Algonquin Power & Utilities Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 9, 2025
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Operator

and welcome to the Algonquin Power and Utilities Corporation First Quarter twenty twenty five Earnings 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. I will now turn the conference over to Mr. Brian Chin, Interim Chief Financial Officer and Vice President of Investor Relations.

Operator

Please go ahead.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Thank you, operator, and good morning, everyone. Thank you for joining us for our first quarter twenty twenty five earnings conference call. Joining me on the call today will be Rod West, Chief Executive Officer and Sarah McDonald, Chief Transformation Officer. To accompany today's earnings call, have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and management discussion and analysis are also available on the website as well as on SEDAR plus and EDGAR.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

We'd like to remind you that our discussion during the call will include certain forward looking information and non GAAP measures. Actual results could differ materially from any forecast or projection contained in such forward looking information. Certain material factors and assumptions were applied in making the forecasts and projections reflected in such forward looking information. Please note and review the related disclaimers located on slide two of our earnings call presentation at the Investor Relations section of our website at algonquinpower.com. Please also refer to our most recent MD and A filed on SEDAR plus EDGAR and available on our website for additional important information on these items.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

On the call this morning, Rod will provide brief commentary on his first sixty days at Algonquin, followed by a review of key highlights and operational updates for the quarter. I will then detail our financial results. We will then open the line for questions. We kindly ask that you restrict your questions to two, then re queue if you have any additional questions to allow others the opportunity to participate. With that, I'll turn things over to Rod.

Rod West
Rod West
CEO at Algonquin Power & Utilities

Thank you, Brian, and good morning, everyone. Before I provide my opening remarks on the quarter and my first sixty days, I first want to acknowledge the heartbreaking incident that occurred on April 9 in Lexington, Missouri, within our gas service territory. As members of the community, our thoughts and prayers remain with the affected families whose lives have been devastated by the tragedy. Our hearts are with you. Nothing's more important to me and to this company than the safety of our customers, employees, and communities.

Rod West
Rod West
CEO at Algonquin Power & Utilities

We remain fully committed to working with the authorities to support the ongoing investigation into the cause of the accident, and we will continue to work in partnership with the community on restoration and recovery initiatives. Moving now to my comments on the quarter. I'd like to start things off by thanking you for your interest in Algonquin, for continuing to support the company through this transformative journey, and for welcoming Brian and I into our new respective roles. It's been a busy first sixty days for me having had the opportunity to meet with many of our stakeholders and visit several of our regional offices. My observations are consistent with the remarks I shared on the Q4 call.

Rod West
Rod West
CEO at Algonquin Power & Utilities

I see significant opportunity ahead, but there's still a tremendous amount of work to do. Algonquin has real potential to be a premium utility. We have a solid, diversified asset base and many talented and hardworking employees, but we have yet to consistently evidence the practices that set premium utilities apart from the rest. Some areas of improvement that come to mind include improving our customer outcomes first and community engagement, leveraging our economies of scale. I look forward to sharing more insights on our path forward.

Rod West
Rod West
CEO at Algonquin Power & Utilities

As promised, we plan to provide a forward looking multi year update on June 3, which falls approximately ninety days from our Q4 twenty twenty four call and my first day in the seat. Also, on June 3, I plan to share more of my observations regarding the company. And later this year, I do expect to provide a little more color into our longer term strategic thinking and positioning of the portfolio. With that, let's now turn to the operational highlights from the quarter. Starting with regulatory updates.

Rod West
Rod West
CEO at Algonquin Power & Utilities

On March 25, the New Hampshire Public Utilities Commission issued an order approving the Granite State Electric Settlement Agreement with new rates having taken effect on April 1. On April 21, the New Hampshire Commission further extended a stay of the Energy North gas rate case proceeding until May 30, allowing more time for settlement negotiations to be completed. On our Empire Electric Missouri rate case, the Commission extended the test year true up period from September 3024 to 03/31/2025, which provides an opportunity for us to capture capital invested during that time frame in our rate filing. Moving to a brief update on the Missouri Commission investigation into our customer service and billing issues. As stated on the Q4 call, the investigation opened at the February, and we have been working with the investigation team responding to data requests and providing answers to their questions.

