Ladies and gentlemen, thank you for standing by and welcome to the Emera’s Q4 2020 Analyst Call. [Operator Instructions] Please be advised that today’s conference is being recorded today, Tuesday, February 16, 2021 at 9:30 Atlantic Time. I would now like to hand the conference over to your speaker today, Erin Power, Emera’s Manager, Investor Relations. Please go ahead.

Thank you, Chris and thank you all for joining us this morning for Emera’s fourth quarter 2020 conference call and live webcast. Emera’s fourth earnings release was distributed this morning via newswire and the financial statements, management’s discussion and analysis and the presentation being referenced on this call are available on our website at emera.com. Joining me for this morning’s call are Scott Balfour, Emera’s President and Chief Executive Officer; Greg Blunden, Emera’s Chief Financial Officer; and other members of Emera’s management team. Before we begin, I will take a moment to advise you that this morning’s discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slides. Today’s discussion and presentation will also include references to non-GAAP financial measures. You should refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. And now I will turn things over to Scott.

Thank you, Erin and good morning everyone. Let me start with this overarching message that while we never could have anticipated at the start of last year what 2020 would bring, I am incredibly proud of the way the Emera team responded and continues to navigate through the unprecedented challenges of COVID-19 pandemic. The financial results we achieved this year and the significant progress we made on advancing our strategy are a testament to the strength and resiliency of our people, our portfolio and our strategy. Overall, I am pleased with the financial results that we delivered in 2020. While the results for some of our utilities fell short of expectations we set for ourselves before the year, our adjusted earnings per share for the year was almost exactly in line with our plan for the year. Key within that, our overall regulated portfolio performed very well and collectively delivered year-over-year earnings growth of 13%, no small feat considering the additional challenges our business has faced last year. Our regulated portfolio continues to be the primary driver of our growth. Regulated earnings contributions have been steadily and predictably increasing as we continue to make rate based investments to reduce carbon emissions and increase reliability, all while keeping customer rates affordable. At Emera, our priority is always the safety of our employees, customers and the communities we serve. Last year, with the onset of the COVID-19 pandemic, we adapted quickly to change the way we work, introducing mandatory safety protocols and in many cases, we are requiring teams to work from home. These measures have been successful and our teams haven’t missed a beat. They continue to safely deliver the affordable, reliable energy our customers count on while advancing Emera’s strategy and supporting our communities, notwithstanding the multitude of challenges brought…

Thank you, Scott and thank you all for joining us this morning. We accomplished a lot in 2020 in very challenging conditions. Our strong regulated portfolio continued to perform well, allowing us to deliver [Technical Difficulty] to our investment. We delivered strong earnings growth from regulating portfolio. As Scott highlighted, our portfolio delivered annual adjusted earnings growth of 13%. We raised our dividend by 4%, keeping our commitment to provide a predictable, sustainable, growing income stream to our investors. We improved the quality of our future earnings and cash flow by negotiating constructive settlement agreements at Peoples Gas and New Mexico Gas and we strengthened our balance sheet, completing our asset sale program, retiring $390 million of holding company debt and issuing $490 million of common equity, primarily through our dividend reinvestment and at the market program. This morning, we reported fourth quarter adjusted earnings of $188 million and adjusted earnings per share of $0.75. For the year, adjusted earnings were $665 million and adjusted earnings per share, was $2.68. Growth in Emera’s adjusted earnings per share for the quarter and year-to-date were primarily driven by favorable results of Tampa Electric in the other segment. And now let’s get into the details about the results. The sales of our unregulated gas plants in Emera Maine business continue to provide or cause variability in our quarterly and annual results normalized – or normalizing for their lost operating earnings contributions better highlights the performance for ongoing business. When normalized for asset sales, our fourth quarter 2019 results would have been $0.56. And for the full year 2019, the asset sale of normalized adjusted earnings per share was $2.31. We will use these normalized results as a starting point to compare our performance for the fourth quarter and full year 2020. Adjusted earnings…

Thank you, Greg. This concludes the presentation. We would now like to open the call to take questions from analysts.

