Good day, and thank you for standing by. Welcome to the Clearway Energy, Inc. Second Quarter 2025 Earnings Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Akil Marsh, Director of Investor Relations. Please go ahead.

Thank you for taking the time to join Clearway Energy, Inc.'s second quarter call. With me today are Craig Cornelius, the company's President and CEO; and Sarah Rubenstein, the company's CFO. Before we begin, I'd like to quickly note that today's discussion will contain forward-looking statements, which are based on 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 will 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. In particular, please note that we may refer to both offered and committed transactions in today's oral presentation and also may discuss such transactions during the question-and-answer portion of today's conference call. Please refer to the safe harbor in today's presentation for a description of the categories of potential transactions and related risks, contingencies and uncertainties. With that, I'll hand it over to Craig.

Thanks, Akil. Turning to Slide 4. Clearway continues to execute with discipline, and we remain well positioned to create long-term shareholder value through our multiple redundant pathways for growth. For the full year, we are updating our 2025 CAFD guidance range to $405 million to $440 million, raising the bottom end to reflect the contributions from recently closed project acquisitions. We continue to target the higher end of the 2025 guidance range. Across the board, we're making progress on growth execution. Our fleet optimization and enhancement growth pathway continues to advance with repowering of Mount Storm on track for construction over 2 phases in 2026 and 2027, Goat Mountain now commercialized for repowering and expansion in 2027 and further potential projects in advancing stages of development. Our sponsor-enabled growth pathway also continues to accelerate with all of our committed growth investments on schedule for 2025 and an offer from Clearway Group to invest in a new battery storage portfolio in 2026. Furthermore, Clearway Group continues to advance its late-stage pipeline, which includes a very substantial volume of renewable projects with safe harbor qualifications through at least 2029, a long-term development footprint in competitive markets and a leading battery storage pipeline, which now represents over 40% of all project capacity in development. And our third-party M&A growth pathway also continues to demonstrate execution and expanding potential. We've now closed the previously disclosed Catalina solar project, which is running well for us, while also demonstrating efficient financial execution on financing of the Tuolumne Wind project while preparing for its potential repowering by 2027. Both M&A transactions were effectuated at attractive long-term CAFD yields and leverage fleet synergies and value add from Clearway's platform. As a result of this progress, we are pleased to now be increasing our 2027 CAFD per share target…

Thanks, Craig. On Slide 12, we provide an overview of our financial results. In the second quarter of 2025, we achieved adjusted EBITDA of $343 million and CAFD of $152 million. These results reflect our continued focus on strategic growth initiatives, including contributions from 2024 growth investments. In addition, our second quarter results reflect lower-than-anticipated wind resources in certain regions as well as low availability for certain facilities where maintenance was optimized prior to near-term repowering or changes in third-party service models have been made to improve performance beginning in the second half of 2025. As we noted during the first quarter, our first quarter CAFD results were higher than seasonally expected due in part to timing of debt service and distributions to noncontrolling partners, which are reflected in our second quarter CAFD results. Our flexible generation results were in line with overall sensitivities and reflected the mild weather in California during the second quarter of 2025, along with timing of certain maintenance costs. We are updating our 2025 CAFD guidance range to reflect the closing of the previously announced acquisition of Catalina Solar in July, and we are anticipating CAFD for 2025 to fall within the range of $405 million to $440 million, continuing to target the higher end of the range. We are focused on execution and performance during the important third quarter with in line performance to date, and we continue to maintain disciplined focus on the availability of our entire fleet as well as the management of energy margin for our flexible generation fleet. The completed drop-downs of Rosamond South, Luna Valley Solar and Daggett 1 storage are on track to achieve COD and be fully funded later this year. Our guidance range reflects P50 renewable production expectations for the remainder of the year at the…

Thanks, Sarah. Turning to Slide 15. Thanks to the sound planning and execution of our organization, we have made excellent progress on the delivery of new project additions this year. We have a clear path to achieve our updated 2025 CAFD guidance, and we are pleased to be increasing our 2027 target CAFD per share range while honoring our DPS growth commitments. We are also excited about the progress we are making towards growth beyond 2027, consistent with our previously stated goals, aiming to fulfill those goals for CAFD per share growth while funding more of that growth from organic cash flow enabled by a lower payout ratio. We look forward to sharing more about that long-term growth outlook in our third quarter earnings call as has been our practice in past years. In all this, we hope you see what we see in ourselves, a company that continues to deliver the best of what the clean power industry has to offer to its customers, to its partners and to you, our valued investors. Operator, you may open the lines for questions.

