Canadian Utilities Stock

Thank you for standing by. This is the conference operator. Welcome to the Second Quarter 2026 Results Conference Call and Webcast for Canadian Utilities Limited. [Operator Instructions] and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, Asea, and good morning, everyone. We are pleased you could join us for Canadian Utilities Second Quarter 2026 Conference Call. On the line today, we have Bob Myles, Chief Executive Officer; and Katie Patrick, Chief Financial and Investment Officer. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located.

Today, I am speaking to you from our ATCO Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy comprised of the Siksika, the Kainai, the Piikani nations and the Tsuut'ina Nation and the Stoney Nakoda Nations, which include Chiniki, Bearspaw and Goodstoney First Nations. I also want to recognize that the city of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, we proudly celebrated National Indigenous History Month in Canada, a time to honor the stories, achievements and resiliency of indigenous peoples. We continue to respect and celebrate the diverse history, languages and culture of indigenous peoples beyond the month of June.

Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings, adjusted earnings per share and capital investment. These measures do not have any standardized meaning under IFRS. And as a result, they may not be comparable to similar measures presented by other entities. Please refer to our filings with the Canadian securities regulators for more information.

And now I'll turn the call over to Bob for his opening remarks.

Thanks, Colin, and good morning, everyone. As we move through 2026, I want to again remind everyone of our focus to remain anchored on our 3 strategic priorities of growth and prosperity, operational excellence and financial leadership, which Katie will address in more detail shortly. Consistent execution across these priorities positions us well to continue to deliver on our growth objectives. .

On our first pillar, growth and prosperity, I want to begin my remarks by congratulating our team on the successful completion of the Central East Transfer Out project in June of this year. Thanks to our dedicated employees, I'm very pleased to share that CETO was completed ahead of project schedule, below expected project spend and with 0 lost time injuries. CETO is a critical energy infrastructure investment that reduces congestion and enhances the efficiency of electric transmission across Alberta's electric grid.

I'd also like to take a moment to recognize our team for their hard work on our Yellowhead pipeline project. All major contracts have been awarded, and I'm pleased to share that the project received its facility application approval earlier this month, which was the final regulatory milestone we've been pursuing. This approval cleared the way for construction to begin, which we expect to occur in August, ahead of schedule. The Yellowhead pipeline project serves as a key growth driver in our current 5-year plan. More importantly, it remains a critical needed piece of infrastructure for the province.

The Yellowhead pipeline is 100% contracted with customers, which underscores the clear demand for this project and the role this pipeline plays in Alberta. As a reminder, we expect the project to be in service in the fourth quarter of next year. Other positive regulatory decisions we received this month include the ATCO Pipelines General Rate Application, which approved the Yellowhead pipeline capital deferral account to manage uncertainties for the project, along with 100% of construction work in progress or CWIP being placed into rate base for 2026 and 2027. CWIP provides temporary credit relief during the construction period of Yellowhead by increasing our cash flows for this project.

The application also approved the proposed depreciation placeholder and IT operating costs for both ATCO Pipelines and ATCO Electric Transmission, providing certainty on the recovery of these costs. On the electric transmission side, the revised negotiated settlement agreement regarding ATCO Electric's general tariff application was also approved by the Alberta Utilities Commission. I commend the strong collaboration between our teams, the interveners and the regulator in reaching this agreement. Reaching these milestones through a negotiated settlement is a positive outcome and is reflective of our coordinated efforts to productively work with the regulatory body, particularly in a jurisdiction that we believe is supportive of infrastructure investments.

The achievement of these regulatory milestones marks meaningful progress and represents an important step in advancing our strategic objectives. Within our regulated utilities, we see a strong runway for growth beyond our Yellowhead project. To support this, we continue to advance our $12 billion capital program over the next 5 years. This capital program is comprised of highly certain projects, and we believe there are opportunities for upside to this plan. The latter half of the 5-year outlook does not reflect several major infrastructure opportunities across the province in which we expect to participate. As these projects are secured, they will represent incremental growth beyond the current plan.

I want to emphasize that across all of our regulated investments, we remain very focused on balancing customer affordability while ensuring we maintain a resilient energy system that is stable, reliable and can withstand the impact of severe weather events. The capital plan underpins a 5-year compound annual growth rate of 6.9%, driven by our regulated utility businesses, including the Yellowhead Pipeline project. It's also important to note that this outlook does not reflect growth from our nonregulated businesses, including opportunities such as natural gas storage expansion, which we expect will provide additional upside for Canadian Utilities.

As we look beyond our current capital and growth plan, the broader operating environment continues to improve and is creating a larger runway for investment across the Canadian utility sector. First, we're seeing renewed momentum in energy infrastructure development. Recent pipeline proposals signal growing confidence in long-term resource investments. These developments create additional opportunities for utilities to support expanding energy systems and the scale is quite material as natural gas is a critical input for Oil Sands extraction, processing and upgrading.

Second, policy direction around emissions is becoming clearer. Commitments from the Oil Sands Alliance provides greater visibility on future carbon-related requirements, helping large industrial customers make investment decisions with more confidence in reducing uncertainty around major hydrocarbon project development. Our Atlas carbon storage hub in partnership with Shell positions us to generate long-term growth from future carbon capture investments. Third, numerous federal government announcements have driven ambitious plans to expand grid capacity, enhance interprovincial connections and introduce financing and tax incentives that will improve the economics of large-scale infrastructure projects. This supports new transmission opportunities such as our McNeill, Alberta, Saskatchewan intertie where the federal government has designated it as 1 of 5 high-priority interprovincial power line projects designed to strengthen the national electricity grid.

Finally, we have not included speculative upside related to data centers in our 5-year forecast. Should Alberta continue to be successful in capturing significant data center activity, this could drive supporting infrastructure investments for our business and therefore, for our growth outlook. Taken together, these developments reinforce a constructive backdrop for long-term growth given our expertise at Canadian Utilities with opportunities spanning power generation, transmission, natural gas infrastructure and other critical energy assets.

Now let's look at operational excellence, which focuses on safety, reliability and operational outperformance. As seen on the top half of the slide, both ATCO Gas and ATCO Electric Distribution attained -- achieved return on equities that are better than peers by an average of 2% each year from 2013 to 2025. This reinforces our ability to drive efficiencies across the business by reducing operating costs and improving productivity.

As shown on the bottom half of the slide, during this same period, both ATCO Gas and ATCO Electric teams have driven substantial efficiencies across previous and current performance-based regulation or PBR cycles, resulting in lower distribution charges and creating savings for our customers. We're proud to be recognized as one of the most efficient utilities in Canada, and we continue to drive efficiencies across our businesses to maintain customer affordability.

Turning to our nonregulated assets in Canada. Natural gas storage continues to be a valuable contributor to our business. In 2026, we continue to advance our strategy to grow and enhance our storage platform through a series of low-cost organic growth initiatives. As shown on this slide, we expect the carbon storage expansion and the Alberta hub expansion to enter commercial operations in the third quarter of this year. These projects will increase our storage portfolio to approximately 130 petajoules. Beyond increasing our capacity, these expansions are expected to further strengthen the financial performance of our storage business, which continues to generate strong cash flow and earnings.

Looking ahead, we are well positioned to pursue additional gas storage expansion opportunities in the year to come. Our third pillar is financial leadership.

And with that, I'll pass the call to Katie to discuss this in further detail.

Thank you, Bob, and good morning, everyone. I've shown this slide in the past, but I think it is worth a reminder of how we will finance our plan. We have a clear and disciplined financing plan to support our growth ambitions while maintaining balance sheet strength. As a reminder, our regulated utilities operate under an approved capital structure. To meet our regulated debt requirements, we expect to issue debentures annually over the 5-year period.

On the equity side, our regulated utilities continue to generate significant cash flow. We expect to fund our regulated equity requirements through internally generated cash, the $700 million of capital we raised in late 2025 and approximately $850 million more of additional capital securities. Based on our current 5-year plan, we do not anticipate the need to issue common equity to support our regulated utility growth. Turning to the nonregulated business. Our current organic investments are expected to be financed through cash flow generated by existing operations, supplemented by project level debt and financing and strategic partnerships.

Overall, our funding approach positions us to execute our growth strategy while maintaining flexibility and preserving balance sheet strength. Moving on to the second quarter performance for Canadian Utilities. I'm pleased to share that we have delivered another quarter of strong year-over-year earnings growth. CU achieved adjusted earnings of $140 million, up from $121 million in Q2 2025. This impressive 16% growth was primarily driven by the impact of inflation indexing on rate base and increased rates in ATCO Gas Australia and growth in rate base in Apple ATCO Energy Systems.

Drilling down into the business units, what is most impressive and visible on the slide is the strong growth we delivered at each of our 3 key business units during the quarter. ATCO Energy Systems achieved adjusted earnings of $124 million in the second quarter, $8 million higher year-over-year. This was primarily driven by rate base growth and year-to-date recognition of final rates resulting from Electric Transmission's recent GTA application decision that Bob spoke to earlier. ATCO EnPower delivered modestly higher results year-over-year. This is an impressive result given the continued headwinds in the renewable portfolio. Adjusted earnings were $15 million for the quarter due to gas storage services achieving stronger seasonal spreads and higher generation from the Veracruz Hydro facility in Mexico.

ATCO Australia had another excellent quarter and was a key driver of growth at Canadian Utilities, delivering adjusted earnings of $34 million, up $13 million year-over-year. As a reminder, inflation indexing can impact our overall earnings in Australia with higher inflation leading to an increase in earnings for ATCO Gas Australia. In 2025, Australia inflation indexing reflected a full year inflation of 3.4%. Australia inflation indexing in 2026 currently reflects an inflation assumption of 4.2%.

Inflation indexing on rate base had a $9 million positive impact year-over-year. As a rule of thumb, for every 10 basis points of increased inflation, our earnings benefit by $1.2 million. From a cash flow perspective, our cash flow from operating activities increased by $116 million year-over-year, largely driven by higher earnings across our businesses and higher customer rates in gas distribution. Entering into the back half of the year, we will continue executing on our strategy while identifying efficiencies across the business to drive substantial shareholder value.

I will now turn the call back to Bob for his closing remarks.

Thanks, Katie. Following a strong start to the first half of the year, we remain focused on delivering on our strategic priorities and capitalizing on our growth opportunities in the back half of 2026. We are encouraged by our outlook for the remainder of the year and beyond.

This concludes our prepared remarks. I'll now turn the call back to Colin for questions from the investment community.

Thank you, Bob and Katie. In the interest of time, we ask that you limit yourself to 2 questions. If you have additional questions, you are welcome to rejoin the queue. I will now turn it over to Asea, our conference coordinator for questions.

[Operator Instructions] The first question comes from John Mould with TD Cowen.

Maybe just starting with ATCO EnPower. I'm wondering if you can just dig in a little more to how your team is spending time in terms of looking at incremental growth, the kind of projects that those are weighted to just given the challenges in the power business right now. And I'm wondering, more specifically, is there anything on the unregulated side beyond gas storage or power where you would consider more meaningful growth? And what could the nature and scale of investments, if you are looking at those kinds of initiatives look at -- look like.

Yes, John, thanks for that. The short answer is yes. And maybe a little longer answer is -- you're right with regards to our concerns as well with regards to the generation and the struggles we've had there and the headwinds still on the renewable side. We are very focused for sure on our gas storage expansion. But in addition to that, we're also looking at areas where we can participate more in the full energy value chain.

So looking at midstream, which, as you know, is something that we've had in our portfolio for a long time. And I would say it's something that I have a lot of passion around the midstream sector. So midstream is an area that we are currently evaluating, and we would look to actually pursue opportunities in that sector.

Okay. We'll look forward to more on that. Then maybe just more broadly on your comments around the national electricity strategy and inter-ties. Inter-ties can be challenging to advance. They can take a while to move to fruition. I guess when investors are looking at just bigger picture electricity opportunities for your company, what key milestones should they be looking for? And what are you hoping to see to get projects of this nature closer to reality?

Yes. John, you're right, definitely a much larger project when you start talking inter-ties. As I've said, we have the McNeill interconnect with Saskatchewan. That will be expanded. We also have in our capital forecast a lot of electric transmission growth in the northwest part of the province. We also think there's some great opportunities as Oil Sands develop to continue our -- it's right in our service territory to continue expansion of the -- our electric system in that area as well.

We are spending a lot of time also working with both BC and Alberta on interties and still a lot of work to be done on that, but we do think it makes a lot of sense to continue the interconnections between our provinces. And so if you had to make me pick which one should probably have the lead right now, it's probably the BC, Alberta one. And so -- but still have a lot of work to be done on that, John.

[Operator Instructions] Since there are no further questions, I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Please go ahead.

Thank you, Asea, and thank you all for participating today. We appreciate your interest in Canadian Utilities, and we look forward to speaking with you again soon. .

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Well, good morning. What a beautiful day, and one of my favorite days of the entire year, being here with all of you. And it's great to see everybody for this, believe it or not, 99th Annual Meeting of Shareowners for Canadian Utilities, 99 years. But we've been around longer than that, too. I'll get into that later.

