Canadian Utilities Limited Class A · TSX:CU
Canadian Utilities Limited Class A — Investor Presentation (December 2024)
46 slides from Canadian Utilities Limited Class A's investor presentation, Dec 6, 2024
Slide 1: Disclaimer
DISCLAIMER Due to uncertainty surrounding the application of recent amendments to the Competition Act (Canada), this document is provided for historical information purposes only and does not constitute an active or current representation of Canadian Utilities Limited or any of its related parties.
Slide 2: Investor Presentation
Investor Presentation Canadian Utilities Limited December 6, 2024
Slide 3: Agenda
CU Investor Presentation Legal Notice 3 Canadian Utilities Overview 5 Agenda Organizational Structure 5 Financial Overview 6 Growth Drivers 8 Community Engagement 9 ATCO Energy Systems 10 Overview 11 Our Next Phase of Growth 21 Capital Investment 22 Yellowhead Mainline 23 ATCO EnPower 25 Overview 26
Slide 4: Legal Notice: Forward-Looking Information Advisory
Legal Notice Forward-Looking Information Advisory Statements made by representatives of Canadian Utilities Limited (the "Company") and information provided in this presentation may be considered forward-looking information. Forward-looking information is often, but not always, identified by the use
Slide 5: Legal Notice: Non-GAAP and Other Financial Measures
Legal Notice Non-GAAP and Other Financial Measures Disclosure Advisory This presentation contains various “total of segments measures” (as such term is defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure ("NI 52-112")), “non-GAAP financial measures” (as such term
Slide 6: Organizational Structure
Canadian Utilities Overview Organizational Structure ) *Canadian Utilities' Corporate & Other includes the global corporate head office in Calgary, Canada, and the Mexico corporate head office in Mexico City, Mexico. Corporate & Other also includes preferred share dividend and debt expenses. Canadia
Slide 7: Year-to-Date 2024 Adjusted Earnings Waterfall
Financial Overview Year-to-Date 2024 Adjusted Earnings1 Waterfall $8 $4 $36 $8 $444 +10% Year-over-Year Growth $404 1 1 YTD 2023 ATCO Energy ATCO ATCO Corporate & YTD 2024 Systems 2 EnPower2 Australia2 Other 2 Note: Millions of Canadian dollars. 1. Total of segments measure (as defined in NI 52-112)
Slide 8: Strong Cash Flows Support Capital Program
Financial Overview Strong Cash Flows Support Capital Program Cash Flows from Operating Activities Capital Investment1 $1,392 $1,663 $1,061 $1,313 YTD 2023 YTD 2024 YTD 2023 YTD 2024 Portfolio of cash flow generating assets support our strategic investments that underpin long-term growth Note: Millio
Slide 9: Canada's Energy Future Begins in Alberta
Growth Drivers Canada’s Energy Future Begins in Alberta #1 GDP Per Capita 1 #1 Population Growth 2 $152B+ new investment in Major Projects in Alberta3 1. Government of Alberta, GDP per capita, 2023. 2. Statistics Canada. 3. Government of Alberta, Major Projects, November 2024. Canadian Utilities Lim
Slide 10: A Long History of Collaborating with Indigenous Communities
Community Engagement A Long History of Collaborating with Indigenous Communities 36+ YEARS 1987: established relationship with Strong relationships with Indigenous peoples positions ATCO as a trusted partner2 Naka Power (formerly 294 Nunavut Ltd Ermineskin Cree Nation Makivik Corp. Nunavik Sahtu Den
Slide 11: Energy Systems
Canadian Utilities Limited Investor Presentation 10
Slide 12: An exceptional jurisdiction for electric and gas infrastructure investment