[Operator Instructions] Our first question comes from Julien Dumoulin-Smith with Jefferies. Hannah Marie Velásquez: This is Hannah Velásquez on for Julien. Congrats on the quarter. Maybe just to start us off, I wanted to ask about the wind repowering opportunity. It looks like last quarter, you all had cited over about 2 gigawatts of repowering opportunity in 2029 and 2030. But then looking at, gosh, Slide 9, it looks like that's really come down to this 3% level. Does that imply that you've pulled that forward potentially into before 2028 such that you don't run into any issues as 2027 placed in service comes into consideration or we await treasury guidance?

The volume of repowering opportunities that we're advancing today is actually larger than it was 1 quarter ago. And the projects that we are -- that we've identified in today's disclosures are the projects that we planned for completion and had indicated we might be building between now and the end of 2027 based on what was optimal for the projects and when they'd be ready to be repowered. So we're advancing the same projects that we were. We're advancing them on the same schedule and are pleased to be making the progress that we are in their commercialization, noting the pretty deep level of demand for these types of resources from customers. There are actually additional wind projects in our fleet that are coming into view as potentially repowerable throughout the balance of this decade. And those are reflected in the pipeline of opportunities that we have today. And to the extent that they become feasible, either based on tax credit qualification or their technical circumstances, then as we have with other projects, we'll look to execute them if they are financially accretive. So I think right now, the repowering program is sort of executing according to plan. Our organization has done a really great job of preparing the projects technically and commercially and from a development perspective, and they look like they're going to be very financially accretive. Hannah Marie Velásquez: Okay. Perfect. And then I just had a quick follow-up. So the CAFD raise for 2025, I think you mentioned during the call that, that was attributed to the Catalina acquisition. But I don't believe you all had updated full year guidance for Tuolumne. Is that embedded in there? Or are you all just being conservative? Or is it not contributing this year?

It had been embedded in the high end of the original range when we had initially issued guidance for fiscal '25 because the agreements for Tuolumne had been signed, though not disclosed when we initially produced that guidance. So it will contribute at the top end of that range of $440 million and is online and is contributing. And as I mentioned and Sarah mentioned, we continue to target the top half of the guidance range for the year. And see clearly how to achieve that.

Our next question comes from Dimple Gosai with Bank of America.

Just further to Hannah's question earlier on, I understand that new builds offer more flexibility for safe harboring and repowers obviously have a narrower qualifying criteria from age and depreciation status, et cetera, et cetera. So do you -- can you provide a megawatt perspective on how much is safe harbor or otherwise qualifies for repowering?

All of the projects that have been identified in our disclosures today and that we are planning to execute through the next few years to contribute to our growth goals into 2028, commenced construction and qualified for tax credits some time ago. There are some repowering projects that we might be able to execute later in the decade that could potentially be qualified through other equipment that the company has already purchased as part of its 13 gigawatt safe harbor program. The projects that really underpin the growth goals that we've increased and reaffirmed today already have commenced construction under the pre-existing guidance for qualification for tax credits some time ago using conservative methods.

Fantastic. And a follow-up or a separate question just on the RA market. Can you comment on what percentage is still open '27, '28? And then just anything you can talk about on pricing trends there would be super helpful.

