiles,
things
of
the
sort.
Bermuda
does experience
fear
of
hurricanes
and
then
the
other
parts
of
the
Caribbean.
So
there's
obviously
a
lot
of
things
we
look
at
when
we
look
at
any
acquisitions.
Scale
is
important,
we
believe
in
terms
of
being
able
to
do
a
lot
more
with
less.
So
building
scale
across
any
one
of
our
three
modalities,
especially
electric
and
water
are
things
that
we
look
at
very
closely.
But
again,
we
end
up
looking
at
a
lot
more
opportunities
than
in
terms
of
executing
against
those
just
because
we
continue
to
be
extremely
disciplined
around
which
assets
we
bring
under
our
fold.
We
just
have
a
lot
of
financial
metrics,
risk
metrics
that
we
need
to
[indiscernible]
(00:50:08).
But
again,
I
hope
I'm
answering
your question,
Andrew.
It's
a
longwinded answer.
It
wasn't a
concise
question
either,
so
I
appreciate
the
time.
Sure.
Your
next
question
comes
from the
line
of
Naji
Baydoun
with
Industrial
Alliance.
Your
line
is
now
open.
Hi.
Good
morning.
Just
wanted
to
start
off
with
I
guess
a
clarification
on
the
balance
of
funding
for
this
year,
so
the
large
debt
offering.
And
in
terms
of
the
priorities
for
asset
recycling,
can
you
just
clarify
if
you're
thinking
about
existing
asset
monetizations
or
non-core
asset
sales
or
is
it
really
just
more
focused
on
developmental
loans
for
this
year?
Hey,
Naji, It's –
so
for
this
year,
I
mean,
as
we
think
about
our
funding
plan,
look,
we've
got –
I
would say,
first
of
all,
we
got
optionality.
As
always,
we've
got
a
lot
of
different
funding
sources
that
we
can
look at
the
top.
I
mean,
asset
recycling
is
certainly
one
of
those
funding
sources
and
that
would
potentially
come
from
existing
assets
that
are
in
our
fleet.
But
again,
it's –
we've
got
quite
a
lot
of
funding
sources
to
potentially
satisfy
what
we
needed to
do
this
year.
Okay.
So there's now
I
guess,
a
necessity
in
terms
of
accelerating
some
of
that
here
in
the
short-term.
Yeah.
Okay.
Just
the
other
question
I
have
was
about
the
accelerating
renewables
growth
that
you
mentioned.
I
know
they
have
a
lot
of
projects
in
the
pipeline
for
this
year,
but
maybe
just
beyond
2022 and
2023.
Can
you
just
give
us
an
update
on
how
the
new
development
projects
are
going
that
could
potentially
extend
that
runway
over
time?
Naji,
it's
as
Jeff
and
I
think
everyone
referred
to
our
greenfield
pipeline,
the
3,800
megawatts
which
we
rolled
out
at
Investor
Day.
That
is
what
we
see
feeding
our
five year
capital
plan.
And
we
continue
to
add
to
that
pipeline,
as
well
as
advance
the
projects
in
that
pipeline
for
pulled
down
into
the
capital
plan.
So
we
feel
like
we've
got
the
pump
well
primed
or
the
flywheel
turning
here.
And
we're
making
good
progress
across
the
spectrum
from
new
entrants
into
that
greenfield
pipeline,
pulling
stuff
out
into
the
capital
plan.
And
so 2022, 2023, 2024,
we
won't
be
able
to
say
anything
concrete
until
we
have
names
ready
to
share
with
you.
But
the
process
is
certainly
working
well.
And
on
top
of
that,
we
also
showed
you
the
1,700
megawatt
hours
of
storage
pipeline,
which
we're
pretty
bullish
about.
Of
course,
and
again,
just
to
be
clear,
I
think you
said
you
are
looking
to
add
about
1
gigawatt
of
new
projects
in
the
next
five
years.
So,
are
you
– do you
feel
that
you're
still
on
track
to
do,
at
least 200
megawatts
this
year
of
new
development?