ATCO Energy Systems An exceptional jurisdiction for electric and gas infrastructure investment ▪ Strong macroeconomic factors, including energy transition support and investment ▪ Government has supportive and pro-business environment ▪ Highly gas supportive jurisdiction ▪ Supportive regulatory envi
Slide 13: Pure-play, gas and electric regulated utility
ATCO Energy Systems Pure-play, gas and electric regulated utility $2.2B+ $14B 7 Utilities ATCO Electric Transmission 2024 YTD Revenue1 2023 Mid-Year Rate Base2 ATCO Electric Distribution ATCO Gas ATCO Pipelines $427M 3.5% - 4.3% ATCO Yukon Electrical Naka Power (NWT) 2024 YTD Mid-Year LUMA Energy (P
Slide 14: Unlocking the energy transition
ATCO Energy Systems Unlocking the energy transition Electric T&D assets + Natural Gas T&D assets Optionality Case study: Dow’s net zero, polyethylene Decarbonization and ethylene derivatives plant directly benefits our ▪ Energy Systems supplying natural gas to the plant as feedstock for ethylene and
Slide 15: Transmission and distribution underpin growth in Alberta
ATCO Energy Systems Transmission and distribution underpin growth in Alberta Adjusted Earnings Contribution by Operating Segment1 LUMA Energy Electricity 264,000 (Puerto Rico) Natural Gas 9% Distribution 17% customers3 Gas Electricity 1.3M Alberta Distribution2 24% 91% Natural Gas Transmission custo
Slide 16: Alberta's economic growth is underpinned by natural gas
ATCO Energy Systems Alberta’s economic growth is underpinned by natural gas Industrial sector relies Alberta is a leading heavily on natural gas 6.8 Bcf/d natural gas producer 11 Bcf/d natural gas production in Alberta, representing 61% of total Canadian production1 is the estimated demand for Alber
Slide 17: The largest gas distributor in Alberta
ATCO Energy Systems The largest gas distributor in Alberta Natural Gas Distribution Volume1,2,3 Energy Systems delivers natural gas Industrial 14.4 PJ to the electricity Commercial 123.1 PJ producers facing increased demand from growth and Residential 112.2 PJ electrification 41,700km of pipeline Ou
Slide 18: Owner, operator of critical electric infrastructure in Alberta and Canada's north
ATCO Energy Systems An owner, operator of critical electric infrastructure in Alberta and Canada’s north Rate base investment opportunities System resiliency, reliability and climate adaptation driven by weather events Yukon 11,000 km NW Territories Stable base anchored by diverse transmission lines
Slide 19: Operational excellence across our electrical and natural gas assets
ATCO Energy Systems Operational excellence across our electrical and natural gas assets 2023 2022 ELECTRICITY GAS System Average Interruption 94% 96% 1.60% 1.63% Frequency Index (SAIFI)1 Customer Customer Satisfaction Satisfaction System Average Interruption 5.99 hr 4.85 hr Duration Index (SAIDI)1 T
Slide 20: LUMA: Deploying our operations expertise in Puerto Rico
ATCO Energy Systems LUMA: Deploying our operations expertise in Puerto Rico 15-year contract to maintain, operate and 1.5M 50/50 modernize Puerto Rico’s transmission & distribution system customers strong ongoing partnership ▪ Fixed fee for service paid ▪ Flow-through of system served in with Quanta
Slide 21: A team that consistently delivers infrastructure builds
ATCO Energy Systems A team that consistently delivers infrastructure builds Project Location In-service date Description 200-230km high-pressure Yellowhead Edson to Q4 2027 natural gas pipeline and Mainline Edmonton (Expected) compression facilities Red Deer, Central East Q2 2026 240kV Lacombe & Tra
Slide 22: Our next phase of growth
Our next phase of growth Canadian Utilities Limited Investor Presentation 21
Slide 23: Capital Investment (3-year plan)