Rod West
Rod West
CEO at Algonquin Power & Utilities

Shifting from state level rate cases to transmission. As discussed last quarter, the Southwest Power Pool, SPP, approved its 2024 integrated transmission plan, the largest portfolio of transmission projects ever undertaken by SPO, totaling roughly $7,700,000,000 A significant share of this transformative investment, approximately $750 to $800,000,000 is dedicated to strengthening the Empire District Electric Service Area, underscoring the region's critical role in the future of the grid. Within the Empire District Electric footprint, the approved upgrades encompass approximately 80 miles of 161 kV rebuilds or conversions, 90 miles of new three forty five kV transmission lines, and the construction of two large scale transmission stations. On April 23, Empire accepted the first tranche of Notices to Construct, or NTCs, for the 161 kilobytes portion of the portfolio. Empire has also received a second tranche of NTCs, and the next step is the official acceptance of the second tranche of NTCs submitted to SPP on or before June 19.

Rod West
Rod West
CEO at Algonquin Power & Utilities

We're excited for the opportunity these projects represent for our stakeholders. I'll now turn things back to Brian to review the financial highlights from the quarter. Brian?

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Thanks, Ron. In a short summary, it was an encouraging quarter for our key financial metrics. First quarter adjusted net earnings from continuing operations were 111,600,000.0 up from up 39% from $80,100,000 in 2024. '40 '3 percent increase of $40,800,000 in net earnings for the regulated services group was primarily due to the implementation of new rates of $15,700,000 and lower interest expense of $13,600,000 as a result of debt repayment with the proceeds from sales of the renewables business and our Atlantica stake. Our depreciation expense was relatively flat year over year.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Our usual organic growth in depreciation expense was partly offset by $8,200,000 in non recurring favorable pickups related to regulatory orders in New Hampshire and Arizona. The $13,400,000 increase in net earnings for the Hydro Group was primarily due to a one time tax recovery related to the sale of the renewable energy business. Our expectations of an effective tax rate in the mid to low 20% range for the year has not changed. And as we have said before, we do expect a bit of lumpiness in our quarterly tax profile. On the corporate side, our adjusted net earnings decreased by $22,700,000 related to the removal of Atlantica dividends.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Moving to our EPS walk, Q1 adjusted net earnings per share were $0.14 which is flat to last year's Q1 twenty twenty four adjusted net earnings per share of $0.14 which includes Renewables. And yet above last year's Q1 twenty twenty four continuing operations adjusted net EPS of $0.11 excluding Renewables. Starting with last year's $0.14 including Renewables, year over year drivers include a negative $03 attributed to the Renewables sale, an increase of $03 for new rate case contributions from New York Water, Velco and Mid States Gas, as well as increased customer demand, and another $02 of contribution from lower interest expense from use of renewables and Atlantica sales proceeds to pay down debt, net of financing for organic growth. Mirroring my earlier comments, we had approximately a penny pickup from nonrecurring items, favorable items, based on depreciation related to regulatory orders in New Hampshire and Arizona. Aside from the regulated business, we captured a zero two dollars increase for the one time tax recovery related to our Hydro Group, a decrease of $03 for the removal of the Atlantica dividend and a reduction of $02 for an increase in weighted average shares outstanding.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

For the last two quarters, our adjusted net EPS impact from dilution has been tracking to $0 each quarter. But since our results are proportionally skewed to Q1, this mathematically increased our dilution to $02 for this quarter. Let me pause here on non recurring items embedded in this walk. If one takes the positive $0 from regulatory orders related to depreciation and the $02 from the hydro tax recovery, our adjusted net EPS includes a total of $03 of favorable non recurring items in the quarter. And given our unchanged view of an effective tax rate in the mid to low 20% range, we expect a portion of the effective tax rate non recurring items to reverse over the remainder of the year.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

In keeping with our goal of reducing complexity, the company's financial disclosures now focus primarily on adjusted net earnings and adjusted net earnings per share and earnings per share as we view these as our key financial metrics. Our simplified financial disclosure includes net earnings from continuing operations separated into regulated hydro and corporate segments in our financial statement footnotes. A few comments now on our credit metrics. Simply stated, our credit metrics are healthy. For year end 2024, S and P indicated our FFO to debt was 12.5%, comfortably above the requisite BBB threshold of 11%.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Fitch indicated our debt to EBITDA was 5.6 times, appropriately below the requisite BBB threshold of 5.8. These metrics were measured before net deleveraging proceeds to continuing operations were received from the sale of the renewable energy business on January 8. And now back to Rod for closing remarks.

