Good day. And thank you for standing by. Welcome to Clearway Energy, Inc. First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the call over to your speaker today, Chris Sotos, outgoing President and CEO of Clearway Energy, Inc.

Good morning. Let me first thank you for taking the time to join Clearway Energy, Inc.'s first quarter call. Joining me this morning are Akil Marsh, Director of Investor Relations; Sarah Rubenstein, CFO; and Craig Cornelius, President and CEO of Clearway Energy Group, our sponsor, and incoming President and CEO of Clearway Energy, Inc. Before we begin, I'd like to quickly take note that today's discussion will contain forward-looking statements, which are based on the assumptions that we believe to be reasonable as of this date. Actual results may differ materially. Please review the safe harbor in today's presentation as well as the risk factors in our SEC filings. In addition, we’ll refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation. Turn to Page 4, CWEN’s first quarter delivered solid results, primarily due to strong renewable resource at Alta, generating $52 million of CAFD, establishing a strong start for the year, allowing for a reaffirmation of our 2024 guidance of $395 million. Clearway also increased its dividend by 1.7% for the quarter, bringing our quarterly dividend to $0.4102 A share, or $1.6408 on an annualized basis, in line with our targeted dividend growth of 7% for 2024. Our latest investments continue to achieve commercial operations, with Cedar Creek and Texas Solar Nova 2 now contributing to CWEN’s CAFD. CWEN also committed to approximately $65 million of new corporate capital deployments since our last earnings fall, generating five-year annual average CAFD yields of approximately 10%, with the executed agreements on Dan's Mountain, and Rosemont South 1. As a result of our continued execution on deployment of the thermal proceeds, CWEN is increasing our pro forma CAFD outlook to $420 million from…

Thanks Chris. I want to start just by saying how grateful all of us at Clearway are for the truly remarkable work that you've done over more than a decade to build up the business that we have become. As the results we achieved during the last quarter attests, you're leaving Clearway Energy, Inc. in a strong position, with forward momentum. We look forward to honoring your legacy with execution and value creation in the quarters and years ahead. As Chris mentioned, CWEN is well positioned to be able to fully allocate the remaining thermal proceeds in 2024 via committed investments on dropdown offers that will enable CWEN to meet its previously stated goal for run rate CAFD per share in 2026. Together, the partnership interests offered already, and the pending offer, will provide the opportunity to invest approximately $150 million of corporate capital into projects with very solid long-term contractual structures at an accretive CAFD yield of 10%. Once these offers go through CWEN's customary rigorous underwriting and approval process, led by CWEN's independent directors on the governance conflicts and nominating committee, these future potential commitments can complete CWEN's growth investment path to achieving $2.15 of CAFD per share by 2026. To go into more details on the existing and pending offers, the first projects I'll highlight are the Luna Valley and Daggett Storage 1 projects. Highly compatible with CWEN's investment mandate, the project's generation and capacity is underpinned by diversified node-settled contracts, with investment-grade load-serving entities, with terms of over 15 years. Subject to approval by its GCN committee, CWEN could commit to investments in the projects during the second quarter of 2024, with funding of investments in the projects to occur in the first half of 2025. The final project planned for allocation of thermal proceeds is…

Thanks, Craig. On Slide 11, we provide an overview of our financial results, which includes first quarter adjusted EBITDA of $211 million and CAFD of $52 million. First quarter results reflected strong wind resource at the Alta facilities, and the impact of timing of planned spring maintenance outages for certain gas plants, which will occur during the second quarter. This was offset in part by lower solar irradiance from higher-than-average rainfall. From a seasonality perspective, the first quarter is one of the contributors to full-year results. We are pleased with these strong first quarter results, and considering the smaller impact of first quarter, the previously mentioned timing impacts, and our observations on second quarter performance to date, we are reaffirming our full-year 2024 CAFD guidance of $395 million. 2024 CAFD guidance continues to reflect P50 median renewable energy production for the full year, as well as contributions from committed growth investments based on expected COD timing. The company continues to have no external capital needs to fund the line of sight growth needed to meet our dividend per share growth objectives through 2026, and pro forma credit metrics, in line with target ratings. With anticipated contributions from the remaining dropdown offers, line of site CAFD remains at $435 million or $2.15 per share. In addition, Clearway continues to demonstrate progress towards growth beyond the $2.15, with the additional RA contracts previously mentioned and potential for additional contracting at favorable rates, as well as further opportunities for dropdowns. For example, the Honeycomb battery asset expansion project that we previously discussed. We do anticipate the dropdowns targeted for 2026 and beyond will require a source of external capital, and we expect to be able to utilize retained CAFD to the extent available, excess corporate debt capacity, while maintaining our target credit metrics and availability under our revolving credit facility. Depending on the relevant timing, we may also consider the use of our existing ATM facility. Now, I'll turn it back to Craig for closing the mark.