It's a true pleasure to see so many of you here today and so many familiar faces, so many shareowners, long-standing, so many people from our companies here and taking the time to be here means a lot to all of us. Your trust, enduring trust in our company and our management teams, all the people of Canadian Utilities, our Boards of Directors, is very meaningful and purposeful, and I want to thank you all for that.

In -- I guess, first order of business is safety. And in terms of housekeeping, if there is an emergency, you'll hear a bell, an alarm, a PA, and please evacuate through the exit doors in case of an emergency, walk to our muster point, which is the Frank Oliver Park just outside the hotel, or the Westin hotel. Both will be our mustering points.

And today, as we gather here, it is important to acknowledge that we are on the traditional lands of the people who have stewarded this land many, many, many centuries before us. And I'd like to acknowledge the traditional territories and the homelands upon which all of our operations are located around the world. We honor and respect the diverse ceremonies, languages, history, culture of the indigenous peoples who call all of these areas home.

But right now, here in Edmonton, we're on the traditional meeting ground of Treaty 6. And it is also a place where gathering occurred. It was a traveling route for the Cree, the Saulteaux, the Blackfoot, the Metis, Dene, and Nakota Sioux nations. All gathered right here at the crossroads to the north and to the south.

And I also want to appreciate and thank so many of the communities within Treaty 8 that are willing to work as true partners with our businesses and develop sovereign economic prosperity for all nations.

I would also like to take a few moments to welcome a few special guests. And there's one walking in right now. But it's really a pleasure to have Aaron Engen join us again, and Dwight Dibben. Dwight is the Chief Administration Officer of the Village of Forestburg. Where are you, Dwight? Right there.

Forestburg, as many of you know who are long-standing shareholders that [indiscernible] you'll remember how difficult it was to close down the coal plants here in Alberta. And Forestburg is a community like many grassroot communities in Alberta. The spirit of their people in that community is remarkable. Resilience would be the #1 characteristic of Forestburg. We lost the majority of the business that was employing the people in the town. And today, they are back at it, hungry and ready to build big and bold. And it's great to have you here, Dwight. Thank you.

And I'll just mention a few of our long-standing shareholders that are here, the owners of our company. Doug Hornbeck is here, in his fancy shirt. Yes. Right there.

Joginder, it's so nice to see you again. And Ernest, great to have you back. And Carlos, 15 years, I think, Carlos, you said now as a shareowner. Susan -- where's Susan and Wendy? They're over there. Great to have you.

And Doug Densmore. Brand new shareowners, Jane and Lisa. Where are you sitting? Right over there. Just 1 year share owner for Jane and a couple of years for Lisa, and they're very happy, and it's a good meeting to come to. Brad Guthrie and so many more. I know many, many of you are friends and caretakers in terms of your ownership of your great company. Thanks all of you so much for coming.

Now, I can't not say a few words about the state of affairs in our country. We are at a very consequential moment in time, not just for our company, but for our country. As we've seen conflict return to the Middle East and persist so acutely in Ukraine, where we must have a Ukraine victory if we actually want the principles of sovereignty and democracy and international law to endure.

Around the world, long-standing assumptions are being tested now, trade routes and supply chains. They've been taken for granted for a long time, but now they have been completely disrupted on many fronts. Energy and trade infrastructure, once optimized chiefly for great efficiency, is now being reassessed and rightly so through the lens of security.

Across the jurisdictions that Canadian Utilities serves, common themes are emerging. Number one, for sure, affordability truly, truly matters. We are all feeling the effects of the conflict and uncertainty in the world today. Reliability matters, that we can rely on each other. We can rely on the products and the services that we provide for each other. And above all, certainty matters. We are at the cusp in Canada and Canadian Utilities of uncommon opportunity. But it's something that calls for confidence, capability and the courage to lead. And the world increasingly needs what Canada can provide, and it's incumbent upon us to deliver it.

For generations before us, our country had a determined willingness to build, not just for today, but for generations that would follow far into the future. And as a result, Canada was known for punching well above its weight, earning influence not through might, but through steadfast partnerships based on trust, the reliable provision of our natural resources, our expertise and our reliable infrastructure. Once again, the moment is ours to meet.

From confederation onward, Canadian businesses have been the bedrock of nation building, not as a substitute for government, but as a partner in ambition. And when this country required pipelines, railroads, highways, ports, power systems, industry stepped up, mobilizing capital and capability, and to translate public purpose into a reality. That's what we're known for, and that's what we are proud of as Canadians. And that is the tradition that has actually shaped your company, Canadian Utilities.

For more than a century, we played a quiet but a very essential role in supporting a vibrant Canada and particularly here in the West, a vibrant Alberta, building the energy systems that enable our communities to grow, our industries to compete, and prosperity to take route. And that commitment to long-term thinking and investment and to translating national ambition into lasting economic progress, that's what continues to guide your company today. And you'll hear a lot more about that from the Rookie of the Year, CEO, Bob Myles.

There's a focus today from all levels of government, driving very practical conversations about how policy can best enable investments and provide certainty and support sustained growth. And these discussions are important. And the consequences for Alberta and Canada cannot be overstated. But for our shareowners, the message is really straightforward. And for us, it's straightforward.

Regardless of how these discussions ultimately take shape, Canadian Utilities is so well positioned for continued growth. Our portfolio is designed for resilience. And Bob will talk more about that in his remarks.

Our success does not rely on any single policy outcome, because in a 100 years, we've been through a lot of different policy outcomes. But that's the magic of your company. The growth in our regulated electricity and natural gas businesses are driven by fundamental long-term demand, and that includes the full value chain of the energy system from carbon capture, storage, clean fuels, renewables, the entire value chain.

And demand is growing here in Alberta from our population growth and industrial activity. And of course, it's growing globally as well. And the world wants what we can all provide.

The need for electricity systems and natural gas infrastructure and the transmission and distribution networks that enable all forms of energy, it's not cyclical. And we were talking about that a little bit, Lisa and Jane. It's structural. It is, in many regards, resistant to the big cycles of ups and downs that we experience, particularly in this province. And it -- that plays directly into the strengths of your company. And it's wonderful to see right now the momentum that we have, the momentum to build, to invest with intention, to lead with excellence, and to act in belief -- in the true belief that the best years for Canadian Utilities and all of our share owners and future generations is yet to come. And that's my belief. It is a message of optimism.

And now let's commence with the formal business of today's meeting, to be followed by presentations from the executive team joining me on the dais. As I mentioned, I would last year -- I'm so excited to announce Bob Myles as the CEO -- the new CEO for Canadian Utilities, and he has had -- he actually gets the Calder Memorial Trophy for winner Rookie of the Year for sure. For those of you that don't know hockey, it's a big trophy. Great job this past year in your first year, Bob. But now, we all want to know what you're going to do for us next year.

Also, a star this past year and for many years at Canadian Utilities is Katie Patrick, our Chief Financial and Investment Officer. And joining Katie is Kyle Brunner. Kyle is our General Counsel and Corporate Secretary. And it's great to have you both here.

Many people of our corporation are also with us today. I'll act as your Chair. Can't get rid of me, it seems. And Kyle will act as Secretary for this year's meeting. Gloria Gherasim of Odyssey Trust, our registrar and transfer agent, will act as scrutineer.

Notice calling this Annual Meeting, along with the form of proxy and management circular, were sent to all registered shareowners as record -- as of record March 24 of this year. And copies of these materials are also available online on the company's SEDAR+ profile. But there's also hard copies here for anyone that didn't get them.

We have confirmed that there is a quorum, and this meeting is duly and properly constituted for the transaction of business. And in order to facilitate the business of the meeting efficiently, we have shareowners who have been designated to move and second the 2 motions that are before us today.

First item that I'd like to present is the company's annual consolidated financial statements. Again, you can receive these if you didn't get them through e-mail, then you can have the hard copy outside. And this also contains the auditor's report. As I mentioned, they were mailed to registered shareowners and on SEDAR+.

Representatives of our auditor, PricewaterhouseCoopers, are here with us today. So if you have any questions, I'll introduce them in a few minutes, and you can talk to them directly.

Next item of business is the election of directors as proposed in the management information circular. The corporation's nominees with one exception, Roger Irwin has retired from the Board and is no longer standing for reelection, is up for a motion to elect those nominees. This document, and there's their pictures.

May I have a motion, please?

Good morning. I'm Becky Penrice, and I'm a proud shareowner. I move that Matthias Bichsel, Loraine Charlton, Robert Hanf, Kelly Koss-Brix, Robert Normand, Alexander Pourbaix, Robert Routs, Nancy Southern, Linda Southern-Heathcott, Wayne Wouters and Jennifer Westacott be elected as directors to serve until the next Annual Meetingof Shareowners or until their successors are elected or appointed.

Thank you very much, Becky Penrice. May I have a seconder, please?

Good morning. My name is Colin Jackson, and I'm also a shareowner, and I second the motion.

Thank you very much, Mr. Jackson. Last item of business is the appointment of PricewaterhouseCoopers as the corporation's auditor for the ensuing year.

May I have a motion, please?

I move that PricewaterhouseCoopers LLP be appointed auditor of the corporation to hold office until the next Annual Meeting or share -- of Shareowners.

Thank you, Becky.

And I am happy to second the motion.

Thanks very much, Colin. I'll now ask Kyle Brunner, our Secretary, to read the results of voting provided by the scrutineer.

Scrutineer's report indicates that the voting of share -- sorry, the voting shareowners have voted in favor of the election of each director who is nominated for election at this meeting and the appointment of PricewaterhouseCoopers LLP as the corporation's auditor for the ensuing year.

Thank you very much, Kyle. I, therefore, declare the motions passed. And I would like to, on behalf of all shareowners, congratulate our Board of Directors. I want to thank each of you individually on behalf of the shareowners for your tremendous commitment, your dedication and the contributions that you give to our company. Thank you.

I'd also like to introduce, as I said, so you can talk to the auditors, from PricewaterhouseCoopers, Courtney Kolla, Armando Pinedo, nice to see you, and Daria Koziak. Nice to have you.

And thank you all very much for joining us. I'm going to now declare the formal part of this meeting terminated and turn the podium over to the Rookie of the Year, Bob Myles.

Before turning to my update, I want to first thank you, Nancy, for setting the stage this morning. You've captured exactly why this moment is so important for our country, for our company, for our shareowners, and for our customers. But before I go any further, I also want to thank you with my utmost appreciation for your leadership as our Executive Chair this past year and for making my transition into this role so wonderful. Your mentorship, I can never say enough about that. So thank you very much, Nancy.

As I thought about my remarks for this year's meeting, a few themes stood out. We have a clear strategy, a team that is refining and growing our portfolio. We are delivering the largest capital program in our history, and we are doing so safely and responsibly with affordability front of mind. Our progress is showing up in our results and in the market's response to our strategy.

Let me unpack our strategy for a moment because it anchors our performance and our plans for the future. Think of it as our house. Our ambition on top, supported by disciplined choices of focus and execution. Our ambition is straightforward, to be a modern, customer-focused, diversified energy company, drive a relentless drive for growth, simplicity and safety.

We execute through 3 pillars: Growth and prosperity, which involves investing to strengthen our regulated core business and to scale complementary businesses; operational excellence, this means continuing to refine our operating model focused on safety, reliability and continuous improvement; and financial leadership, this is the disciplined funding and strong consistent performance that enables our growth ambitions. And it's all underpinned by team members living our values. With that framework, let's look at the scale of the business and the momentum and the optimism we are carrying into 2026. So why am I optimistic? Because we have a clear strategy and a team that is aligned, focused and executing against it.

Let me share a snapshot of the momentum underway across your company. We have grown significantly in Canadian Utilities with $25 billion in assets. Today, we serve more than 4 million customers around the world, relying on us every day for safe, reliable, and affordable energy. We don't take their trust for granted. It is earned and sustained through our performance. This customer-centric focus was key to our success in 2025, which saw us deliver $658 million in adjusted earnings, up year-over-year despite meaningful headwinds.

We continued that momentum into the start of 2026, as we announced yesterday, delivering another quarter of year-over-year adjusted earnings growth. That earnings performance, combined with our capital plan and funding approach, supports strong share price performance. So let's dive into that for a moment.

At the beginning of 2025, Canadian Utilities' share price was just over $34. As of about 20 minutes ago, our share price is just under $48. Importantly, what this chart shows is that our share price to earnings multiple has closed the gap on our utility peers. It's a clear signal that the market recognizes the strength of our regulated growth profile and the value of our diversified portfolio. But you don't have to take my word for it.

Recent commentary from the investment community provides an independent view of our performance. And in my view, it captures the 2 main reasons for the performance you saw on the previous slide. Firstly, it's about our strong compound annual growth rate and a solid capital plan. And secondly, it's about our ability to deliver the Yellowhead Pipeline. These comments and the price-to-earnings ratio improvements are concrete evidence of the external buy-in to the -- our strategy and our direction.