[Operator Instructions] And your first question comes from Linda Ezergailis of TD Securities. Your line is open.

Thank you. I am wondering how you are thinking about the outlook for your operations in the U.S. with the new Biden administration, recognizing that there is going to be an accelerated, I guess, drive to reduce greenhouse gases in the energy transition in addition to just general electrification driving demand. How might this influence Emera’s business and strategy beyond kind of where you have taken it and where do you expect to see the largest benefits as you grow your franchise?

Thanks, Linda, for the question. Look, I think as you point out, the Biden administration plans to look to accelerate decarbonization across the broad economy, frankly, is directionally positive for us. It certainly aligns with our strategy of decarbonizing and continuing journey to reduce the carbon intensity of the energy that we are delivering for our customers. Obviously, we will continue to pay attention to policies as they develop and looking to make sure that we’re capturing to the greatest extent possible, those that can benefit our customers and allow Tampa Electric, but frankly – Peoples Gas and New Mexico Gas as well, to do our part to do their part as we look to continue that decarbonization journey. And if the government policy mandates a faster path than that, that we’re already on, obviously, we will execute that. And from an investor perspective, that creates more opportunities. And our job in running utilities to make sure we are transparent around cost impacts and making sure that we are constantly working to manage affordability impacts for customers.

Thank you. And as you see these opportunities beyond 2022, I am wondering what factors you will consider to either extend your 4% to 5% dividend growth or what might cause you to revise that and when might you deliberate upon that? And can you comment on I guess payout ratio, balance sheet, foreign exchange and other factors?

So look, I mean, obviously, all those things you mentioned go into our considerations around financial policy and target capital structure and dividend policy. I think, obviously, dividends get set by the Board of Directors. And typically, we do that in the fall of each year. I would expect that’s the timing that we would do that again this year. But I’d also remind you that when we pivoted from the previous dividend growth rate target to the 4% to 5% target that we have now, we did that with a view – obviously, we put a time-bound to it. But we did it with a view as to establishing a dividend rate that we thought was likely to be sustainable over the longer-term with an objective that our earnings growth will be higher than our targeted dividend growth that allows us to effectively grow our payout ratio down over time and that – all those things continue to remain true today. But as to the root of your question, I would expect we would see some clarity on that in the fall.

Thank you. And maybe more of an operational follow-up question, I am assuming that the energy marketing and trading business is off to a good start this year given the cold weather we are seeing. But any commentary about what Q1 is looking like would help us kind of fine-tune our expectations for Q1?

Linda, it’s Judy. So you are right that we are having a solid start to 2021. But really, I wouldn’t go anything beyond that. If you kind of – I know that there is some markets that are ripping into $100 price point, that’s not happening in New England, but there has been healthy trading ranges between, let’s say, $7 and $15, which does provide us with some opportunities the way things have worked out. We have had access to transportation capacity under several AMAs that we have been able to deploy profitably. So I would be very reluctant to start to try to provide quarterly guidance on Emera Energy, but I will say that it has been a decent winter so far in January. So we would just normally continue to guide that we would expect to be within our normal earnings range of $15 million to $17 million at this point in the year.

Thank you, Judy and congratulations to Nancy on a successful career and her retirement. I will jump back into queue.

Thank you, Linda

Your next question comes from Ben Pham of BMO. Your line is open.

Hi, thanks. Good morning. I wanted to touch base Atlantic loop, any updates commercially since the Trump speech last year and also been some changes at the infrastructure bank?

Yes, Ben, it’s Scott. And Peter Gregg is on too, and Peter’s been immersed, obviously, in this project initiative, along with other of our colleagues within Emera and Nova Scotia Power. I wouldn’t say anything as advanced commercially, Ben. I think this is still, at this point, this is about shaping the opportunity in terms of alignments of the opportunity that it can create for the region as a whole. Obviously, we’re focused on what it means for Nova Scotia, but we know for this project to come together. It needs to provide benefits to New Brunswick to Quebec and to Newfoundland and Labrador as well. And so we’re working with those provinces as well as our utility partners and the federal government to capitalize on this opportunity to accelerate the decarbonization in Atlantic Canada. From what would otherwise be a 2040 time frame to as early as 2030, and we’re encouraged by the momentum that we seem to be building with this and the engagement all those government parties and others have expressed so far, but it’s a long road ahead. It’s very complex, given the multi nature. Of the project, and we’re hoping to be in a place where we can talk with some more clarity around it by the third quarter. But at this point in time, we’re just continuing to advance the shaping and discussions and trying to see if we can get this all together.