Rod West
Rod West
CEO at Algonquin Power & Utilities

Thanks, Brian. As per our press release this morning, I want to highlight to our listeners to save the date for our investor update call on June 3, which I referenced earlier. We expect this outlook, which will be primarily based on the current portfolio, will include projected adjusted net EPS ranges for '25, '20 '20 '6, and 2027, with more detailed thoughts on the company and its potential after my first ninety days. I also aim to share my broader strategic thinking on the broader portfolio later this year. Thanks to everyone for joining us on the call this morning.

Rod West
Rod West
CEO at Algonquin Power & Utilities

I am excited motivated by the opportunities ahead. And now the management team is available to answer your questions. Operator?

Operator

Thank you. If you have a question, please press 1 on your telephone Your first question comes from the line of Robert Hope with Scotiabank. Your line is open.

Robert Hope
MD - Equity Research at Scotiabank

Morning, everyone. I won't ask about the forward outlook, but maybe a little bit backwards looking. Rod, you've been here for a number of weeks, months now. Can you maybe walk us through kind of what you think the most impactful changes you've made organization so far have been?

Rod West
Rod West
CEO at Algonquin Power & Utilities

Yeah, it's interesting that you say months because it is literally two months. So the S in months look back is literally one month. But my focus and the initial impact has been setting a vision for what a premium pure play utility looks like, and setting the attributes of a pure play utility to the corporation, which informs the work we're doing to lower our overall cost profile to make room to do more on the capital and O and M front, but also a focus on improving our stakeholder engagement capacity and discipline. Again, these things are notional because I'm communicating them to the organization as I'm setting ourselves up to actually execute on those plans. And the way that they will ultimately play out are on outcomes for our stakeholders, for the investment community.

Rod West
Rod West
CEO at Algonquin Power & Utilities

We're talking more and we'll be talking more about total shareholder return from the customer perspective. We'll be talking about Net Promoter Score and specific customer outcomes that will drive our capital plan and our organizational health, the motivation, health, the alignment of our employees' actions to create sustainable value for those four key stakeholders. And the metrics that we're paying attention to are the types of things that will give us our stage gates along the way so everybody has a clear understanding of where we're headed and what are the milestones along the way that will separate us from good to great. The good thing is that we have a lot to work with. And that's the biggest part of my initial evaluation is that we have really quality assets, and we have a group of employees who are really motivated to turn our performance around.

Robert Hope
MD - Equity Research at Scotiabank

All right. Appreciate that color. Second question, moving over to the SVP projects. So you have two tranches with good clarity right now. Do you know how much capital that could be versus the $750,000,000 to 800 that you referenced as well as when would that capital start being spent?

Rod West
Rod West
CEO at Algonquin Power & Utilities

We haven't disclosed anything beyond what is currently public. So I anticipate that we'll do so until we're further along. But the short answer is my expectation is that if successful in executing on what's in front of us, we'll be in a better position to capture and execute on additional CapEx opportunities in that space.

Robert Hope
MD - Equity Research at Scotiabank

All right, thank you.

Robert Hope
MD - Equity Research at Scotiabank

I'll jump back in the queue.

Operator

Your next question comes from the line of Sean Stewart with TD Cowen. Your line is open.

Sean Steuart
Managing Director at TD Securities

Thank you, good morning. Good morning. Couple of questions. I want to start with investigations. So there's another investigation in Arkansas and an audit in New Hampshire.

Sean Steuart
Managing Director at TD Securities

And I'm just trying to gauge, are these the same billing issues that you're dealing with in the Missouri investigation? And do you have any perspective on timing resolution for these various investigations and audits?

Rod West
Rod West
CEO at Algonquin Power & Utilities

I don't believe New Hampshire is a customer related investigation. But the other investigations have to do with the billing issues, the timeliness of billing associated with the deployment of an overhaul of a new system. And we're working with the regulators and the state in each of those circumstances. And from my initial observation that our challenges were not unlike other utilities who have gone through system deployment. I think where we have fallen short and are seeking to remedy it is that we did not do a good job of stakeholder engagement prior to the deployment of the system, which left a lot of folks surprised when the normal, what I would consider to be the normal hiccups associated with the scale of the system overhaul that we implemented.

