Clearway Energy, Inc (NYSE:CWEN) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 08:00 am ET

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Clearway Energy, Inc (NYSE:CWEN) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Christopher Sotos

Good morning. Let me first thank you for taking the time to join Clearway Energy's First Quarter Earnings Call. Joining me this morning is Chad Plotkin, our Chief Financial Officer; as well as Craig Cornelius, President and CEO of Clearway Energy Group. Craig will be available for the Q&A portion of our presentation.

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 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.

Turning to page 4. For the first quarter of 2020, we achieved CAFD of $8 million, in line with our internal expectations and full year guidance. The PG&E contracts continue to perform as PG&E works through their bankruptcy process and we're looking forward to their emergence. As we await the resolution of the PG&E process, we are holding our quarterly dividend flat with last quarter at $0.21 per share.

Regarding COVID-19, I first want to take a moment to thank all of our employees within the Clearway team for their hard work and focus during this difficult time. While the effects of COVID-19 have been felt across the entire country, I am pleased to say that to date, COVID effects on Clearway have been minimal, with our employees keeping safe and no material effect to operations or revenues. Given our observations to date and due to the characteristics of the Clearway portfolio, we also currently see no reason for the pandemic to materially impact financial results in the future. Ignoring operational matters that can always affect financial results across our portfolio, our conventional assets are backed by tolling agreements that are unaffected by an economic slowdown.

Exposure in our renewable portfolio is generally around economic curtailment, they may not reimbursable pursuant to terms of the PPAs. We have not experienced any economic curtailment to date related to COVID-19, projects subject to unreimbursable economic curtailment, represent approximately 2% of full year CAFD, a relatively immaterial amount.

In the Thermal platform, our customer profile remains strong with some volumetric impacts the steam and chilled water sales experienced in April. This amount is also not viewed as material for the entire enterprise, that would only represent around 2% of full year CAFD that persisted every month for the course of the full year.

As I discussed earlier, Clearway sees PG&E's emergence from bankruptcy on track for June of 2020. At the end of the first quarter, Clearway had $148 million of cash, they would anticipate would be released in the second half of the year as PG&E emerges from bankruptcy. During the quarter, we all signed binding agreements on our next drop-down transaction with Clearway Group