Okay. And then you – so if – theoretically, if this project were to be commercialized, then directionally your net zero carbon targets it could be a 10-year SRAs in that potentially?

Yes, this is about both the addition of additional transmission or the availability of additional transmission as well as additional infrastructure build in Nova Scotia, including more renewable generation, including storage technologies, the combination of all those things, could position us to enable Nova Scotia Power, to retire coal plants, 10 years earlier than what is currently envisioned through the equivalency agreement that is in place between the province of Nova Scotia and the government in Canada. So I could see it accelerate from 2040 to 2030. That’s the effort that we put forward. But as I say, there is lots of steps to line up still and hoping we have more clarity and perspective that we can share by the third quarter of this year.

Okay. And maybe just questions for Greg next. And you had a commentary around the profit market improving. Is that mainly a function of cost of capital or your cash tax situation that’s driving that? And can you also share your thoughts on mandatory converts. Is that a potential lever that you could look at adding to your funding plan?

Yes, Ben, I think I think the way to interpret the comments is when we look at how our existing preferred shares are trading and extrapolate that on what we think a new issue would look it starts to become pretty competitive versus the other sources of capital that’s available to us. I think at this point in time, although we always look at other products that are out there, it’s probably reasonable to assume that we’ll probably be fairly consistent with what we have done in the past and do a traditional Canadian dollar preferred share offering, but we haven’t concluded on that at this point.

Okay. That’s great. And I also want to extend my retirement – or to Nancy’s best wishes to retirement as well.

Thank you, Ben.

Your next question comes from Robert Kwan of RBC Capital Markets. Your line is open.

Good morning. Maybe I can start with the Tampa Electric rate case. You called it or characterize it as being straightforward, but I’m just wondering what your thoughts are on a potential negotiated settlements? And specifically, are custom features attractive to you such as ROE protection against higher interest rates or immediate tax increase recovery flow through, the types of things that we saw in the Duke settlement?

Nancy?

Yes. I’ll take that. Robert, negotiated settlement is definitely a possibility here as you said, Duke negotiated – got a settlement, they negotiated a settlement in advance of even filing a rate case. So the timing of that might come after discovery – I think we’re in it now. We filed our test year letter. We’ll file our rate case soon, and I suspect that intervenors will want to get a sense of our case. We’re very confident in our case, of course. And of course, FPL is filed as you know, like – no doubt know that, that is filed as well. So it’s a busy agenda for the FPSC here in Florida. And so I think that also is likely that the intervenors will want to settle.

That’s great. And maybe if I can just finish the question on funding leverage and payout, there was a question earlier just on the Biden administration policies. As you look at those with respect to decarbonization and with that renewable electrification, there’s quite possibly a bias to upside in future CapEx. So I’m just wondering, what’s the strategy in terms of responding whenever that shows up or do you feel it’s prudent to start taking action in the near-term to help gain in front of that?

Well, I think I’d answer it this way, Robert and maybe Nancy has some additional perspective that I encourage you to share. But I think largely, Robert, we’re already on a path, right. I mean we are very focused already on decarbonizing. And if you think about Tampa Electric and 4 years ago, when Emera acquired them had very little renewable generation in the mix. Today, as you heard, we have more solar generation on a per-customer basis than any other utility, we’re looking to effectively double what we now have in place, while at the same time, retiring coal units and replacing that with faster acting, modern efficient gas generation and, of course, making reliability investments. So I think in many ways, I think we’re aligned with the objectives of the Biden administration. And our job, as we do that and meet the customers’ needs and desires for improved reliability and cleaner energy we also have to make sure that we’re being transparent and upfront as to the impact on cost. And so that largely comes about making sure that we’re doing it at a pace that doesn’t sacrifice affordability. And that’s very much our focus. And the plan that Nancy and her team have put forward at Tampa Electric, which is consistent with how we think about it across all of our utilities. If there is something that requires us to move faster by way of government policy, then obviously, we’ll respond to that. But in the meantime, we’re going to continue to execute our strategy of continuing to make cleaner and reliable focused – reliability focused investments without sacrificing affordability. And so I think we’re aligned. We won’t get ahead of and getting ourselves to a point where we’re going faster than what our customers would otherwise want to do. But I think directionally aligned with the Biden administration. And frankly, I think the same thing is true in a climate policy and energy policy here in Canada as well.