I'd like to provide a reminder of the scale of the business generating that momentum. We operate across 7 jurisdictions with more than 8,000 employees and a market capitalization of approximately $13 billion. Our regulated utilities in Alberta, Western Australia, Canada's North, are the core of our business. In fact, this year marks 125 years of operating in the Yukon, underscoring our commitment to the north and to delivering service in some of the most challenging conditions in the world.

Our nonregulated generation and midstream assets in Alberta, Ontario, Mexico, and Australia, complement our utilities foundation of disciplined cash-generating growth where customers need storage and power solutions. Many of you are familiar with our Australia operations.

We own and operate more than 15,000 kilometers of natural gas pipelines in Western Australia. And we have 2 gas-fired power plants, one in Western Australia and one in Adelaide in South Australia. But we're also pursuing an energy services strategy to deliver industrial solutions in generation and midstream to Australia's increasingly strategic mining sector.

Here at home in Alberta, our role is just as important, to invest in the backbone infrastructure that enables economic and population growth, supports new supply and strengthens the system for the long-term. As many of you know, Alberta leads the country in population growth. That population growth combines with industrial development to drive long-term gas and electricity demand.

Our infrastructure makes this growth story possible. In our gas utility alone, we added over 19,000 new connections in 2025. It's the highest level in about a decade. Meanwhile, the government of Alberta forecasts that provincial electricity demand is expected to roughly double by 2050, driving growing needs for storage to maintain reliability during peak periods and extreme weather. Together, these trends align squarely with our strategy of investing in essential infrastructure Alberta needs to grow. And we are executing that strategy today across our utilities, midstream and generation platforms.

As I mentioned, we're expanding natural gas networks and the electrical grid to meet rising demand while keeping safety, affordability and reliability front and center.

Near term, there are 2 important big delivery milestones. The Central East project is on track to be energized in Q2 of this year, helping relieve grid congestion in Alberta. The Yellowhead Pipeline is our largest ever capital project and a transformative piece of natural gas infrastructure for Alberta. I'll speak a bit more about this project in a moment, but I want everyone to know that it is advancing very well.

Beyond utilities, our midstream platform is a powerful cash-generating growth engine. One of the results of the heightened global concern for energy security is that we are seeing a change in attitudes towards conventional energy. We are seeing a renaissance of natural gas and natural gas derivatives in Western Canada.

Just last week, we saw Shell's $22 billion purchase of ARC Resources and its production portfolio that is weighted towards natural gas. This improved outlook is great for our natural gas storage business with long-term contracts generating consistent and predictable cash flows.

We are expanding our gas storage capacity at Carbon and Alberta Hub by about 10% later this year, and we have the potential for additional expansion opportunities in 2027. One of the key applications for natural gas is power generation, and we are successfully building a diverse generation portfolio.

Gas-fired generation plays a key role, strengthening portfolio resilience, improving dispatchability and supporting system reliability. Last year, we acquired an 18-megawatt power plant located near Grande Prairie, Alberta. This power plant functions as a peaking facility, supplying dispatchable power when the system needs it most and capturing value when prices are the strongest. And it just goes to show that being focused on our strategy, looking at the globe around us allows us to adjust accordingly.

Now in Puerto Rico, we continue to operate and enhance the island's electric transmission and distribution systems through our 50% stake in LUMA Energy. In my career, I have not seen a more demanding environment than the one that LUMA is operating in today. After years of neglect, the scale of the rebuild is daunting and the regulatory and political hurdles are significant. However, the LUMA team, our LUMA team is making real progress, replacing more than 100,000 power poles, installing 19 transformers, installing more than 140,000 smart meters and installing more than 11,000 grid automation devices.

We have also hired a terrific new Chief Executive Officer, Janisse Quinones. She's a seasoned U.S. utility executive whose connections on island are already having a major impact.

At its core, our commitment to Puerto Rico is rooted in who we are at Canadian Utilities, a company that stands by its word. To enable our growth across our regulated businesses in Canada and Australia, we're investing a significant amount of capital, $12 billion over the next 5 years. It's our largest investment plan to date.

Looking at the graph on this slide, this year and 2027 are driven by our natural gas transmission spending, which is fueled by the Yellowhead Pipeline project. In our view, this is just a portion of our overall investment plan. We expect to see the addition of other major infrastructure projects in the back half of the plan.

When secured, these potential projects would be additional growth on top of the current plan. I want to reiterate that for all of our regulated investments, affordability and minimizing the impact on customer rates continues to be a priority

Here are 2 data points regarding our focus on cost through our performance-based regulation cycles. In Alberta, our gas utility has driven significant efficiencies that have resulted in our gas distribution charges staying below the rate of inflation. Similarly, the focus of our electric utility on cost savings has resulted in our distribution charges growing less than all of our peers in our province.

With the Yellowhead Pipeline project being a driver of growth under our current 5-year plan, I want to provide an update as we work towards the commencement of construction. The approval of the facility application from the Alberta Utilities Commission is the final milestone for construction to proceed, which we expect to commence in the third quarter of this year.

I would also like to note that the Yellowhead Pipeline is 100% contracted with our customers, an indication of how important this project really is. But beyond regulatory milestones and commercial arrangements, advancing a project like Yellowhead requires something more, earning the trust through meaningful engagement with the communities. This is especially true for our indigenous communities, and I am proud of the commitment our teams have shown in early and sustained engagement and in identifying opportunities to deliver long-term value for our indigenous communities.

Now we have a video to highlight our work in this area.

[Presentation]

Great job. Jason, Patrick, Nicole, I thought that was a wonderful video. Thank you all very much. I'd like to repeat some of my opening words as I wrap up. We have a great team focused on executing safely, keeping affordability front and center and delivering long-term value. Their efforts are improving our results and the market is responding positively.

With that, I will turn things over to Katie Patrick. And I truly appreciate your interest and definitely your support.

Thank you, Bob, and thank you all for attending our meeting and being interested and invested in Canadian Utilities. I really like the simplicity and clarity that Bob creates with you as investors, partners, and also with our employees and leadership teams.

In a world of misinformation and miscommunication, being clear and concise is crucial to creating the understanding of our strategy and confidence in our future.

Simply put, my goal is to share some information and numbers, a lot of numbers, with you related to the financial performance of Canadian Utilities. This is part of the house that Bob brought up on the screen earlier. I want to highlight our stable regulated earnings, prudent capital allocation and balance sheet strength. Let's dig into 2025 earnings.

Last year, Canadian Utilities delivered adjusted earnings of $658 million or $2.42 per share. This is up from $647 million in 2024. What made these results particularly noteworthy is that we had some significant headwinds to overcome in 2025. You can see, this on the chart shown in the gray boxes. These include regulatory items, a decrease in the 2025 return on equity, and the completion of the efficiency carryover mechanism at the end of 2024.

It also includes our strategic decision to redeploy capital from the sale of ATCO Energy to our core regulated businesses, which did create an earnings obstacle relative to 2024. Okay. So that created approximately $57 million of headwinds during the year. Under the leadership of Bob and our leadership team, our entire Canadian Utilities team rallied. I kind of feel like I need the rocky theme now for what comes next.

We successfully fought through those headwinds, and our comeback to these challenges was a 1, 2, 3 punch. First, the deployment of our capital into our core utilities as well as unlocking operational efficiencies helped to generate about $36 million of regulated rate base growth in Alberta.

Next, successful regulatory outcomes and frameworks in Australia added an additional $21 million of growth. Finally, we had $11 million of growth within our storage and industrial water segment. That was an impressive 30% increase on a year-over-year basis. This momentum is driving through to our first quarter 2026 results.

Looking at the quarter, our performance for Canadian Utilities, we are proud to have delivered another quarter of year-over-year earnings growth. As we announced to the markets just yesterday, we achieved adjusted earnings of $242 million, up from $232 million in Q1 2025.

As you can see on this graph, this was primarily driven by earnings growth at ATCO Energy Systems and ATCO Australia. This was moderated by the expected lower earnings within financing and other. Last year, we issued hybrids in September to fund our Yellowhead project, and that had an increased interest expense, which was the primary driver of the year-over-year difference.

ATCO Energy Systems delivered adjusted earnings of $246 million in the first quarter, $14 million higher year-over-year. This was driven by a few factors, including rate base growth, coupled with ongoing customer demand as well as lower income tax expense from the reinstatement of accelerated capital cost allowance under C-15. That's a multiple.

Within ATCO EnPower, we delivered comparable results to the prior year as our continued challenges in the renewables portfolio was offset by growth within our storage and industrial water business.

ATCO Australia had an excellent quarter and was a key driver of the overall growth at Canadian Utilities, delivering adjusted earnings of $21 million, up $8 million year-over-year.

In addition to strong operational performance in this business, we also benefited from inflation adjustments, which had about a $5 million positive impact year-over-year.

You heard Bob speak about all the exciting growth opportunities that we are -- that are ahead for Canadian Utilities. One of the top questions I get as CFO is, "How are you going to pay for all of this?"

So let's first talk about our regulated business. As background, our regulated utilities operate under a regulated capital structure, funded by both debt and equity. To fund our regulated debt requirements, we expect to issue debentures each year during the 5-year capital plan period we outlined. We will also continue our proactive engagement with our credit rating agencies and maintain strong investment-grade credit ratings.

For our regulated equity requirements, our utilities are a strong generator of cash flow. We expect to use this cash flow along with the $700 million we raised in 2025 and approximately $850 -- $850 million of an additional capital securities to fund our equity portion of the investment. Our current 5-year capital plan does not require common equity to fund our regulated utility growth.

On the nonregulated side, we do not forecast equity issuance to fund the current organic growth profile. Nonregulated growth will be funded with our cash from our current operating assets, combined with project level debt financing and partnerships with the flexibility to access other equity instruments if an opportunistic acquisition arises. If an opportunity were to become available, we would provide the markets with the financing details at that time.

Overall, this funding strategy supports our growth initiatives while preserving balance sheet strength. As we look ahead, we are well positioned entering 2026, and we expect to deliver strong adjusted earnings growth on a full year basis. We will continue to execute on our proven strategy and focus on funding efficiencies across our business to ensure we create shareowner value.

Thank you again for your trust and interest. And I will now turn it back to Nancy for closing remarks.

That really was a mouthful. I think the great news, though, in what Katie just explained to all of us is that to this point in time, we're able to fund without diluting your ownership in Canadian Utilities and Seymour. I don't think we've seen that kind of capital growth and investment in all the years that we've -- I've known you, you've known me, and it's great to see you here. And [ Belmond ], wonderful that you could make it as well.

And I don't know if I mentioned Brad, but I did -- Brad Guthrie, too.

One thing, Katie, is that you and Bob both delivered pretty darn good news. It's not often that I can stand up here and be as optimistic as I am today, and I hope you share that. It's been a while. You've trusted us. We've said we would improve, we would continue to invest, we would continue to bring efficiencies. And now after several years of really almost a stagnant growth profile in Alberta and the opportunities that we now see and the work that your team has done, we are actually seeing the results of the hard work. So thank you all for sticking with us, believing in us and your trust. And I'm -- I hope you're as proud of the Canadian Utilities team as I am. Well done.

When I -- I mentioned at the outstart of the meeting that this is our 99th Annual General Meeting. But parts of our business have been around even longer. I think Bob mentioned, or it was on the slide, in the Yukon, we've been there 125 years. And ATCO Gas started heating homes and businesses back in 1912 when the original Bow Island to Calgary pipeline went into service. And my grandfather -- my great grandfather actually built the cradles for that pipeline back in those days all by hand, along with the drilling rigs. And it's this longstanding connection between the people of your company, Canadian Utilities and Alberta communities, the entire province of Alberta, but also the Northwest Territories, the Yukon and Australia. We both celebrate and appreciate this longstanding commitment.

And our team put a little video together that I wanted to show you, that demonstrates some of the connection that we feel.

[Presentation]

Thank you all. Thank you to our Board of Directors, our executive team, all of the people of Canadian Utilities that work so hard, and a special thank you to our shareowners, the owners of our company, for your trust, your commitment and your belief in what is possible.

I'll open the meeting now up to any questions that you might have.

And if you don't have any questions -- oh, okay Doug.

Nancy Southern and I have roots in the Netherlands. And so my -- of course, my green thumb brings me to an observation that we talk about excellence in the company, excellence in your green stuff. I noticed even in the [indiscernible] picture, I don't know if you noticed, the trees and the grass. And when I see any building, even the building in Edmonton constantly has beautiful flowers outfront. And so -- and you go to -- another thing that's excellent is the ATCO Kitchen in Calgary. All your buildings are excellent, and you take care of them. And -- so I really want to express my appreciation for the green stuff.

Thank you.

I also want to throw something at you. You know how companies have a symbol like -- it seems like [indiscernible] birds and animals and that sort of thing. And Rice Krispies have the 3 little...

Oh, yes.

Little people that go, crispy, crunchy, all that stuff. Anyways.

Snap, Crackle, Pop.

Thank you. Thank you. I had them this morning, and I'm thinking of the French Cric, Crac, Croc. Anyways, I was thinking that maybe ATCO or CU could come up with -- we have one of the top mascot builders in North America, right, in Edmonton, but we could have some kind of a symbol that -- it could be a Mr. Electric or Mr. Gasman or some really cute thing that represented our company. And this would work with -- people have these images and the ATCO name is famous, but it would be kind of need to have a figure or something that identifies to our company, and especially when we get involved with kids. But even adults like this sort of thing. So to your advertising people, I throw that out.