Rod West
Rod West
CEO at Algonquin Power & Utilities

We didn't, in my view at least, do the conditions precedent to making it a smoother transition for customers and regulators. But we're closing that gap as we speak. And I am not surprised at all by the attorney generals or whoever else was initiating investigations because we put them in a position where they had to do that. I do expect us to work through them. And I have personally gone to those respective states to represent my commitment to follow through and cure the issues that the customers have been experiencing.

Rod West
Rod West
CEO at Algonquin Power & Utilities

But we'll continue to participate and support the work of the states in closing out these customer complaints.

Sean Steuart
Managing Director at TD Securities

Okay, thank you for that context. Second question, wondering if there's any update on your thinking around the hydro portfolio potential timeline towards divestiture, how the thinking's evolved in the current valuation environment?

Rod West
Rod West
CEO at Algonquin Power & Utilities

Yeah. And if we do a double click, I'll let Brian talk more about it. But my perspective is consistent with the position we've taken. We're looking to transact, but the condition precedent has to be it being value accretive, not from a singular EPS perspective, but certainly from a balance sheet and a strategy accretive perspective as well. And we're monitoring the market environment for potential off takers, but it has to be something that we view as net accretive.

Rod West
Rod West
CEO at Algonquin Power & Utilities

And I don't know that there's a specific timeline that we feel forced to pursue. But should that opportunity arise, I have given the go ahead that we'll transact if those conditions are met. Brian?

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Yeah. And Sean, as a reminder, our thought process is that we would be looking at that in the first portion of this year. Obviously, with the leadership transition and our thought process on the portfolio strategy has been evolving here. We've pushed back the timetable a little bit, but everything that we said before about it being value accretive on a number of fronts, that remains consistent.

Sean Steuart
Managing Director at TD Securities

Got it. Okay. Thanks very much, guys. Much appreciated.

Operator

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

Nelson Ng
Nelson Ng
Vice President & Equity Analyst at RBC Capital Markets

Great. Thanks. And good morning, everyone. Just a quick question on the old CRM implementation. Can you just comment about I think in the past, you talked about how the CRM implementation would result in cost savings.

Nelson Ng
Nelson Ng
Vice President & Equity Analyst at RBC Capital Markets

And I just had a look at the operating expenses of the Utility division. I think costs have increased by just 1.5% year over year. So that's obviously lower than inflation. So that's good. But can you just talk about realizing cost savings in the business, that big picture and maybe give a bit more color going forward as well?

Sarah MacDonald
Sarah MacDonald
Chief Transformation Officer at Algonquin Power & Utilities

Sure, Nelson. It's Sarah McDonald. So the implementation was not just about cost savings, there were a lot of other customer benefits that are now coming to fruition. When we were starting to implement, we had multiple systems, no integration and issues in making sure that customers had access, visibility, ability to go online and look at their bills. And so there was certainly a lot more benefits to the customer coming in.

Sarah MacDonald
Sarah MacDonald
Chief Transformation Officer at Algonquin Power & Utilities

Ultimately, when the system is functioning optimally, you will start to see cost, you know, we'll start to be able to realize the benefits of that integration. But for now, we're focused on getting it implemented right and making sure the customer experience is better.

Rod West
Rod West
CEO at Algonquin Power & Utilities

The cost benefits are not going to be specifically called out solely to the implementation of the platform. But you would expect to see more digital channels, lower calls from customers because we're providing more self help options and lower paper expenses. But those would be reflected in our overall O and M numbers and not just attributed to the one specific platform, just on a future basis to understand where we'll be coming from.

Nelson Ng
Nelson Ng
Vice President & Equity Analyst at RBC Capital Markets

Okay, thanks for the color. And then the second question probably relates to Brian. So just a quick one on the non controlling interest earnings of $18,900,000 I know in the past you kind of singled out HLBV as a line item. Is this item, is it all HLBV or are there several items lumped together into earnings attributable to non controlling interest?

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Yes. It's primarily HLBV income. The other significant piece of that, and it's a relatively small piece, is the minority interest related to the ownership stake in Ceralis down in Chile.

Nelson Ng
Nelson Ng
Vice President & Equity Analyst at RBC Capital Markets

Got it. Thanks. Just get back in the queue.