Yes. Our '26 position is almost entirely contracted. Our '27 position is 3/4 contracted approximately. And we feel good about the way that we've been managing that position. The RA market is at a place where regulators, suppliers and customers are all engaging with each other around what kind of policy design will assure that the state has adequate reliability resources and what implications that has for how much RA of different types load serving entities need to procure and as a result, what price they will need to pay for the supply that's available. We feel comfortable that the way that we have planned our goals for the future reflects a posture for marketing of our open position that is consistent with our historical practice of setting goals that we know how to meet. And embedded in our currently communicated goals for CAFD per share in 2027 and 2028 by implication of our historical CAFD per share growth rate commitment is an expectation for contracting of our open RA position at prices that are not as high as prices where we contracted last year, even despite the fact that our fundamental system view is that those RA resources have significant value into the future at a higher level than that. So we feel good about the necessity for the resources. We feel good about the way that we've planned the business, and we feel good about contracting the position at the right time at prices that are fair to the ratepayers of California and that pay Clearway Energy, Inc. an appropriate value for those resources while we meet the goals that we've set.

Our next question comes from Noah Kaye with Oppenheimer.

The company is, I think, very, very experienced in navigating different policy and regulatory changes over the years. Maybe just -- you talked about safe harboring. Maybe just comment a little bit on any implications or lack of see from the DOI memo, the finalized FOC requirements and how it's affecting the portfolio and product development plans.

Yes, sure. Yes, I appreciate the recognition of our history anticipating, planning and navigating around policy changes over time, Noah. The first -- to the first question that you posed around our safe harbor strategy. As we noted previously, we safe harbored over 9 gigawatts worth of resources under the Section 45 and 48 tax credits that projects were entitled to claim had they commenced construction before 2025. The Treasury executive order, the Treasury review in response to the executive order issued by the President after OBBB addresses changes to -- or an inquiry around potential changes to commence construction provisions for the technology neutral tax credits, which projects would qualify for if they commence construction this year. The further 4 gigawatts worth of safe harbor investments that Clearway Group made to commence construction on projects this year also were largely complete before July 4 and the modest quantity of additional commencement of construction investments will have been complete before mid-August when that executive order is expected. All that based on our clear legal assessment and past practice makes us feel very secure about the safe harbor strategy that we've created for about 13 gigawatts worth of projects that could potentially be built through 2029 or longer potentially. So we feel good about how we've done that. We feel good about where we stand. We feel good about what that means for the certainty with which we can hit the goals we've increased or reaffirmed today with clearly identified projects that have already commenced construction. And I should add to that, that the projects we've planned for completion through 2028 all commenced construction under the old tax credits before 2025. In terms of the other questions you posed about FIAC compliance, we have had a policy of designing and procuring…

It hardly seems fair to my peers to ask a follow-up, but I'm going to ask a very quick one anyway. Sarah, can I just go back to what you said during your prepared remarks, I think you said you had hedged already the full notional amount of the $850 million. Did I hear that correctly? And if so, would you mind kind of sharing with us what the base rates are that are fixed?

Yes. We have pre-hedged the $850 million initial maturity. And I don't think we've disclosed a specific base rate, but it was just in line with what base rates were when we executed, which was within the last month or so. So essentially, we're just trying to lock in the rates that we're at, at the moment. And so eliminating the volatility risk as we move forward towards the actual refinance fee.

So it was done in the last month, so we can figure it out from there.

Our next question comes from Justin Clare with ROTH Capital Partners.

So I wanted to start off just on Slide 13, you increased the retained CAFD expected for 2025 to 2027 a bit. So just wondering if you could walk through the increase there. Is it a function of the acquisitions that were closed, additional drop-downs that are anticipated? Or is there any change in the expected performance of the assets or any change in the payout ratio that you expect over the next few years here?

Yes, Mark, thanks for the question. Sarah, I think we'll have you answer the update on a line-by-line basis. But Mark, what we can outlined in general is that we have updated our outlook on the total organic CAFD contribution from the portfolio across the 3-year integral that is referenced there. And the range that we've articulated incorporates the projects that have been committed to or have been identified for potential commitment by CWEN and the contributions from those investments are incorporated into the range and also the balance of the base portfolio CAFD contribution includes a SNAP to current expectations like the ones that we identified in the walk, where we've updated the view of the cost of capital associated with refinancing of the upcoming bond maturities, the expectations for CAFD contribution from the existing thermal fleet. So we feel good about the aggregate quantity and how we would produce that. With that, Sarah, I'm glad to turn it over to you.

