Capital Power (OTCPK:CPRH.F) 2025 Investor Day Transcript

Capital Power 2025 Investor Day Summary Company Overview - Company: Capital Power (OTCPK: CPRH.F) - Focus: Natural gas-fired generation, with a commitment to reliable, affordable, and effective energy solutions in North America Key Industry Insights - Natural Gas Demand: The demand for natural gas is critical to meet the growing electricity needs in North America, particularly due to the AI infrastructure boom and increasing reliability concerns in the grid [13][16][19] - Electricity Demand Growth: Forecasts indicate that the U.S. will need 20% more power generation by 2030, with significant contributions expected from natural gas [19][20] - Market Dynamics: Higher power prices and longer contract lengths are becoming the norm, indicating a favorable environment for natural gas investments [19][48] Financial Performance - Shareholder Returns: Capital Power has delivered a 20% total annual shareholder return over the past decade, outperforming Canadian Independent Power Producers (IPPs) and major indices [7][8] - Value Creation: The company has generated CAD 65 per share in value, with CAD 20 from dividends and the remainder from share price appreciation [8] - Growth Strategy: The company anticipates 8%-10% cash flow growth and a 50% increase in U.S. capacity over the next five years, with total shareholder return expectations raised to 13%-15% [28][30] Business Model and Strategy - Core Business: Capital Power operates three key businesses: natural gas generation (90% of capacity), a growing storage and renewables business, and a supply and trading business [22] - Acquisition Strategy: The company has invested over CAD 8 billion in assets since 2016, focusing on acquiring existing natural gas generation assets to optimize and enhance value [23][60] - Operational Excellence: The company emphasizes operational discipline, with a focus on optimizing existing assets to maximize efficiency and reliability [31][35] Growth Opportunities - Pipeline of Opportunities: Capital Power has a robust pipeline of growth opportunities, including nearly 8 gigawatts of potential within its existing fleet and external acquisitions [24] - Partnerships: The company is entering a partnership with Apollo Global Management to invest up to $3 billion in acquiring new merchant gas power plants, enhancing growth and shareholder returns [25] - Re-contracting Potential: The company expects significant EBITDA growth through re-contracting, with potential increases in contract pricing leading to substantial revenue growth [54][58] Market Positioning - Competitive Advantage: Capital Power's ability to commercialize, trade, and operate megawatts provides a unique edge in the market, allowing it to capture value effectively [22][43] - Focus on AI Infrastructure: The company is positioning itself to meet the energy demands of AI-driven loads, with tailored solutions for large-scale customers [56][57] Conclusion - Strategic Focus: Capital Power's strategy is clear and consistent, focusing on natural gas as a critical component of North America's energy future, with a disciplined approach to capital allocation and operational excellence [29][30] - Long-term Vision: The company is well-positioned to capitalize on the growing demand for reliable energy solutions, leveraging its existing assets and strategic partnerships to drive future growth [60][62]