Yes,
in
terms
of
new
development
that
would
fall
under
the
capital
plan
that
we
share
at
Investor
Day,
we
would
expect
that
at
least
200 megawatts.
Yeah. Okay.
Got
it. Thank you.
Yeah.
Thank
you,
Naji.
Your
final
question
today
comes
from the
line
of
Rupert
Merer
with
National
Bank.
Your
line
is
now
open.
Hi,
good
morning,
everyone.
And
another
question
on
asset
recycling,
I'm
afraid.
Can
you
talk
about
the
potential
to
sell
your
existing
assets?
Are
you
only
looking
to
do
sell-downs
on
development
assets
or
could
you
do
sell-downs
on
existing
assets
as well?
Hey,
Rupert,
it's
Jeff.
Yeah,
existing
assets
are
certainly
on
the
table,
and
we
believe
they've got
good
value,
given
the
transactions
we're
seeing
in
the
market.
And
to
the
extent
that
we're
looking
to
monetize
anything
in
the
shorter
term,
that's
where
the
more
material
amount
would
be.
And
then
would
you
look
to
aim
or
look
to,
say,
control
51%
of
assets
in
the
future,
so
you
are
going
to maintain
control
and
then
you
have
a
joint
venture
accounting
somewhat
like
you
have
with
your
Texas
assets?
Not
necessarily, Rupert.
I
mean,
we
have
not
decided
exactly
what
level
of
ownership
we're
going
to
take.
I
believe
what
is
more
important
for
us
is
to
make
sure
we
are
operating
an
asset
management
entity,
because
again,
creating
and
furthering
skill
on
that
side
of
the
business
also
continue
to
be
important
for
us.
So, that's
what
we're
focused
on,
exactly
what
percent
is
we sell
down,
that's
still in
the
planning
stages.
Great.
And
then
just
finally
on
Texas,
you
saw
some
headwinds
at
the
Coastal
Wind
assets.
I
know
you
gave
us
some
color
on
that
situation
back
in
December,
just
wondering
if
you
could
walk
us
through
what
you
saw
in
Q4
and
what
the
outlook
is
for
these
assets
going
forward.
I
understand
you're
looking
at
improved
transmission
there
over
time.
But
what
does the
outlook
look
like
for
the
remainder
of
this
year?
Sure.
So,
Rupert,
so
there
are
really
a
combination
of
factors,
right,
on
those
Coastal
Wind
Facilities.
First
of
all,
there
was
lower
wind
resource,
which
again,
I
believe
is
an
industry-wide
phenomenon
that
affected
quite
a
number
of
our
North
American
wind
assets
in
2021.
On
top
of
that
and
during
periods
of
oversupply,
the
prices
were
obviously
lower
than
anticipated
in
the
market.
And
third,
one
of
the
projects
actually
got
to
COD
later
than
anticipated.
And
finally,
as
you
saw
that
was
late
of
the
year,
there
was
general
in transfer
income
stream
that
was
announced
by ERCOT.
So,
it
really
was
a
combination
of
factors.
We
believe
that
the
first
–
three
of
those
should
be
transitory.
The
fourth
one,
we
believe,
is
going
to
go
away
with
time
because
of
the
announcement
of
a
general
transfer
income
stream,
that
means
that
both ERCOT and
the
commission
have
already
approved
transition
upgrades
at
–
around
that
region
and
that
facility.
So,
we
believe
that
over
time,
starting
2024,
that
basis
risk
is
going
to
be
– should
significantly
go
away.
So
of
those
– the
four
factors
I
talked
about, three
of
them
are
transitory.
One,
we
believe
will
continue
until
2024.
Okay.
Very
good.
I'll leave
it
there.
Thank
you.
Okay.
Thank
you,
Rupert.
There
are no
further
questions
at
this
time. Arun,
I
turn
the
call
back
over
to
you.
Thank
you,
operator,
and
thank
you
everyone
for
taking
the
time
on
our
call
today.
With
that,
please
stay
on
the
line
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disclaimer.
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This
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