Sure. Thanks, Craig. Yes. So what we've done in terms of updating our commitments and how we fund them is essentially the commitments reflect -- or the commitments and offers reflect the latest on what we've been offered. And then our sources essentially are aligned to tie back to our updated range for our 2027 CAFD per share targets. So that essentially, those all align with the $2.50 to $2.70 of CAFD per share and the implied retained CAFD as well as excess debt capacity that the revised range will provide. So hopefully, that sort of provides you with the -- I didn't go line by line, but I think essentially, the math is done by using our updated range, which we do walk through the movements on Slide #8 to walk through how we get to that $2.50 to $2.70. And then the math behind the sources sort of just aligns with the same set of information back to how our sources would be generated. Does that make sense?

Yes, yes, that makes sense, and that's helpful. So we can walk through that. So just to follow up on that, another part of the sources and uses that was updated was the equity issuances. So I think it was $0 to $75 million previously updated to $50 million to $100 million. So just wondering how we should think about the update there and whether you need more or less equity to get to the high end versus the low end of the targeted range. Maybe just speak to how much equity you think might be required in different scenarios.

Yes, Mark, glad to address that. So as you've noted, the range that we'd articulated initially for 2027 aimed to produce $2.40 to $2.60 in CAFD per share in that year. And we've indicated that we could get to the middle end of that range without the need to issue equity at all. That continues to be true. The accumulation of growth commitments that we've now announced or projects that are now online, some to CAFD per share contribution that's just above the original midpoint of $2.50 in CAFD per share in 2027. So we've now cast our sights towards reaching the midpoint or better of the new $2.50 to $2.70 range. And -- and as we look at what capital is required to achieve that range and what projects we would add in order to reach it, the projects that we've identified for drop- down or repowering through 2027 in today's call would take you to the midpoint of that range approximately and then would start to require capital in that range of $50 million to $100 million worth of equity issuance. And then as we go towards the higher end of that range or we look at what we think is optimal between the range of 5% to 8% CAFD per share growth that we'd outlined as our goal in 2028 and 2029, that's what takes you to the higher end of that range. As Sarah noted and we've talked through in a succession of recent calls, we aim to capitalize that growth through traditional and predictable mechanisms consistent with those used in the listed infrastructure space and for leading growth mid-cap utilities. And that's how we plan to capitalize the core goals that we've articulated today. So I think we feel quite good about how we've executed on the plan that we've articulated to our investors and the way that we're able to grow at a pretty compelling way as we go into the end of 2027 and beyond with relatively modest amounts of equity issuances. Is that responsive to your question?

Yes. No, that's helpful.

Our next question comes from Mark Jarvi with CIBC.

Just turning to Slide 9 again. Just in terms of as you look out to '29, '30 and through to '32 and you show sort of the build of storage becoming a bigger component of the advanced pipeline and that could fulfill the growth alone for C1. Is that the message there on that slide that if people are concerned about solar and wind economics beyond the tax credit expiry that batteries can fill that in? And I guess just how have conversations gone around origination on battery contracts given the evolution of tariffs and tax credits in the last couple of months?

Yes. That's certainly one interpretation of the chart. I think we feel good about many of the projects that make up those bars and their competitiveness and also qualification for tax credits. But certainly, one of the advantages that Clearway Group and Clearway Inc. being sponsored by Clearway Group enjoy is that we've built a really excellent franchise developing and operating battery projects, and those projects continue to be eligible to receive tax credits well into the next decade. And the projects that we've planned in 29 in 2030 and into the early years of the next decade, all have very advantageous locations and interconnection queue positions in markets where the ability to deliver capacity really determines whether a project is commercially valuable and executable. So our finding has been that in the core markets where most of our battery development is occurring, we can build and profitably commercialize everything we can interconnect. And that continues to be true today in today's tariff environment and with the requirement to be able to source batteries from companies that can satisfy the requirements of foreign entity of concern provisions in the most recent statute. So we feel good about that. Our ability to continue to equitably share risk around tariff or supply chain disruption with customers throughout the West, where we can sign long-term contracts has continued to prove out here over a number of monthly cycles of change this year. And what I'd add is we love these resources in our fleet. We're into our second full year of operating gigawatt scale battery resources and they're running routinely 98.5%, 99% availability above what we underwrote and they respond in the way that we need them to and that our customers do. So we're really pleased that this is an asset class is a low resource volatility asset that will continue to grow in its share of CWEN's fleet and with contracts that are routinely 15- and 20-year contracts and very compatible with this business model.