Doug, I think that's -- obviously, we're not doing a good enough job of highlighting our mascot, I'm a little animal. But Jason Sharpe is going to tell us all about Digger.

Well, I'm thankful that you're not calling me the little animal. So we do have Digger, which is a golfer as our mascot. We use him -- actually, the cool thing about him, it's actually our employees that go in Digger. So the -- when you see him at the stampede or at any of the community festivals here in Edmonton as well or in the north, it's actually one of our employees that's in there. Just a little warning for the employees, if you're under 5.8, you're perfect for this. I am under 5.8, so -- but I have not had the opportunity to be in Digger yet, but I guess that's coming.

We -- He is a lovely mascot, and made here in Alberta. So Doug, thank you for that. And also, I appreciate you recognizing the flowers and the trees. That is definitely something from my Dutch gene pool, my mom carrying through with the landscaping and quality of how we look to the world. Thank you very much for that.

Is there any other questions? Yes. Brad.

I hope you don't mind me asking this, but I saw your graph with the peers and how they are very different, we're at the bottom. That brings it up to me as a customer, I look at my bill and I see all the rate riders, franchise fees and all those types of costs in there. Do -- does Alberta, like ATCO Electric, all the other utilities get together every once in a while and figure out can we streamline that or somehow make it more understanding to the regular customer, and therefore, have a better idea of what's being paid for our fees? And then in theory, your peers and ATCO should kind of close the gap between each other, I would think?

Well, we don't really want to share our best kept secrets in improving this constantly. However, I'm in total agreement with you. And I know Bob will have a few comments to add. But the biggest and most important thing, I believe, in this province is that our province listens to customers, not just about a particular price in a particular area. What we need is real transparency. We need to really understand all the costs that are going into our utility bills. And I think there is a hesitancy -- there has been a hesitancy, but I do think this transparency is starting to penetrate as to how we actually present these costs that are associated with transmission and distribution.

I'm very proud of the fact that we are in those graphs the most efficient. And -- but I am a believer that a blending so that there's equalization across the province, particularly in electricity, is something we need to look at very, very seriously.

Now the problem with getting there is that, that means that the big cities are going to have to share with rural Alberta. And that will mean the cities actually -- the big cities are actually going to, actually face a little higher cost. And as we know, that's politically difficult for the province to get around. But it's the right thing to look at. It's the right thing to try and do.

Bob, did you want to add anything?

Nancy touched on the word transparency, and I totally agree with that. I really think the more we can be transparent in the province, I think the better it will be for all of our customers. And so I could not agree more. But to also your point about blending of rates, I think we need to -- we're supportive of that, but it does come with a political awkwardness, if I could put it that way. But I agree with your comments.

Yes. In our province, we have this vast area, so transmission and distribution into towns like Forestburg or your town -- I mean, it's a long way to build these large capital investments. And then we make you pay more because we have to go all the way out there to you, whereas the cities have this density that allows them to share their investment in a much more economic position. But the cities are also big voters, and that's the reality of how our utilities are operating. But I also think that in this province, we have a reluctance to actually blend north-south. And if we -- even if we just did that, we would do that in electric transmission, but we don't even do that in natural gas. So even that piece would at least help some. So I think it's a good point that you've raised.

Anybody else? Anybody from our company that has questions?

Okay. Well, we get to go enjoy ourselves, have coffee, a cookie, and continue to enjoy each other's company. Thank you all so very, very much for taking the time to attend this meeting today. Next year, 100 years, I look forward to seeing you all next year for 100 -- oh, Seymour?

On behalf of the rank-and-file shareholders, Madam Chair, I want to thank you for your guidance and the team because, as you pointed out in your speech this morning, we are in a very, very challenging time in the world, in the province. And as the team has underscored today in the presentations, Canadian Utilities has what Alberta needs and what Alberta wants and what the world needs and what the world wants. Energy Thank you so much.

Thank you, Seymour. Thank you.

We are adjourned. Thank you very much. See you in the reception area for coffee and tea and cookies. Thank you.

Thank you for standing by. This is the conference operator. Welcome to the First Quarter 2026 Results Conference Call and Webcast for Canadian Utilities Limited. [Operator Instructions] The conference is being recorded. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for Canadian Utilities First Quarter 2026 Conference Call. On the line with me today, we have Bob Myles, Chief Executive Officer; and Katie Patrick, Chief Financial and Investment Officer. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located.

Today, I am speaking to you from our ATCO Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy comprised of the Siksika, the Kainai and the Piikani nations, the Tsuut'ina Nation and the Stoney Nakoda Nations, which include the Chiniki, Bearspaw and Goodstoney First Nations. I also want to recognize that the city of Calgary is home to the Metis Nation of Alberta, Districts 5 and 6. We honor and respect the diverse history, languages, ceremonies and culture of the indigenous peoples who call these areas home.

Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian security regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings, adjusted earnings per share and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. Please refer to our

Filings with the Canadian securities regulators for further information. And now I'll turn the conference call over to Bob for his opening remarks.

Thanks, Colin, and good morning, everyone. To kick off 2026, we remain focused on our three strategic pillars. First, growth and prosperity. This includes our project pipeline across all of our business segments. Next is operational excellence. And lastly, we remain focused on financial leadership, which Katie will speak to in her remarks. Consistently executing across these 3 pillars will help us achieve our growth in the year ahead. Looking at our first pillar, growth and prosperity.

I want to start by discussing our positive view on the Alberta environment, which is tied to our strong growth plans and continued focus on driving affordability through the efficiencies our teams deliver. As you can see on the slide, Alberta continues to be at the forefront of population growth amongst Canadian provinces heading into 2026. Economic fundamentals, coupled with an affordability advantage are expected to sustain above-average interprovincial migration in the year ahead, a positive sign that momentum persists. Looking ahead, the government of Alberta forecasts that the province's electricity demand is projected to double by 2050. Last year, public and private investments in Alberta's utility sector totaled over $5 billion, and we anticipate an increase to this spend in the years ahead.

As Alberta's energy landscape continues to evolve, it's crucial we invest in projects that address our province's changing energy needs, enhancing Alberta's energy infrastructure while enabling a modernized system that can readily accommodate generation. Specific to our regulated utilities, we see a significant growth opportunity ahead. As such, we are investing a significant amount of capital, $12 billion over the next 5 years, our largest investment plan to date. Looking at the graph on the slide, this year and 2027 are driven by our natural gas transmission spending, which is fueled by the Yellowhead pipeline project.

In our view, this is the tip of the iceberg when it comes to our investment plan. The back half of the 5-year plan does not account for some of the other major infrastructure projects needed in the regulated utilities across the province in which we would expect to participate. When secured, these potential projects would be additional growth on top of the current plan. I want to reiterate that for all of our regulated investments, affordability and minimizing the impact on customer rates continues to be a priority.

In Alberta, our gas utility has driven significant efficiencies that have resulted in our distribution charges growing less than inflation since 2013. Similarly, the focus of our electric utility on cost savings has resulted in their distribution charges growing less than our peers in the province since 2013. This is a significant accomplishment and one I will speak to further in the presentation. The capital plan that I discussed drives our 5-year compound annual growth rate or CAGR of 6.9%. This CAGR incorporates the regulated utility business, including the Yellowhead Pipeline project. I will also add that it does not include the growth plans related to our nonregulated assets, including natural gas storage expansions, which will drive further growth for Canadian utilities. With the Yellowhead pipeline project being a driver of the growth under our current 5-year plan, I want to provide an update on recent milestones as we work towards the start of construction.

In March, the project received its key environmental approval under Alberta's Environmental Protection and Enhancement Act from the Alberta Energy Regulator. In all projects we undertake, we are committed to environmental responsibility and regulatory compliance. This approval reinforces our commitment to ensuring the land and community impacted by our project are respected. The approval of the facility application from the AUC will be the final milestone we are working towards and is required in order for construction to proceed. Once received, construction can begin, which we still currently expect to commence in the third quarter of this year. Something that I would like to remind everyone is that the Yellowhead Pipeline is 100% contracted with our customers, an indication that this project and infrastructure is greatly needed in the province.

As we look beyond 2030 in our regulated utilities, we also believe there are opportunities to increase rate base in our electric service territory tied to the ISO's long-term outlook. Namely, the ISO forecast an increase in load growth as a result of an expected increase in industrial activity, electrification and emerging loads. These developments require additional transmission capacity across the province. Specific to our service territory, a significant opportunity we see post 2030 is the McNeil converter station, the only intertie point between Alberta and Saskatchewan. We have now received a needs identification document for this project, which confirms the need for the proposed transmission system upgrades. We have submitted a proposed project scope and schedule to the ISO who is currently evaluating our submission.

The preliminary cost estimate for this work is approximately $1 billion with the vast majority of costs expected to occur between 2030 and 2034 period. Beyond this needed project, there continues to be ongoing conversations and excitement over the longer term. Of note, in March of this year, the government of Alberta and the government of the Northwest Territories signed a first-of-its-kind partnership agreement on transmission intertise with the goal of modernizing electricity transmission and building a more resilient energy future across Canada. While these discussions are very early days, given this intertie would fall within our service territory, we see this as a possible long-term opportunity outside of our current 5-year capital plan.

Further, conversations are underway between the federal government and utility companies for additional interprovincial tie lines between Alberta and BC and Alberta and Saskatchewan. This, again, would be a post-2030 opportunity. The additional projects, opportunities and ongoing conversations I've outlined today provides us confidence that our strong growth will continue beyond 2030. Our second pillar, operational excellence, focuses on safety, reliability and operational outperformance. I want to start by congratulating the work of our utilities, both transmission and distribution. On the transmission side, ATCO Pipelines work collaboratively with all stakeholders, including the AUC, who in the first quarter approved our negotiated settlement agreement for the 2026 to 2028 general rate application.

All of our utilities continue to seek out and drive efficiencies across our business. Our distribution utilities operate under the performance-based regulation, which incentivizes utilities to reduce costs while maintaining safe and reliable service and then share these cost savings with customers. As seen on the slide, both ATCO Gas and ATCO Electric teams have driven substantial efficiencies across previous and current performance-based regulation cycles, resulting in lower distribution charges and creating savings for our customers. Across the utilities, we are delivering more than $500 million in savings in total distribution costs, which customers are already benefiting from over the 2023 to 2028 period. I'm very proud to be recognized as one of the most efficient utilities in Canada, and we'll look to continue to drive efficiencies across our businesses going forward.

Looking at Australia, our 5-year regulated capital plan allocates $500 million of investment in our Australian gas business. More specifically, we see a variety of macro trends in Australia, both on the regulated and nonregulated side on which we believe we can capitalize, including population growth, the expansion of mining, LNG and critical minerals, record infrastructure investments and industrial energy demand. Currently, we own and operate over 15,000 kilometers of natural gas pipelines in Australia.

We also have 2 natural gas-fired generation plants, Karratha, which is located in the Pilbara region of Western Australia and our Osborne facility located in Adelaide in South Australia. Western Australia stands out as a highly attractive market for development opportunities, and we believe strategic expansion is possible. We see bilateral infrastructure development as a fast, low-risk, flexible way to serve the demand of the many new and expanding remote and semi-remote mines, which require generation. Given our background and expertise across the portfolio, we remain positive towards the Australian market and see Australia's evolving energy landscape and progressive policies as a center of opportunity and a place where we can benefit. Moving to our nonregulated assets in Canada.

Natural gas storage continues to be a valuable asset for our business. In 2026, we are continuing to further develop and expand our natural gas capacity via organic growth initiatives. As seen on the slide, we expect commercial operations of the Carbon main pool expansion as well as the Alberta Hub Phase 1 expansion in the third quarter of 2026. Our low-cost growth initiatives will bring our portfolio to approximately 130 petajoules with the potential for additional expansion opportunities in 2027. These expansions contribute to the financial performance of our storage business, which have been a consistent generator of cash flow and earnings for our portfolio in recent years. Our third pillar is financial leadership. And with that, I'll pass the call to Katie to discuss this in further detail.

Thank you, Bob, and good morning, everyone. Now that Bob has spoken to a number of growth opportunities ahead of us at Canadian Utilities, I want to talk about how we're going to pay for all of this. Our regulated utilities operate under a regulated capital structure. To fund our regulated debt requirements, we expect to issue debentures each year during the 5-year period. Through this period, we remain focused on continuing our proactive engagement with our credit raters and maintaining strong investment-grade credit ratings. For our regulated equity requirements, our utilities are a strong generator of cash flow. We expect to use this cash along with the $700 million we raised in 2025 and approximately $850 million of additional capital securities, that being debentures, preferred shares or hybrid bonds to fund our equity portion of our regulated capital investment. Our current 5-year plan does not require common equity to fund our regulated utility growth.