Operator

Your next question comes from the line of Rupert Merer with National Bank. Your line is open.

Rupert Merer
Managing Director at National Bank Financial

Hi. Good morning, everyone. If I could start with a follow-up on the operating costs. I think with the billing issues you've had in previous quarters, it did incur some added costs. Are you still seeing added costs related to those issues?

Rupert Merer
Managing Director at National Bank Financial

Or is that largely in the rearview mirror now? And when we look at those operating costs, are they more representative of what we should expect in future quarters?

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Yeah, Rupert. So, when we started experiencing those billing issues, the extra cost that we did call out in the Q4 materials was bad debt expense. And that's where we saw the majority of that. You saw a little bit of that this quarter, but it wasn't really enough for us to call out specifically. And definitely, the trend line is moving in a more improved direction.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

I think going forward from here, that we would expect that that would temper off, just given the trajectory of where our customer billings exceptions are at. So the short answer, Rupert, is we recorded the majority of that in Q4.

Rupert Merer
Managing Director at National Bank Financial

And last quarter you talked about some dis synergies related to the sale of the renewable group. It seems like the costs in the renewables and corporate group have come down significantly. Have you largely dealt with these dissynergies? Are there any other sort of plans you can discuss to lower cost in the I understand some of this may be things you want to talk about on June 3.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Yeah, Rupert. So last year, if you look at the year in aggregate, we had roughly $18,000,000 in dis synergies that affected our OpEx numbers last year. For the first quarter, it's at a smaller amount. It's less than a penny of dis synergies that we're seeing. We didn't call it out specifically in the materials just because of the size.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

We do expect that as we're continuing to execute greater operational and capital discipline on the company that the eventual removal of those dis synergies will manifest themselves through the outlook. But at this stage, for the quarter, it just simply wasn't large enough for us to call out. So we do think that that's a helpful stage and that's something you should expect for us here.

Rupert Merer
Managing Director at National Bank Financial

Okay, very good. I'll leave it there. Thank you.

Operator

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

Ben Pham
Ben Pham
Managing Director at BMO Capital Markets

Hey, thanks. Good morning. I had a few of your peers on conference calls highlight customer affordability as a topic of interest these days with all that's going on with markets and inflation and supply chain. Can you add some flavor I think about some of your comments previously on cost initiatives and narrowing that ROE down towards the well.

Rod West
Rod West
CEO at Algonquin Power & Utilities

Yeah, I'll certainly start on that. If I think about the guardrails the company, and you heard me make reference to premium utilities, we aren't capital constrained if we have constructive regulatory mechanisms and we have a platform for customer centric investment to meet evolving customer demands for our services. But I think at this point, the one thing that gives us credibility when coming in to our regulatory environment asking for support is that we've done everything that we can to lower the cost profile, the actual cost of service, for our customers. And so from my vantage point, the one constraint is not capital constraint, it's affordability. And so the conversation that we are having internally and for the entirety of my tenure here in our pursuit to be a premium utility is driving the cost down so that we could put productive capital to work on behalf of our stakeholders in a way that minimizes the impact on customer bills.

Rod West
Rod West
CEO at Algonquin Power & Utilities

It's embedded in what you just heard Brian make reference to about capital discipline, but we're also constantly going to be benchmarking ourselves against best in class on our overall cost profile so that we can make a credible case to our stakeholders that we're responsible stewards of our service. So you'll see that in our O and M numbers, and I'll talk a little bit more about it in our outlooks on June 3. But I think discipline should be your takeaway. And we're comparing our objectives. We're not there yet.

Rod West
Rod West
CEO at Algonquin Power & Utilities

Obviously, we're ways away. But our objective is to compare ourselves to best in class on both capital and O and M discipline.

Ben Pham
Ben Pham
Managing Director at BMO Capital Markets

Okay, got it. And I need to provide some details on the June update. You mentioned also later in the year. I just wanted to clarify the June portion with 25,000,000 to $27,000,000 is it focused on EPS numbers, rate base, CapEx in that time frame? And then later in the year, it's beyond 'twenty seven

Ben Pham
Ben Pham
Managing Director at BMO Capital Markets

guidance?