So if I get what you’re saying Scott, basically, it sounds like – recognizing it’s early days, but what you’re kind of getting out of the policies might – the upside might just be crystallizing that rate base or capital spending upside that you’ve already set out, but not likely to drive above that high end, so you don’t feel the need to be out in front of it from the perspective of fee funding or creating balance sheet capacity?

Yes. I mean, first of all, I mean, it’s obviously early days, and we don’t have – there’s no legislation in place or anything like that. So what we’re responding to. And I think broadly, I think the questions from our investors is about directionally, is this going to provide more opportunities for Emera and our utilities to make investments, and I think it probably will. But as to the quantum of that, the exact triggers for that, the timing of that obviously remains very uncertain. In the meantime, we’re focused on executing the strategy that’s in front of us that’s broadly aligned with the initiatives we’ll see what kind of legislation or the like does come into place, both in Canada and the U.S. is equally true in Canada and respond to that once that’s clear. But in the meantime, keep focused on what we always have, which is making reliability investments, making cleaner energy investment and making sure we’re doing it at a pace and with a transparency about cost that’s clear and affordable for our customers.

Understood. Nancy, thank you for the answer earlier and all the best on the retirement.

Thank you, Robert.

Your next question comes from Mark Jarvi of CIBC Capital Markets. Your line is open.

Thanks. Good morning everyone. I wanted to go back to Tampa Electric in a rate case in the context of the Duke settlement in the ROE Band and then also the adjuster to the treasury yields. Is that something that you are open to in terms of those ROE adjusters? And then just when you think about where the band was but for Duke from your position? Is that something that you think is a similar benchmark for you or is there an argument made from Tampa Electric’s perspective to argue for a higher midpoint?

So, thank you Mark. It’s Nancy. We obviously watch all the regulatory proceedings pretty closely. Duke did have what we would say is a headline ROE below 10. But as you point out, had, there are some mechanisms in the settlement to allow them to earn above that similar to the people’s gas settlement that happened earlier. Would we be open to something like that? It’s hard to tell outside the context of a full settlement. We believe we’ve applied for a higher ROE, as you see in our test letter. And of course, FPL is there with us also applying for a higher ROE. So – and we believe that we can if that based on the amount of capital that we will put in into the utility over the next number of years. So I think it all remains to be seen, but we feel we’re on pretty solid ground with our evidence and our ask for ROE.

Okay. That makes sense. And then just on the – maybe this is for Scott, the net zero by 2050 and incredible metrics in terms of milestones as you think about 80% reduction by 2040. To go from that 80% reduction then to net zero from 2040 to 2050, is that require technology improvements? Or what helps you kind of close that final gap to get to net zero?

Yes, Mark, it’s an important question. And I think we’ve tried to be clear in our distinction between the goals that we’ve set out for 2023 and 2025 and 2020 where we have a path there. We can see the path. We’re on a track, and we can clearly see how that gets achieved. The truth is that, that transition that step from 80% carbon reduction to net zero. The path isn’t as clear as we sit today, at least not without sacrificing affordability for customers. And so clearly, we remain open to all those things in terms of emerging technologies, in terms of offset markets and other factors that are going to help us to achieve that vision. And broadly, from our perspective, we look at it that, as you heard me say earlier in the prepared remarks that we’ve been executing a decarbonization strategy for 15 years. And we’re now setting a target that we believe we can achieve an 80% reduction by 2040. But clearly, we’re not going to stop when we get there, and we’re going to continue to execute on that strategy of decarbonizing and that vision, that ambition for us to achieve net zero is very passionate about it. But the fact is the path to get there without sacrificing affordability today, yes, we’ll need to rely upon things like emerging technologies, continuing reduction in cost for those emerging technologies. As well as looking at offset markets and other levers that will be important not just for us, but for everyone who is looking at executing a path to net zero particularly while we remain so focused on ensuring that we’re not sacrificing affordability to achieve that.