Thank you, Sarah. Turning to Slide 13, I'll recap where we stand in making progress towards meeting the key goals that we've set for Clearway Energy, Inc. this year. Thanks to our solid first quarter results, CWEN remains on track to meet its 2024 CAFD guidance and its 2024 EPS growth goal of 7%. Beyond 2024, our path to $2.15 of CAFD per share looks increasingly clear, on the back of the commitment CWEN has now made for investments in Dan's Mountain and Rosemont South, and with an eye to the current and pending offers that would finish allocation of the proceeds received from the sale of our district thermal business. Furthermore, we are in excellent position towards firming up our ability to grow CAFD per share within our long-term target of 5% to 8% in 2027. The new RA contracts we signed at strong pricing and the joint development agreement signed for development of the Honeycomb battery assets, are the beginning of additional data points that we'll share on our post 2026 growth outlook as we go through the year. Lastly, we continue to evaluate opportunistic third-party M&A, while adhering to our disciplined capital investment underwriting standards. Through these initiatives for future value creation and disciplined execution in our current core business, we are focused on delivering good outcomes for the shareholders of Clearway Energy, Inc., meeting the goals that we have set for this year and out through 2026, and extending on those in the years that follow. We are pleased with the momentum that we've built in 2024 thus far, and look forward to extending on that momentum in the days ahead. Operator, please open the lines for questions.

[Operator instructions] Our first question comes from Michael Lonegan with Evercore ISI. You may proceed.

Hi, thanks for taking my question and congrats on a great update. So, you talk about the new contract terms at Walnut Creek and Marsh Landing providing higher CAFD than run rate expectations. Just wondering if you could give us a sense how much higher, maybe in percentage terms, they were, and with continued contracting at these levels change, how aggressively you pursued dropdowns over this timeframe or third-party M&A, given the organic growth.

Maybe to take your question in each of those two parts, first, being that we are in the middle of an annual procurement cycle for California through the central procurement entity process, which is seeking to establish sources of supply for the needs of load-serving entities into the 2027 and period beyond 2027, it's not really to the advantage of the company for us to go into detail around the pricing that we're securing in the contracts that we've already executed bilaterally. I think our vision here is that we'll go through that procurement cycle, and as we go further into this year, provide an update on our outlook of CAFD per share contribution from the business as a whole after we've seen the results of that procurement cycle. So, I think for the benefit of the shareholders, we'll stay focused on giving you an outlook in aggregate later. We also have an obligation towards our customers to maintain confidentiality on the terms of those contracts for their benefit as well as ours. So, hopefully, you can understand that outlook. But we're quite happy with what we've secured in those contracts to date, and we feel quite good about the setup of the overall market and the way it would these resources that we have - that we're in a position to be able to offer. I think with respect to further growth investments, as we noted before, we want to be very deliberate about pacing new commitments based on the accretiveness of the sources of capital that we have available to us. And I think you're right to note that there is a relationship between the CAFD contribution that we'd expect from the resource adequacy capacity that we have on those units, and the amount of retained CAFD that we would have to allocate, and hopefully also with that, the value of our underlying equity and our overall corporate debt capacity. So, I think we'll think about all those things in relation to each other as we pace additional investment commitments, but feel quite good about the fact that we have sufficient building blocks in development to offer CWEN numerous opportunities for growth, provided that those investment opportunities are accretive.

Great. thank you. And then secondly for me, given all the data center demand, just wondering if we could expect you to pursue third-party M&A opportunities for gas generation in addition to the renewables for storage you have planned?

