Algonquin Power's Q1 2025: Key Contradictions in Hydro Portfolio Divestiture, Capital Allocation, and CEO Strategy

Divestiture of Hydro portfolio, capital allocation strategy, CEO succession and strategy, capital allocation and utility spend, and cost savings and efficiency initiatives are the key contradictions discussed in Algonquin Power & Utilities Corp.'s latest 2025Q1 earnings call.



Financial Performance and Strategic Focus:
- Algonquin Power & Utilities reported adjusted net earnings from continuing operations of $111.6 million, up 39% from the previous year.
- The increase was primarily due to the implementation of new rates, lower interest expense following debt repayment, and a one-time tax recovery related to the sale of the renewable energy business.

CRM Implementation and Cost Management:
- The company's operating expenses in the Utility Division increased by only 1.5% year-over-year, lower than the inflation rate.
- The implementation of a new CRM system was aimed at enhancing customer experience and improving operational efficiency, with expected cost savings to materialize as the system is fully optimized.

Rate Case Updates and Regulatory Progress:
- The New Hampshire Public Utilities Commission approved a settlement agreement for Granite State Electric, with new rates effective April 1.
- The Missouri Commission extended the test year true-up period, allowing Algonquin to capture additional capital investments in its rate filing.

Investigations and Customer Issues:
- Algonquin is actively working with regulators in Missouri, Arkansas, and New Hampshire to resolve customer service and billing issues related to a new billing system deployment.
- The company acknowledged shortcomings in stakeholder engagement prior to the system overhaul and is committed to rectifying these issues to improve customer experience and satisfaction.

Divestiture of Hydro Portfolio:
- Algonquin continues to explore the divestiture of its Hydro portfolio, with the potential timeline being the first part of the year.
- The company is focused on ensuring any transaction is value accretive in terms of balance sheet and strategic positioning, with the market environment playing a role in determining the optimal timing and off-takers for the assets.