And then just a follow-up, in terms of getting to the 80% reduction, that can be done with the existing technology. It’s really just balancing affordability or do you still feel like that 80% reduction is still a bit of a stretch goal by 2040?

Well, I mean, I think there is a bit of a stretch in the sense that there is a lot of work to do to achieve that. I think it’s definitely counting on continuing to see falling prices for things like storage technology, frankly. And factors like that. But largely is in place with a vision around technology that exists today. We’re not sort of looking for miracles to appear in order to achieve that 80% reduction, we see both upon the continuation of the path that we’re already on with benefit of the generation planning work and the IRP work, the integrated resource planning work that’s been done across all utilities. We can see the path to achieve that just based on naturally what we’re doing within the generation profile, particularly for Tampa Electric and for not Scotia power. And so for there, we are counting on existing technologies, albeit counting on continuing decreasing pricing. Again, in order to make sure that we are constantly keeping customer affordability insight.

Okay. Thanks, Scott and all the best to you Nancy in retirement.

Thank you very much, Mark.

Your next question comes from David Quezada of Raymond James. Your line is open.

Thanks. Good morning everyone. My first question here, just on the $1.2 billion of projects under development that are kind of the upper bound of your CapEx plan. Just wondering if you could touch on how maybe the key elements of that have progressed over the last few months since you first outlined them? And maybe just thoughts on timing about when you would add them to that sort of base capital plan?

David, it’s Greg. I can’t say there’s anything explicit to call out on in over the last couple of months, we would likely provide an update on that, consistent with our annual update every fall. I think you’ve heard us talk about it before, roughly half of it would be related to the Atlantic loop or something like that, more regional transmission in the early stages of that. About 25% of that 1.2% is any number of projects at Tampa Electric over the next few years, but that represents less than 10% of their capital spend and per the last balance of it is spread across all of our other businesses, but there is nothing outside of the comments that’s got had around the Atlantic loop. There’s nothing significant to highlight at this point.

Okay, great. Thanks for that. And then maybe just other one other one, just on the general topic of decarbonization, I know you already have 30 megawatts of battery storage planned at Tampa Electric. I’m just curious if you have additional sites that you think could move forward if we were to see some kind of a tax credit or something like that, potential upside, I guess, to that target?

Nancy, do you want to?

Yes. So, David, is other solar sites, is that what your battery storage site? We – as you know, if that was your question, as you know, we are – we’ve been on a very aggressive solar build here in Tampa, 600 megawatts, and we’re now into our second 600 megawatts. We continue to look for land. And in fact, we’re going to do a very small sort of water – solar on water to see what that is, how that works for us. And we are also going to do a study this year to understand how we integrate even more solar into our system, solar, battery storage, etcetera. So we continue to work every day to understand how we can put more renewables on our system here. And work to make sure that we’ve got the capacity to do it, both from a land perspective and from a system operation technology perspective. But we’ve got 600 megawatts to build right in front of us now over the next 3 years, and we’re very focused on executing that.

Excellent. Thanks for that color. And I will echo the comments, Nancy, congratulations on the retirement.

Thank you very much, David.

Your next question comes from Patrick Kenny of National Bank Financial. Your line is open.

Hey, good morning. I guess just on the retirement of Unit 3 of Big Bend. And I guess, coming back to the conversation around achieving net zero, could you just remind us of the current time line for retiring Unit 4 or at least transitioning the unit to full natural gas? And I guess, outside of those emerging technologies or sequestration becoming affordable. Maybe you can just comment if you are starting to build up your inventory of emission offset credits as we speak, just as a say a backup plan for achieving net zero by 2035?