ATCO Energy Systems Capital Investment (3-year plan) $4.3B to $4.7B 3.5% to 4.3% 3 Year 3 Year Mid-Year Capital Investment Plan1 Rate Base CAGR2 We expect to get a 4% to 5% long-term rate-base growth target Electricity Distribution Electricity Transmission Natural Gas Distribution Natural Gas Transm
Slide 24: Yellowhead Mainline
ATCO Energy Systems Yellowhead Mainline Existing pipeline Yellowhead Needs application filed with AUC 200-230 km length pipeline Production in September 2024 Fort McMurray Total investment for the project is 1.1 Bcf/d capacity estimated at $2.8 billion Construction to start in 2026; expected to be o
Slide 25: Yellowhead Mainline Timeline
ATCO Energy Systems Yellowhead Mainline Timeline Q2 2024 Q3 2024 Q2 2025 Q3 2025 Q2 2026 Q3 2026 Q4 2027 Pre-FEED AUC Need AUC Need Approval Land Acquisition Regulatory and Construction Target Complete Application FEED Complete Complete Permitting Start In-service Date AUC Facility Complete Long Lea
Slide 26: ATCO EnPower
Canadian Utilities Limited Investor Presentation 25
Slide 27: A strong, stable base of unique operating assets
ATCO EnPower A strong, stable base of unique operating assets Renewables Storage 423 MW $226M 117 PJ operating assets1,2 Revenue1 natural gas storage $115M (wind, solar, hydro) capacity 1.5 GW development pipeline Total Adjusted EBITDA1,3 544,000m3 natural gas liquids storage Adjusted EBITDA Contrib
Slide 28: Our footprint is a critical part of Alberta's energy future
ATCO EnPower Our footprint is a critical part of Alberta’s energy future Assets 1 Carbon natural gas storage 2,000 acres owned 2 Alberta Hub natural gas storage ATCO Heartland energy centre in the Alberta 3 Fort McMurray (natural gas liquid storage) 4 ATCO Heartland industrial water system Industria
Slide 29: We are Alberta's leader in three low carbon markets
ATCO EnPower We are Alberta’s leader in three low carbon markets MATURE ESTABLISHED AND GROWING EMERGING H H Natural Gas & NGL Storage Generation Cleaner Fuels ▪ Natural gas and NGLs are key energy ▪ Alberta is home to world-class wind and ▪ Uniquely positioned for cleaner H2 transition fuels in sup
Slide 30: Storage leaders in the Alberta market
ATCO EnPower Storage leaders in the Alberta market 117 PJ Natural gas ~20% ▪ Multi-year contracts with high quality, diverse customer base provide predictability with upside potential from Alberta gas storage future spreads outlook 5 storage capacity market share ▪ Growing capacity and revenue with
Slide 31: Critical infrastructure for natural gas and NGLs
ATCO EnPower Critical infrastructure for natural gas and NGLs, Canada’s transition fuels LATE-STAGE DEVELOPMENT CONSTRUCTION FEED COD / OPERATING – STORAGE FINAL INVESTMENT DECISION COD / OPERATING – WATER COD & production capacity 2024 2025 2026 2027 2028 2029 2030 NG Storage Expansion I 10 PJ NG S
Slide 32: A diverse portfolio of generation operating assets with strong off-takers
ATCO EnPower A diverse portfolio of generation operating assets with strong off-takers Gross operating assets 1 Gross Owned (MW) Operating projects Type Capacity Capacity Contracted Off-taker Hydro Forty Mile Wind 202 202 74% Microsoft 67 Adelaide Wind 40 30 100% OPA Wind Empress Solar 39 39 100% La
Slide 33: Canadian Electricity Generation
ATCO EnPower Canadian Electricity Generation Generation (MWh) Contractedness 706,397 Merchant 45,863 603,716 27% Power Purchase 64,526 145,929 Agreement 37,114 Hydroelectric 73% Solar YTD Wind 2024 502,076 514,605 YTD 2023 YTD 2024 Higher generation offset lower merchant pricing Canadian Utilities L
Slide 34: Generation – Development Opportunities