On the nonregulated side, we do not forecast equity issuance to fund the current organic growth profile. Nonregulated growth will be funded with cash from its current operating assets, combined with project level debt, financing and partnerships with the flexibility to access other equity instruments if an opportunistic acquisition arises. If an opportunity were to become available, we would provide the market with the financing details at the time. Overall, this funding strategy supports our growth initiatives while preserving balance sheet strength. Looking at the first quarter performance for Canadian Utilities, we are proud to have delivered another quarter of year-over-year earnings growth.

Canadian Utilities achieved adjusted earnings of $242 million, up from $232 million in Q1 2025. As you can see on this graph, this was primarily driven by earnings growth at ATCO Energy Systems and ATCO Australia and moderated by the expected lower earnings within financing and other. As a reminder, we issued hybrids in September of last year to fund our Yellowhead projects and the increased interest expense was the primary driver of the year-over-year difference.

Looking at the specific business units, ATCO Energy Systems delivered adjusted earnings of $246 million in the first quarter, $14 million higher year-over-year. This was driven by a few factors, including rate base growth, coupled with ongoing customer demand as well as lower income tax expense from the reinstatement of accelerated capital cost allowance under Bill C-15. Within ATCO EnPower, we delivered comparable results to the prior year as lower generation from domestic renewables was offset by growth within our storage and industrial water business. ATCO Australia had an excellent quarter and was a key driver of growth at Canadian Utilities, delivering adjusted earnings of $21 million, up $8 million year-over-year.

In addition to strong operational performance in this business, we also benefited from inflation adjustments, which had about a $5 million positive impact year-over-year. From a cash flow perspective, our cash flow from operating activities decreased by $33 million year-over-year. This was a result of the refunds provided to customers under the PBR 2 reopener decision, which I will remind everyone, our appeal was recently heard by the Alberta Court of Appeal. Excluding this impact, we would have delivered modest year-over-year growth in cash flow from operations in the first quarter. As we look ahead, we are well positioned entering 2026, and we expect to deliver strong adjusted earnings growth on a full year basis. We will continue to execute on our proven strategy and focus on finding efficiencies across the business to ensure we continue to create shareowner value. I will now turn the call back to Bob for his closing remarks.

Thanks, Katie. With a solid first quarter in the books, we will continue to advance our strategic priorities and capitalize on the opportunities in front of us. Looking ahead, we remain optimistic for the upcoming year and beyond. That concludes our prepared remarks. I'll now turn the call back to Colin for questions from the investment community.

Thank you, Bob, and thank you, Katie.[Operator Instructions] I will now turn it back over to the conference coordinator, Asha, for questions.

[Operator Instructions] The first question comes from Maurice Choy with RBC Capital Markets.

If I could just pick up on a comment you made, Bob, in your prepared remarks. You mentioned that Yellowhead is the tip of the iceberg and at the back half of your 5-year plan, there are other infrastructure projects needed across your platform. I know in Slide 10, you've identified some electric opportunities. So my two-pronged question is, is there a way to size some of these projects relative to the Yellowhead project? And b, are there any gas pipeline projects that you're thinking about?

Yes. Thanks, Maurice. What -- in the 5-year plan, there definitely isn't anything of the size of Yellowhead that we have in there. So a lot of the opportunities that we have in our 5 plants, specifically on the electric side, are smaller opportunities really tied to the ISOs long-term plan, things like new substations, wire expansions, but it's nothing of that magnitude. Where I'm really optimistic is when you start looking at some of the things that are not in there, whether it be interties, major expansions like that, I think there's significant potential for that. We also are already seeing with the gas demand in the province that we're already having discussions about expansions of the Yellowhead pipeline system. So again, that's why I'm optimistic, and I did use that term tip of the iceberg for the latter half of the plan.

Are those gas opportunities purely centered on expanding Yellowhead? Or are there other ones that could also come to fruition?

I think there's other ones as well, Maurice. But I would say Yellowhead expansion is, in my view, is definitely the largest opportunity for us. And we're already having discussions about the first stage of the expansion would be adding compression and then with the ultimate goal of looping the pipeline in the future.

Got you. And just to finish off on a question on gas storage. I believe the previous disclosure that you had to reach 130 petajoules was by the end of 2026. And I noticed in this set of slides, it's delayed by about a couple of quarters, which isn't much to be fair. But I just wanted to know what generally is the reason for this change in time line? And holistically, what's your updated outlook about Western Canadian gas storage?

Yes. Maybe, Maurice, starting with your second question first is I've been always a believer in gas storage for a long time, and I still am a believer that gas storage is very much needed, especially as we start looking at things like LNG Canada Phase 2 and other growth opportunities with regards to natural gas. So I just see gas storage as something that's very much needed in Western Canada and across North America in general. When you look at the delays that we had in the project, my view on that, Maurice, is that we really need to have the gas storage in place to be able to capitalize it later this year. And so the delays are really tied to the decisions we made over the winter to not incur winter construction, wait till the spring to actually complete the work. Some of the work is some well workovers, some new wells that need to be drilled and then associated pipelines with that. So even though we're saying it's delayed a couple of quarters, it's not really delayed from impacting and benefiting our financial performance.

[Operator Instructions] The next question comes from John Mould with TD Cowen.

Maybe just going back to Yellowhead. Could you give us a little more color on your thoughts on the regulatory proceeding there so far just in terms of how that's going? I think the hearing starts on Monday. And then relatedly, on the broader GRA potential acceptance of one of the several credit relief measures that you've proposed just on the financing side. Just some insight on how that's progressing would be great.

Sure. On Yellowhead, John, the -- you're right, next week is the hearing. The hearing is truly the facility application, the needs for the project. We received that approval last year. There are I might get this wrong, John, but I think there's -- we're down to low single-digit interveners now coming in on the pipeline. So we are optimistic that will be positively received, but it is a step that we have to go through. And so -- but again, I think we're well positioned. We spent a lot of time having discussions with impacted parties. So we're confident from that perspective.

We're working with -- trying to work with the AUC, the government around an expedited decision because the sooner we can get a decision on that, a positive decision, the sooner we can get into construction. We have an outside sort of set a time line of late July, early August for at the outer edge of an approval, which would allow us to start construction in August, September, which is the time line that we've set for ourselves. So again, we're still -- I'm still optimistic on that. And hopefully, it will even be sooner. We've also, just as an aside on that, we've been having a lot of discussions with contractors to get contractors signed and in place so that we are ready to start construction and not delay due to contracts with contractors. Katie, why don't you comment on John's second part of that question?

Yes, for sure. Thanks, John. On the credit release metrics that we've applied for through the GRA and specifically related to Yellowhead, I think the two just for everyone's benefit, the that we have requested would be an ROE adder or CWIP during the construction period, construction work in progress. I think we're -- we've had the hearing with the AUC, and I think we're somewhat optimistic that we might receive one or the other. Obviously, I think the more. The one that would be easier for the AUC to issue would be the CWIP, but we'll hear about that in this quarter, similar time frame to when we will hear about the final decision around the facilities application for Yellowhead.

Okay. That was very fulsome. And then maybe just a quick follow-up on expansions at Yellowhead. Could that potentially come through ahead of even some of the later-stage items that you've noted as incremental to your capital plan, like I'm thinking of McNeil, for example. Like when could we get more confidence in line of sight on some of those expansions?

John, absolutely. I do think it could happen sooner. To give you -- give everyone a sense of this is there has been an open season for expansion. As I said in my remarks, the Yellowhead pipeline, which if you go back even a year ago, I want to say a year ago, we were probably at the 60% contracted on that pipeline. We're now -- we're at 100% contracted. We -- there's been an open season, and there's already interest in additional volumes. So I could see that happening within this 5-year capital plan. And again, that is not -- those additional expansions are not in the numbers that we put forward as our CAGR for capital.

The next question comes from Mark Jarvi with CIBC World Markets.

This is Kristina Kulikow on the line on behalf of Mark Jarvi. A couple of questions this morning. So on funding, in the past, you've indicated that you would contemplate asset or minority interest sales to support equity funding. That wasn't included in the options you mentioned today. So does that imply that it's not a likely source of funding? And then my second question is any update on any other intertie opportunities, including the potential in the Northwest of Alberta?

Thanks, Kristina. I'll start just with the asset recycling/partnership opportunities. It wasn't specifically included on the slide related to our regulated capital investments, but I would say that absolutely, that would remain on the table for funding alternatives. So we are trying to be quite clear that our regulated capital plan can be funded with additional effectively debt securities through our balance sheet. But that on the nonregulated side, as we pursue opportunities and we will be pursuing opportunities, we would look for potentially other sources of equity, which could include asset recycling or partnerships or the common equity markets if the right opportunity were to become available.

Kristina, on Interties, we've taken a conservative approach to that, not including Intertie opportunities in our capital plan. But I do believe there's a great opportunity here in Alberta for Interties, whether it be Northwest Territories, British Columbia or Saskatchewan. And we're having a lot of discussions with the federal government, provincial governments and the territories around that. I just think it's too early to start putting numbers into our plan with regards to Intertise. But I do think we have some great opportunities as a province and as a country to execute in that area.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Please go ahead.

Thank you, Asha, and thank you all for participating today. We appreciate your interest in Canadian Utilities, and we look forward to speaking with you again soon.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the Fourth Quarter 2025 Results Conference Call and Webcast for Canadian Utilities Limited. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for Canadian Utilities Fourth Quarter 2025 Conference Call. On the line today, we have Bob Myles, Chief Executive Officer; Katie Patrick, Chief Financial and Investment Officer. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous additional territories and homelands on which our global facilities are located. Today, I am speaking to you from our ATCO Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy comprised of the Siksika, the Kainai and the Piikani Nations, the Tsuut'ina Nation and the Stoney Nakoda Nations, which includes the Chiniki, Bearspaw and Goodstoney First Nations. I also want to recognize that the city of Calgary is home to the Metis Nation of Calgary, Districts 5 and 6. We honor and respect the diverse history, languages and ceremonies and cultures of the indigenous people who call these areas home.

Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings, adjusted earnings per share and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. Please refer to our filings with the Canadian securities regulator for further information.

And now I'll turn the call over to Bob for his opening remarks.

Thank you, Colin, and good morning, everyone. To begin, I'm really pleased to tell you about the strong results we achieved in 2025. Notably, we overcame $57 million of headwinds last year. This is a major feat highlighting our ability to deliver earnings growth in the phases of challenges. This is a testament to our strong work ethic, discipline and resiliency. Katie will speak to this more in the financial update.

I want to reiterate the key pillars driving our strategy and where we will focus our efforts in 2026. First, we have growth and prosperity. This is reflective of our project pipeline across all of our business segments. Next, we have operational excellence, which includes continuous modernization of our operating model with safety, reliability and resiliency at the forefront. And lastly, we remain focused on financial leadership, which includes our funding strategy and financial performance.

Beginning with our first pillar, growth and prosperity. 2025 was a transformational year at Canadian Utilities. The team at ATCO Energy Systems saw significant growth with over 19,600 new gas connections. This is the largest number of gas connections we've had in a decade, and we are projecting to continue this momentum into 2026. With our largest assets located in Alberta, we remain optimistic for the year ahead. Throughout 2025, Alberta experienced the strongest population growth, leading the country amongst all provinces.

As shown on this slide, this population growth, along with industrial development is also driving the increasing electricity load forecast for Alberta. We continue to believe that significant investment will be required in our service territory, reinforcing our view that Alberta is leading Canada's energy future. Aligned with Alberta's growth forecast, we are spurring investment and capitalizing on growth opportunities in front of us. Today, we announced a $12 billion 5-year capital expenditure plan across all of our regulated utilities, which I'm proud to say is our most ambitious plan in the history of Canadian Utilities.

As shown on this graph, you can see a significant increase in our natural gas transmission spending in 2026 and 2027. This is directly correlated with the Yellowhead pipeline project, which I will expand upon later in my remarks. Although 2028 will see a year-over-year decline in capital spend following the completion of the Yellowhead project, I want to highlight on this slide that our 2028 to 2030 plan will still be significantly above historical levels as we focus on 3 key areas: customer growth, system reliability and safety and climate and technology.

I will also note that the forecast does not account for any prospective major projects that may be approved to alleviate existing capacity constraint on the natural gas or electric transmission systems, nor does it reflect the possible approval of new interprovincial electric transmission lines. These potential projects would be additional growth not currently recognized in the forecast. Our strategic capital plan is driving our 5-year compound annual growth rate or CAGR of 6.9%, an increase from our previously announced 3-year forecast of 5.4%. This CAGR includes our regulated utility businesses and the impact from the Yellowhead pipeline project.

I would like to remind everyone that it does not include the growth ambitions from our nonregulated assets and only reflects regulated distribution and transmission, allowing for further growth for our organization. We are pleased to confirm that our Central East Transfer-Out project, or CETO, continues to progress on time and on budget with our 85 kilometers of the transmission line on track to be energized by June of this year. This $255 million investment directly mitigates grid congestion challenges and remains a critical piece of energy infrastructure in the province, improving the efficiency of our grid.