That's great to hear. And then maybe a couple of quarters ago, you talked about the opportunity around -- opportunity with data center customers, both behind the meter and grid connected and talking about multi-technology solutions. How have those evolved? And how of that customer base working into your advanced pipeline at this point? Are those progressing well? Are they become complicated to transact or just sort of update from what you shared at the Q4 update?

Yes, those dialogues continue. You can see in some of the contracting customers that we've announced for some of our recent wind repowerings that we've started to build mutually fruitful relationships with multiple major data center hyperscaler companies. And we find that these relationships now exhibit a level of balance that allows us to contract and create projects that are compatible with the CWEN investment mandate and that also meet the needs of those customers. And we have found that as we move from one project to another, there's a virtuous cycle that we're executing a repeat business with each of them. So it would be reasonable to expect that some of the origination activity that you see referenced on our appendix slide of awards or shortlisted opportunities continues to be with those types of data center customers and not only for repowering projects, but also for other resource types and in multiple geographies. As to bigger data center complexes, we do have dialogue ongoing principally for co-located resources that would allow customers like that to come to load-serving entities with a request for additional load service that is accompanied by generation supply that allows for their load to be integrated into the grid while assuring that there's adequate capacity and energy to serve it and avoid disrupting the value proposition for the rest of the customer base for those load-serving entities. And in some instances, also with a mixture of partly behind-the-meter resources. And as we've noted before, we want to be deliberate about more specifically communicating about our plans for complexes of that nature until we feel that they have matured enough to be as certain as the other types of things that we communicate to you in calls like these. But as and when we reach that point and it becomes more certain that they will play a role in the future growth of CWEN, you can certainly expect to hear more from us.

Our next question comes from Steve Fleishman with Wolfe Research.

Actually, Craig, all my questions were answered. So I'm all good. I'll let people end early.

Our next question comes from Corinne Blanchard with Deutsche Bank.

This is actually Mike Tilley on for Corinne. Congrats on the guidance range and guidance rates. My first question is with the Goat Min. You mentioned you signed a PPA with a hyperscaler. Can you just talk about how these PPA terms differ from those of more traditional PPA contracts?

What we find today is that really with all customers, whether it's a hyperscaler or a sophisticated regulated utility that understands project risk. The relationship between a project seller and a buyer is a balanced and fair one where the scarcity value of a project that has a permit that can be interconnected, that has a viable supply chain and a sponsor that is able to capitalize and build it is significant. And that means that when signing PPAs, we can account for risks like the potential changes in costs attributable to tariffs or variations in the tax credit that the project is ultimately able to claim or variations in differences between the price of power at the node where the power injects in some hub, all can be accounted for in a way that is fair and allows us to be confident that the return we need to generate for CWEN as a permanent investor and the return that we need to generate for Clearway Group as a sponsor can be satisfied while also still delivering a value proposition to the customer that motivates them to sign a PPA. So in that PPA, we feel good that, that right balance has been struck and allows Goat Mountain to be executed across a broad range of foreseeable scenarios. And in the other PPAs that we've signed so far this year, we have similarly accounted for risks like that. And it's part of what makes us confident that the projects we've planned and identified can be executed successfully and contribute to CWEN's CAFD in the years ahead.

Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back over to Craig.

Thank you, everyone, for joining us today and for your ongoing support of Clearway. We really look forward to continuing to deliver with the excellence you've seen from us this year and the quarters ahead as we strive to set the gold standard for America's power sector and reliability, growth and competitiveness for the long run. Operator, you can close the call.

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.