No, I think what we would like to do for the moment is to describe the overall strategy that we have for engagement, and the particular ways that we pursue the execution of that opportunity set as Clearway, I think we’ll address in due time when we've got specific new commitments to be able to reference. As you could imagine, being one of the country's largest developers and owner operators of clean electricity generation assets, with a footprint that spans most of the country's major power markets, Clearway’s enterprise obviously occupies a place at the intersection of the emerging trend for load growth and energy value expansion as the US economy's appetite for computation grows. And our footprint and our development pipeline and our proven capabilities, certainly put us in a position where engagement with the country's leading data center developers and hyperscalers is a pretty customary and core part of our origination and development. So, engagements with those customers are most certainly ongoing, and those are around a spectrum of potential opportunities, and with a range of potential partners and customers. But it would be premature at this stage to comment pretty specifically on the way that that attractive opportunity set would be something we'd prosecute within Clearway’s context or with specific growth capital investments by CWEN. I think what we can say is that we do have a pretty significant set of building blocks that can potentially support both behind the meter and front of the meter project configurations and demand, and that we're also advancing projects that will serve traditional load-serving entities who have a need for increased carbon-free energy supply to serve growing data center load, and that they are exhibiting a high degree of flexibility around what they would be prepared to accommodate in contractual structures and settlement terms and pricing and locations, given the substantial needs that they have for meeting load growth. And I think just the last thing that I'd note is that from amongst the 4.4 gigawatts of late-stage opportunities that we'd identified previously, as you can imagine, many of those are in the major markets where this need is exhibited and that we have a pretty strong track record for execution in those geographies, which is something that customers like that certainly value.

Great. Thanks for taking my questions.

Thank you. One moment for questions. Our next question comes from Noah Kaye with Oppenheimer. You may proceed.

Hey, thanks. Chris, congratulations and best of luck in your next stage, and thanks for the dialogue over the years. And Craig, congratulations as well. My first question is really around the transition itself. Maybe just talk to a little bit how you operationalize the transition. Obviously, you're keeping, it seems, the investment and management principles of the platform very much intact. But Craig, maybe just talk a little bit about your focus areas and how we should think about you kind of coming into this role while still continuing to drive all the development and growth of the sponsor along with the team.

Yes. Thanks for the congratulations, Noah, and I think all of us at Clearway could not be in greater accord with you about the really incredible track record of value creation that Chris's tenure here has spanned. I think this is actually an extraordinarily smooth transition process. As Chris and I had noted together when we had the opportunity to talk with you and others when we’d announced our succession, this is a business that we built together over more than a decade. The people who together comprised the nearly 1,000 employees of Clearway in aggregate, have been colleagues to each other over that 10 years and in many cases, even more time. And we operate already as a very integrated enterprise, and everything from our approach to financial planning, to our underwriting and structuring of individual assets, to our planning of corporate capital allocation and long-term dividend policy. So, in a lot of respects, the management of this enterprise has been a joint collaboration of Chris and I over time, and it reflects collaboration of people across the nation. And in pretty much every respect, everybody is continuing to do their work in the way that they did before. So, I think this transition is actually about as smooth as you possibly could imagine. And as you've noted, I think a key hallmark for us in terms of capital allocation and planning for Clearway Energy, Inc., is that we will continue on with the business model that has been very successful for us to date. So, that's absolutely a starting point. I think we are at a juncture here now where we have the opportunity to look ahead, and I think to the extent that there are new things afoot, it's really going to be a function of what the dynamic energy markets provide us as an opportunity, and we feel quite good about what those can ultimately provide for Clearway Energy, Inc. as we look forward.

Thanks for that color, Craig. Hoping you could give us an update wearing one of your hats on the development side. We've heard from some of the equipment providers into the solar space so far this quarter around some project delays, and obviously there's just very robust demand for power, given one of my peers earlier comments around data center and other load growth. But just talk about what you are seeing in terms of bottlenecks, gating factors, and how you're viewing kind of the timetables and trajectory for the key projects you have under development.