Rod West
Rod West
CEO at Algonquin Power & Utilities

It's fair to say that you're absolutely right on 'twenty five, 'twenty six and 'twenty seven. And I know that there are going to be questions about the broader points of view on a portfolio strategy. And what we're saying is that we're prepared to go public with the guidance and outlooks for that three year timeframe. And while we are definitely thinking through the broader strategic portfolio questions, we think we'll be in a better position to talk about it publicly later in 2025.

Ben Pham
Ben Pham
Managing Director at BMO Capital Markets

Okay, got it. Thanks, Rick.

Operator

Your next question comes from the line of Mark Jarvi with CIBC. Your line is open. Mark, your line is open.

Mark Jarvi
Equity Research Analyst at CIBC Capital Markets

Sorry about that. Questions on New Hampshire. You've got settlements now at Energy North and Granite State, but obviously there's still the audit in terms of the systems there. A bit of perspective in terms of the path forward there, when you could get back in to file for new rates and try to get through some of those revenue requests that didn't come through on the prior settlement.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Yeah, Mark. So just to be clear, we do have an order approving the settlement for Granite State. We are in settlement discussions at Energy North and that's part of the prepared commentary that we've got a little bit more time as granted by the commission to negotiate that settlement. Just to clarify that. But with regards to when we can go back in for new rates, so for Granite State, what we have in the settlement is a stay off period until we can file a new rate case on 01/01/2026.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

And is a helpful data point those. And given that similar parties, similar timescales for the rate cases, I think that's something to think about as we're looking at concluding settlement negotiations in Energy North.

Mark Jarvi
Equity Research Analyst at CIBC Capital Markets

Got it. And then maybe just updated views in terms of at Calpico, the application for interim rates. Any feedback yet in terms of whether or not that's feasible? And just probably how you see timelines progressing in Calpico?

Sarah MacDonald
Sarah MacDonald
Chief Transformation Officer at Algonquin Power & Utilities

So, it's absolutely feasible. We wouldn't have filed otherwise. We haven't got any feedback yet, but we're continuing to answer any questions that come up. But it's certainly an option open to us that we're taking every advantage of.

Mark Jarvi
Equity Research Analyst at CIBC Capital Markets

When do you think you can get clarity? Because I believe the ask was for interim rates by the middle of this year and that's not that far away at this point.

Sarah MacDonald
Sarah MacDonald
Chief Transformation Officer at Algonquin Power & Utilities

Yeah, California is a slower jurisdiction to hear back. So, I actually I can't say when we'll hear.

Mark Jarvi
Equity Research Analyst at CIBC Capital Markets

Got it. Okay, thanks for the time.

Brian Chin
Brian Chin
Interim CFO & VP - Investor Relations at Algonquin Power & Utilities

Thanks, Mark.

Operator

There are no further questions at this time. I will turn the call to Mr. Rod West.

Rod West
Rod West
CEO at Algonquin Power & Utilities

All right, thanks again for your interest and your questions this morning, and we look forward to visiting with you again in just a few weeks on June 3. Have a great rest of the day.

Operator

This concludes today's conference call. You may now disconnect.

Executives
    • Brian Chin
      Brian Chin
      Interim CFO & VP - Investor Relations
    • Rod West
      Rod West
      CEO
    • Sarah MacDonald
      Sarah MacDonald
      Chief Transformation Officer
Analysts
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Key Takeaways

  • Rod West outlined a vision to transform Algonquin into a premium utility by prioritizing customer outcomes, strengthening stakeholder engagement and enforcing capital and O&M discipline.
  • First-quarter adjusted net earnings from continuing operations were $111.6 million, up 39% year-over-year, with adjusted EPS of $0.14 driven by new rate implementations, lower interest expense and a one-time tax recovery in the Hydro group.
  • Regulatory progress included rate approvals and extensions in New Hampshire and Missouri, while the Southwest Power Pool’s 2024 plan allocates ~$750–800 million for Empire District Electric transmission upgrades, with initial Notices to Construct already accepted.
  • Algonquin continues to support the community and authorities following the April 9 Lexington, Missouri tragedy, and is addressing billing system rollout issues under investigation by regulators in Missouri and Arkansas.
  • Credit metrics remain robust, with an FFO-to-debt ratio of 12.5% (above the BBB threshold of 11%) and a debt/EBITDA ratio of 5.6x (below the 5.8x threshold).
AI Generated. May Contain Errors.
Earnings Conference Call
Algonquin Power & Utilities Q1 2025
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