Patrick I’ll answer. It’s Nancy. I’ll answer the Big Bend 3 and 4. So as you say, we are retiring Big Bend 3 early. Big Bend 4 today, as you know, operates on coal, we intend to retire that sort of – it will be – it’s on a path for its useful life. We are doing some work this year though that will allow us to operate that at full power, both on coal and natural gas. So it will have the ability to be at full load on natural gas this year. I think the other question was likely for Scott, was it?

Yes. And I think, Patrick, I think – so at this point, no, we’re not building up an inventory of credits at this point. As I say, clarity of legislation is still a ways away. But I think back tied into the previous question is as climate policy, as energy policy becomes more clear obviously, we will respond to that. In the meantime, we are just continuing to focus on our own decarbonization.

Okay. That’s helpful. And then, I guess, more broadly speaking, Scott, just wondering if you could provide a bit more color on some of the opportunities you’re seeing out there around decentralized generation, maybe as well, energy efficiency programs. Just maybe clarify how these trends are supporting a tailwind for earnings going forward as opposed to being a risk to your base outlook?

Yes. And it’s a really good question and one that you described rightly in the context of strategic in nature and thinking about it, and our efforts are focusing on capturing that as an opportunity in managing the risk. Obviously, some would look at decentralization and think, well, what that means is rooftop solar. Well, yes, it might mean that, but it can mean a whole bunch of other things, too, where we are very focused and whether that’s in community solar based initiatives in Tampa, whether it’s in looking at distributed battery storage in Florida and Nova Scotia power that initiatives that are underway right now. And then additionally, it’s looking at emerging technologies or even technologies that we’re looking to advance, and you’ve heard us talk before about block energy and what a team here led by Rob Bennett has been doing and looking at taking decentralized distributed concept and thinking about it as an in front of meter kind of service where we can look to utilize rooftop solar, combined with residential battery storage interconnected within a community to community backup generation and maybe even more community – renewable based generation with an inter tie to the grid, and this is technology that as we’ve developed is now working – has actively been working at a demonstration site at Air Force base in Albuquerque, New Mexico, and is now in deployment in a pilot residential sub in Florida in partnership with Lennar Homes, one of the largest homebuilders in the U.S. and Tampa Electric currently has a filing in front of the Florida Public Service Commission and looking to support through the regulatory environment, effectively the rate basing of that infrastructure, where the utility can then operate that clean distributed generation source, interconnect customers, provide a reliability level to customers that is very difficult to achieve within existing technologies and so we’re excited about that prospect. It’s certainly early days, but looking forward to advancing that project in Florida and continue to advance the story of block energy as we see as to whether that’s a potential and meaningful opportunity for us in the content of decentralization.

Great. Much appreciated, Scott, and all the best, Nancy, in your retirement, congratulations.

Thank you, Patrick.

Your next question comes from Andrew Kuske of Credit Suisse. Your line is open.

Thanks. Good morning. Scott, I think you mentioned earlier on despite all the health and safety protocols this year, which obviously was challenging, you still managed to execute your largest capital program ever. So the question really becomes, you have given what you’ve learned over the course of a challenging year when we return more to normal, does that allow you to scale the capital program to a greater degree with even a higher degree of confidence?

Yes. I mean, it’s an interesting question, Patrick. I mean, really sorry, – Patrick, Andrew, it’s I think largely as it relates to the operations and construction activity that was in execution of that capital plan was really largely about additional protocols that were put in place. How do we manage social distancing, ensuring we’ve got masking in place, obviously, being a couple of key examples as to the implications of that, but also even managing supply chains when those things became more strained and making sure that we were managing that to avoid impacts on construction activity. So I guess, notionally, you could look at it and think that, that should provide an enhancing impact to our ability to manage these programs. But I think more broadly, it was really more just about sort of looking at these things from the perspective of maintaining efficiency even in the face of changes. And so I think from that, there’s lots of good learnings for our teams, and I’m sure not dissimilar for all of our industry peers about the ability to respond to those changes, to adapt our processes and continue to execute near flawlessly, frankly, while keeping our team and the community safe through that. I think really was the biggest learning as opposed to any meaningful impact on the ability to scale that execution.