Beyond CETO, further opportunities exist to improve congestion of the electricity system as our transmission lines are located in key areas that will bring generation to consumers, including industrial development. Opportunities that we expect will drive long-term growth include the Northwest area transmission development. This is one area where the ISO has initiated needs identification development work for transmission reinforcements in the Grande Prairie area of Alberta to support existing demand, future load growth and reliability.

The size of this opportunity will be clear as we progress through 2026 with a preliminary cost estimate of $500 million. The McNeill converter station is another opportunity we continue to progress. As shown on the map, the McNeill converter station is currently the only intertie point between Alberta and Saskatchewan. Currently, the ISO-led work is being undertaken for an end-of-life replacement of the McNeill converter. Once complete, this will enable more generation to flow between Alberta and Saskatchewan, representing the next step in addressing regional congestion and supporting system reliability.

Due to the scope involved with this opportunity, preliminary cost estimates are approximately $1 billion, and we would expect the majority of the costs to fall outside of our 5-year capital plan. And finally, we believe there are a number of opportunities for us related to substations and interties. On substations, I'm proud to announce we recently had 2 new substations approved by the AUC in Fort McMurray and in Northwest Alberta, which will be in service in late 2026 and the first half of 2027, respectively. Beyond these projects, we continue to work on other substation development opportunities throughout the province of Alberta.

As it relates to interties, we are optimistic about the collaboration referenced in the Alberta, Canada MOU, which is expected to significantly increase the intertie transfer capability between the Western provinces, which we expect will be an opportunity for our utilities. Moving to our largest infrastructure opportunity, the Yellowhead pipeline project. This project will be a key conduit to connecting supply to demand growth while debottlenecking Alberta's existing natural gas network. Ultimately, the Yellowhead pipeline will relieve pressure on the entire Alberta integrated system, making it a key infrastructure investment in the province.

The Yellowhead pipeline is fully situated in Alberta, running through Treaty 6 territory. We continue to pursue partnership arrangements with indigenous partners, First Nations and Metis as meaningful participation remains essential and closely linked to our company values. In 2025, the project reached several milestones, including the approval of the needs application from the AUC. In late 2025, we also filed a facility application with the AUC. This facility application includes a detailed technical and environmental plan, along with our consultation data, a requirement for construction approval.

We expect to receive approval of the facility application by the third quarter of this year, which will enable us to commence construction. Other Yellowhead milestones accomplished in the last quarter include the procurement of steel pipe, the securing of major equipment for compressor facilities and the advancement in the selection of a number of service providers. We continue to work collaboratively with the AUC to progress this project, and I'm proud to share that the Yellowhead pipeline project is now 100% contracted, reinforcing the need for this natural gas pipeline in Alberta.

Moving to Australia. I'm also proud to say that ATCO Gas Australia continues to deliver strong results, particularly under the new access arrangement, AA6. For the 5-year AA6 period, the return on equity is 8.23%. Coupled with the arrangement, the Australia government forecasts significant population increases from which we will benefit and expect to grow by 80,000 new customers during the AA6 period. Our 5-year capital plan has $500 million of investment in our Australian gas business, and we remain confident that we will continue to see growth in Australia in the years ahead.

As I look at the non-reg side of the business, we have a strong base of assets that align with our strategic pillars of energy storage, generation and cleaner fuels. Notwithstanding the challenges renewable generation is facing in Alberta, we remain committed to the long-term strategic potential of power generation. In the fourth quarter, we acquired a 100% ownership interest in Northstone Power Corporation, an independent 18.6 megawatt power producer located near Grande Prairie, Alberta. Northstone primarily operates as a gas peaking facility, supplying power during periods where there is low renewable generation.

This acquisition provides differentiated economics and follows a distinct operating strategy, complementing our existing assets and strengthening our generation profile. As you can see on the slide, we have a balanced portfolio of gas-fired wind, solar and hydro generation assets. As previously mentioned, and based on our inability to get Government of Canada support for rail infrastructure expansion, we've made the decision to pause further work on the Alberta Hydrogen Hub project.

We did stage gate this cleaner fuel project opportunity, and we will reevaluate the project at a later date should investment in cleaner fuels like hydrogen become more economically feasible and market conditions become more favorable. The project remains part of the portfolio and our long-term cleaner fuel strategy. But in the near term, we require appropriate policy frameworks to make the project investable. As part of our cleaner fuel strategy, we continue to move ahead with the first phase of the Atlas Carbon Storage Hub in partnership with Shell Canada. This project serves as a centralized storage facility for carbon emissions in Alberta's Industrial Heartland region.

Construction has begun and once it reaches commercial operations in late 2028, Atlas will be another key nonregulated asset within our portfolio. Optionality allows us to choose growth opportunities we wish to pursue. Natural gas storage remains a valuable asset for our business, generating consistent and predictable cash flow based on long-term secure contracts. The growth in our storage business has allowed us the ability to offset the reduction in our generation earnings and still achieve our overall nonregulated financial targets.

We remain on track to expand the capacity of our carbon and Alberta hub assets from 117 petajoules today to 130 petajoules by the end of 2026. This expansion will support future natural gas storage financial performance. Outside of these accretive organic growth opportunities, we continue to review strategic opportunities for additional growth in both natural gas storage capacity and power generation, including M&A. We are well positioned to capitalize on these market fundamentals, and I look forward to sharing further updates as we progress through 2026.

Our second pillar, operational excellence, is anchored on safety, reliability and operational outperformance. Despite a challenging wildfire season with the number of fires in 2025, well above the 5-year average, we were able to maintain strong operational performance, reinforcing the strength and reliability of our infrastructure and systems. As evident by the year-over-year performance on this slide, we saw a significant improvement in the overall reliability of our Alberta distribution utilities despite headwinds caused by wildfires.

These results can be directly attributed to the teams across our company who seamlessly coordinated their efforts while responding with remarkable efficiency and unwavering dedication to the safety of our people. As we look at safety across Canadian Utilities, we were able to achieve 0 recordable incidents across our nonregulated businesses in 2025, a wonderful accomplishment. Throughout 2025, our team members continue to show their commitment to continuous improvement. And as we enter 2026, safety, reliability and operational outperformance will continue to be at the forefront of our operations.

Our third pillar is financial leadership. And with that, I'll pass the call to Katie to discuss this in further detail.

Thank you, Bob, and good morning, everyone. Following the financing plan I have discussed for the Yellowhead pipeline project in previous quarters, I'm very pleased to share that our portion of the equity investment of the project is fully funded. This was completed via combination of hybrids, preferred shares and cash from operations without the need to issue common equity. We continue to pursue partnership arrangements with indigenous partners for up to 30% of the remainder of the equity investment.

Looking at the full year 2025 performance for Canadian Utilities, we are very proud to have delivered year-over-year earnings growth despite many challenges put in front of us. Canadian Utilities achieved adjusted earnings of $658 million or $2.42 per share, up from $647 million in 2024. As you can see on the graph, this was an exceptional accomplishment as we were able to overcome $57 million of headwinds we faced. The first of these was a decrease in the 2025 return on equity and the completion of the efficiency carryover mechanism at the end of 2024. These factors immediately created a $26 million gap to overcome.

As Bob discussed, changing government policy also created significant earnings deficit from our renewables portfolio of $12 million. And lastly, as you can see on the slide, our strategic decision to redeploy capital from the sale of ATCO Energy to our core regulated business did create an earnings obstacle relative to 2024. However, redeployment of this capital contributed to the $36 million of Alberta utility rate base growth and other outperformance. Adding to this, our successful regulatory outcome and move into AA6 in Australia added $21 million of growth to Canadian Utilities.

And finally, we had $11 million of growth within our Storage and Industrial Water segment, an impressive 30% increase over 2024. Our continued adjusted earnings growth in the face of these headwinds highlights the strength and resiliency of the company's portfolio. I would particularly highlight the impact of targeted capital recycling out of ATCO Energy into our core utilities, which created an immediate positive impact to our shareowners. As we look ahead, we are well positioned entering 2026, and we expect to deliver further adjusted earnings growth on a full year basis.

Looking at the specific business units, ATCO Energy Systems delivered adjusted earnings of $642 million in 2025, $10 million higher year-over-year. When factoring in the impact from the change in the ROE and completion of the efficiency carryover mechanism, ATCO Energy Systems drove an impressive $36 million of growth within its regulated utilities, driven primarily by growth in rate base and a prudent focus on delivering cost efficiencies. Within ATCO EnPower, we successfully delivered comparable results to the prior year.

As shown in this graph, this was due to the strong performance of our Storage and Industrial Water segment, which, as I mentioned, delivered adjusted earnings growth of 30% year-over-year. This segment continues to generate consistent earnings growth. And as Bob spoke to, we continue to progress our expansion of key facilities that will result in additional storage capacity for us by the end of this year. ATCO Australia had an excellent year and was a key driver of growth at Canadian Utilities, delivering adjusted earnings of $69 million, up $21 million year-over-year.

This is an almost 45% increase in year-over-year adjusted earnings, and I want to congratulate the team's effort in transitioning seamlessly into the new access arrangement, AA6 and their focus on driving efficiencies and outperformance across all of our operations in Australia. From a cash flow perspective, our cash flow from operating activities increased by $144 million. Our strong foundation of regulated utilities continues to drive cash flow, earnings and our long and consistent history of dividend growth. In 2026, we will continue to execute our proven strategy and focus on finding efficiencies across the business to ensure we create shareowner value.

I will now turn the call back to Bob for his closing remarks.

Thanks, Katie. As we close out 2025, we have positive momentum heading into 2026. In the year ahead, we will continue to advance strategic initiatives that reinforce our stability, expand our capabilities and position the business to capture long-term value. I hope you agree it was an outstanding year as our team worked very hard to overcome many headwinds to drive earnings growth.

That concludes our prepared remarks. I'll turn the call back to Colin for questions from the investment community.

Thank you, Bob, and thank you, Katie. [Operator Instructions] I'll now turn it over to the conference coordinator for questions.

[Operator Instructions] The first question comes from John Mould with TD Cowen Securities.

First of all, I'd just like to touch on the renewable impairments, a bit of a 2-part question. One, how much of this is due to planned versus actual curtailments since you bought the assets versus uncertainty around future congestion policy and where financial transmission rates are going? And then sort of flowing from that, EnPower generated about $60 million of EBITDA in 2025. How much lower could this go under the scenario that underpin that impairment decision?

John, I'll start, Bob here. On the curtailment, when we, I guess, got into the renewables business 3, 4 years ago, there was a policy of 0 congestion in the province. That has since changed. And to give you a sense, probably 12 to 15 months ago, we were seeing 0 congestion on our largest facility, our 40-mile wind project. We're now seeing upwards of 40% curtailment. So it's pretty significant. We're obviously working hard with the ISO and the government to actually address that. But as of right now, that's a pretty significant impact on our ability to generate power in the area.

Katie, why don't you comment on the financials?

Yes, John, I mean, I think when you think about how we look forward for the renewables business, I mean, it's a very challenging market, as we've highlighted before, but I think you can see comparable year-over-year. We expect comparable earnings profile going forward. I can't exactly translate it to EBITDA, but I'm sure we can give you some help with that offline as well.

Okay. No, that's helpful. I appreciate that. And then just maybe on the gas side of things, you highlighted looking at gas M&A and the peaker you bought. How much of what you're potentially looking at is additional acquisitions of smaller gas in Alberta? Is there a potential for you to build a bit of a peaker portfolio there? Are you looking outside the province? Or -- and would you consider development opportunities in any circumstances just being mindful of the merchant nature of the market?

Yes, John, I mean, as we've said in our capital forecast, that's the regulated side, and I'm sure you saw that as well. On the non-reg side and specifically in generation, we have been looking at different gas -- peaker gas generation opportunities. Would we look outside Alberta? Yes, we would. We see some opportunities in Australia to basically develop as well as to acquire. So we would look at both organic and inorganic opportunities. But the thing that I would really stress is that it's got to be economic. We are not going to do things just for the sake of doing a deal.

The next question comes from Mark Jarvi with CIBC Capital Markets.

[indiscernible] the equity for that is fully covered. How would you frame the overall funding as you look out over the 5-year plan to 2030? Would there be a need for any external equity to fund the growth?

Yes. Thanks, Mark. Yes. No, we're really happy that we have cleared away the headwinds that were in front of us in terms of headwinds in terms of trying to make sure we had a clear funding strategy for Yellowhead. I think that was an important step for us. And as you know, we've released the new 5-year capital forecast. I think as we move forward, we should see higher cash flows obviously coming from the investment in Yellowhead and the renewed rate base. But we will continue to look to maximize the funding plan for shareowner value. And as we get closer to those investments, roll out a more specific funding strategy as we are with Yellowhead right now in the near term.

In the past, you've mentioned potentially some minority asset sales or even noncore asset sales. Is that something that's still on the table beyond Yellowhead? Yes.

Yes, absolutely, we would consider any option that's going to maximize returns to investors and capital recycling is part of the mix in terms of how we would fund future growth.

And then, Bob, just on Yellowhead facility application, you're trying to get it by Q3. Can you just comment in terms of time lines, if it slips a little bit, any implications, what that could do for the project in itself?