ATCO EnPower Generation – Development Opportunities CONSTRUCTION LATE-STAGE DEVELOPMENT COD / OPERATING - WIND COD / OPERATING - SOLAR COD / OPERATING - BESS COD & gross installed capacities 2024 2025 2026 2027 2028 2029 2030 Forty Mile Solar 220 MW Wicehtowak Solar 29 MW Miyopayiwin Wind 210 MW BES
Slide 35: Atlas Carbon Storage Hub offers open access decarbonization for Alberta industrials
ATCO EnPower H H Atlas Carbon Storage Hub offers open access decarbonization for Alberta industrials Alberta Carbon Grid Milestone 50/50 Bison Hub Pathways Final Investment Decision (FID) Wolf Alliance JV with Shell Wabamun Hub Hub for Phase 1 achieved Enabling Shell to Edmonton produce cleaner fuel
Slide 36: Heartland Hydrogen Hub
ATCO EnPower H H Heartland Hydrogen Hub Achievements to date ATCO Heartland Business update Energy Center • Signed Letter of Intent with Linde Canada Inc. (Linde). • Working alongside Linde and other parties to further the development and Heartland Hydrogen Hub Site commercial success of the project
Slide 37: Partnership strategy to derisk projects
ATCO EnPower Partnership OFFTAKERS strategy to derisk projects STRATEGIC PARTNERS EQUITY INVESTORS FINANCIAL INSTITUTIONS INDIGENOUS COMMUNITIES GOVERNMENT Canadian Utilities Limited Investor Presentation 36
Slide 38: Alberta is ideally positioned for the energy transition
ATCO EnPower Alberta is ideally positioned for the energy transition Resource Alberta has one of the best geological Macro Demand formations to safely store emissions and is a strong wind and solar resource region. Drivers Energy Market Gas Supply ▪ Industrial electrification Canada is the fifth lar
Slide 39: ATCO Australia
Canadian Utilities Limited Investor Presentation 38
Slide 40: Business Highlights
ATCO Australia Business Highlights ▪ ATCO Gas Australia is a regulated provider of natural gas distribution 14,700 KM services in Western Australia, serving metropolitan Perth and Pipelines surrounding regions. (Owns and Operates) ▪ ATCO Power Australia develops, builds, owns and operates energy and
Slide 41: Business Highlights
ATCO Australia Business Highlights Sixth Access Arrangement (AA6) Hydrogen Jobs Plan Project • The final decision for AA6 was received from the Economic • In August 2024, the South Australian Hydrogen Jobs Plan project Regulation Authority (ERA) on November 8, 2024. secured development approval for
Slide 42: Growing our stable base of assets in Australia
ATCO Australia Growing our stable base of assets in Australia 14,700km 800k $1.4B of pipeline customers 2023 Mid-Year Predictable Rate Base1 and stable cash flow with a proven ability $43M ~100% 10.5% to outperform approved ROE Adjusted Earnings2 Earnings derived from avg. ROE regulated operations (
Slide 43: Why Invest
Canadian Utilities Overview Why Invest Regulated Utilities create a stable base of recurring cash flow and dividends and are critical to successful energy transition globally. Alberta’s Non-regulated opportunities in electricity generation, clean fuels, and energy storage provide an opportunity for
Slide 44: Appendix
Appendix Canadian Utilities Limited Investor Presentation 43
Slide 45: Conservative balance sheet and well distributed debt profile
Credit Ratings Conservative balance sheet and well distributed debt profile $173M $2.0B CU Inc. ($ millions) $220 cash available available credit facility $200 $200 $185 $160 DBRS FitchRatings $150 $125 A (high) A- A A- 2028 … 2034 2035 2036 2037 2038 2039 Note: As at September 30, 2024. Canadian Ut
Slide 46: InvestorRelations@atco.com
InvestorRelations@atco.com Canadian Utilities Limited Investor Presentation 45
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