Okay. That’s helpful color and context. Maybe if we ran with the argument that there is green stimulus and you could actually ramp your capital program, given what you’ve learned. How do you think about funding? And maybe just some color on what we saw with Duke and GIC. Is that an alternative or an approach that you would potentially contemplate to help surface value and just have additional flexibility?

Yes. I think it’s premature to say that, Andrew. It’s Greg. Obviously, effort to sell some assets, in particular, our merchant gas plants in Emera Maine to fund our business going forward and have no plans to – or complete that side of it. So we have no plans to do anything further at this time. Selling a minority interest in one of our regulated utilities, it’s not something we have looked at before. And I’m not sure, quite frankly, how I feel about it. But in the event that we see some acceleration in our capital plan, we’ll do what we always do at that point in time is look at what’s the most effective way of raising that capital in the most cost-effective way as well. But I think it’s just kind of premature to draw conclusions on what we may or may not do of these.

Okay, that’s very helpful. Thank you very much.

Your next question comes from Matthew Weekes of iA Capital Markets. Your line is open.

Good morning. I was wondering if you would be able to provide a little bit of granularity as to sort of your FX hedging program and going forward, we are seeing a bit of sort of weakness in the U.S. dollar, how we could expect that to maybe impact earnings in 2021?

Yes. Matthew, it’s Greg. Certainly, I mean, as always, we’ll see volatility in the Canadian dollar, and that certainly has been the case over the last year or so and most recently, obviously, some strength. Rough numbers kind of I kind of think of it as every penny change in the currency, so $130 to $129, as an example would be about $0.01 in EPS. And we do some earnings hedges. We have about 25% to 30% of our business hedged in 2021 at rates north of 140 right now. And we’ll continue to look at opportunities if we see some additional weakness in the Canadian dollar to put on some incremental hedges.

Okay. Thanks very much. And I was wondering as well, if you’d be able to provide a sort of similar rough breakdown of how maybe weather impacted earnings in Tampa Electrics, specifically and how maybe that could reverse going forward with some normalization?

Yes. Outside, Matthew, what we’ve already provided, I am not so sure I can be much more helpful. So we certainly saw some benefit on a year-over-year basis, probably about $14 million after tax so – on U.S. dollars. So I think a bit more like probably $20 million pretax or $18 million pretax from weather related. If you’re trying to equate that to load, probably the easiest thing and I haven’t done the math to decode to the segment information in the MD&A. And you can see the change in load on a year-over-year basis. But in general, we would expect that load in 2021 is probably going to be more like ‘19 and less like what we experienced in 2020.

Okay. Thanks very much. That’s it for me and Nancy, congratulations on retirement, all the best.

Thank you, Matthew.

Your next question comes from Elias Foscolos of Industrial Alliance. Your line is open.

Good morning. Just want to follow-up on a macro question. And first of all, Archie and Nancy, both of you congratulations. On the macro side, are you seeing any inflationary pressure, particularly in the U.S. and how would you classify that if you do see it? I will leave it at that.

So Elias, it’s Scott. Certainly, something that is driving any particular focus attention or concern at my level. But I know Nancy and Ryan are both on, I don’t know whether they’re seeing anything as it relates to their supply chains or anything that would give any clarity of answer to your question. But certainly, Elias, nothing that’s caught my attention yet. Nancy?

Yes, I would concur, Scott, nothing that’s really caught our attention here for sure.

Ryan, anything on your end?

Yes. No, we have not seen anything here as well. So I would concur.

Okay. I’ll leave it at that. I appreciate that color. It’s just we were hearing from our Chief Economist today, and they said that the U.S. – that’s a focal point for the U.S. Fed. So I thought I would bring that up. So we’ll leave it at that. Thank you very much.

There are no further questions at this time. I will now return the call to our presenters for closing remarks.

Thank you, Chris, and thank you, everyone, for joining us this morning and for your continued interest and support in Emera.

Ladies and gentlemen, this concludes today’s conference call. Your participation is appreciated. You may now disconnect.