Yes, Mark, we -- knock on wood here, we're optimistic that we will receive it. We have a hearing date set with the regulator right now, which is actually about 3 weeks ahead of what we had in our original plan. So that's encouraging. We -- obviously, we want to be in construction in late Q3 is kind of our time line. The current plan is we're still on track to do that. If it slips, then, of course, it would -- the construction onstream date would slip as well. We have some room to be able to move on that. But we're definitely taking a look at the schedule. I'm not going to say on a daily basis, but definitely on a weekly basis, we're evaluating the schedule and making sure that we have some ability to have some float in that schedule.

Typically, if something gets delayed a little bit, there's some cost increases. Is your view though that, that would be fully put back to the ratepayers? Or would there be a view that maybe you'd have to reevaluate even the scope of the project somehow?

We have been working with the regulator, Mark, specifically on some plus or minus in our estimate. We filed an application of $2.9 billion, plus or minus 20% because we still don't have final design, and we don't have all of that schedule locked down yet for the reasons you've mentioned. But we are working with contractors quite closely to partner around how we can definitely execute this on time and on budget.

The next question comes from Maurice Choy with RBC.

Just wanted to come back to the rate base CAGR. Previously, I know that you've mentioned a long-term CAGR of 4% to 5%. And obviously, today, you've further increased it from 5.4% to now 6.9%. Is there -- if I look at some of the commentaries that you made today, it sounds like there is even more to come as well. So just curious whether or not this 4% to 5% long-term CAGR is still valid or not?

Yes, Maurice, I am quite proud to say that we have increased our CAGR. As I mentioned, there are opportunities that we're pursuing to allow us to increase that further. We just want to make sure we're comfortable with the numbers that we put forward. We do think there is potential, but we want to -- again, we want to make sure that whatever we put forward that we can actually execute on that.

Maybe just a quick follow-on to that. When I think about your philosophy of what's baked into this $12 billion of CapEx, you mentioned it doesn't include prospective projects such as those on Slide 11. Is it fair to say that the projects in this $12 billion pipeline are projects that either have been approved or have effectively been sanctioned such as the Yellowhead project?

Yes, exactly, Maurice, is you might say that's a conservative way of looking at it, but we do want to feel very confident in the projects that we put into our capital forecast. We have been working with the ISO. We have been working with the regulator on those projects. There is, as you know, the time delay from pursuing some of these projects to getting them into rate base, which we obviously are working on that issue as well. But yes, I would say that we're pretty comfortable with the numbers that we're putting forward.

Understood. And if I could just finish off with discussion about guidance and more specifically EPS guidance. I know you guys don't put that out. And I suppose you have at least 2 moving parts here, one being the annual update to your Alberta ROEs. And secondly, any equity raises that you may do seeing us -- it doesn't sound like you're ruling that out from an earlier response. So beyond these 2 items, can you just discuss some of the top things that could prevent you from delivering an EPS CAGR that's similar to your updated 6.9% rate base CAGR?

Yes. Thanks, Maurice. It's Katie. I think you hit on the 2 big ones that are moving factors when we look at how we will deliver earnings per share growth in the future. And the other one, obviously, would be the outperformance. And we have a long history of strong outperformance, but as we move through, as you know, we've moved through a number of different PBR cycles as well as different characteristics associated with our transmission applications. And so those can create some upside or can create some headwinds in terms of how we would deliver precise sort of earnings related to that rate base growth. So I think those are a few of the -- some of the biggest items that we would -- can have a bit of volatility in them.

And do you envision the non-reg business to provide -- I'm sure there's upside, but material upside beyond just the infrastructure -- regulated infrastructure category?

Yes. Sorry, apologies. And that rate base growth, of course, would not include any growth that we would have from the nonregulated side, but we are definitely looking for not insignificant growth, but we are looking for that to be a big driver of growth for us in the future.

[Operator Instructions] The next question comes from Ben Pham with BMO.

I wanted to follow up on Mark Jarvi's question on funding. I just didn't totally get it or crystal clear from my standpoint. In your CapEx plan you have now, do you need equity to fund that? Or can you self-fund the $12 billion?

To be clear, I think that as we get further out, there probably will be the need for some form of capital recycling or equity component to that $12 billion capital plan. But we are very focused on the near term and delivering successfully on the project at Yellowhead, which we have now fully funded. So for the next few years, I think we're in a good position, and we'll keep people posted on how it looks for the outer years of that capital plan.

Okay. Got it. And on the top of acquisitions, you now have the 7% rounded rate base CAGR. You have maybe some upside beyond that in acquisitions or nonorganic growth opportunities. I'm just curious then, I mean, that's generally pretty good growth rate in North America as a leading point. Why are you pursuing acquisitions than when you're considering just the balance sheet right now to and where it's going forward. Is that sort of strategic angle you're looking at? Is it relative valuations versus organic growth? Maybe enlighten us a bit on the acquisition strategy?

Ben, I would say one of the big things is, obviously, we want to try to continue to increase our earnings per share and which is why I said earlier that not really interested in acquisitions if they're not going to be accretive and not going to really make economic sense. But the other benefit of looking at acquisitions for us is geographic diversification. And Australia is an area that I really believe is a great opportunity for us. And so an acquisition in Australia would be something that we would consider. Just to give you an example of that. But also as we grow our portfolio, it's got to be the right acquisition. And so it's more around those items, I would say.

The next question comes from Patrick Kenny with National Bank.

Sorry, Patrick, we're having some trouble hearing you. So maybe we'll just continue on with the call.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Please go ahead, Colin.

Thank you, and thank you all for joining us today. We appreciate your interest in Canadian Utilities and look forward to speaking to you again in the future.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the Third Quarter 2025 Results Conference Call and Webcast for Canadian Utilities Limited. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for Canadian Utilities Third Quarter 2025 Conference Call. On the line today, we have Bob Myles, Chief Executive Officer of Canadian Utilities Limited; and Katie Patrick, Executive Vice President, Chief Financial and Investment Officer. .

Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and home lands on which our global facilities are located. Today, I am speaking to you from our ATCO Park head office in Calgary which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy comprised of the Siksika, the Kainai and the Piikani Nations, the Tsuut'ina Nation and the Stoney Nakoda Nations, which includes the Chiniki, Bearspaw and Goodstoney First Nations. I also want to recognize that the city of Calgary is home to the Metis Nation of Alberta, Districts 5 and 6.

During the quarter, employees across Canada recognized the National Day for truth and reconciliation by walking together to honor indigenous communities and their experiences. May we continue to reflect, learn and respect the diverse history, languages, ceremonies and cultures of indigenous peoples as we move forward towards understanding healing and reconciliation.

Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, including adjusted earnings, adjusted earnings per share and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. Please refer to our filings with the Canadian security regulators for further information.

And now I'll turn the call over to Bob Myles for his opening remarks.

Thanks, Colin. Good morning, everyone. I want to begin by highlighting 3 key pillars of our long-term strategy. growth and prosperity. This includes our robust project pipeline and our policy and regulatory partnerships. Operational excellence, which includes modernizing our operating model with safety and reliability at the forefront and financial leadership, which touches on our funding strategy and financial performance. .

Moving to our first pillar, growth and prosperity. Foundational to our growth at Canadian Utilities are the economic drivers we are seeing in the province of Alberta. Alberta continues to lead population growth in Canada and in Q3 2025, Alberta's population reached 5 million people, up 2.5% year-over-year. Canadian Utilities plays an essential role in enabling this population growth. In 2025, we are on track to connect over 19,000 customers in ATCO Energy Systems, particularly in our Alberta gas business, in line with the strong growth we delivered in 2024, which saw our highest number of customer connections in almost a decade.

When we look at the projects driving our growth and prosperity pillar, I want to begin with our Central East Transfer-Out project or CETO. At a high level, this $280 million project assigned by the Alberta Electric System Operator upgrades and strengthens the transmission system in Central East Alberta. Alberta's electric transmission system has experienced ongoing congestion challenges affecting the reliability of the grid, the market efficiency and the integration of new energy sources. In response, CETO was developed to directly address these constraints.

CETO is a critical energy infrastructure investment, representing meaningful progress for Alberta's electric system by enhancing the efficiency of how power flows across the electric grid, CETO makes it easier to deliver energy to where it is needed most, like major demand centers in Calgary, Edmonton and Northern regions. CETO is deep into construction and remains on track to be completed in the first year -- first half of next year. The project will have a significant benefit to our customers across the province modernizing and enhancing the reliability of the transmission system. Beyond CETO, we believe further opportunities exist to improve congestion.

An example is the McNeill converter station, currently the only intertie point between Alberta and Saskatchewan, as shown on this slide. The McNeill station recently underwent repairs and is being evaluated for a capacity upgrade. Once complete, this upgrade will enable more generation to flow between Alberta and Saskatchewan, representing the next step in addressing regional congestion.

Moving to natural gas. Our assets are strategically positioned in areas that allow us to capitalize on the spectrum of energy opportunities being delivered. On the map, you can see our 3 gas storage assets are well positioned near natural gas production zones, major project infrastructure as well as locations associated with the planned data center developments and links to LNG development. Our Yellowhead pipeline project that I have discussed previously is a required addition to the natural gas network in Alberta and it will be a key conduit to connecting supply to demand growth. Yellowhead creates a new direct corridor from the Northwest Alberta supply region to the Greater Edmonton area, debottlenecking constrained segments and reducing reliance on longer, more complex flow paths.

This relieves pressure on the entire Alberta integrated system improves delivery reliability for all types of customers across the province and frees up capacity for not only residential demand, but industrial, power generation and commercial growth making it a foundational investment in Alberta's energy future. Overall, it is evident that natural gas is needed more than ever in Alberta, and we remain in a very strong position to capitalize on the growth opportunities within the province. There have been positive developments on our Yellowhead pipeline project during this past quarter. We are pleased to announce the approval of the needs application from the Alberta Utilities Commission, or AUC, I'm also excited to announce that we filed the facilities application with the AUC earlier this week, which will provide detailed technical, environmental and consultation data required for construction approval.

The filing of the facilities application is a key milestone in the regulatory process and demonstrates that we have completed sufficient consultation with communities, environmental studies and engineering to permit the construction of the project. The Yellowhead pipeline project remains 90% contracted and will deliver long-term economic benefits while strengthening the provinces natural gas network.

In the third quarter, 2 additional service offerings to the market were undertaken. We expect that some or all of the remaining capacity provided by Yellowhead will be contracted through these offerings. While we waited on final regulatory approvals, we have successfully awarded major equipment contracts for the compressor facility. In the fourth quarter, we will place major contracts for the supply of steel pipe. Ordering these long-lead materials is prudent to preserve our in-service date and avoid cost escalations and supply chain delays. As you can see on this slide, the Yellowhead pipeline runs through Treaty 6 territory in Alberta, which is why we continue to pursue partnership arrangements with indigenous partners, First Nations and Metis. Early meaningful and continuous economic indigenous participation in infrastructure projects on traditional land is essential for development, reconciliation and long-term project success including the Yellowhead Pipeline project.

An integral part of our nonregulated growth at Canadian Utilities is from our natural gas storage operations. We've had a strong year in natural gas storage with increases in seasonal spreads, driving strong customer demand for our facilities. We have successfully optimized our storage facilities by contracting through staggered contract maturities over the coming years. The plans I have previously discussed to expand our existing storage capacity from 117 petajoules to date to 130 peta joules in late 2026 positions us for continued growth and financial performance in the years to come.

As we look at the future of storage and the broader market trends, a number of fundamentals are driving the demand for gas storage. Storage capacity growth across North America has slowed to less than 1% annually since 2016. While gas demand across North America continues to increase driven by industrial demand, LNG demand and new power generation accelerated by the build-out of data centers. As a leader in natural gas storage, we have the technology, the infrastructure, customer base and experience to execute and build out additional storage capacity.

Beyond the brownfield expansion that we have already identified, we continue to explore strategic opportunities for additional growth in storage capacity, both within Alberta and the broader North American market.

Similar to the opportunities ahead of us in Alberta, our ATCO Australia businesses, which is a provider of regulated natural gas distribution services in Western Australia and a developer and owner of gas-fired generation is also well positioned given Australia's evolving energy landscape. The developing regulations, government emissions reduction targets and associated investment incentives present ATCO Australia with opportunities which the business is well positioned to pursue.

Our gas utility business in Australia has developed a strong -- delivered a strong 2025, and we expect this growth to continue into the years ahead. as the Australian government remains focused on enabling the development of new infrastructure to meet increasing population growth. In response to this, we continue to focus our new customer connections. Under our new access arrangement, AA6, our 5-year plan sees us growing by approximately 80,000 new connections as customer sentiment towards gas continues to be positive in Western Australia. This amounts to a 27% increase in expected customers compared to our previous access arrangement. For the 5-year AA6 period, we're operating under a higher return on equity of 8.23% driving consistent earnings for Canadian Utilities.