Yes. I mean, I think one of the things that we're very proud of about Clearway as we built it up over time is just the overall quality of craftsmanship that we bring to our work in every dimension, which includes the way that we develop projects, structure them, and obtain supplies for them. I think something that we've demonstrated over the last five years is that in general, we have demonstrated a thoughtfulness around potential risks in supply chain or policy disruptions that has allowed our company to continue executing projects where sometimes peers have been less able to do so. And I think that's something that's certainly occurring now again. So, we invested pretty heavily around high voltage equipment supply over the course of the last few years. I think we did that ahead of peers, which helped secure execution timetables for us and for the utility customers that we serve and need to interconnect us. I think we were pretty thoughtful about establishing domestic content supply chains for all of wind and solar and battery projects, which both can convey additional value and fundamental economic returns for projects, but also assure that the projects can be executed when policy changes may make it more difficult to import certain equipment. And again, we've done that. We've previously announced that we had established domestic content supply chains, for example, for solar and for battery projects. And those supply chains are absolutely going to help us underpin the execution timetables that we have projects for over the late-stage pipeline we'd identified through 2026 and 2027. And I think as you're probably alluding to, with respect to potential near-term disruptions for solar projects, we don't face a risk of those based on the more recent solar trade cases that have been formulated, based on the format of the supply chains that we're maintaining and our contractual relationships and the format of that trade case. So, we feel very good about fulfillment to the projects that we've offered already, the new ones that are pending offer and the timetables that are shown here. And we feel also very good about the family of supply chain solutions that are required to continue to advance the 4.4 gigawatts of late-stage projects that we've identified for growth over 2026 to 2029.

Very clear and detailed. Thank you.

Thank you. [Operator instructions]. Our next question comes from Alex Kania with Marathon Capital. You may proceed.

Hey, good morning. First of all, again, congrats both Chris and Craig, to kind the new future roles and everything. So, that that's great. Maybe thinking about the battery opportunities, certainly with the new framework for development, joint development of effectively I guess retrofitting battery to existing renewables, just wondering if you could talk a little bit more about what that opportunity means in a greater context among the whole portfolio. And then what was the kind of maybe financial thoughts behind moving forward with that. Are battery prices low enough and returns high enough that this makes a lot of sense today, maybe even preferable to other types of renewable development. I just want to kind of think about like where the batteries show up in the hierarchy of investment opportunities.

Yes, sure. Well, I mean, I think something that you may have noticed over the course of the last few years was that Clearway surged a pretty substantial development investment campaign to create opportunities, both for greenfield construction of batteries, as well as increasingly additions of batteries at sites that already house operating renewable projects that are owned by CWEN. And we did that being a major incumbent in the west, recognizing that it was likely that regulators and load-serving entities would have a need to procure incremental capacity to be able to enhance grid reliability, and that they would exhibit a preference to doing that wherever possible with batteries. And that puts us in a position in those markets of the west to be able to execute revenue contract structures that are favorable, extremely favorable for the company in duration and settlement terms, as well as price. And that's something that you can see in the hybridized solar and battery projects that we've just completed this past year, and which CWEN now has an ownership interest in, in California the most recent set of projects that we've offered and signed commitments around in the case of Rosemont South and that are pending in the case of Luna Valley and Daggett 1, but it also includes situations like this one for the Utah projects, where acreage adjacent to our existing projects and grid capacity in those locations can accommodate additional batteries. And the types of duration on toll contracts for those batteries that we're able to secure in a lot of respects, are the most favorable types of tenors that can be achieved in today's market because of how essential those battery resources are. With respect to cost, yes, I think we've been really collectively pleased across the industry about the continuing improvements in performance efficacy and safety of batteries, as well as the cost structure for manufacturing and delivering them and constructing them. It's reminiscent of the kind of evolution that we saw in the industry for solar over 2011 to 2015, and that cost structure and the execution experience that we as a company are growing and the industry is generally makes these resources, I think extremely executable for construction and also high performing when in operation. And so, we really like the fact that we've got as many projects as we do, gigawatts of them, in the western US in places where load-serving entities and utilities need to firm those renewable resources with batteries, and the kind of execution capability we've built up. So, these are very attractive investment opportunities for CWEN in structure and return, and we hope that these first projects that we're calling Honeycomb are the shape of a lot to come.

Thank you. I would now like to turn the call back over to Craig Cornelius, incoming President and CEO of Clearway Energy, Inc., for closing remarks.

Thank you, everyone, for joining us today and for your ongoing support of Clearway Energy, Inc. We look forward to what the days ahead have in store and to our next conversation in the quarter ahead. Operator, you can close the call.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.