Our second pillar, operational excellence, is anchored on safety, reliability and operational outperformance. Safety is a key element linked to our long-term growth by continuing to foster a strong safety culture. We ensure that operational efficiency and reliability are achieved without compromise. Safety across Canadian Utilities requires collaboration and a continued focus on our commitments. We must learn from incidents, promote safety initiatives and champion workplace safety across the business.

From an outperformance perspective, our utilities are known for their ability to drive operational efficiencies. In 2024, our Australia utility delivered over 550 basis points of outperformance above the regulated ROE, while our utilities in Canada drove almost 100 basis points of outperformance above the regulated ROE. As we move ahead, we will share our learnings across all businesses like Canadian Utilities with a focus on driving further efficiencies across IT, supply chain and administrative costs. I look forward to sharing further updates on this over the upcoming year.

Our third pillar is financial leadership. And with that, I'll pass the call to Katie to discuss this in further detail.

Thanks, Bob, and good morning, everyone. And can I say what a great quarter we had, but I'll start with our external funding. I want to provide an update on our successful financing we executed in the third quarter. On September 8, Canadian Utilities Limited announced a $750 million transaction of hybrid notes at a fixed rate of 5.45%. And on September 11, CU Inc. announced a $370 million transaction of debentures at a rate of 4.787%. I am proud to say that these offerings had significant interest from the investment community at approximately we're 3x oversubscribed across a strong pool of buyers.

This confirms that there is sufficient investor demand to satisfy the funding requirements for the total investment in Yellowhead, which will be funded according to the regulated capital structure of 63% regulated debt and 37% regulated equity. We continue to pursue partnership arrangements with indigenous partners that may contribute up to 30%. The remaining investment of approximately $750 million will be funded through Canadian utilities with gross -- with proceeds coming from diverse capital sources, including the $500 million from the September 2025 fixed to fixed rate subordinated notes, cash from operations and other future potential issuances of hybrids or preferred shares. I look forward to updating you very shortly on this. As with all our capital decisions, we will review all options and choose what is in the best interest of shareowner value creation.

Looking at our third quarter performance for Canadian Utilities as a whole, we delivered positive earnings growth year-over-year. We achieved adjusted earnings of $108 million or $0.40 per share up from $102 million for the same period in 2024. This was despite headwinds, including a reduction in their approved ROE for our Alberta utilities and the conclusion of the efficiency carryover mechanism or ECM. Our strong performance was driven by growth across all of our core businesses. ATCO Energy Systems delivered adjusted earnings of $98 million in the quarter, $4 million higher year-over-year. Despite $6 million of headwinds from the reset in our approved ROE and the conclusion of the ECM for our distribution utilities. We still deliver growth within Energy Systems. While ATCO Energy Systems has seen an increased earnings year-over-year. We expect to face headwinds in the upcoming quarter as we will not have the same tax efficiencies that we achieved in Q4 of 2024.

ATCO EnPower delivered adjusted earnings of $16 million, up $2 million year-over-year. In the Storage and Industrial Water segment, we continue to deliver growing earnings. As Bob mentioned earlier on the call, we plan to grow the storage business and capitalize on brownfield expansion opportunities. In electricity generation, adjusted earnings were up for the quarter driven by higher compensation related to turbine availability guarantees at our Forty Mile wind facility and higher generation at the Veracruz Hydro facility in Mexico.

ATCO Australia delivered adjusted earnings of $27 million during the quarter. This is $12 million or 80% higher than the same period last year. As Bob noted earlier, we continue to see momentum within our ATCO Gas Australia business with earnings growth driven by higher rates and outperformance. This accounted for the majority of the improvement. At ATCO Power Australia, higher earnings were primarily due to the settlement of the South Australian Hydrogen jobs plan project. From a cash flow perspective, our cash from operating activities increased 12% compared to the same period last year. The cash we generate will be used in combination with the external funding I previously discussed to fund our enhanced capital program that will generate future earnings growth.

Overall, we remain in a strong financial position as we round out the last quarter of 2025 and head into 2026. We continue to remain focused on finding efficiencies across the organization, including supply chain improvements, repatriating some IT operations internally and consolidating senior levels of leadership, all while executing on our strategy to generate long-term value for all stakeholders, including our shareowners. I will now turn the call back to Bob for closing remarks.

Thanks, Katie. It's evident from this quarter that we've seen strong momentum across our businesses when we work together as one organization. To reiterate, our 3 pillars guiding our future include growth and prosperity, operational excellence and financial leadership. It's an exciting time at Canadian Utilities. The environment in which we operate continue to have positive tailwinds, including Alberta, where we are positioned to benefit from the province's focus on natural resources and economic growth. Our unique position as an operator of utilities, storage and generation assets positions us to capitalize on the opportunities ahead of us and to be a key provider for all of our current and future customers. .

I look forward to leading us through this period of growth, and we'll share our progress on our initiatives throughout 2026. That concludes our prepared remarks. I'll turn the call back to Colin for our question period.

[Operator Instructions] I will now turn it back to the conference coordinator for questions.

[Operator Instructions] The first question comes from Rob Hope with Scotiabank.

Hoping we can dive a little bit deeper into ATCO Gas Australia or even the Australian business in aggregate. Year-to-date, you're up 42% and the ATCO Gas under AA6 has been quite strong. So can you maybe help us understand kind of the key drivers of the strong growth with the outlook for Q4 and whether or not you would get back to a more normal kind of growth rate in '26 and '27?

Sure. Rob, it's Katie. We're really happy with the AA6 parameters that were set out. And you can see a lot of our strong earnings growth there. That being said, there were some onetime items that we had this year that we would not repeat next year, including the settlement on the South Australia hydrogen jobs plan as well as some cleanup of a previous project that we are working on Central West Pumped Hydro. But all that said, we do expect the continued strong growth that we had in the outperformance that you can see specific to ATCO Gas Australia. Those 2 onetime items that I'm talking about mostly show up in the ATCO Power part of the segment. So I think we continue to have headwinds behind us there. We also do benefit from the inflation indexing, and we're watching that closely, but I think that could help in the future a little bit as well going forward on some of our earnings there in Australia.

Rob, if I could just add, I also think there's some great opportunities to look for efficiencies across our operations in Australia as we align across Canadian utilities. So I do think there's some great potential for Australia.

All right. I appreciate that. And then maybe more broadly, looking at the electric transmission opportunities in Alberta. You have a potential for a significant increase in load in the province. However, the system operator is trying to minimize transmission investment. How does that kind of balance for the growth outlook for that business?

Yes, Rob, I really enjoy talking about that topic because we do think there's some great opportunities for electric transmission build in the province. We do have to consider that as we look at affordability across this province as it impacts the consumer. But in the capital forecast that we've been giving, we don't have capital in there for things like interties, and we do think there's some great opportunity with interties. But the projects that are in our service territory, we think we're well positioned to capitalize on those. And much of the growth is actually in our service territory. So we do see there's some great potential there. .

The next question comes from Maurice Choy with RBC Capital Markets.

I just want to come back to Slide 17 about the funding of the Yellowhead pipeline. Can I just ask how advanced you are in terms of securing the 30% investment with indigenous partners. And if you could help break down that $261 million of remaining funding a little bit more, what drivers are there to determine how much from cash from operations and how much from, I suppose, equity raises?

Maurice, thanks. I'll comment on the indigenous kind of status and then let Katie comment on the rest of your question. I personally have had a lot of conversations with the indigenous communities. I'm very optimistic that we will have that in place. It takes a little bit of time, but we've had really good conversations. And we, as an organization, are very committed to making that happen. And I know the conversations I've had with those indigenous communities, we're also getting a lot of support from their side as well. So I'm pretty confident in that. .

And Maurice, to your second question related to the $261 million. I would just say stay tuned, but we don't -- just to be quite clear, we don't anticipate having to access the public equity markets for that amount of money. And I think there's a depth in other capital areas, in some of the hybrid preferreds in some of those markets to be able to fulfill that need shortly.

Understood. That's great color. And if I could just look into your discussion about, I guess, hydrogen. Not a whole lot of mention here, but I suppose if we look at the Canadian budget and you look at the major projects office, how do you feel about your projects? Were there any takeaways from the budget or even from the initial list of comments from MPO that you think would be positive takeaways to facilitate your H3 ambition?

Maurice, we've spent a lot of time, as you know, working with the federal government on our project that we are pursuing, ammonia by rail based on hydrogen development. And there are some encouraging things that are in the budget, but we do not have a lot of capital put in our plan for the hydrogen project, because we just don't have the full confidence that that's going to develop. We're continuing to do some work on it, but we need to see more definitive signs from the federal government that they'll support the project. And specifically, we need to see more certainty across Canada for the project. So -- we're still having conversations, but it's not -- it's definitely not one of our key opportunities right now. .

Next question comes from John Mould with TD Cowen.

Thanks for that Yellowhead financing slide that really helps lay things out. I guess -- on the nonregulated side, beyond the storage opportunity that you discussed earlier, where do you feel like you've got the best line of sight or best potential on possible regulated investments over the midterm -- excuse me, possible investments over the midterm outside of the regulated platform.

John, again, Bob here. We do -- first of all, I don't want to dismiss the gas storage because I think there's such great opportunities in gas storage. But in addition to that, we do see some opportunities in generation, but primarily in gas-fired generation, not in really going out and building a lot more renewables. We do think there's pockets of electric storage. In other words, batteries that we can pursue. And then And when I say gas-fired generation, I'm saying both in Alberta and in Australia, we think there's opportunities there in the near term.

Okay. And then just speaking about generation more broadly in the province of Alberta, can you maybe speak a little bit to your engagement on -- and I know it's an ongoing process, but your engagement on the market design reforms there. And also on the transmission side, what you're hoping to see -- sorry, I should say the transmission regulation side as it applies to generation. And what you're hoping to see as an owner of generation in the province and as a potential investor in incremental generation in the province, be that gas-fired or renewables down the road.

And John, you're correct. They are 2 different things. The impact on generation versus the impact on electric transmission as we said earlier, we think there's some great opportunities in the province for electric transmission. On the generation side, it is being impacted and will be impacted by the long-term plan with the restructured energy market, as we've discussed previously. We're also having a lot of conversations with the government as we speak around the 0 congestion policy that was tied to the transmission regulation changes over the last couple of years. The conversation to the government are encouraging that they recognize the impacts that changing the 0 congestion policy has on generation. So we're continuing to work that.

I am optimistic that we'll actually get something from the government to give us more confidence on where we're going with generation. But as a province and as an investor, we do need to get more confidence in the province as to what's going to happen with the rules uncertainty before much more generation is built in this province.

Our next question comes from Ben Pham with BMO.

I had a couple of questions on the gas storage commentary you had. Maybe just to start in Alberta. Isn't it better to leave an open book into a rising contract price in Alberta, given what LNG export thematic is playing out?

Are you saying, Ben, just keep it all merchant. I'm trying to -- sorry, I'm trying to understand your question.

Yes. I was wondering your philosophy around you've locked in contracts is what you said and extensions in a rate that's probably about $1 or so. And why not just wait a while, a year or 2 and capitalize on potentially a rise in movement in the storage rates. So I'm not saying keep it all merchant, but just thinking about you philosophy between weighing those 2 differences.

Yes. Ben, I'm a huge believer in a balanced approach. So if you look at our gas storage, we have a balance of contracting out part of our storage to customers. So they have access to that storage based upon what they want to do. We also do a lot of seasonal deals with our customers, which is a different type of service. And then the third service is doing a lot of day-to-day service, which is probably more what you're talking about is looking at more of that merchant market. So we actually do some of that. But we do like to lock in our deals, and I think we've been very successful on that. So I do feel like we need to have a balanced approach, not all of just one scenario or the other.

Okay. Got it. And then you also mentioned looking at other regions, maybe acquisitions or development. Is there a particular region that looks very interesting to see you at this point of time, we've seen some announcements in the Gulf Coast today from another company.

I'm assuming you're still talking about gas storage, Ben?

Yes, that's right.

Yes. And I actually believe across North America, there's opportunities for gas storage. And so we are evaluating opportunities, again, across the North America gas storage environment. So I would agree with you on that.

Okay. So it's pretty broad to look out right now? .

Yes, yes.

Okay. And maybe lastly, I just wanted to check on Yellowhead with the CapEx. You had a couple of details there. A couple of years ago, you had an initial figure, you updated on scope. What stage are you at right now? I don't know if you use an engineering hat on it in terms of really your confidence in that CapEx numbers, just looking at past projects where they've hit the needs and then you go into the next phase.

Yes. We keep updating our capital forecast on that, and we're down to a Class 3 kind of plus or minus 20% estimate currently. As of today, we're looking at $2.9 billion is kind of what we're -- we've informed the Alberta Utilities Commission as to the cost of that. As we progress with long lead materials, we can lock in more of the supply chain side of it. And then in 2026, we'll be going to the market for contracting pricing. So we'll get better confidence as time moves on. Obviously, the risk with building that pipeline in addition to supply chain and contractors is always weather. And that's something that we have to do the best we can to manage that. .

Since there are no more questions, this concludes the question-and-answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Please go ahead.

Thank you, and thank you all for participating today. We appreciate your interest in Canadian Utilities and we look forward to speaking with you again soon.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.